The Management Of The Delhi ... vs The Govt. Of N.C.T. Of Delhi And ...
2007 Latest Caselaw 1022 Del

JUDGMENT

Hima Kohli, J.

1. The present petition has been filed praying inter alia for an appropriate writ, order or direction to quash the award dated 10th September, 1998, published under Section 17-A of the Industrial Disputes Act (hereinafter referred to as 'the Act'), whereunder it was held that the termination of the respondent/workman was void ab initio and the petitioner/management was directed to reinstate the respondent/workman with full back wages and continuity of service.

2. Facts leading up to the present petition, in brief, are as follows. The petitioner, the Delhi Gymkhana Club Ltd., was incorporated on 3rd July, 1913. The main objects with which the petitioner club is founded is to promote polo, hunting, racing, tennis, other games, athletic sports and pastimes. The petitioner club amongst other activities, ran a general provision store under the name 'Jumbo Shop' within the club premises which used to cater to and was exclusively meant for the use of mfembers of the club. Due to accumulation of work in the said Shop caused by switching over of transactions from credit to cash basis, certain difficulties were experienced in the running of the said Shop. A need for additional staff in the accounts department was felt so as to overcome the extra-transient load. On 12th September, 1987, the respondent No. 3 workman was engaged by the petitioner club as an additional clerk, allegedly on daily rate/casual basis for the running of the Jumbo Shop. On 2nd May, 1988, the respondent/ workman wrote a letter to the Secretary of the petitioner club requesting that he be considered to be appointed as a permanent clerk which contained an endorsement of the Manager in charge of the Jumbo Shop dated 15th April, 1988, wherein he recommended the respondent workman for permanent appointment. However, the recommendation was not acceptable to the petitioner club as the appointment of the respondent/workman was allegedly for a limited purpose and that there was no need for a permanent clerk in the club. It is alleged by the petitioner club, which allegation is denied by the respondent/workman, that the respondent/workman remained absent for five days w.e.f. 21st May 1988 to 26th May 1988. Thereafter, when the respondent/workman reported for duty on 27th May, 1988, he was given an appointment letter appointing him as a clerk on daily wage basis with effect from 27th May, 1988 for 30 working days @ Rs. 25. 40/- per day. On the completion of the specific work in the Jumbo Shop, the petitioner decided to discontinue the services of the respondent/workman and vide its letter dated 4th June, 1988, informed the respondent/workman that his services were no longer required and that he was being relieved w.e.f. 5th June, 1988. On 18th June, 1988, the petitioner club was served with a demand notice by the Shops and Commercial Workers Union (Regd.), which espoused the case of the respondent workman. As no reply was received from the petitioner club, the respondent/workman raised an industrial dispute which was referred to conciliation. The conciliation officer gave the failure of conciliation report on 19th June, 1989, pursuant to which the dispute was referred for adjudication to the Labour Court with the following terms of reference:

Whether the services of Shri Jagdish Chandra is illegal and/or unjustified and if so, to what relief is he entitled and what directions are necessary in this respect?

3. Thereafter, a corrigendum dated 29th January, 1991 was issued with the following terms of reference:

Whether the services of Shri Jagdish Chandra is illegal and unjustified and if so, to what relief is he entitled and what directions are necessary in this respect?

4. The respondent/workman filed his statement of claim stating therein that his last drawn wages were Rs. 25.40/- per day which was less than the minimum wages of Rs. 29.25/- per day. He claimed that he was victimized by being marked as absent from 21st May to 26th May, 1988, although he was present and did his duties. As against this, the petitioner club filed its written statement and the respondent/workman filed his rejoinder.

5. After perusing the pleadings, documents and the evidence adduced by the parties, the Labour Court, by the impugned award dared 10th September, 1998, held that the termination of the respondent/workman was not covered under any of the exceptions to the provision of Section 2(oo) of the Act and merely on the basis of the appointment letter dated 27th May, 1988, the past continuous service of the respondent/workman could not be overlooked. It was, therefore, held that the termination of the services of the respondent/workman was void ab- initio besides being ineffective as the same had been made without complying with the provision of Section 25-F of the Act and the respondent/workman was directed to be reinstated with full back wages and continuity of service.

6. Learned Counsel for the petitioner club submitted that the respondent/workman had been appointed only as a daily wager, and in this regard, placed reliance on the letter dated 26/27 May, 1988, issued by the Secretary of the petitioner to the respondent workman. It was stated that the respondent/workman being only a daily wager, his contract of service began and ended with each working day. It was further stated that the respondent/workman was engaged only to meet the temporary need of additional staff in the accounts section of the Jumbo Shop run by the petitioner club and that he was appointed for the first time on 12th September, 1987 and for the last time on 26th May, 1988 for a period of 30 days. Attention of the Court was drawn to the letter dated 2nd May, 1988 addressed by the respondent/workman to the Secretary of the petitioner club seeking confirmation as clerk in the petitioner club. It was stated that it was after the receipt of this letter that the respondent/workman was issued his last appointment letter appointing him as a clerk on daily wage basis w.e.f. 27th May, 1988 for 30 working days @ Rs. 25. 40/- per day and vide its letter dated 4th June, 1988, the respondent/workman was informed that his services were no longer required and that he was being relieved w.e.f. 5th June, 1988. It was argued that since the services of the respondent/workman were not extended thereafter, his services lapsed automatically, the same being of a temporary, need-based nature. Placing reliance on the appointment letter dated 27th May, 1988 and the termination letter dated 4th June, 1988, it was argued that the respondent/workman had not completed 240 days of continuous service so as to attract the provision of Section 25-F of the Act.

7. On the basis of the aforesaid factual matrix, the counsel for the petitioner club contended that the case of the respondent/workman is squarely covered under the provision of Section 2(oo)(bb) of the Act, the appointment of the respondent/workman being contractual and temporary in nature. It was stated that the respondent/workman was engaged by it only for specific work and that he had not worked for 240 days continuously in the one year preceding the date of termination of his services, and since the petitioner was engaged only for specific work, his case was covered under the exception to 'retrenchment' as provided for under the said Section 2(oo)(bb) of the Act, and therefore, the termination of his services when his services were no longer required, did not amount to retrenchment. It was further submitted that 'retrenchment' being the precondition for applicability of Section 25-F and 25-G, and there being no retrenchment in the present case, there was also no need to comply with the provisions of Section 25F and 25-G while terminating the services of the petitioner/workman and, therefore, the said termination was neither illegal nor unjustified. In support of his contention reliance was placed by the counsel for the petitioner on the following judgments:

1. Escorts Limited v. Presiding Officer and Anr. , and

2. Harmohinder Singh v. Kharga Canteen Ambala Cantt. .

8. Counsel for the petitioner also sought to challenge the impugned award on the ground of the relief given to the respondent/workman under it. It was vehemently argued that in the absence of a specific averment in the Statement of Claim to the effect that the respondent/workman had completed 240 days of continuous service with the petitioner club or that he was not gainfully employed during the period when his services stood terminated, the Labour Court erred in granting reinstatement to the respondent/workman with full back wages and continuity of service. It was also stated that the Labour Court should have weighed the preponderance of probabilities to see if an accountant would continue without a job for so many years. Reliance was sought to be placed on the following judgments rendered by This Court and the Supreme Court:

1. Murari Lal Sharma v. Nehru Yuva Kendra Sangathan ,

2. Pramod Kumar and Anr. v. Presiding Officer and Anr. , and

3. Lords Homeopathic Laboratories Pvt. Ltd. v. Ms. Lilly Unnikunju and Ors. 2006 IV AD (Delhi) 739.

9. On the other hand, learned Counsel for the respondent/workman vehemently argued in support of the impugned award. It was stated that the fact that the respondent/workman was appointed by the petitioner in September 1987, remains undisputed. It was further submitted that the case of the petitioner is based on a wrong premise that since the respondent/workman was a daily wager, his contract of service starts in the morning and ends in the evening, because the work being performed by the respondent/workman was perennial in nature, and therefore, once he had completed 240 days of continuous service in the year immediately preceding the date of termination, provisions of Section 25-F of the Act, were to be compulsorily complied with.

10. The case of the respondent/workman was that as soon as he asked for being confirmed as a clerk with the petitioner club, vide his letter dated 2.5.1988, and the said letter was endorsed by the Manager of the Jumbo Shop, who recommended his confirmation, that the petitioner club issued to him an appointment letter dated 27.5.1988, appointing him for a period of 30 days, but removed him from services within a week thereof, i.e., w.e.f. 5.6.1988. The counsel for the respondent/workman sought to bring out the inherent contradiction in the argument of the counsel for the petitioner club that on one hand it was contended that the respondent/workman was engaged only for certain exigency of work, and on the other hand, it was sought to be argued that the said exigency ended within a week of the date of appointment of the respondent/workman. The attention of the Court was drawn to the deposition of the Management witness, MW-1, who stated that there was no exigency in the September, 1987 when the respondent/workman was employed, but the exigency started when the petitioner club switched to cash shopping from credit shopping in May 1988. It was submitted that on the basis of the said deposition of MW-1, it is difficult to perceive as to how could such an exigency came to an end within one week from the date of appointment of the respondent workman.

11. On the issue of the respondent/workman not having completed 240 days of service, the counsel for the respondent/workman submitted that having considered the cross-examination of MW-1, wherein he had admitted that the respondent/workman had been working with the petitioner club since September, 1987, coupled with the fact that merely because the respondent/workman was given an appointment letter on 27th May 1989 for a period of 30 days, the same would not mean the past continuous service of the respondent/workman could be overlooked the Labour Court rightly came to the conclusion that the respondent/workman had completed 240 days of service with the petitioner club, and was therefore entitled to the protection granted to him under Section 25-F and 25-G of the Act.

12. As regards the issue relating to the relief of reinstatement with full back wages as given to the respondent/workman under the impugned award, it was submitted by the counsel for the respondent/workman in the course of arguments that though the impugned award is liable to be maintained, as it does not suffer from any infirmity, the respondent/workman is willing to accept an amount less than full back wages as long as the order of reinstatement is maintained. Reliance was placed on the following judgments amongst others to show circumstances where the courts have given reinstatement with full back wages and instances where the courts have maintained the relief of reinstatement granted to the workmen on the order of termination of their services having been found illegal:

(i) Hindustan Tin Works Pvt.Ltd. v. The Employees of Hindustan Tin Works Pvt.Ltd. 1978 (37) FLR 240

(ii) Krishna District Co-operative Marketing Society Ltd., Vijaywada v. N.V.Purnachandra Rao and Ors.1987 SCC (LandS) 366

(iii) Management of MCD v. Prem Chand Gupta and Anr. AIR 2000 SC 454

(iv) Vikramaditya Pandey v. Inudstrial Tribunal, Lucknow and Anr. (2001) 2 SCC 423

(v) Krishnachandra Yadav v. Presiding Officer, Labour Court, BS City, District Dhanbad and Anr. 2002 Lab.I.C.3408

(vi) Zilla Parishad, Nagpur and Anr. v. Moreshwar 2004 Lab I.C. 2505

(vii) Nand Kishore Singh v. Presiding Officer, Labour Court, Bokaro 2005 Lab. I.C. 3094

However, as against the argument of the petitioner club that there was no averment by the respondent/workman to the effect that he was not gainfully employed elsewhere after termination of his service, reliance was sought to be placed on the affidavit of the workman filed before the Labour Court, wherein it was specifically stated that the respondent/workman was out of employment since the termination of his services. It was thus contended that lump sum compensation in lieu of reinstatement and back wages is not an appropriate remedy in the facts and circumstances of the present case.

13. I have heard the counsels for both the parties and have examined the material placed on record, including the impugned award and other documents.

14. So far as the contention of the petitioner club to the effect that the respondent/workman having been employed only to overcome the temporary extra load and only on a temporary basis on daily wages, therefore it is a case covered under the exceptions to retrenchment as provided under Section 2(oo)(bb) of the Act is concerned, the same is devoid of any merit. It has been rightly observed by the Labour Court that it is apparent from the records that the services of the respondent/workman were terminated otherwise than as punishment inflicted by way of disciplinary action and merely because the respondent/workman was appointed on daily wages, it does not mean that he was appointed on a need basis for the extra transient load. The aforesaid conclusion of the Labour Court is well supported by the judgment of the Supreme Court in the case of S.M. Nilajkar and Ors. v. Telecom District Manager, Karnataka, reported as , wherein it has been held as under:

14. The engagement of a workman as a daily-wager does not by itself amount to putting the workman on notice that he was being engaged in a scheme or project which was to last only for a particular length of time or up to to occurrence of some event, and therefore, the workman ought to know that his employment was short-lived. The contract of employment consciously entered into by the workman with the employer would result in a notice to the workman on the date of the commencement of the employment itself that his employment was short- lived and as per the terms of the contract the same was liable to termination on the expiry of the contract and the scheme or project coming to an end. The workman may not therefore complain that by the act of employer his employment was coming to an abrupt termination. To exclude the termination of a scheme or project employee from the definition of retrenchment, it is for the employer to prove the above said ingredients so as to attract the applicability of Sub-clause (bb) above said. In the case at hand, the respondent-employer has failed in alleging and proving the ingredients of Sub-clause (bb), as stated hereinabove. All that has been proved is that the appellants were engaged as casual workers or daily-wagers in a project. For want of proof attracting applicability of Sub-clause (bb), it has to be held that the termination of the services of the appellants amounted to retrenchment.

15. The aforesaid position of law was followed by This Court in the case of Amarpal Singh and Anr. v. MCD reported as 2006 II AD (Delhi) 43.

16. In the present case also all that had been proved by the petitioner club was that the respondent/workman was appointed on daily wages, but that in itself does not mean that the respondent/workman had any notice of the fact that his services were contractual in nature and that the same were liable to be terminated as soon as the exigency of work got over or that he had been engaged temporarily to meet temporary need based requirements of the petitioner club. On the other hand, the deposition of the management witness clearly goes to show that the exigency of work arose only in May 1988 and not in September, 1987, when the respondent/workman was employed. The appointment of the respondent not being contractual in nature, the provision of Section 2(oo)(bb) of the Act has no application to the facts of the present case. Therefore, the petitioner cannot be heard to state that retrenchment being a precondition for application of Section 25-F and 25-G, and the same not being fulfillled in the present case, there was no need to comply the requirements of the said provisions. Thus, there is no error in the finding returned by the Labour Court that termination of the services of the respondent/workman without complying with the provision of Section 25-F of the Act, made the termination itself ineffective.

17. Coming to the averment of the respondent/workman that his services were permanent in nature, there is force in the said argument and the same is evident from the letter of recommendation dated 15th April, 1988, written by the Manager of the Jumbo Shop to the Secretary of the petitioner club wherein it was stated as under:

Shri Jagdish Chandra, D.W. Clerk has been working as a Clerk in the Jmbo Shop since 99/1987 onwards. His work is very satisfactory.

Therefore, Sir, I recommend he may be appointed as regular basis as we require a Clerk in the Jumbo Shop. When Shankar Singh Sinha, resigned, nobody was appointed on his substitute after that Sale of Jumbo Shop increase due to Credit system started also.

18. The aforesaid letter of the Manager of the Jumbo Shop read in conjunction with the deposition of MW-1 goes to prove that the work being performed by the respondent/workman was of a perennial nature and not of a temporary nature and that the respondent was not engaged merely to meet any exigency of work, since the exigency, if any, arose only in May 1988.

19. Even otherwise, assuming that the respondent/ workman was engaged only on a temporary basis, still merely on that basis the petitioner cannot deny the protection available to the respondent/workman under Section 25-F and 25-G of the Act. In view of a catena of judgments of the Apex Court and This Court, it is now a settled position of law that that irrespective of whether a workman was daily wager or not, once he has completed 240 days of continuous service, termination of his services without complying with the provision of the Section 25-F of the Act, is illegal. It was held by a Division Bench of This Court in the case of Delhi Cantonment Board v. Central Government industrial Tribunal and Ors. that in industrial law there is no difference between permanent and temporary employees as in service law and that as long as a person is a 'workman' within the meaning of Section 2(s) of the Act and had put in 240 days of service in the year prior to the date of termination of his service, it is mandatory to comply with Section 25-F of the Act.

20. The judgment rendered by a single judge of This Court in the case of Management of Horticulture Department of Delhi Administration (supra) in this regard is also noteworthy, relevant extract of which is being reproduced as under:

22. Notwithstanding the aforesaid position in law Mr. Anil Grover, learned Counsel appearing on behalf of the petitioner argued that respondent is not to be treated as workman and is not entitled to the benefit of the provision of Section 25-F of the Act and in support of his submission he tried to draw sustenance from another judgment of Supreme Court in the case of Himanshu Kumar Vidyarthi and Ors. v. State of Bihar and Ors. reported in.... In this case, decided by a Division Bench, no doubt certain observations were made by the Supreme Court which give the impression that temporary working of daily wages...would not be considered to be re- trenched under the Act. However, a close look would show that the case was mainly decided on the ground that the concerned department namely, Cooperative Training Institute, Deogarh was not to be treated as ``industry'` within the meaning of Section 2(j) of the Act and further in this case Supreme Court did not take into consideration the earlier case decided by it holding to the contrary and as noticed above. Not only this even in the following subsequent judgments, Supreme Court has taken the view that provision of Section 25-F would be applicable even in a case of daily rated workman. These cases are:

1. Rattan Singh v. Union of India, .

2. Municipal Corporation of Delhi v. Praveen Kumar Jain, .

3. Samistha Dubey v. City Board Etawah, reported in 1999 LLR 460 (SC).

21. It is evident from a study of the law laid down in the abovementioned case laws that once the requirement of 240 days of continuous service is fulfillled, the workman cannot be retrenched without complying with the provision of Section 25-F of the Act. The Labour Court, after perusing the documents placed on record and the evidence of the witnesses correctly arrived at the conclusion that the respondent/workman had worked with the petitioner club for a period of 240 days continuously in the year preceding the date of his termination. The date when the respondent/workman was engaged as a clerk is admitted to be 12th September 1987. The letter addressed to the Secretary by the Manager of the petitioner club, as reproduced hereinabove, also records that the respondent had been working with the petitioner for the last nine months. In such circumstances, the mere fact that the petitioner club had issued a formal letter of appointment only on 27th May, 1988 and that the services of the respondent/workman were terminated w.e.f. 5th June 1988, cannot be read to mean that the respondent/workman had not served the petitioner club for a period of 240 days in the year preceding the date of termination of his services, thus attracting the provisions of Section 25-F of the Act.

22. Reliance placed by the petitioner club on the judgments in the cases of Harmohinder Singh (supra) and Escorts Limited (supra), is misplaced, since both of these are cases where the appointment was clearly contractual in nature, unlike in the present case. Therefore the said cases can be distinguished from the present case on facts as well as on law.

23. In the light of the position of law as discussed above and the facts and circumstances of the case, the inevitable conclusion is that the action of the petitioner club in termination the services of the respondent workman without complying with the provisions of Section 25-F and 25-G of the Act renders such a termination illegal and unjustified and the impugned award merits no interference in so far as its findings in this respect are concerned.

24. Moving on to the second contention of the petitioner as to whether the relief of reinstatement in service with full back wages as granted to the respondent workman under the impugned award is appropriate, it is to be noted that contrary to the contention of the petitioner club that there was no specific averment on the part of the respondent/workman that he was not gainfully employed during the period when his services were terminated, the respondent workman had stated in his affidavit by way of evidence that he was unemployed since the time of his termination from the services of the petitioner club. Once the respondent workman had made a statement to the said effect, the onus then shifted to the petitioner club to prove that the respondent workman was gainfully employed elsewhere during the period of termination of his services, which burden was not discharged by it.

25. The present trend of law as enunciated by the Apex Court and followed by various High Courts is that reinstatement is not the inevitable consequence of quashing an order of termination. However, each case is to be weighed on its own merits, and the question of reinstatement and back wages is to be decided depending on the facts and circumstances of each case.

26. In the case of Prem Chand Gupta (supra), the Supreme Court after coming to the conclusion that the termination of the workman was null and void, while deciding the question of relief held that since the termination was in violation of Section 25-F of the Act, the logical consequence would be that he would be entitled to be reinstated with continuity. But in view of the fact that the termination order was passed 33 years before, it was observed that to saddle the exchequer, with full back wages for the entire period would be too harsh on the management.

27. Again in the case of Vikramaditya Pandey (supra), the Supreme Court held that in a case where the retrenchment is illegal, then in the absence of any special circumstances warranting non-reinstatement, the proper relief is reinstatement. In the said also, taking in view the fact that the termination was effected about fifteen-and-a-half long years ago, the back wages were granted only to the extent of 50%.

28. Reliance has been rightly placed by the counsel for the respondent on the judgment rendered by a Division Bench of the Jharkhand High Court in the case of Krishna Chandra Yadav (supra). In the said case, the High Court upheld the order of the Labour Court in reinstating the workman whose termination was found to be improper as the same was effected without serving a notice on the workman, particularly because of the fact that a Senior Officer had strongly recommended the case of the workman for regularization.

29. What follows from the position of law as discussed above is that, unless there are serious circumstances and reasons for justifying non- reinstatement or grant of compensation in lieu of back wages and reinstatement, the workman cannot be made to suffer for no fault of his. In the present case also, as has been held above, the action of the petitioner club in terminating the services of the respondent workman without complying with the provisions of Section 25-F and 25-G of the Act is illegal. The services of the respondent workman were terminated despite the same being satisfactory and despite the fact that he was recommended by the manager of the jumbo shop for permanent appointment vide his letter dated 15th April, 1988, addressed to the Secretary of the petitioner club. However, the fact that the order of termination was passed almost 19 years back and that a long period of time has elapsed since, cannot be ignored. Keeping in view the manner in which the courts have dealt with such cases while deciding on the question of relief, and having regard to the facts and circumstances of the present case, it is found just and appropriate that the respondent workman be reinstated in service, but with back wages payable only to the extent of 25%.

30. Accordingly , the writ petition is allowed to the extent that while the impugned award in so far as the respondent/workman has been directed to be reinstated by the petitioner with continuity of service, is maintained, the order of payment of full back wages is modified and the petitioner is directed to pay only 25% back wages to the respondent/workman within four weeks from today.

31. No orders as to costs.