New India Assurance Co. Ltd. vs Sh. Narender Kumar
2010 Latest Caselaw 2372 Del

                    *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                             W.P.(C) 6293/2001

%                                                Date of decision: 4th May, 2010

NEW INDIA ASSURANCE CO. LTD.                        ..... Petitioner
                  Through:   Mr. K.L. Nandwani, Advocate.

                                        Versus

SH. NARENDER KUMAR                                   ..... Respondent
                  Through:   Mr. Inder Jit Singh, Advocate.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may
         be allowed to see the judgment? Yes

2.       To be referred to the reporter or not? Yes

3.       Whether the judgment should be reported
         in the Digest? Yes

RAJIV SAHAI ENDLAW, J.

1. The petitioner impugns the award dated 21st August, 2001 of the Industrial

Tribunal holding that the respondent had worked for it continuously for 244 days

and his termination was against the statutory requirements of Section 25F of the

Industrial Disputes Act, rendering the termination void ab initio. The Industrial

Tribunal held the respondent to be entitled to reinstatement with continuity in

service and full back wages. This Court issued notice of the petition and

subsequently after notice, vide order dated 18th December, 2001, subject to the

petitioner depositing a sum of Rs.1,70,000/- in this Court, stayed the operation of

the award. The counsel for the petitioner has informed that the petitioner in

pursuance to this order deposited Rs.1,75,000/- which remains deposited in this

Court. The respondent filed an application under Section 17B of the ID Act. The

said application was allowed vide order dated 10th May, 2002 and the petitioner

directed to pay to the respondent w.e.f. 12th October, 2001 at the rate of last drawn

wages i.e. at the rate of Rs.720/- p.m. The respondent applied for modification of

the said order and vide order dated 30th September, 2005 the order aforesaid dated

10th May, 2002 was modified and payment under Section 17B was directed at the

rate of minimum wages from time to time subject to the respondent filing an

undertaking to refund the excess amount over and above the last drawn wages in

the event of the petition succeeding. The amount of Rs.1,75,000 (Rupees One Lac

Seventy Five Thousand Only) earlier deposited by the petitioner was also directed

to be kept in fixed deposit and certain directions with respect to interest accrued

thereon were also made. The appeal preferred by the petitioner against the order

of modification of the 17B the order was dismissed. Vide order dated 23rd

November, 2006, this Court directed that the arrears of difference between last

drawn wages and minimum wages be deposited in this Court. A sum of

Rs.94,812/- has been so deposited by the petitioner in this Court and permitted to

be withdrawn by the respondent subject to undertaking to refund in the event of

the petition succeeding.

2. That brings me to the challenge to the award.

3. It is the admitted position that the respondent worked with the Morena

Branch of the petitioner for a period of 244 days only (with intermittent breaks) as

Asstt. (Clerical). It is further the admitted position that he was appointed on daily

rate basis; it is his case that he was assured by the Area Manager that his services

would be regularized but in May, 1986 one Shri R.K. Bansal was appointed in his

place. The respondent raised dispute contending that having completed more than

240 days in terms of Section 25B of the Act, his services could not have been so

terminated. He further pleaded that he made representations for his regularization

and reinstatement but to no avail. He further pleads that he also tried his luck

against recruitment as a Typist and even though he passed the written examination

in January, 1987, he was failed in the typing test. He thus raised the dispute.

4. It is the case of the petitioner that the regular appointment in the petitioner

company is made through procedures as per the rules of the company and for

which tests are held; it is denied that any assurances as alleged were meted out to

the petitioner and it is contended that none of the officials of the petitioner are

empowered to mete out such assurances. It is further pleaded that the respondent

was appointed purely on ad hoc basis for specified periods to clear the pending

works till the regular appointment through written test and interview was affected

and had no right to be appointed on a regular basis. It was pleaded that the

appointment of the respondent being ad hoc and for a specified period, the

question of notice or payment of retrenchment compensation to him did not arise.

It was confirmed that the respondent had failed to qualify through the prescribed

procedure.

5. The Industrial Tribunal finding it to be admitted that the respondent had

worked for 244 days held that the services of the respondent were terminated

without complying with Section 25F of the ID Act and thus held the termination to

be bad. It was further held that the attempt of the respondent for regular selection

test would not cure the legal defect of the termination.

6. The counsel for the petitioner has relied on Secretary, State of Karnataka,

Vs. Umadevi (2006) 4 SCC 1, Post Master General, Kolkata Vs. Tutu Das (2007)

5 SCC 317 & Mahadeo Bhau Khilare (Mane)Vs. State of Maharashtra and

Sopan Vishnu Kapase Vs. State of Maharashtra (2007) 5 SCC 524.

7. It was held in Umadevi (supra) that unless the appointment is in terms of

the relevant rules and after a proper competition among qualified persons, the

same would not confer any right on the appointee; if it is a contractual

appointment, the appointment comes to an end at the end of the contract, if it were

an engagement or appointment on daily wages or casual basis, the same would

come to an end when it is discontinued; a temporary employee cannot claim to be

made permanent on the expiry of his term of appointment; merely because a temporary

employee or a casual wage worker is continued for a time beyond the term of his

appointment, he would not be entitled to be absorbed in regular service or made

permanent, merely on the strength of such continuance, if the original appointment

was not made by following a due process of selection as envisaged by the relevant

rules. It was further held that the courts should not ordinarily issue directions for

absorption, regularization, or permanent continuance unless the recruitment itself

was made regularly and in terms of the constitutional scheme.

It was thus contended that the award of the Labour Court is contrary to the

said judgment.

8. In Tutu Das (supra) it was held that that the completion of 240 days of

continuous service in a year would be attracted only in a case where retrenchment

has been effected without complying with the provisions contained in Section 25F

of the Industrial Disputes Act, but would not be relevant for regularization of

service.

9. In Mahadeo Bhau Khilare (Mane) (supra) a distinction was made between

an irregular appointment and an illegal appointment. It was held that appointments

made without following the statutory rules were unconstitutional and that before a

person can claim regularization in the service of the State, he must be in the

service of the State; without being in service, the question of regularization did not

arise.

10. Attention of the counsel for the petitioner was invited to Maharashtra

State Road Transport Corporation Vs. Casteribe Rajya P. Karmchari

Sanghatana (2009) 8 SCC 556. The Supreme Court in this judgment, with

reference to R.N. Nanjundappa Vs T. Thimmiah (1972) 1 SCC 409 carved out a

distinction between irregular appointments and illegal appointments. In R.N.

Nanjundappa (supra) the Supreme Court held that if the appointment itself is in

infraction of the rules or if it is in violation of the provisions of the Constitution,

illegality cannot be regularized; ratification or regularization is possible of an act

which is within the power and province of the authority but there has been some

non-compliance with procedure or manner, which does not go to the root of the

appointment; regularization cannot be said to be a mode of recruitment. It was

held that to accede to such a proposition would be to introduce a new head of

appointment in defiance of rules or it may have the effect of setting at naught the

rules. The Supreme Court in Casteribe Rajya P. Karmchari Sanghatana (supra)

held that the purpose of the Maharashtra Recognition of Trade Unions and

Prevention of Unfair Labour Practices Act, 1971 with which it was concerned in

that case was to provide for prevention of unfair labour practices and the industrial

and the labour courts were empowered, if unfair labour practice is proved, to

declare that unfair labour practice and direct the person indulging in the same, to

cease and desist from such unfair labour practice and take such affirmative action

including payment of reasonable compensation to the employee affected by the

unfair labour practice. It was further held that such issues pertaining to unfair

labour practice were not referred, considered or fall for consideration by the

Constitution Bench in Umadevi case. In the facts of that case it was found that the

industrial court, having found the employer in that case to have indulged in unfair

labour practice of continuing employees for years with the object of depriving

them of status and privileges of permanent employees, was entitled to direct the

employer to reinstate the employees.

11. At first blush it appeared to this Court that the Supreme Court in Casteribe

Rajya P. Karmchari Sanghatana aforesaid had laid down that the judgment of the

Constitution Bench of the Supreme Court in Umdevi does not come in the way of

the Industrial/Labour Courts issuing directions as in the present case, even in

favour of casual workman and which orders will have the effect of regularizing

their employment. However, on closer analysis, it is found that the exception is

only on the ground of unfair labour practice. Else, the law as laid down by the

Constitution Bench in Umadevi would bind the Labour/Industrial Court also. Even

otherwise, it cannot possibly be held that though the High Court and the Supreme

Court, even on finding a case for regularization to have been made out, are barred

from doing so, the Labour/Industrial Court has freedom in this regard. In the

opinion of this Court, the concept of 240 days of continuous service in Section

25B and Section 25F of the ID Act has to be necessarily read in the light of the

judgment in Umadevi and cannot be read de hors the same. If the appointment of

the workman in the industry is illegal, even if he continues for more than 240

days, such illegality would not empower even the Industrial/Labour Court to direct

his absorption/regularization/reinstatement except on a finding of unfair labour

practice to have been indulged in.

12. In the present case the petitioner is a nationalized company. It is the case of

the respondent himself that at the relevant time the branch of the petitioner at

Morena, Madhya Pradesh had been newly set up. In the circumstances, the action

of the petitioner of engaging the respondent temporarily till it could make

recruitment in accordance with its rules & regulations cannot be said to be an

unfair labour practice. It is also not as if such casual appointment/arrangement was

continued for years together as is generally found to be the case in all judgments

where such reliefs are granted. Here, the engagement exceeds the statutory period

of 240 days by merely 4 days. The respondent himself admits that the petitioner

thereafter had conducted test for regular appointments and in which he also

appeared though remaining unsuccessful. Thus by no stretch of imagination can an

element of unfairness be attributed to the petitioner. The temporary, casual, daily

rated appointment of the respondent otherwise was illegal and as per the law in

Umadevi case, the petitioner is not entitled to be reinstated.

13. The counsel for the respondent relies on Krishan Singh Vs. Executive

Engineer, Haryana State Agricultural Marketing Board 2007 LLR 1233 where

the Supreme Court has held that if the Industrial Tribunal records a finding of

violation of Section 25F by the employer, it should strike down the termination

order as being bad in law. However in the present case, the appointment of the

respondent having been found to be illegal and the petitioner having been found to

have not indulged in any unfair labour practice, the finding of the petitioner having

violated Section 25F is being set aside. The said judgment is thus is of no avail to

the respondent. The counsel for the respondent also relies on MCD Vs. N. Kumar

(144) 2007 DLT 493 but which does not consider the aforesaid aspects and thus

cannot come to the rescue of the respondent.

14. The award impugned in this petition thus cannot be sustained and is set

aside/quashed. The counsel for the respondent points out that the petitioner in

compliance of the order under Section 17B of the ID Act has paid a total sum of

Rs.45,360/- to the respondent from October, 2001 to December, 2006 at the rate of

last drawn wages i.e. Rs.720/- p.m. and has further paid a total sum of

Rs.1,27,840/- to the respondent from 1st January, 2007 to April, 2010 at the rate of

Rs. 3,196/- p.m. Even though the respondent is liable to refund the excess amount

over and above the last drawn wages so received, but it is deemed expedient to

relieve the respondent from the said obligation. However the petitioner shall be

entitled to refund forthwith of the sum of Rs.1,75,000/- and Rs.94,812/- deposited

as aforesaid and stated to be lying in this Court. Though certain directions with

respect to the interest accrued on the deposit of Rs.1,75,000/- were made but since

the deposit obtained from the petitioner is found to be on the basis of an award

which has been struck down, the interest accrued on the amounts deposited by the

petitioner be also refunded to the petitioner.

The parties are also left to bear their own costs.

RAJIV SAHAI ENDLAW (JUDGE) 4th May, 2010 pp