Delhi High Court
Municipal Corporation Of Delhi vs Shri Ramu Singh And Another on 8 December, 2010
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) No. 4939/1998
% 8th December, 2010
MUNICIPAL CORPORATION OF DELHI ...... Petitioner.
Through: Mr. Rahat Bansal,
Advocate for Mrs.
Amita Gupta, Advocate.
VERSUS
SHRI RAMU SINGH AND ANOTHER .... Respondents
Through: Mr. Anuj Aggarwal,
Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the 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?
VALMIKI J. MEHTA, J (ORAL)
C.M. No.12223/2010 in W.P.(C) No.4939/1998
I may at the outset note that on the commencement of
hearing, the counsel for the workman said that since the present
application filed under Section 17B of Industrial Disputes Act, 1947 is
pending this Court should decide this application under Section 17B
first although the main matter is otherwise ripe for final arguments. I
W.P.(C) No.4939/1998 Page 1 of 18
may note that the petition was admitted vide order dated 28.04.2004
after the workman was served and yet he chose not to appear. After
Rule was issued the respondent No.1-workman as per the Rules
applicable to this Court was served afresh and pleadings were
completed thereafter. The matter came up for final hearing in Regular
Matters on 22.03.2010 whereafter the application u/s 17 B was filed in
September, 2010. Counsel for the applicant sought to place reliance
upon the decision of the Division Bench of this Court in the case of
Iklash Hussain Vs. M/s. Delhi Transport Corporation 2006 IX AD
(Delhi) 187 and para 9 thereof which reads as under:
"9. The learned Counsel for the appellant also made a
grievance that the application under Section 17B of the
Act has been adjourned to be heard along with the writ
petition itself in February, 2007. In our view this is
contrary to the law laid down by the Hon'ble Supreme
Court in Workmen represented by Hindustan V.O.
Corporation Ltd. v. Hindustan Vegetables Oils Corporation
(2000) 9 SCC 534 (supra), and a Division Bench of this
Court in a judgment dated 8th September, 2006 in LPA
No. 190/2006 titled Airport Authority of India v. Puran
Chand and Ors. (supra) has held by applying the ratio of
the Hon'ble Supreme Court in above decision of the
Supreme Court that the Section 17B application should be
disposed of with great promptitude and before the
disposal of the writ petition. Paragraphs 2 and 3 of the
said judgment of the Hon'ble Supreme Court read as
follows:
2. The order under challenge has been passed by a
Division Bench of the High Court at Calcutta. Its operative
portion states that the writ petition filed by the present
appellants and their application under Section 17B of the
Industrial Disputes act should be disposed of together,
expeditiously. We are of the view that an application
W.P.(C) No.4939/1998 Page 2 of 18
under Section 17B should be disposed of before the
principal petition and it should be disposed of most
expeditiously.
3. We, thereforee, set aside the order under challenge to
the extent that it requires the disposal of the writ petition
and the Section 17B application together and we direct
that Section 17B application should be disposed of with
great promptitude and before the disposal of the writ
petition."
In the facts of the present case, I am unable to agree with
the contention of the counsel for the respondent/workman in this
regard. At this stage, merely because an application has been filed
under Section 17B cannot mean that the Court should not hear the
main petition when the workman in execution of the impugned Award
has already received substantial amounts at different points of time in
different years aggregating to a total of about Rs. 3,30,000/-. Thus it is
not that the workman has not got the benefit under the Award. In fact
the workman had concealed the factum of having received the
abovesaid amount pursuant to the Award in this application u/s 17 B
where an impression has been given that he has not received any
amount at all which conduct amounts to an abuse of the process of
law. This court, is therefore, proceeding to dispose of the main petition
and this application is dismissed.
W.P.(C) No.4939/1998
1. By the present writ petition under Article 226 of the
W.P.(C) No.4939/1998 Page 3 of 18
Constitution of India, the petitioner Municipal Corporation of Delhi
seeks quashing of the Award dated 15.10.1996 passed by the Labour
Court directing reinstatement with full back wages to the workman-
respondent No.1.
2. The facts of the case are that respondent/workman was
appointed as a Mali/Beldar as a casual daily wager on 26.4.1983. His
services were terminated on 22.10.1984 without assigning any reason.
The workman had therefore worked for about one and half years. It
could not be argued with any conviction on behalf of the petitioner that
the termination of the workman was not wrongful and that the
provision of Section 25F was actually not complied with. Clearly,
therefore, termination of the workman was in violation of provision of
Sections 2(oo) and 25F of the Industrial Disputes Act, 1947.
3. The only issue, however, which has been urged on behalf
of the petitioner is that reinstatement is not automatic more so with
respect to a casual labour who had worked just for about 18 months
and compensation ought to have been an adequate remedy in a case
such as the present.
4. It is also argued that the workman in spite of receiving
minimum wages over different years after the Award has not worked
for the petitioner. It is a fact agreed to by the counsel for the workman
that the workman has till date received approximately an amount of
W.P.(C) No.4939/1998 Page 4 of 18
Rs.2,58,985/- plus Rs.25,693/- plus Rs.20,346/- plus Rs.22,746/- at
least. Possibly certain other amounts may have also been received
which the counsels are not able to immediately verify. Therefore, the
workman has, without putting in any work since he was terminated in
the year 1984, received an amount of Rs.3,30,000/-.
5. The counsel for the workman has argued two points before
this Court. The first point is that this Court should not interfere with the
decision of the Labour Court in exercise of its discretion under Article
226 of the Constitution of India. The second argument is predicated
upon a recent judgment of the Supreme Court reported as Ramesh
Kumar Vs. State of Haryana 2010 II AD (SC) 333 that the
workman was and is entitled to reinstatement with full back wages.
6. So far as the issue with regard to exercise of jurisdiction
under Article 226 of the Constitution of India is concerned, I am of the
firm view that no doubt exercise of this power is discretionary,
however, it is well settled that this power has to be exercised to further
the ends of justice and the ends of justice for the reasons given below
require allowing of the petition. The workman‟s wages on the date of
termination were the applicable minimum wages being approximately
Rs.354/- as informed to this Court by the counsel for the workman. In
law it was always open to the petitioner to legally terminate the
services of the workman complying with Sections 2(oo) and Section
W.P.(C) No.4939/1998 Page 5 of 18
25F by giving one month notice and 15 days pay for each year of
completed service. In this case, the petitioner by complying with the
requirements of Sections 2(oo) and Section 25F at best, would have
been liable to pay the workman a sum of Rs.700/-. Because of the
fault of the petitioner, and which indeed pains this Court because the
petitioner is a corporation who has with it public monies, the fact of the
matter is that workman has received about Rs.3,30,000/- till date
pursuant to the impugned Award. The issue is comparison between
Rs.700/- which would have been paid because the petitioner was well
entitled to terminate the services of a casual labour after complying
with Section 25F and the substantial amount of Rs.3,30,000/- received
by the workman for which he has given no work in return. I may note
that during the course of arguments in this case and on the last two
dates of hearings it was put to the counsel for the workman that the
workman can take the amount of Rs.3,30,000/- in full and final
satisfaction, however, the counsel for the workman, on instructions,
states that the workman still wishes to press his case.
7. This Court is persuaded to Award compensation by setting
aside the Award for reinstatement with full back wages in the facts
and circumstances of the present case which include the factum of
the workman having worked only for 18 months, not having worked
thereafter with the petitioner for a long period of 26 years and more
W.P.(C) No.4939/1998 Page 6 of 18
so in spite of receiving minimum wages, entitlement of the petitioner
to legally terminate the services of the workman on paying about
Rs.700/-, the employment of the workman not being through regular
modes of employment and the recent trends as found in the
judgments of the Supreme Court under Section 25F.
There is also nothing appearing in the record that workman
during this period was not gainfully employed elsewhere. Of course, it
is the duty of the petitioner to point out whether the workman was
gainfully employed however that cannot exempt the workman to be
fair and honest and state as to whether he was gainfully employed
during this long period of over 26 years since the date of his
termination. All I can say is that the workman is not such a rich person
that he could have afforded to sit at home and not worked at all.
8. I have recently had an occasion to consider the issue of
reinstatement of a workman in case the workman before
retrenchment has not worked for a long period of time in the case of
M/S Genesis Printers VERSUS Shri Rati Ram Jatav Presiding
Officers & Ors. W.P.(C) No.61/1997 decided on 27.10.2010, where
this Court also referred to the recent developments pertaining to
Section 25F as emerging from a catena of judgments of Supreme
Court. It would be useful, at this stage, refer to certain paragraphs of
W.P.(C) No.4939/1998 Page 7 of 18
the said judgment and which deal with the issue. These paras are
paras 9 and 10 and the same read as under:-
"9 . A lot of water has flown since the early 80‟s
when reinstatement was considered to be automatic and
a matter of right on account of violation of Section 25-F.
There are atleast now a few dozen judgments of the
Supreme Court that reinstatement is not automatic and
facts of each case have to be seen as to whether
reinstatement should be granted or compensation is an
adequate remedy. Various factors such as the industry
in question, financial capacity of the employer, peculiar
circumstances of each case, the nature and period of
employment and so on have to be seen. In a recent
judgment in the case of Incharge Officer and Anr. Vs.
Shankar Shetty 2010 (8) Scale 583, the Supreme
Court has referred to its various earlier judgments and
has held that reinstatement is not automatically a matter
of right because of violation of Section 25 F. Paras 2 and
3 of this judgment are relevant and the same read as
under:-
"2. The only question to be considered in this appeal
by special leave is with regard to the relief of
reinstatement granted to the respondent by the Single
Judge of the High Court of Karnataka in his judgment
and order dated August 13, 2001 and affirmed by the
Division Bench vide its judgment and order dated
December 9, 2004 in the writ appeal. Should an order
of reinstatement automatically follow in a case where
the engagement of a daily wager has been brought to
end in violation of Section 25F of the Industrial
Disputes Act, 1947 (for short „ID Act‟)? The course of
decisions of this Court in recent years has been
uniform on the above question. In the case of Jagbir
Singh v. Haryana State Agriculture Marketing Board
and Anr, delivering the judgment of this Court, one of
us (R.M.Lodha, J.) noticed some of the recent decisions
of this Court-namely, U.P.State Brassware Corporation
Ltd. & Anr. V. Uday Narain Pandey; Uttranchal Forest
Development Corporation vs. M.C. Joshi; State of M.P.&
Ors v. Lalit Kumar Verma; Madhya Pradesh Admn v.
W.P.(C) No.4939/1998 Page 8 of 18
Tribhuban; Sita Ram & Ors. V. Motil Lal Nehru Farmers
Training Institute; Jaipur Development Authority v.
Ramasahai & Anr; Ghaziabad Development Authority
& Anr. v. Ashok Kumar & Anr. and Mahboob Deepak v.
Nagar Panchayat, Gajraula & Anr. and stated as
follows:
"It is true that the earlier view of this Court
articulated in many decisions reflected the legal
position that if the termination of an employee
was found to be illegal, the relief of
reinstatement with full back wages would
ordinarily follow. However, in recent past, there
has been a shift in the legal position and in a
long line of cases, this Court has consistently
taken the view that relief by way of
reinstatement with back wages is not automatic
and may be wholly inappropriate in a given fact
situation even though the termination of an
employee is in contravention of the prescribed
procedure. Compensation instead of
reinstatement has been held to meet the ends of
justice. It would be, thus, seen that by a catena
of decisions in recent time, this Court has clearly
laid down that an order of retrenchment passed
in violation of Section 25-F although may be set
aside but an award of reinstatement should not,
however, be automatically passed. The award
of reinstatement with full back wages in a case
where the workman has completed 240 days of
work in a year preceding the date of
termination, particularly, daily wagers has not
been found to be proper by this Court and
instead compensation has been awarded. This
Court has distinguished between a daily wager
who does not hold a post and a permanent
employee".
3. Jagbir Singh has been applied very
recently in the case of Senior Superintendent
Telegraph (Traffic) Bhopal v. Santosh Kumar Seal &
Ors. (Civil Appeal No. 3815 of 2010) decided on April
26,2010 wherein this Court stated:
W.P.(C) No.4939/1998 Page 9 of 18
"In view of the aforesaid legal position and
the fact that the workmen were engaged as
daily wagers about 25years back and they
worked hardly for 2 or 3 years, relief of
reinstatement and back wages to them cannot
be said to be justified and instead monetary
compensation would subserve the ends of
justice."
The learned counsel for the petitioner has also relied
upon the case of Jagbir Singh Vs. Haryana State
Agriculture Marketing Board and Anr.
MANU/SC/1213/2009 and in which the Supreme
Court has held that reinstatement is not automatic.
Paras 3, 6, 7, 8 and 12 of the said judgment are
relevant and the same read as under:-
"3. The Presiding Officer, Industrial Tribunal-
cum-Labour Court, Panipat, after recording
evidence and hearing the parties held that the
appellant had worked for more than 240 days in
the year preceding the date of termination and
that the Respondent No. 1 violated the
provisions of Section 25F of the Act 1947 by not
giving him notice, pay in lieu of notice and
retrenchment compensation before his
termination. The Labour Court, accordingly, vide
its award dated September 16, 2005 declared
that the appellant was entitled to reinstatement
with continuity of service and full back wages
from the date of demand notice, i.e., January
27, 1997.
6. The learned Counsel for the appellant
strenuously urged that once the termination of
service of the appellant was held to be in
violation of Section 25F of the Act 1947, the
Labour Court rightly ordered reinstatement with
continuity of service and full back wages and
the High Court was not justified in interfering
with the just award passed by the Labour Court.
On the other hand, the learned Counsel for the
W.P.(C) No.4939/1998 Page 10 of 18
respondents supported the order of the High
Court.
7. It is true that earlier view of this Court
articulated in many decisions reflected the legal
position that if the termination of an employee
was found to be illegal, the relief of
reinstatement with full back wages would
ordinarily follow. However, in recent past, there
has been a shift in the legal position and in long
line of cases, this Court has consistently taken
the view that relief by way of reinstatement
with back wages is not automatic and may be
wholly inappropriate in a given fact situation
even though the termination of an employee is
in contravention to the prescribed procedure.
Compensation instead of reinstatement has
been held to meet the ends of justice.
8. In U.P. State Brassware Corporation Ltd. v.
Uday Narain Pandey MANU/SC/2321/2005:
(2006)ILLJ496SC , the question for consideration
before this Court was whether direction to pay
back wages consequent upon a declaration that
a workman has been retrenched in violation of
the provisions of the Section 6N of the U.P.
Industrial Disputes Act, 1947 (equivalent to
Section 25F of `the Act, 1947') as a rule was
proper exercise of discretion. This Court
considered a large number of cases and
observed thus:
The Industrial Courts while adjudicating on
disputes between the management and the
workmen, therefore, must take such decisions
which would be in consonance with the purpose
the law seeks to achieve. When justice is the
buzzword in the matter of adjudication under
the Industrial Disputes Act, it would be wholly
improper on the part of the superior courts to
make them apply the cold letter of the statutes
to act mechanically. Rendition of justice would
bring within its purview giving a person what is
W.P.(C) No.4939/1998 Page 11 of 18
due to him and not what can be given to him in
law. (para 41)
A person is not entitled to get something only
because it would be lawful to do so. If that
principle is applied, the functions of an
Industrial Court shall lose much of their
significance.(para 42)
The changes brought about by the subsequent
decisions of this Court, probably having regard
to the changes in the policy decisions of the
Government in the wake of prevailing market
economy, globalisation, privatisation and
outsourcing, is evident.(para 43)
.....
12. In this case, the Industrial Court exercised
its discretionary jurisdiction under Section 11A
of the Industrial Disputes Act. It merely directed
the amount of compensation to which the
respondent was entitled had the provisions of
Section 25F been complied with should be
sufficient to meet the ends of justice. We are
not suggesting that the High Court could not
interfere with the said order, but the
discretionary jurisdiction exercised by the
Industrial Court, in our opinion, should have
been taken into consideration for determination
of the question as to what relief should be
granted in the peculiar facts and circumstances
of this case. Each case is required to be dealt
with in the fact situation obtaining therein."
(Emphasis added)
10. A reading of the aforesaid judgment in the
case of Incharge Officer (supra) and also various other
judgments which have been referred to show that the
reinstatement is not automatic and the facts and
circumstances of each case have to be examined by the
court. The learned counsel for the respondent sought to
place reliance upon Harjinder Singh Vs. Punjab State
Warehousing Corporation MANU/SC/0060/2010 to
contend that this court should not interfere with the
exercise of discretion by the labour court for granting
reinstatement in service. I do not find that the reading
of the judgment shows that the decisions referred to in
the case of Incharge Officer (supra) are said to have
laid down the incorrect law. Whether or not
reinstatement is to be granted or only a compensation
should be granted is surely in the realm of facts of each
case, a legal position which is not disputed even by the
counsel for the respondent. And, in the facts of this case,
as already stated, the Labour Court had no occasion to
examine the issue as to whether compensation should
be granted instead of reinstatement as the Award is an
ex parte Award."
9. So far as argument on the basis of the judgment in the
case of Ramesh Kumar (supra) is concerned, I do not find that
the said judgment in any manner holds that compensation ought not
to be awarded and that the relief of reinstatement with full back
wages ought to be granted in all cases.
10. Accordingly, I find that in the facts and circumstances of
this case although the workman has been wrongly retrenched from
service, the workman should be only entitled to compensation
instead of reinstatement with full back wages considering inter alia
the fact that his period of work was not long being only of one and
half years and that too 26 years back. The impugned Award is thus
set aside to the extent it directs reinstatement with full back wages.
11. The issue then to be decided is what should be the
amount of compensation which ought to be paid to the workman.
The fact is that the workman has not reported for work to the
petitioner and has kept on receiving minimum wages over these
years after the Award. Surely, fairness and honesty is not a one way
street. It applies to all classes and all stratas of the society. It
cannot be said that the provisions of Industrial Disputes Act can be
used so as to further injustice and enable persons to make huge
amounts of money without really working for the amount which they
are receiving and although they possibly may be gainfully employed
elsewhere or having other sources of income. Considering that for
valid termination under Section 25F an amount of Rs.700/-
approximately would have been payable, and applying maximum
multiplier to such amount, an amount of Rs. 50,000/- in my opinion
is adequate compensation which ought to be payable to the
workman.
12. The next aspect to be considered is what should happen
to the amount which the workman has received in excess of the
compensation he ought to receive. In case of Genesis Printers
(supra), I had considered the issue whether the amount received
by the workman under Section 17B should or should not be directed
to be refunded back in case the management succeeds. In this
regard, after considering various aspects this Court made the
following observations in the said judgment:
"12. The issue then arises is what should happen
to the excess amount received by the workman
pursuant to the orders under Section 17-B. Though an
order under Section 17B is only an interim order which
is subject to the final decision in the case, however,
the Supreme Court in the case of Dena Bank Vs.
Kirtikumar T.Patel (1999) 2 SCC 106 has held that
the payment under Section 17 B is in the nature of
subsistence allowance which would not be refundable
or recoverable even if the Award is set aside by a
higher court. On a careful reading of this judgment, I
am of the opinion that this judgment cannot be said to
be laying down an intractable position that even if the
employee has other sources of income, although he
has simultaneously received the payment under
Section 17B, even then there can be no recovery of
the amount received in excess of the compensation
which is finally determined by the Court.
The stand as taken on behalf of the petitioner by its
counsel is quite fair as it is urged that as long as the
Award is set aside, the petitioner is agreeable to not
press the issue of recovery of compensation and that
whatever amount which stands paid to the respondent
/workman should be taken as full and final settlement
of dues of the petitioner towards the workman for
illegal retrenchment provided of course that the
workman did not have other sources of income when
he was receiving the payment under Section 17B. The
counsel for the petitioner however submits that as per
the information received by the petitioner, it is not as
if the respondent workman is a poor person and has
no source of income except the monies which were
paid under Section 17B. The counsel for the petitioner
states that the workman in fact owns a premises and
he has let out a floor of these premises and is earning
rent therefrom. This aspect of course has not been
established on record and is also strongly disputed by
the learned counsel for the workman.
13.The object of the ratio of the judgment of the
Supreme Court in the case of Dena Bank (supra)
that the workman should not be asked to refund any
amount received under Section 17B was because the
workman is not a rich person who has various sources
of income and his only source of income is the
payment that he would be receiving under Section
17B. It is for this purpose, the payment under Section
17B has therefore being categorized "subsistence
allowance" by the Supreme Court in Dena Bank's
case. Surely, the payment under Section 17B cannot
be treated as a subsistence allowance, if the workman
is having other sources of income. Accordingly, in the
opinion of this court in case, the workman during this
period after passing of the order under Section 17B
from 1.5.1997 is not having any other source of
income except the payment which is received under
Section 17B, then the workman will not be bound to
refund the amount in excess of Rs.1 lac which has
been decided by this court as compensation for illegal
termination, however, in case during the said period if
the workman has other additional source(s) of income
including from other employment, then, the workman
is bound to refund to the petitioner the amount in
excess of Rs.1 lac. I may note that in compliance of
the order under Section 17B, the petitioner has been
making payments by cheque to the respondent and
this amount of cheque is being regularly credited
every month in the bank account of the
workman/respondent no.2. The respondent/workman
is therefore directed within a period of four weeks from
the passing of this order to file an affidavit along with
copies of his bank accounts that he had no other
source(s) of income during the period he received
payment pursuant to an order under Section 17B so
that there is no need of any recovery from him."
I may note that technically the amount received by the
workman in this case is not under Section 17B but in execution of
the Award, however the same aforesaid principles would apply as in
substance the amount received in execution of the Award will have
some colour as the amount received pursuant to an application
under Section 17B.
13. I find that the present is accordingly a fit case to direct
that the workman should file with an affidavit, his statement of bank
accounts right from the year 1984 or from whenever reasonably
thereafter the same is available till date and also such other
documents to show his income from other sources during this
period of 26 years. This affidavit be filed within a period of two
months from today and which must also state he had no earnings
from alternative employment or sources for the period for which he
has received payment from the petitioner. In case the workman has
not had any alternative employment or alternative sources of
income after reinstatement, then, whatever amount which has been
received by the workman till now i.e. approximately Rs.3,30,000/-
will be taken as full and final settlement of all the claims of the
workman although he has been otherwise only held entitled to
compensation of Rs.50,000/-. In case, however it is revealed that
the workman had other sources of income including earning from
alternative employment, then, since it would be a clear case of
workman not acting fair and not revealing the complete facts the
compensation which the workman will be entitled to would be only a
sum of Rs.50,000/- and then he would be bound to refund a sum of
Rs.2,80,000/-to the petitioner and for which the petitioner is free to
take all steps in accordance with law to recover this amount from
the workman.
The petition stands accordingly disposed of.
DECEMBER 08, 2010 VALMIKI J. MEHTA, J
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