Life Insurance Corporation Of ... vs Presiding Officer And Ors.
2004 Latest Caselaw 377 Del

JUDGMENT

Madan B. Lokur , J.

1. The Petitioner is aggrieved by an Award dated 18th June, 2001 passed by the Central Government Industrial Tribunal in I.D. No. 27/91. The impugned Award was notified under Section 17 of the Industrial Disputes Act, 1947 (the Act) on 22nd June, 2001.

2. Some time in 1982 an industrial dispute was raised by a section of employees of the Petitioner that the Petitioner is indulging in unfair labour practices in respect of engagement of temporary, badli and part time employees in its establishments in the country. For the sake of convenience such temporary, badli and part time employees are hereinafter referred to as temporary employees.

3. As a result of the dispute, the Central Government made a reference on 20th May, 1985 to the National Industrial Tribunal presided over by Justice R.D. Tulpule. The question referred for adjudication was as follows:-

" What should be the wages and other conditions of services of badli, temporary and part time worker of the Life Insurance Corporation of India as well as the conditions of their absorption in the regular cadre."

4. It appears that during the pendency of the reference, the Tulpule Tribunal passed an interim Award on 15th January, 1986 restraining the Petitioner from recruiting staff on a regular basis. Consequently, the Petitioner was compelled to recruit temporary employees to carry on its activities.

5. On 17th April, 1986 the Tulpule Tribunal gave its Award. For the present, it is not necessary to go into the conclusions arrived at by the Tulpule Tribunal for reasons that will be apparent hereafter.

6. The Petitioner was not satisfied with the Award given by the Tulpule Tribunal and, therefore, filed WP No. 1801/86 in the Bombay High Court. A learned Single Judge of the High Court was of the view that the Award was ad invitum and, therefore, by an order dated 14th August, 1986 the writ petition was dismissed.

7. Thereafter, some disputes arose with regard to the interpretation of the Tulpule Award, with the result that on 1st June, 1987, the Central Government made a reference under Section 36A of the Act to the National Industrial Tribunal presided over by Justice S.M. Jamdar to interpret the Award. The terms of reference were as follows:-

"Can the Award dated 17.4.1986 with special reference to paragraphs 44, 45, 46, 48, 49, 51, 52, 54, 55, 56, 57, 60, 64 and 66 and the interim order dated 14.3.86 be interpreted to mean that the Central office of the Life Insurance Corporation of India is empowered to issue instructions/guidelines as contained in their circular issued in this behalf to implement the directions of the Award. If not, what could be the correct interpretation of various directions covered by the said paragraphs in the circumstances of the case, whether the term "absorption' referred to at various places in the Award can be interpreted to mean "recruitment"?"

8. During the pendency of the reference before the Jamdar Tribunal, it appears that an interim Award was passed on 29th June, 1987 once again restraining the Petitioner from making regular recruitments.

9. Eventually, on 26th August, 1988 the Jamdar Tribunal passed an Award called the Jamdar Award interpreting the Tulpule Award.

10. The Petitioner was neither satisfied with the Tulpule Award nor was it satisfied with the Jamdar Award and, accordingly, on 7th November, 1988 the Petitioner filed SLP No. 14906/88 in the Supreme Court (The Management of Life Insurance Corporation of India vs. Their Workmen) challenging the validity of both the Awards.

11. During the pendency of the SLP, a compromise was arrived at between the Petitioner and eight out of nine of its Unions. Accordingly, on 1st March, 1989 the Supreme Court passed the following order in SLP No.14906/88:-

"Special leave is granted. It appears that out of nine Unions eight Unions said to be representing about 99% of the workers have entered into a compromise with the Management. In the circumstances pending the final disposal of the appeal, we permit the Management and members of the said eight Unions to implement the terms of compromise by way of interim measure without however, any prejudice to the rights and contentions of the members of the other Union, who have not entered into such compromise with the management."

12. Eventually, the SLP was converted into a civil appeal being CA No. 1790/1989 (The Management of Life Insurance Corporation of India vs. Their Workmen) and disposed of on 7th February, 1996. This will be adverted to a little later.

13. While implementing the compromise arrived at between the Petitioner and 99% of its employees, some temporary employees were naturally adversely affected. They were mainly those temporary employees, who were recruited during the pendency of the reference before Justice Tulpule and Justice Jamdar.

14. Some of the adversely affected employees filed CM Writ No. 13583/1988 in the Allahabad High Court (Ashish Kumar Sinha and Others vs. Zonal Manager, LIC, Kanpur). By a judgment and order dated 13th December, 1988 the Allahabad High Court dismissed the writ petitions. The principal contention raised by the Petitioners in the Allahabad High Court was that LIC (the Petitioner herein) was adopting a practice of not filling up permanent vacancies but appointing persons only on a temporary basis for a fixed period and, according to the petitioners therein, this amounted to an unfair labour practice.

15. I was told that against the decision of the Allahabad High Court (Ashish Kumar Sinha and Others vs. Zonal Manager, LIC, Kanpur) an SLP was preferred by the petitioners therein, but it was dismissed as withdrawn on 20th February, 1989.

16. The controversy with regard to the status of temporary employees refused to die down. Eventually, on 4th March, 1991 the Central Government referred the following dispute to the Central Government Industrial Tribunal for adjudication:-

"Whether the action of the management of Life Insurance Corporation of India in not absorbing Badli/temporary and part time workmen employed in the establishment of LIC after 20.5.85 is justified, If not, to what relief the workmen are entitled."

17. The reference was registered as I.D. No.27 of 1991 and it is in this industrial dispute that the impugned Award was passed, which has given rise to the present writ petition.

18. Between 1989 and 1991 a large number of writ petitions relating to temporary employees were filed in the Madras High Court by some Unions and individuals. Terminated Full Time Temporary LIC Employees Welfare Association vs. Senior Divisional Manager L.I.C., Thanjavur was treated as the main case and a decision was rendered by a Full Bench of the Madras High Court on 27th July, 1992 and 4th August, 1992. This is reported as 1993 (1) LLJ 1030. The Full Bench dismissed the batch of writ petitions.

19. Feeling aggrieved by the decision of the Madras High Court, SLP No. 10393-10413/92 was filed in the Supreme Court on 8th August, 1992. The lead case in the Supreme Court was E. Prabhavathy vs. Life Insurance Corporation of India.

20. On 6th October, 1992 when the SLP came up for preliminary hearing, the Supreme Court directed the Petitioner to frame a scheme for regularization of those employees who were granted ad hoc appointment for 85 days at intervals from time to time. In accordance with the directions of the Supreme Court, the Petitioner framed a Scheme as per the decision of the Supreme Court in State of Haryana vs. Piara Singh . On 23rd October, 1992 the Supreme Court granted special leave and disposed of the civil appeals incorporating the essential features of the Scheme prepared by the Petitioner as a part of its order. The operative portion of the order passed by the Supreme Court in Prabhavathy reads as follows:-

"The Scheme contained in Clauses (a) to (d) of paragraph 1, which is as under, is approved subject to the postponement of the recruitment scheduled in November, 1992 by at least six weeks and the LIC will proceed to regularise the employees eligible under the Scheme:

a)All those temporary employees who have worked for 85 days in any two consecutive calendar years with the Life Insurance Corporation between 20th May, 1985 uptil date and who conformed to the required eligibility criteria for regular recruitment on the dates of their initial temporary appointment will be permitted to compete for the next regular recruitment after the regular recruitment for these posts currently scheduled for November, 1992.

b)These candidates will be considered on their merits with all other candidates who may apply for such appointments, including those from the open market.

c)These candidates will be given an age relaxation for applying for regular recruitment provided that they were eligible on the date of their first temporary appointment for securing regular appointment with the Life Insurance Corporation.

d)If these candidates are otherwise eligible, they can apply for regular recruitment in the normal course.

This regularisation will, in the circumstances, be by selection for appointment. We make the above clauses of the Scheme a part of our order."

As per the Scheme, temporary employees were entitled to a chance to compete for regular recruitment.

21. Soon after the above decision of the Supreme Court, the Petitioner moved an application on 9th December, 1992 before the learned Tribunal. The prayer in the application was that the industrial dispute be disposed of in terms of the decision in Prabhavathy.

22. The learned Tribunal took up the application for consideration and by an order dated 9th December, 1992 the application was kept pending with a direction that it will be considered at the time of disposal of the reference.

23. The Petitioner thereafter framed a set of instructions called the Life Insurance Corporation of India (Employment of Temporary Staff) Instructions, 1993 that were issued on 28th June, 1993. These instructions contained all the essential features of the Scheme approved by the Supreme Court.

24. On 14th December, 1995 the Petitioner moved another application before the learned Tribunal in an attempt to have the industrial dispute resolved. This application was also not accepted by the learned Tribunal.

25. In the meanwhile, petitions similar to those that had been filed in the Allahabad High Court and Madras High Court came up for hearing before the Andhra Pradesh High Court. By an order dated 3rd December, 1996, the Andhra Pradesh High Court dismissed the writ petitions following the directions given by the Supreme Court in Prabhavathy. The Andhra Pradesh High Court passed similar orders in another set of petitions on 19th April, 1997.

26. The Petitioner then moved a third application before the learned Tribunal in January, 2000. In this application the prayer was to the same effect as in its earlier applications, except that it was now stated that the workmen concerned in the dispute would be offered three chances to compete along with open market candidates for recruitments to be made. The learned Tribunal did not consider even this application.

27. Eventually, on 18th June, 2001 the impugned Award was passed by the learned Tribunal. The operative portion of the impugned Award reads as follows:-

"In view of the matter I find and conclude that the action of corporation denying the absorption of these temporary/badli/part time workmen as dealt with above in the body of this award and employed after 20.5.85 is not justified. I further find that these workmen employed after 20.5.85 should be given absorption in their job on the same terms and conditions as laid down in the aforesaid two awards namely Hon'ble M.S. Jamdar in respect of the workmen employed effect from 1.1.82 to 20.5.85 and dealt with by me as above. It is directed that the corporation shall take into consideration for the absorption of the workmen, on their eligibility and suitability as dealt with above in the Award. The case of those workmen belonging to the category of temporary/badli/part time who had become eligible for their absorption in their job after completing the qualified period of working and were suitable in all respect but their services were terminated and they were turned out of the job by the corporation should also be considered for the absorption of such terminated workman the corporation shall publish and notice in the daily newspaper having wide circulated throughout India and if no compliance of the notice the workman concerned in writing within stipulated period which could be given in the said notice the case of such workman should also be considered for their absorption in the regular vacancy then existing. At the time of the consideration of absorption of such workmen if it is found that no regular vacancy is available to such workmen. Supervisory posts should also be created and such workmen should be given absorption in it. It is also directed that the cases of these workmen for absorption in existing vacancies should be taken for consideration first irrespective of the regular recruitment be taken. The case of the contractual workmen for absorption shall be taken into consideration as per observation made in the body of the award and on the basis and on conditions as stated above.

The term of reference is answered accordingly and the award is given in the like manner."

28. During the pendency of this writ petition, it seems that a writ petition was filed in the Andhra Pradesh High Court by some temporary employees praying for writ of mandamus to the Petitioners for their absorption on a permanent basis. The writ petition was dismissed, but in appeal, a Division Bench of the High Court directed the Petitioner to frame a scheme to regularize the services of temporary employees in accordance with the scheme. The Petitioner assailed this direction in the Supreme Court (L.I.C. of India vs. G. Sudhakar).

29.Before the Supreme Court, it was contended by the Petitioner that a Scheme had already been framed as noted in Prabhavathy. The Supreme Court had accepted the Scheme and its terms were incorporated in the order passed by the Supreme Court. The submission was that there was no necessity of framing another Scheme. It is also pointed out that a set of instructions called the Life Insurance Corporation of India (Employment of Temporary Staff) Instructions, 1993 had also been issued to take care of those employees who were continuing for a very long period without being regularized.

30.The respondents in the Supreme Court (Sudhakar and others) contended that in Management of Life Insurance Corporation of India vs. Their Workman decided on 7th February, 1996 the Supreme Court had disposed of a similar matter with a direction to consider the case of temporary employees for regularization by considering their suitability at a lesser standard. It was contended, therefore, there was no infirmity in the direction given by the Andhra Pradesh High Court.

31.The Supreme Court observed that the order dated 7th February, 1996 did not refer to Prabhavathy and in view of that decision, there was no necessity of framing a fresh scheme because the Scheme approved in Prabhavathy was applicable to all divisions of the Petitioner in the country. The Supreme Court further observed as follows:-

"Needless to mention, in the earlier decision of this Court dt. 23.10.1992 this Court has not limited the applicability of the scheme only to the employees of the Tamil Nadu Division. In the aforesaid circumstances, the High Court of Andhra Pradesh was not justified in issuing the impugned direction to the Corporation to evolve a new set of scheme to govern the case of the employees who had filed writ petitions in the High Court. We, therefore, set aside the impugned direction of the Division Bench of the High Court and substitute the same with the direction that the case of regularisation of these respondents shall be considered in accordance with the scheme which formed a part of the order of this Court dated 23.10.1992, if not already considered. This appeal accordingly stands disposed of."

32. When this writ petition was heard on 20th March, 2004 the submission of learned counsel for the Petitioner was simply this: in view of the order passed by the Supreme Court in Prabhavathy and Sudhakar, the reference stood adjudicated and nothing more needs to be done but to dispose of the present writ petition in terms of the order passed by the Supreme Court in Prabhavathy and Sudhakar. Of course, learned counsel for the Respondents vehemently opposed this contention, but unfortunately, I am not in agreement with them.

33.The controversy in this case is really limited to determining the scope of the orders passed by the Supreme Court in Prabhavathy, The Management of LIC vs. Their Workmen and Sudhakar.

34.In Prabhavathy, the Supreme Court had made it very clear that regularization of temporary employees was to be effected in accordance with the principles laid down in Piara Singh. Since the Scheme propounded by the Petitioner was reasonable, it commended acceptance by the Supreme Court, and it was so accepted and made a part of its order. The Scheme postulated a relaxation in the standard of eligibility and a postponement of the recruitment scheduled for November 1992 by six weeks "to enable the eligible ad hoc employees to compete with others for selection at the said recruitment". The Scheme applied to "All those temporary employees who have worked for 85 days in any two consecutive calendar years with the Life Insurance Corporation between 20th May, 1985 uptil date?" The Supreme Court also noted the submission of learned counsel for the Petitioner that "in regard to future ad hoc appointments/regularization the LIC is in the process of making a Scheme consistent with the guidelines laid down in Piara Singh's case so that this device of employment for 85 days which has not been approved may not be resorted to in future."

35.The decision rendered by the Supreme Court in Prabhavathy made it quite clear that temporary employees recruited after 20th May, 1985 were covered by the Scheme formulated by the Petitioner, which Scheme was accepted by the Supreme Court. This was precisely the term of reference before the learned Tribunal. Consequently, the Petitioner was fully justified in moving an application before the learned Tribunal to dispose of the dispute in terms of the order passed in Prabhavathy.

36.In the subsequent order passed in The Management of LIC vs. Their Workmen the Supreme Court inadvertently overlooked the order passed in Prabhavathy. The Supreme Court, therefore, made a departure from Prabhavathy in as much as it directed the Petitioner "to exempt the concerned Class IV employees from the test and interview if the Management has power to do so under the regulations/instructions governing their conditions of service. In case the Management has no such power, we have no doubt in our mind that the test which shall be prescribed for these workmen shall be of a lesser standard than the one which has been prescribed under the two circulars mentioned in the compromise." It was to implement this order that the Andhra Pradesh High Court directed the Petitioner to frame a fresh scheme.

37.The Supreme Court tacitly disapproved of the direction given in The Management of LIC vs. Their Workmen. This is apparent from a reading of the order passed in Sudhakar. Two issues had arisen in Sudhakar: firstly, whether it was necessary for the Petitioner to frame a third scheme, that is a scheme in addition to the one approved and incorporated in Prabhavathy and the Life Insurance Corporation of India (Employment of Temporary Staff) Instructions, 1993; secondly, whether Prabhavathy was confined to the employees of the Tamil Nadu Division only. The Supreme Court unequivocally answered both the questions in the negative.

38.As regards the first issue, the Supreme Court noted in Sudhakar that the decision in Prabhavathy (rendered by a Bench of three learned Judges) had not been brought to the notice of the Bench that decided The Management of LIC vs. Their Workmen (consisting of two learned Judges). It was then held that in view of the order in Prabhavathy, there was no justification for the Andhra Pradesh High Court to issue the direction that it did. For this reason, the direction issued by the High Court was set aside. As regards the second issue, the Supreme Court noted that it had not limited Prabhavathy to the employees of the Tamil Nadu Division. Consequently, the decision in Prabhavathy would apply to employees of all Divisions of the Petitioner in the country.

39.It is true that the Supreme Court rendered its decision in Sudhakar after the impugned Award was published, but that hardly matters. The correct legal and factual position was settled much earlier in Prabhavathy. It is only fortuitous that Prabhavathy was misinterpreted or misapplied by the Andhra Pradesh High Court that Sudhakar had to come to the Supreme Court; otherwise there would have been no occasion for the Supreme Court to reiterate in Sudhakar what it had said in Prabhavathy.

40.It appears to me, therefore, that on a plain reading of the relevant decisions of the Supreme Court, the term of reference before the learned Tribunal stood answered when the Supreme Court decided Prabhavathy. In any case, the issue is now concluded by the decision of the Supreme Court in Sudhakar. Needless to say, the order passed by the Supreme Court in Prabhavathy was binding on the learned Tribunal; unfortunately, it did not correctly appreciate the decision.

41.For the above reasons, the writ petition is required to be allowed, and it is so allowed. The impugned Award dated 18th June, 2001 passed by the Central Government Industrial Tribunal in I.D. No. 27 of 1991 is set aside. There will be no order as to costs.

42.Needless to say, learned counsel for the Petitioner confined his submissions to the interpretation of the decisions of the Supreme Court mentioned above. Learned counsels for the Respondents replied to these submissions and also made additional submissions on the merits of the Award. I have not dealt with the additional submissions, because it is not necessary to do so in view of the decisions of the Supreme Court referred to above.