Municipal Corporation Of Delhi vs Budh Prakash
2012 Latest Caselaw 3974 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI
%                     W.P. (C) 5093/2007
+                             Date of Decision: 9th July, 2012
#      Municipal Corporation of Delhi          .....Petitioner
!                 Through: Ms. Saroj Bidawat, Advocate

                            Versus

$      Budh Prakash                        .....Respondent
                Through: Mr. Rajiv Aggarwal & Mr. Anuj
                         Aggarwal, Advocates

       CORAM:
*      HON'BLE MR. JUSTICE P.K.BHASIN

                         JUDGMENT

P.K.BHASIN, J:

By way of this writ petition the petitioner-employer has challenged the Award dated 16-12-2006 of the Industrial Tribunal No. 1, Delhi in ID No. 92/06(old no. 89/05) whereby the respondent-workman, who was employed as a muster roll beldar with Municipal Corporation of Delhi, had been ordered to be reinstated in service with 50% of back wages and it was also directed that the case for his regularization in service be also considered as per the policy of regularization of daily

wagers/muster roll employees by the petitioner-employer treating his seniority from 25.04.1995.

2. The learned Tribunal has found after appreciating the evidence adduced by the parties that the services of the respondent-workman had been terminated by the petitioner- employer and he had not abandoned his job as was its plea and further that the respondent-workman had worked for a period of 240 days in the year preceding the date of termination of his services and his employment was not for a fixed tenure. It was also concluded that the termination of the services of the respondent-workman was illegal. The objection taken by the petitioner-employer that no relief should be given to the respondent-workman because of his having raised the dispute after five years of the alleged termination of his services was rejected. In view of these conclusions the Tribunal ordered reinstatement of the respondent-workman w.e.f. 14.06.96 with continuity of service and all other consequential benefits but awarded him only half of his back wages as per the Minimum Wages Act w.e.f. 14.06.96 till his re-instatement. A s far as the claim of the respondent-workman for his regularization from the

initial date of his employment is concerned it was directed that the management shall consider his case as per its policy of regularization which admittedly had been framed. The Tribunal, however, declined the relief of payment of wages to the respondent-workman as were being paid to the regular employees of M.C.D. for the period when he had worked as a muster roll employee on the ground that he could not equate himself with regularly recruited employees as he was only a daily wager and he had accepted daily wage employment as per his own wishes. Consequently the principle of 'equal pay for equal work' was not invoked in his favour by the Tribunal. The respondent-workman did not challenge that decision of the Tribunal while the petitioner-employer had challenged the award whereby some relief was given to the respondent-workman.

3. The Tribunal while coming to the conclusion that the respondent-workman had completed 240 days of service with the petitioner-employer had relied upon the admission made to that effect by the petitioner's own witness, MW-1, during his cross-examination. He admitted that the respondent workman had worked continuously from 25.04.95 to 14.06.96. The

petitioner's case was that the respondent-workman had stopped coming for duty w.e.f 15.06.96 but the same was rejected by the Tribunal and the learned counsel for the petitioner could not point out any perversity in this finding of fact justifying interference by this Court. It was not even claimed on behalf of the petitioner-employer either before the Tribunal or before this Court that Section 25-F of the Industrial Disputes Act,1947 was complied with before the termination of the services of the respondent-workman. Therefore, I have no hesitation in affirming the decision of the Tribunal that the termination of services of the respondent-workman was illegal.

4. It was, however, vehemently argued by the learned counsel for the petitioner-employer that since the respondent-workman had raised the demand for his re-instatement admittedly after about five years from the date of alleged termination of his services the Tribunal should not have given him any relief and in any case the relief of his re-instatement in service with 50% back wages was not justified at all considering the fact that he had worked for a very short period.

5. As far as the delay part is concerned, the Tribunal has exercised its discretion in not rejecting the claim of the respondent-workman in toto only on the ground of delay and this Court does not find any good reason to interfere with the impugned award on this ground.

6. However, I am in full agreement with the submission of the learned counsel for the petitioner-management that considering the fact that respondent-workman had worked for about one year only as a daily wager the learned Tribunal was not justified in granting him relief of reinstatement in service with 50% back wages. The Supreme Court has recently been taking the view in its various decisions that the relief of reinstatement in service with back wages should not flow automatically when industrial adjudicator declares the termination of services of an industrial workman to be illegal and particularly when the concerned workman is a daily wager or muster roll employee and in such cases lump sum monetary compensation is the appropriate relief which should be granted to the successful workmen. Reference in this regard can be made only to one of those decisions of the Supreme Court which was

also a case of a daily wager. In that case the Supreme Court had after taking note of all its earlier decisions on the aspect of grant of relief of reinstatement in service and back wages to those workmen whose services are found to have been terminated illegally by the industrial adjudicators, had come to the conclusion that relief of reinstatement and back wages should not be awarded to daily wagers even after termination of their services is found to be illegal. That judgment is in the case of "Jagbir Singh vs. Haryana State Agriculture Marketing Board and Anr"; (2009) 15 Supreme Court Cases 327. The relevant paras from this judgment are re-produced below:-

"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 (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:

41. 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 due to him and not what can be given to him in law.

42. 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.

43. 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.

45. The Court, therefore, emphasised that while granting relief, application of mind on the part of the Industrial Court is imperative. Payment of full back wages, therefore, cannot be the natural consequence."

9. This Court in the case of Uttaranchal Forest Development Corporation v. M.C. Joshi (2007)2LLJ390SC held that relief of reinstatement with full back wages were not being granted automatically only because it would be lawful to do so and several factors have to be considered, few of them being as to whether appointment of the workman had been made in terms of statute/rules and the delay in raising the industrial dispute. This Court granted compensation instead of reinstatement although there was violation of Section 6N of the U.P. Industrial Disputes Act, 1947 (equivalent to Section 25F) of the Act, 1947. This is what this Court said:

9. Although according to the learned Counsel appearing on behalf of the appellant the Labour Court and the High Court committed an error in arriving at a finding that in terminating the services of the respondent, the provisions of Section 6N of the U.P. Industrial Disputes Act were contravened, we will proceed on the basis that the said finding is correct. The question, however, would be as to whether in a situation of this nature, relief of reinstatement in services should have been granted. It is now well settled by reason of a catena of decisions of this Court that the relief of reinstatement with full back wages would not be granted automatically only because it would be lawful to do so. For the said purpose, several factors are required to be taken into consideration, one of them being as to whether such an appointment had been made in terms of the statutory rules. Delay in raising an industrial dispute is also a relevant fact.

10. In the case of State of M.P. and Ors. v. Lalit Kumar Verma AIR2007SC528 , this Court substituted the award of reinstatement by compensation.

11. In yet another decision in the case of M.P. Administration v. Tribhuwan : (2007) 9 SCC 748, this Court reversed the High Court's order directing reinstatement with full back wages and instead awarded compensation. It was opined:

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.

13. We, therefore, are of the opinion that keeping in view the peculiar facts and circumstances of this case and particularly in view of the fact that the High Court had directed reinstatement with full back wages, we are of the opinion that interest of justice would be subserved if the appellant herein be directed to pay a sum of Rs. 75,000 by way of compensation to the respondent. This appeal is allowed to the aforementioned extent."

12. In the case of Sita Ram v. Moti Lal Nehru Farmers Training Institute (2008)IILLJ688SC , this Court considered the question as to whether the Labour Court was justified in awarding reinstatement of the appellants therein:

21. The question, which, however, falls for our consideration is as to whether the Labour Court was justified in awarding reinstatement of the appellants in service.

22. Keeping in view the period during which the services were rendered by the respondent (sic appellants); the fact that the respondent had stopped its operation of bee farming, and the services of the appellants were terminated in December 1996, we are of the opinion that it is not a fit case where the appellants could have been directed to be reinstated in service.

23. Indisputably, the Industrial Court, exercises a discretionary jurisdiction, but such discretion is required to be exercised judiciously. Relevant factors therefore were required to be taken into consideration; the nature of appointment, the period of appointment, the availability of the job, etc. should weigh with the court for determination of such an issue.

24. This Court in a large number of decisions opined that payment of adequate amount of compensation in place of a direction to be reinstated in service in cases of this nature would subserve the ends of justice. (See Jaipur Development Authority v. Ramsahai (2006)11SCC684 , M.P. Admn. v. Tribhuban :

(2007) 9 SCC 748 and Uttaranchal Forest Development Corporation v: M.C. Joshi (2007)2LLJ390SC )

25. Having regard to the facts and circumstances of this case, we are of the opinion that payment of a sum of Rs. 1,00,000 to each of the appellants, would meet the ends of justice. This appeal is allowed to the aforementioned extent. In the facts and circumstances of this case, there shall be no order as to costs."

13. In Ghaziabad Development Authority and Anr. v Ashok Kumar and Anr. (2008)ILLJ1013SC , this Court again considered the question whether the Labour Court was justified in awarding the relief of reinstatement with full back wages in favour of the workman and held:

18. The first respondent was admittedly appointed on a daily wage of Rs. 17 per day. He worked for a bit more than two years. It has not been disputed before us that sanction of the State of U.P. was necessary for creation of posts. The contention of the appellant before the Labour Court that the post was not sanctioned after 31-3-1990 by the State was not denied or disputed. If there did not exist any post, in our opinion, the Labour Court should not have directed reinstatement of the first respondent in service.

19. A statutory authority is obligated to make recruitments only upon compliance with the equality clause contained in Articles 14 and 16 of the Constitution of India. Any appointment in violation of the said constitutional scheme as also the statutory recruitment rules, if any, would be void. These facts were required to be kept in mind by the Labour Court before passing an award of reinstatement.

20. Furthermore, public interest would not be subserved if after such a long lapse of time, the first respondent is directed to be reinstated in service.

21. We are, therefore, of the opinion that the appellant should be directed to pay compensation to the first respondent in stead and in place of the relief of reinstatement in service.

22. Keeping in view the fact that the respondent worked for about six years as also the amount of daily wages which he had been getting, we are of the opinion that the interest of justice would be subserved if the appellant is directed to pay a sum of Rs 50,000 to the first respondent...."

14. In Mahboob Deepak v.Nagar Panchayat, Gajraula (2008)ILLJ855SC , it was observed:

6. Such termination of service, having regard to the fact that he had completed 240 days of work during a period of 12 months preceding the said date, required compliance with the provisions of Section 6N of the U.P. Industrial Disputes Act. An order of retrenchment passed in violation of the said provision although can be set aside but as has been noticed by this Court in a large number of decisions, an award of reinstatement should not, however, be automatically passed.

7. The factors which are relevant for determining the same, inter alia, are:

(i) whether in making the appointment, the statutory rules, if any, had been complied with;

(ii) the period he had worked;

(iii) whether there existed any vacancy; and

(iv) whether he obtained some other employment on the date of termination or passing of the award.

8. The respondent is a local authority. The terms and conditions of employment of the employees are governed by a statute and statutory rules. No appointment can be made by a local authority without following the provisions of the recruitment rules. Any appointment made in violation of the said rules as also the constitutional scheme of equality as contained in Articles 14 and 16 of the Constitution of India would be a nullity.

9. Due to some exigency of work, although recruitment on daily wages or on an ad hoc basis was permissible, but by reason

thereof an employee cannot claim any right to be permanently absorbed in service or made permanent in absence of any statute or statutory rules. Merely because an employee has completed 240 days of work in a year preceding the date of retrenchment, the same would not mean that his services were liable to be regularised.

10. Applying the legal principles, as noticed hereinbefore, the relief granted in favour of the appellant by the Labour Court is wholly unsustainable. The same also appears to be somewhat unintelligible.

11. The High Court, on the other hand, did not consider the effect of non-compliance with the provisions of Section 6N of the U.P. Industrial Disputes Act, 1947. The appellant was entitled to compensation, notice and notice pay.

12. It is now well settled by a catena of decisions of this Court that in a situation of this nature instead and in place of directing reinstatement with full back wages, the workmen should be granted adequate monetary compensation. (See M.P. Admn. v. Tribhuban (2007) 9 SCC 748.)

13. In this view of the matter, we are of the opinion that as the appellant had worked only for a short period, the interest of justice will be subserved if the High Court's judgment is modified by directing payment of a sum of Rs 50,000 (Rupees fifty thousand only) by way of damages to the appellant by the respondent. Such payment should be made within eight weeks from this date, failing which the same will carry interest at the rate of 9% per annum."

15. It would be, thus, seen that by catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in violation of Section 25F 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. ................................................................."

6. Therefore, the award of the Industrial Tribunal in the present case awarding the relief of reinstatement in service with 50% back wages to the respondent-workman cannot be sustained. Learned counsel for the respondent-workman had contended that the wages upto December,2010 stood paid to the respondent-workman and therefore nothing survived really in this petition. I am afraid there is no force in this submission. Just because the respondent-workman has been able to recover the wages in terms of the award of the Tribunal that will not make the challenge to the award at the instance of the employer infructuous. In case the relief of reinstatement and half of back wages is sustained that would be allowing the daily wager workman, who was not appointed as per recruitment rules, to achieve what is clearly prohibited by a Constitution Bench judgment of the Apex Court in Uma Devi's case reported as (2006) 4 Supreme Court Cases 1. Therefore, withdrawing the reliefs of reinstatement and 50% back wages granted to the respondent-workman by the Tribunal the respondent-workman is awarded lump-sum compensation of Rs.30,000/- only

considering the short period of his employment with the petitioner-employer.

7. As far as the direction given by the Industrial Tribunal to the petitioner-management for considering the case of the respondent-workman for his regularization as per its policy of regularization of daily wagers is concerned, the petitioner can possibly have no grievance against that direction since it has not been directed to regularize the respondent-workman and all that it has been directed to do is to consider if he can be regularized under its policy of regularization or not. The petitioner- management can pass any appropriate order in respect of the demand of the respondent-workman for his regularization. Therefore, no interference is called for in the second direction of the Industrial Tribunal.

8. This writ petition is, therefore, disposed of by setting aside the award of the Industrial Tribunal to the extent reliefs of re- instatement and 50% back wages have been given to the respondent-workman and that direction is substituted with the direction to the petitioner-management to pay to him a sum of

Rs.30,000/- as compensation in lieu of the reliefs of reinstatement and back wages.

P.K.BHASIN, J

JULY 9, 2012