Baljeet Singh vs The Management Of State Farms Mgt. ...
2008 Latest Caselaw 929 Del

     IN THE HIGH COURT OF DELHI AT NEW DELHI

                      +L.P.A. No.1975/2006.

                                    Date of Hearing:05.05.2008
                                   Date of Decision: 04.07.2008


#Baljeet Singh                                     ....Appellant

!                               Through: Mr.Sanjoy Ghose,Adv.


                 Versus


$The Management of                              .....Respondent
State Farms Management of India Ltd.

^                               Through Mr.C.N.Sreekumar with
                                 Mr.P.R.Nayak and Mr.Dushyant
                                          Parashar, Advocates.


CORAM :-
*THE HON'BLE MR.JUSTICE A.K.SIKRI
THE HON'BLE MR. JUSTICE J.R.MIDHA


     1.Whether Reporters of Local papers may be allowed to
       see the Judgment?
     2.To be referred to the Reporter or not?
     3.Whether the judgment should be reported in the Digest?


A.K. SIKRI, J.

:

1. The appellant herein is a workman employed with

M/s.State Farms Management of India Ltd. and had

challenged his termination by raising industrial dispute. He

has witnessed luck of his pendulum shifting from one end to

another inasmuch as the Labour Court has given the Award

in his favour holding termination to be illegal and directing

reinstatement into service with back wages. The said

Award is upturned by a learned Single Judge of this Court in

Writ Petition filed by the respondent herein (hereinafter

referred to as `the Management') vide judgment dated

28.4.2006 and quashing the Award of the Labour Court.

The appellant has preferred the present appeal against the

said judgment of the learned Single Judge. What is in store

for him would be unfolded in these pages, as we are

proposing to decide this appeal by this judgment.

2. The appellant herein was appointed as Apprentice by

the Management w.e.f. 19.7.1983. Two years period as an

Apprentice came to an end on 18.7.1985 whereafter the

appellant was taken as daily wager in the capacity of Lower

Division Clerk w.e.f. 23.7.1985. The period of daily wage

was extended from time to time and continued till

22.3.1986. Since no further extension was given, the

engagement of the appellant as daily wager came to an

abrupt end from 22.3.1986. The appellant perceived this as

termination from service and raised industrial dispute

questioning the purported termination on the ground that it

was violative of Section 25(F) of the Industrial Disputes

Act,1947 inasmuch as he was not paid retrenchment

compensation as well as notice pay while terminating his

services, as the same was a pre-condition thereof. It is not

in dispute that provisions of Section 25(F) of the Industrial

Disputes Act,1947 are applicable in those cases where a

workman serves the employer for 240 days in a year. The

appellant had not completed 240 days service as a daily

wager from 23.7.1985 to 22.3.1986 as there were certain

breaks in between. However, the plea of the appellant was

that service rendered by him as Apprentice right from

19.7.1983 should also be included in computing the total

service rendered by him.

3. The claim of the workman was contested by the

Management on various grounds i.e. provisions of Section

25(F) were not attracted as the workman had not rendered

240 days of service; the period of Apprentice could not be

included while computing 240 days; the non-extension of

the workman did not amount to retrenchment as the case

of the workman fell in `Excepted category' of Clause (bb) of

Section 2(OO) which defines retrenchment inasmuch as it

was a case where non-renewal of contract on an expiry of

specific period could not be treated as retrenchment as per

the definition contained in the aforesaid provision. On the

basis of pleadings between the parties, following issues

were framed:

 Whether the workman worked with the management from 19th July,1983 to 22nd March,1986 as alleged in para no.3 of the statement of claim? If not, to what effect? (OPW)  As per terms of reference.

4. The Labour Court decided both the issues in favour of the

workman. We may point out that though the Management had

not taken specific plea in the written statement to the effect

that the Management was not an `industry' under the provisions

of Section 2(j) of the Industrial Disputes Act, this objection was

taken for the first time during the course of the arguments and

because of this reason the learned Tribunal refused to entertain

the said objection while rendering its Award dated 18.7.1998.

From the reading of the impugned Award, it becomes clear that

the Tribunal opined that as the workman was engaged as Clerk

from 23.7.1985 to 22.3.1986, total period of employment was

more than 240 days. However, there were short breaks in

between for a total period of 6 days and the contention of the

Management was that if those 6 days are excluded, period will

fall short of 240 days. The Tribunal, however, held that the

Management could not have the benefit of exclusion of 6 days

which were in the nature of artificial breaks. The Tribunal also

held that the termination would not be covered by exception

contained in clause (bb) of Section 2(oo) of the Industrial

Disputes Act in view of judgment of Punjab & Haryana High

Court reported in 1996 LLR 259 and that of Madras High Court

reported in 1992(I)LLR150. On this basis it was opined by the

Industrial Tribunal that benefit of the provisions of Section 25(F)

of the Industrial Tribunal Act was available to the appellant and

as the Management did not adhere to the said provisions while

terminating the services of the workman, the termination was

illegal. The Tribunal also held that even if the workman had not

completed 240 days as daily wager, the services could not be

terminated without any justification as no employer could adopt

`hire and fire policy'.

5. The learned Single Judge while allowing the writ petition

vide impugned judgment did not agree with the Industrial

Tribunal on both counts. In the first instance it is held that since

the appointment was on temporary basis as daily wager for a

fixed tenure pursuant to written orders, it would not amount to

retrenchment as it fell in `Excepted category' mentioned in

Clause (bb) of Section-2(OO). It was also observed that when

the workman was taken as Apprentice vide orders dated

19.7.1983 it was clearly stipulated in the said original contract

that he had to pass Trade Test. As he had failed to clear the

said test, his appointment could not be so continued. For this

reason also the termination could not be treated as

retrenchment. The learned Single Judge also noted the

submission of the Management that even if it was treated as

retrenchment merely for non-compliance of Section 25(F) of the

Industrial Disputes Act, direction for reinstatement could not

have been made. The learned Single Judge also discussed the

issue of `industry' and concluded that in view of the judgment of

the Division Bench of Madras High Court, relating to the

establishment of the appellant itself holding that said

establishment was not an `industry' within the meaning of

Section 2(j) of the I.D. Act, and the Management not able to

satisfy the test of being `industry' the Award was not tenable

and without jurisdiction.

6. In this appeal preferred by the workman against the said

judgment, the findings of the learned Single Judge are assailed.

We will take note of the respective submissions of the parties

while discussing the issues involved.

7. It is clear from the aforesaid narration that there are

primarily two issues, namely,

(a) Whether the Management is an `industry' or not?

Incidental issue herein is as to whether the

Management is entitled to take this plea at all or not

which was not raised in the written statement filed

before the Labour Court and, therefore, no issue is

framed thereupon.

(b) Whether the purported termination of the workman is

retrenchment or it comes under the exception

provided by Clause (bb) of Section-2(oo) of the I.D.

Act.

INDUSTRY:

8. The learned Single Judge has dealt with the contention of

the respondent that it was principally engaged in agricultural

activity and was clearly outside the purview of the definition of

`industry' under Section 2(j) of the Act. The learned Single

Judge notices that no such stand has been taken before the

Industrial Adjudicator and no evidence has been led in this

respect. The Court, however, has proceeded to hold that

industrial adjudication was not fettered by the technical rules of

procedure and that delay would not defeat a belated request for

amendment when such a delay can be compensated by

payment of adequate costs. The learned Single Judge

thereafter, relied on the Madras High Court decision in State

Farms Corporation of India Ltd. Vs. The Second

Additional Courts, Madras and others 1997(1)LLN 361

(hereinafter `Madras Case'). It held that in the said case the

petitioner was a farm which was a unit of the respondent. The

Court proceeded to notice the order passed in

WP(C)No.2037/1996 entitled State Farms Corporation of

India Ltd., Beej Bhawan, Nehru Place, New Delhi Vs.

Govt. of India to hold that this Hon'ble Court has relied upon

the Madras Case to hold that the respondent was not an

`industry'. At para 45 of the impugned order, while accepting

that the appellant's stand that industry issue cannot be raised

for the first time in the writ court deserved to sustain, held that

in light of the judgment dated 26th September,2005 the

respondent entity was not an industry.

9. Assailing this finding, it was the submission of learned

counsel for the appellant that the learned Single Judge failed to

appreciate that the issue, as to whether an establishment is an

industry or not, is a mixed question of law and fact and evidence

have to be led by the party which contends that its

establishment is not an `industry'. No such defence was taken

nor evidence led before the learned Industrial Adjudicator.

Distinguishing the judgment of Madras High Court, he submitted

that it is evident that the unit concerned therein was not the

Head Office of the Respondent but was a Central State Farm

situated at Melchgam, West Post, North Arcot District, Tamil

Nadu. In that case, the unit was actually a farm unlike in the

instant case whereas the appellant was employed in a clerical

capacity in the Head Office situated at Delhi. The submission

was that one unit of a particular establishment can be held to be

outside the purview of the definition of `industry' whereas

another unit/activity can be held to be `industry' and in support

of this proposition, he cited the decision of the Supreme Court in

the case of Nagpur Corporation Vs. its employees, AIR

1960 SC 675. He also sought to distinguish the judgment

dated 26.9.2005 rendered by a Single Judge of this Court in

W.P.(C)No.2037/96 on the ground that it was an ex-parte order

and, therefore, aforesaid distinguishing features could not be

pointed out. He also contended that the learned Single Judge

failed to appreciate that the Apex Court in Hari Nagar Cane

Farm's case (1964) SC 903 has held that a limited company

formed for the express purpose of carrying on agriculture,

employing workmen could not contend that its activity does not

fall within the definition of Section 2(j) of the I.D.Act.

10. It is not in doubt that the issue of `industry' is a mixed

question of law and fact. Therefore, ordinarily speaking such an

issue cannot be decided unless there is a proper evidence led

before the Industrial Tribunal. At the same time it is also to be

borne in mind that whether the establishment is `industry' or

not is a jurisdictional issue and goes to the route of the matter.

In case a particular establishment is held to be not an `industry',

Industrial Tribunal has no jurisdiction to deal with the disputes of

employees of that establishment. Thus even when such an

issue was not taken in the written statement, the Tribunal could

have still gone into the question, however, subject to the

condition that it was possible to decide the issue on the basis of

admitted facts on record. View from this angle, if the

Management is able to produce judicial pronouncements

whereby it is held that same very Management/Establishment is

already held not to be an industry by a Court of law, that would

be the material which can be taken into consideration by the

Industrial Tribunal in forming the opinion on this issue. In view

of this, we do not think that the learned Single Judge committed

any error in proceeding ahead in determining the issue as to

whether the Management is an `industry' or not under the

provisions of Section 2(j) of the I.D.Act when the two judgments

were produced, one of the Division Bench of Madras High Court

and another judgment of a Single Judge of this Court relying

upon the judgment of the Division Bench. We may note that the

learned Single Judge was conscious of this fact as is clear from

the following observations made in para-45 of the judgment:

"The stand taken by the respondent may deserve to be sustained in a case where such issue had not fallen for judicial scrutiny and consideration and there was no judicial finding and precedent on the matter. In the present matter, this court in its judgment dated 26 th September,2005 has categorically held that the petitioner is not an industrial establishment. There is no dispute that the present petitioner was a petitioner in Writ Petition (C) No.2037/1996".

11. The next step would be to consider as to whether the

learned Single Judge was right in relying upon the aforesaid two

judgments and deciding the issue of `industry' against the

workman. Before delving into this discussion, we may point out

that the learned Single Judge initiated the deliberations on this

issue by referring to the Constitutional Bench judgment of Apex

Court in the case of Bangalore Water Supply & Sewerage

Board Vs. Rajappa (1978) 2 SCC 213. Thus, the principles

laid down therein were kept in mind inasmuch as it is specifically

observed in the impugned judgment that as per the aforesaid

judgment of the Supreme Court, absence of a profit motive or

gainful objective is irrelevant, be the venture in the public, joint,

private or other sector. The true focus is functional and the

decisive test is the nature of the activity with special emphasis

on the employer-employee relations. The learned Single Judge

thereafter referred to two judgments and quoted as under:

(a) Ramesh Chander Singh Vs. Union of India, 1981

Labour IC 781, wherein the Court held as under:-

"13. Where a complex of activities, some of which qualify for exemption, others not, involve employees on the total undertaking some of whom are not "workmen" or some departments are not productive of goods and services if isolated, even then the predominant nature of the services and integrated nature of the departments will be true test. The whole undertaking will be "Industry' although those who are not "workmen" by definition may not benefit by the status.

Applying this criteria to the facts of the instant case we find that the National Sugar Institute is predominantly a research institute and its objective is to devise ways and means of economizing in sugar production and also to design machines and machine parts so as to make the working of the sugar mills more efficient. It also helps the industry in solving their specific problems and to advise the industry

in various other ways to make the whole industry more effective and viable. The defendant has admitted in its written statement that the Institute charges for advice to the Industries and also undertakes other jobs of research on payment by the Industries. It is indeed an organized and systematic enterprise but to my mind it does not qualify to the various requirements which can make an enterprise an industry. It is purely a technical institute which provides the industry with its know-how and skill and gives advantage of its research to the industry, of course, on payment but not on profit. Under these circumstances, I find myself unable to agree with the submissions made by the appellant that the research institute was an industry."

(b) P.Jose Vs. The Director, Central Institute of

Fisheries & Anr.1986 Labour I.C. 1564, the Bench

ruled as under:-

"7. Except to contend that the petitioner is a casual worker, the learned counsel for the petitioner has not placed anything before this Court to sustain his plea that the 1st respondent is an `industry' within the meaning of `the Act'. In this connection it is relevant to recall the pleadings in the counter-affidavit sworn on behalf of the respondents. In the counter- affidavit it has been stated thus:

"The Central Institute of Fisheries, Nautical and Engineering Training, is not engaged in research in deep sea fishing. The Institute is meant for training personnel in deep sea fishing and allied operations and not for research."

Such institutions as the respondent-institute will not be an `industry' because it belongs to the restricted category of institutions mentioned in the decisions of the Supreme Court in Bangalore Water Supply & Sewerage Board

Vs. Rajappa, (1978) 2 SCC 213: (1978) Lab IC 467 at p.514, para 161).

Xxxx xxxx xxxx xxxx

9. For the reasons stated above, I have no hesitation to hold that the petitioner is not entitled to the benefits of the provisions contained in Chapter V A of the Industrial Disputes Act.

In this view of the matter, the Original Petition is liable to be dismissed. The Original Petition is accordingly dismissed. No order as to costs."

12. Reference was also made to the judgment of Punjab and

Haryana High Court in the case of State of Punjab Thr. The

Director of Agriculture Punjab, Chandigarh and Anr. Vs.

Shri Daljit Singh & Anr. 1986(1)SLR 420. In that case the

issue was as to whether Agriculture Department of the Punjab

State comes within the ambit of industry. The Punjab High Court

answered the said issue in the negative on the premise that

Agriculture Department of the Punjab Government deals with

the governmental activity which was not an analogous to trade

and business nor there was an element of economic venture

inasmuch as function of the Agriculture Department of the

Government was to render help to the agriculturist in the pursuit

of farming. The nature of work was thus largely advisory.

13. With this we now proceed to discuss the two judgments

relating to the Management itself. No doubt before the Madras

High Court it was the Central State Farm of the Management

with respect to which the Madras High Court considered the

issue as to whether that is the industry or not. However, it is

also not in dispute that within one establishment a certain

department may qualify as industry whereas certain other

department may not as held in Nagpur Corporation(Supra).

However, insofar as the Management establishment is

concerned, the main and predominant purpose of the State

Farms Corporation is production of high breed quality seeds for

the farmers and the Head Office is doing nothing but adding to

the said predominant activity. The learned Single Judge has

made the following pertinent observations in this behalf:

"I find that it is not even the contention of the respondent that the petitioner is engaged in any systematic activity producing goods or rendering any service. The seeds produced at the Farms are supplied to the State Governments and even the head office would be part of the same functions being performed by the petitioner. The main and predominant purpose of the State Farms Corporation is production of high breed or quality seeds for the farmers, which is clearly agricultural activity. In view of the above, it has to be held that the predominant activity of the petitioner is agricultural in nature".

14. Furthermore, this Court in its judgment dated 26.9.2005 in

WP(C)2037/96 had accepted the aforesaid judgment of the

Madras High Court while deciding the case of the Head Office

itself. It is no ground to say that this was an ex-parte judgment,

more so when the appellant herein was also party to the said

case. The said judgment was, therefore, rendered inter parties,

and thus even if it was an ex-parte, it would be binding

precedent and in view thereof the same question which was an

issue in the said petition, inter parties shall operate as res

judicata. We, therefore, do not find any error in the judgment of

the learned Single Judge on this issue.

RE: RETRENCHMENT

15. In view of our decision on the first issue, it is not even

necessary to go into this question. We may, however, only say

that it is not even necessary to decide as to whether

engagement of the appellant would fall under the `Excepted

category' mentioned in Clause (bb) of Section-2 (oo) and would

amount to retrenchment or not on that ground. It was

necessary for the appellant to pass the said test and in the

absence whereof the Management which is a public body could

not have given him employment on regular basis. The daily

wage arrangement continued which was given for specific

period and extended from time to time for few months only. In

a course like this even if it is presumed that the provisions of

Section 25(F) were attracted, the appellant could not have been

given the relief of reinstatement with back wages but could get

some compensation only. [See:M.P.State Agro Industries

Development Corpn. Ltd. & Anr. Vs. S.C.Pandey (2006)2

SCC 716]

16. We, therefore, are not impressed by any of the arguments

made by learned counsel for the appellant on the basis of which

challenge to the judgment of learned Single Judge is laid.

Accordingly, we dismiss this appeal without any orders as to

costs.

                                                  (A.K. SIKRI)
                                                    JUDGE



July        , 2008                               (J.R.MIDHA )
skk.                                                 JUDGE