Delhi High Court
Project Dir.Dep Of Rural Devel vs Its Workmen Thr.D.P.V.V.I.E.Un on 28 March, 2019
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 27th February, 2019
Date of decision: 28th March, 2019
+ W.P.(C) 17555/2005
PROJECT DIR.DEP OF RURAL DEVEL ..... PETITIONER
Through Mr.Rizwan with Mr.Jatin
Ghuliani, Advs.
Versus
ITS WORKMEN THR.D.P.V.V.I.E.UN ..... RESPONDENT
Through Mr.Piyush Sharma, Adv.
+ W.P.(C) 10994/2006
PROJECT DIRECTOR DEPARTMENT ..... Petitioner
Through Mr.Rizwan with Mr.Jatin
Ghuliani, Advs.
versus
ITS WORKMEN THR. DELHIPRASASAN ..RESPONDENT
Through Mr.Piyush Sharma, Adv.
+ W.P.(C) 4402/2007
PROJECT DIRECTOR, DEPARTMENT ..... PETITIONER
Through Mr.Rizwan with Mr.Jatin
Ghuliani, Advs.
versus
ITS WORKMEN THRU D.P.V.V.I.E.U ..... RESPONDENT
Through Mr.Piyush Sharma, Adv.
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 1 of 27
CORAM:
HON'BLE MS. JUSTICE REKHA PALLI
REKHA PALLI, J
1. The present batch of writ petitions impugn three different but
similar Awards passed by the Industrial Tribunal in ID No.45/2001,
ID No.63/2003 and ID No.39/2006, and are, therefore, being decided
by this common judgment. For the sake of convenience, only the facts
of WP(C) No.17555/2005 challenging the Award dated 04.12.2004
passed in ID No.45/2001, are being referred to hereinbelow.
2. As a part of the Mini Master Plan for the development of rural
parts of NCT of Delhi, a proposal for the construction of multi-
purpose community centers in different rural areas of Delhi was
formulated and consequently, 28 multi-purpose community centers
were constructed under the aegis of the petitioner/Government of
NCT of Delhi, in June, 1997. The petitioner being desirous of
employing ex-servicemen as caretakers at these community centers,
requested the Rajya Sainik Board to recommend the names of
registered eligible ex-servicemen for the said purpose.
3. Upon their names being forwarded by the Rajya Sainik Board,
the 35 respondents/workmen were called for a personal interview by a
selection committee constituted by the petitioner, based on whose
recommendations the respondents were appointed as caretakers on
contractual basis on a consolidated monthly salary of Rs.2,500/- vide
appointment letters which comprehensively described their duties and
responsibilities. Each of the respondents was directed to take charge
of the management and security of the community centers assigned to
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 2 of 27
him. Pursuant to their initial appointments, the services of the
respondents were extended from time to time, the last extension
having been granted to them on 01.05.2001, whereafter they have
uninterruptedly continued in service though without any specific letter
of extension being granted to them.
4. The respondents, after having worked as caretakers at the
community centers on consolidated salaries for more than two years,
raised an industrial dispute on 07.12.1999, seeking regularization of
their services. The respondents also sought grant of pay in the regular
pay scale as applicable to the post of a caretaker, which dispute was
referred to the learned Industrial Tribunal in February 2001 in the
following terms:-
"Whether the workmen as shown in Annexure „A‟ are entitled
for regularization of their services in the regular pay scale
applicable to the post of "Care Taker" and if so, to what relief
are they entitled and what directions are necessary in this
respect?"
5. Before the Tribunal, the main contention of the workmen was
that though they had been performing a job which was perennial and
regular in nature, involving duty periods of almost 24 hours at a
stretch without weekly rest or holidays, yet the management had
continued to employ them on casual basis for years together, only in
order to deprive them of the benefits payable to a permanent
employee. The workmen also contended that this action of the
management amounted to an unfair labour practice within the
meaning of Section 2(ra) of the Industrial Disputes Act, 1947
(hereinafter referred to as the „ID Act‟), for which reliance was placed
on Entry No.10 of the Fifth Schedule of the said Act.
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 3 of 27
6. Per contra, the petitioner/management had contended that the
very reference to the Industrial Tribunal was not maintainable as the
workmen had been engaged by a government department, which
could not be treated as an „industry‟ within the meaning of Section
2(j) of the ID Act. Therefore, in the event the respondents were
aggrieved by any action of the management, their only remedy was to
approach the Central Administrative Tribunal under the
Administrative Tribunals Act, 1985.
7. In the light of the specific plea taken by the petitioner that it
was not an "industry" under Section 2(j) of the ID Act, the Tribunal
framed the following two issues:-
"i. Whether the management is not an industry. If so, its
effect.
ii. As per terms of reference."
8. Upon a consideration of the pleadings and the evidence led
before it, the Tribunal, relying on the decision of the Supreme Court
in Bangalore Water Supply and Sewerage Board v. A. Rajappa
[(1978) 2 SCC 213], rejected the petitioner‟s contention that it was not
an „industry‟. The Tribunal further found merit in the respondents‟
contention that despite the nature of their work being of a perennial
nature, their continuous employment for a period of six to seven years
on temporary basis amounted to an unfair labour practice under the ID
Act. Accordingly, the Tribunal, vide its impugned Award dated
04.12.2004, directed the petitioner/management to regularize the
services of the respondents/workmen in the pay scale of Rs.650-1200
w.e.f. the date of the reference, i.e., 13.02.2001.
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 4 of 27
9. The present petition impugning the said Award, was filed in
September, 2005 and this Court vide its order dated 11.11.2005,
stayed the operation of the Award, which order was made absolute on
10.10.2007. At this stage, it may be noted that even though the
operation of the Award continues to remain stayed, the petitioner has
continued to engage the respondents/workmen in the same capacity.
Consequently, the respondents have been working as caretakers for
the last twenty-two years without any interim protection or direction
from any court.
10. Mr.Rizwan, learned counsel for the petitioner while impugning
the Award, has primarily raised two submissions, the first being that
the Tribunal has erred in holding that the petitioner falls within the
ambit of "industry" under Section 2(j) of the ID Act, as there is no
production, supply or distribution of goods and services involved in
running these community centers. He contends that the Award has
been passed by the Tribunal without appreciating the fact that the
operation of these community centers is a charitable activity
undertaken by the petitioner in discharge of its public welfare duties.
His second submission is that the respondents/workmen, having not
been appointed through the process applicable for regular
appointment, could not be directed to be regularized, especially when
no posts of caretakers for running these community centers were ever
sanctioned by the petitioner/department.
11. In support of his first submission, Mr.Rizwan submits that the
Tribunal has erroneously relied upon the ratio in Bangalore Water
Supply (supra) in that the petitioner‟s project is neither remunerative
in nature, as it is carried out by the petitioner in discharge of its public
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 5 of 27
welfare duties, nor is it an organized activity of a recurrent nature. By
placing reliance on State of U.P. v. Jai Bir Singh [(2005) 5 SCC 1],
he states that the Supreme Court has not only expressed doubt
regarding the correctness of the definition of „industry‟ in Bangalore
Water Supply (supra), but has, while referring the same to a Seven-
Judge Bench, specifically observed that public welfare activities ought
to be kept outside the purview of the definition of „industry‟ and that
the ambiguity arising out of the judicial interpretation given to
„industry‟ in the said decision needs to be removed. He contends that
in these circumstances, the Tribunal has erred in relying upon the
interpretation of Section 2(j) in Bangalore Water Supply (supra) to
hold that the petitioner is an „industry‟.
12. In support of his second contention, Mr. Rizwan submits that
the respondents were employed on a temporary basis as neither were
there any sanctioned posts for caretakers in the petitioner department
nor did the Mini Master Plan have any provision for recruitment of
regular employees as caretakers. It is his contention that in the
absence of any sanctioned posts, the Tribunal has erred in directing
the regularisation of the respondents‟ services as caretakers, especially
in light of the ratio of the Supreme Court in Secretary, State of
Karnataka and Ors. v. Umadevi [(2006) 4 SCC 1] and of this Court
in Anil Lamba and Ors. v. GNCTD and Ors. [WP(C) No. 958/2018].
He states that the temporary nature of the posts held by the
respondents is evidenced from the fact that the basic ingredients of a
selection process to a regular post, which ordinarily include inter alia
advertisement of the post, conducting interviews of those candidates
who fulfill the eligibility criteria and the consequent selection and
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 6 of 27
appointment from the finalists, were absent from the appointment
process followed in the case of the respondents. In fact, no assurance
for regularisation was ever given to them as the work assigned to them
was never ordinarily performed by regular employees.
13. Mr. Rizwan states that even otherwise, in the absence of any
statutory provision which grants power to the courts of law to
regularize the services of workmen initially employed on a temporary
basis, the courts cannot arrogate to themselves such right to grant
regularization. By placing reliance on Uma Devi (supra), he states
that the Supreme Court has categorically held that in cases of public
employment, courts acting under Article 226 of the Constitution of
India should not ordinarily issue directions for regularization unless
the recruitment itself was made regularly. In the case of the
respondents herein, whose recruitment had been made on a temporary
and contractual basis without following any selection process under
the recruitment rules, their demand for regularization was wholly
misconceived. He further submits that in the absence of a legal right,
courts cannot direct regularization of a workman who is not working
on a sanctioned post, merely on the ground of sympathy.
14. On the other hand, Mr.Piyush Sharma, learned counsel for the
respondents/workmen while supporting the impugned Award, submits
that there is absolutely no reason for this Court to interfere with the
said Award which has been passed after a careful consideration of
Bangalore Water Supply (supra) and its applicability to the facts of
the present case. Mr.Sharma states that the predominant nature of the
services at the concerned community centers is an organized activity
and is remunerative in nature, for which purpose he draws
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 7 of 27
myattention to the statement of one Mr. B.S. Banerjee who had,
during his cross-examination before the Tribunal, admitted that the
community centers in which the respondents were performing work of
permanent nature were remunerative projects. In his cross-
examination, he had further stated that the petitioner/department was
willing to continue the respondents in service but was not being
granted the requisite permission from the Finance Department, which
fact is specifically recorded in the impugned Award.
15. Mr. Sharma further states that the findings of the learned
Tribunal that the petitioner department was an industry, is in
consonance with the dicta laid down in Bangalore Water Supply
(supra) as there can be no doubt about the fact that the
petitioner/department fulfils the triple test as laid down by the
Supreme Court therein. By placing reliance on the decision of this
Court in AIIMS v. Raj Kumar (LPA No. 1152/2007), he contends that
decision in Bangalore Water Supply (supra) continues to be good law
and merely because it has been referred for reconsideration to a larger
bench, its precedential value is not lost.
16. In response to the second contention of the petitioner, Mr.
Sharma submits that the admitted facts on record in itself show that
the workmen were appointed to the post of „caretaker‟ after having
undergone the complete process of public selection and have been
uninterruptedly working on these posts for almost twenty-two years.
He submits that the Tribunal has rightly held that the petitioner‟s
decision to keep the respondents as temporary workers for such a long
period qualifies as an unfair labour practice and, therefore, the
respondents/workmen were entitled to regularization. He submits that
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 8 of 27
these findings of fact were arrived at after duly considering the entire
material on record,including the cross-examination of the petitioner‟s
own witnesses and, thus, could not be faulted. Mr.Sharma relies on a
decision dated 08.09.2015 of a Division Bench of this Court in Shri
Ram Singh v. The Management of CPWD [LPA No.755/2014] to
state that the reliance by the petitioner on Uma Devi (supra) and Anil
Lamba (supra), is wholly misplaced as the said decisions do not deal
with cases in the realm of industrial adjudication but pertain to matters
of service law jurisprudence. By placing reliance on ONGC Limited v.
Petroleum Coal Labour Union &Ors. [2015 (5) SCALE 353],
Umrala Gram Panchayat v. The Secretary, Municipal Employees
Union & Ors. [(2015) 4 SCALE 334] and Ajaypal Singh v. Haryana
Warehousing Corpn. [(2015) 6 SCC 321], he states that Supreme
Court has consistently held that the powers of the industrial
adjudicator under the ID Act are very wide and as the purpose of the
Act is to pre-empt industrial tensions, the adjudicator has been
prescribed vast powers to issue preventive as well as positive
directions to the employer. He, therefore, contends that once the
Tribunal in the present case found the petitioner/management to be
indulging in unfair labour practices, it was fully justified in directing
the petitioner to regularize the services of the respondents.
17. I have heard the learned counsel for the parties at length and,
with their assistance, perused the record. The first and foremost issue
raised by the learned counsel for the petitioner is that, in view of the
observations of the Supreme Court in Jai Bir Singh (supra), the
learned Tribunal erred in still applying the test laid down in
Bangalore Water Supply (supra) to hold that the community centers
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 9 of 27
in question were industries under Section 2(j) of the ID Act. In this
regard it may be noted that in Jai Bir Singh (supra), the Court while
observing that the limitations on the expansive import of the definition
of „industry‟ under Section 2(j) needed to be revaluated, initially
referred the decision in Bangalore Water Supply (supra) to a larger
bench of seven judges for reconsideration, which has been
subsequently referred to an even larger bench of nine-judges vide
order dated 02.01.2017 in Civil Appeal No.897/2002. The Supreme
Court, however, has not laid down that all public welfare activities
carried out by the government should be exempted from the
applicability of the ID Act or that such activities undertaken by public
departments should not be treated as industries within the meaning of
Section 2(j) of the ID Act, even if they satisfy the triple test as laid
down in Bangalore Water Supply (supra). Therefore, the position as
it stands today is that the decision in Bangalore Water Supply (supra)
continues to remain the binding precedent on this issue regarding the
test to be applied for determining whether an undertaking is an
industry under Section 2(j) of the ID Act. Consequently, this Court, or
for that matter any court, cannot at present choose to ignore the
precedent laid down in Bangalore Water Supply (supra) and must
proceed to decide cases in accordance therewith as and when the
occasion arises.
18. I am fortified in my aforesaid conclusion by the decision of a
Division Bench of this Court in Raj Singh (supra), wherein the
finding of the Labour Court that AIIMS is an industry within the
meaning of Section 2(j) of the ID Act, was challenged on the ground
that the decision in Bangalore Water Supply (supra) was pending
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 10 of 27
reconsideration before a larger bench. The said challenge was rejected
by this Court by observing as under:-
"7. It was submitted by Mr. Mukul Gupta, learned counsel for
the appellant that the correctness of the decision of the
Constitution Bench in the Bangalore Water Supply &
Sewerage Board has been referred to a larger Bench of the
Supreme Court and therefore, this Court should await the
judgment of the larger Bench before deciding the present
case. We are unable to accept this submission. The law
declared in Bangalore Water Supply & Sewerage Board
continues to be binding. This Court has to apply the law as
it prevails. The reliance placed upon the decision of the
Supreme Court in Physical Research Laboratory v. K.G.
Sharma (1997) 4 SCC 257 is misconceived for the simple
reason that the AIIMS does not cease to be a hospital merely
because research is also carried on therein. Applying the law
as explained in Bangalore Water Supply & Sewerage Board,
AIIMS has to be held to be an "industry" within the meaning
of the ID Act."
19. Thus, as long as the law laid down in Bangalore Water Supply
(supra) is not overruled, it remains binding on all Courts and quasi-
judicial bodies under Article 141 of the Constitution of India. It is for
this reason that the learned Tribunal‟s reliance on the said decision
while examining whether the concerned community centers were
industries within the meaning of Section 2(j) of the ID Act, cannot be
held to be erroneous.
20. Now coming to the second limb of the petitioner‟s first
submission that even as per the test laid down in Bangalore Water
Supply (supra), the community centers in question are not industries,
as they carry out public welfare activities that are neither organized
nor remunerative in nature. Before dealing with the aforesaid
contention, it may be useful to refer to the following paragraphs of the
decision in Bangalore Water Supply (supra), that lay down the
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 11 of 27
parameters for determining whether a particular undertaking is an
industry or not:-
"13. [A]n industry is a continuity, is an organized activity, is
a purposeful pursuit -- not any isolated adventure, desultory
excursion or casual, fleeting engagement motivelessly
undertaken. Such is the common feature of a trade, business,
calling, manufacture -- mechanical or handicraft-based --
service, employment, industrial occupation or avocation. For
those who know English and are not given to the luxury of
splitting semantic hairs, this conclusion argues itself. The
expression "undertaking" cannot be torn off the words whose
company it keeps. If birds of a feather flock together
and noscitur a sociis is a commonsense guide to construction,
"undertaking" must be read down to conform to the
restrictive characteristic shared by the society of words
before and after. Nobody will torture "undertaking" in
Section 2(j) to mean meditation or musheira which are
spiritual and aesthetic undertakings. Wide meanings must fall
in line and discordance must be excluded from a sound
system. From Banerji to Safdarjungand beyond, this limited
criterion has passed muster and we see no reason, after all
the marathon of argument, to shift from this position.
14. Likewise, an "industry" cannot exist without co-operative
endeavour between employer and employee. No employer, no
industry; no employee, no industry -- not as a dogmatic
proposition in economics but as an articulate major premise
of the definition and the scheme of the Act, and as a necessary
postulate of industrial disputes and statutory resolution
thereof.
15. An industry is not a futility but geared to utilities in which
the community has concern. And in this mundane world
where law lives now, economic utilities, material goods and
services, not transcendental flights nor intangible
achievements -- are the functional focus of industry.
Therefore, no temporal utilities, no statutory industry, is
axiomatic. If society, in its advance, experiences subtler
realities and assigns values to them, jurisprudence may reach
out to such collective good. Today, not tomorrow, is the first
charge of pragmatic law of western heritage. So we are
confined to material, not ethereal end products.
WP (C) Nos.17555/2005, 10994/2006 & 4402/2007 Page 12 of 27
16. This much flows from a plain reading of the purpose and
provision of the legislation and its western origin and the
ratio of all the rulings. We hold these triple ingredients to be
unexceptionable.
***
40. The same two Judges choose to impart a wide
construction to the word "industry", for they ask:
"How can we, conformably to recognized rules
of legal construction, attempt to limit, in an
instrument of self-government for this
Continent, the simple and comprehensive words
„industrial disputes‟ by any apprehension of
what we might imagine would be the effect of a
full literal construction, or by conjecturing what
was in the minds of the framers of the
Constitution, or by the forms industrial disputes
have more recently assumed? „Industrial
warfare‟ is no mere figure of speech. It is not
the mere phrase of theorists. It is recognized by
the law as the correct description of internal
conflicts in industrial matters. It was adopted
by Lord Loreburn, L.C.
in Conway v. Wade [1909 AC 511]. Strikes and
lock-outs are by him correctly described as
„weapons‟."
These arguments hold good for the Indian industrial statute,
and so, Section 2(j) must receive comprehensive literal force,
limited only by some cardinal criteria. One such criterion, in
the monarchical vocabulary of English Jurisprudence, is
Crown exemption, re-incarnating in a Republic as
inalienable functions of constitutional government. No
government; no order, no law; no rule of law, no industrial
relations. So, core functions of the State are paramount and
paramountcy is paramountcy. But this doctrinal exemption is
not expansionist but strictly narrowed to necessitous
functions.
***
140."Industry', as defined in Section 2(j) and explained
in Banerji, has a wide import.
"(a) Where (i) systematic activity, (ii) organized by co-
operation between employer and employee (the direct and
substantial element is chimerical) (iii) for the production
and/or distribution of goods and services calculated to
satisfy human wants and wishes (not spiritual or religious
but inclusive of material things or services geared to
celestial bliss e.g. making, on a large scale prasad or food),
prima facie, there is an „industry‟ in that enterprise.
(b) Absence of profit motive or gainful objective is
irrelevant, be the venture in the public, joint, private or
other sector.
(c) The true focus is functional and the decisive test is the
nature of the activity with special emphasis on the employer-
employee relations.
(d) If the organization is a trade or business it does not
cease to be one because of philanthropy animating the
undertaking.
141. Although Section 2(j) uses words of the widest amplitude
in its two limbs, their meaning cannot be magnified to
overreach itself.
(a) „Undertaking‟ must suffer a contextual and associational
shrinkage as explained in Banerji and in this judgment; so
also, service, calling and the like. This yields the inference
that all organized activity possessing the triple elements in I,
although not trade or business, may still be „industry‟
provided the nature of the activity, viz. the employer-
employee basis, bears resemblance to what we find in trade
or business.This takes into the fold of „industry‟
undertakings, callings and services, adventures „analogous
to the carrying on the trade or business‟. All features, other
than the methodology of carrying on the activity viz. in
organizing the co-operation between employer and
employee, may be dissimilar. It does not matter, if on the
employment terms there is analogy.
***
143.The dominant nature test:
"(a) Where a complex of activities, some of which qualify for
exemption, others not, involves employees on the total
undertaking, some of whom are not „workmen‟ as in the
University of Delhi case [University of Delhi v. Ramlfath,
(1964) 2 SCR 703 : AIR 1963 SC 1873 : (1963) 2 Lab LJ
335] or some departments are not productive of goods and
services if isolated, even then, the predominant nature of the
services and the integrated nature of the departments as
explained in the Corporation of Nagpur will be the true test.
The whole undertaking will be „industry‟ although those who
are not „workmen‟ by definition may not benefit by the status.
(b)Notwithstanding the previous clauses, sovereign
functions, strictly understood, (alone) qualify for exemption,
not the welfare activities or economic adventures
undertaken by government or statutory bodies.
(c) Even in departments discharging sovereign functions, if
there are units which are industries and they are substantially
severable, then they can be considered to come within Section
2(j).
(d) Constitutional and competently enacted legislative
provisions may well remove from the scope of the Act
categories which otherwise may be covered thereby."
21. Thus, as per the law laid down in Bangalore Water Supply
(supra), an undertaking is an industry if it carries out (1) a systematic
activity, (2) with the help of co-operation between the labour and the
management, (3) for the production of material goods and services for
the community at large. The absence of remuneration for the goods
and services so provided is an irrelevant consideration, as the essence
of the definition under Section 2(j) of the ID Act is the nature of the
activity carried out by the undertaking with a focus on the relationship
between the labour and management, and not whether the production
process is profit-generating or profit-oriented. Furthermore, the
inalienable functions of the constitutional government operate as the
sole exception to the definition under Section 2(j) of the IDA, but
such sovereign functions must be understood in a limited and not
expansionist sense. Therefore, while core administrative, judicial and
legislative functions of the government fall out of the purview of
Section 2(j) of the ID Act, other commercial and welfare activities
carried out by the government that satisfy the triple-test for an
„industry‟, cannot avail of this exemption and are necessarily bound
by the provisions of the ID Act.
22. In the light of the aforesaid settled legal position, when I
examine the organizational set up and nature of the activities carried
out by the concerned multi-purpose community centers, I find that
they essentially perform a welfare function by providing the
communities they are located in with spaces for social interaction. In
so doing, they not only provide public spaces for commerce inter se
private citizens (such as spaces for setting up small shops and kiosks
for regular retail activities), but also provide access to larger spaces
for one‟s private gatherings and other communal activities. The
provision of such services and the sustained utilization of these public
facilities to meet the material needs of people living in large
communities, is made possible only through the active co-operation of
the government and the caretakers employed to systematically
maintain and administer these community centers. I am of the view
that this entire process, though in the nature of a public welfare
activity that is not strictly commercial, undoubtedly possesses the
three characteristic features of an „industry‟ under Section 2(j) of the
ID Act, in that it contemplates the systematic maintenance and
administration of the community centers to meet the tangible social
needs of the community at large, through sustained co-operation
between the management/government and labour/caretakers.
Therefore, in my opinion, these community centers fall squarely
within the ambit of „industries‟ as defined under Section 2(j) of the
IDAct.
23. The plea of the learned counsel for the petitioner that the
community centers fall outside the purview of Section 2(j) of the ID
Act since they are being run by the petitioner as a non-remunerative
welfare activity in exercise of its sovereign functions, cannot be
accepted as it runs in the teeth of the decision in Bangalore Water
Supply (supra), which not only repudiates profit or profit-motive as
an integral attribute of industries under the ID Act but also carves out
a single exception for the core functions of the government and not its
other economic endeavors that satisfy the triple test laid down therein.
It cannot be emphasized enough that considerations of remuneration
and profit-generation are extraneous to the question of whether an
undertaking is an „industry‟, and the decisive test as per the prevailing
jurisprudence is the nature of the activity being carried out and the
essence of the employer-employee relationship. Even otherwise, a
perusal of the record shows that the petitioner‟s own witness Mr. B.S.
Banerjee had, during his cross-examination before the Tribunal,
categorically admitted that the community centers were remunerative
projects. Therefore, in view of the above, I find absolutely no
infirmity in the conclusion arrived at by the Tribunal that the
community centers in the present case are indeed industries under
Section 2(j) of the IDAct.
24. Having rejected the petitioner‟s first objection to the impugned
Award, I may now deal with the second submission made by Mr.
Rizwan that since the respondents were not appointed by way of
regular appointment, their subsequent regularization would be
contrary to the decision of the Supreme Court in Uma Devi (supra) as
also of this Court in Anil Lamba (supra). Before I consider this
submission, it would be appropriate to notice that the present case
stems out of an industrial adjudication, which field is occupied by a
specific statute, i.e, the ID Act, and, therefore, the orders passed by
the Industrial Tribunal have to be considered in the light of the
provisions of the said Act. Furthermore, the undisputed position that
emerges from the record is that the petitioner had requested the Rajya
Sainik Board to recommend the names of some registered ex-
servicemen to be appointed as caretakers of the community centers in
question. Once the Rajya Sainik Board had recommended the
respondents‟ names, they were called for a personal interview with
the selection committee, based on the result whereof they were given
official appointment letters informing them of the nature and scope of
their duties. Pursuant to their initial appointment on contractual basis
in 1997, the respondents have been in uninterrupted service till date,
i.e., for a period of almost twenty-two years, and that too without any
specific extension letters being issued to them after 2002.
25. In the backdrop of these admitted facts, I may now examine
whether the decisions in Uma Devi (supra) and Anil Lamba (supra)
apply to the facts of the present case. Both of these decisions relied
upon by the learned counsel for the petitioner pertain to service law
matters in which the employees had directly approached the writ
Court. In Uma Devi (supra), some public employees working in the
Commercial Tax Departments of some districts in Karnataka, had
approached the Administrative Tribunal with a prayer to be made
permanent employees and to be granted all benefits accruing to
regular employees. Upon their claim being rejected by the Tribunal,
the employees approached the High Court of Karnataka, which in turn
not only directed the State to consider the employees‟ cases for
regularization but also directed that they be paid the salary and
allowances being paid to regular employees of their cadre, from the
date of their initial appointment. It is in this context that the Supreme
Court, while setting aside the decision of the High Court, had
observed that contractual employees in public departments cannot
seek regularization and confirmation of service on the ground of the
length of their service. The Court, however, laid down an exception
for those employees who had been appointed in an irregular but not
illegal manner and had completed at least ten years of service without
any judicial intervention, and directed the Government to take steps to
regularize the services of such employees. Likewise, in Anil Lamba
(supra), contractual employees of the Institute of Liver and Biliary
Science had approached this Court seeking regularization of their
services, which prayer was rejected on the ground that contractual
employees appointed without following the process for regular
appointment cannot claim regularization and confirmation of their
services.
26. On the contrary, in the present case, the respondents/workmen
had approached the Industrial Tribunal claiming that the petitioner
was indulging in unfair labour practices as set out in Clause 10 of the
Fifth Schedule of the ID Act. The Industrial Tribunal, after finding
that the petitioner was indeed indulging in unfair labour practices, had
directed it to regularize the workmen‟s services with retrospective
effect, but only from the date of the reference. Thus, it is evident that
the issue in the present case was not of regularization of services, but
of unfair labour practices being adopted by the management qua
continuing with the services of casual labourers for long periods of
time, for the purposes of doing work that should ordinarily be done by
regular employees.
27. In my view, the rigors applicable for grant of regularization in
cases of public employment cannot be read in such a manner so as to
take away the wide powers of an Industrial Tribunal under the ID Act.
It needs no reiteration that the basic tenets of service law are very
different from those of labour law and, therefore, the safeguards put in
place to protect the interests of workmen cannot be conflated with the
service rules and regulations applicable to government employees in
the public sector. Both of them stand on a different footing and can
neither be tested on the same touchstone nor enforced in the same
manner. Therefore, I am of the opinion that neither the decision in
Uma Devi (supra) nor in Anil Lamba (supra) has any application to
the facts of the present case. Even otherwise, a perusal of the decision
in Uma Devi (supra) shows that with respect to the regularization of
temporary employees, the Supreme Court itself had specifically
carved out an exception for those contractual employees who, though
appointed irregularly, had completed at least 10 years of service. In
the facts of the present case, the respondents/workmen have as on date
completed more than twenty-two years of service and, therefore, even
as per the decision in Uma Devi (supra), they would be entitled to the
regularization of their services.
28. The decisions relied upon by the learned counsel for the
respondents in Ajaypal Singh (supra), ONGC (supra) and Umrala
Gram Panchayat (supra), also leave no manner of doubt that the
Supreme Court has specifically observed that the prohibition laid
down for regularization in Uma Devi (supra) does not apply to
industrial adjudication and that the Industrial Tribunal has the power
to direct regularization of services in cases where pursuant to unfair
labour practices, employees have been made to render services for
long periods of time on causal basis for work that should ordinarily be
done by regular employees. Reference may also be made to the
observations of a Division Bench of this Court in the case of Ram
Singh (supra), wherein the decisions of the Supreme Court in Ajaypal
Singh (supra), ONGC (supra) and Umrala Gram Panchayat (supra)
were relied upon to arrive at a finding that denying regularization of
services to a temporary workman after he has been in uninterrupted
service for a very long period, tantamounts to an extremely unfair
labour practice. For the sake of ready reference, the relevant
paragraphs of the decision in Ram Singh (supra) are extracted
hereinbelow in extenso:-
13. Mr. Rajiv Aggarwal, learned counsel appearing for the
appellant/Ram Singh has also drawn our attention to a recent
pronouncement of the Supreme Court reported as 2015 (5)
SCALE 353 in ONGC Limited v. Petroleum Coal Labour Union
& Ors. in support of his submission that the prohibition laid
down in Uma Devi does not apply to industrial adjudication. We
may usefully extract the relevant portion of this judicial
pronouncement, which reads thus:-
" 11. On behalf of the workmen concerned, it was
contended before the Single Judge of the High Court that
the dispute falls within the jurisdiction of the Tribunal
under the provisions of the Act and that the Tribunal had
sufficient jurisdiction to adjudicate the dispute referred to
it. It was further contended on behalf of the workmen
concerned that they have been working on temporary basis
from the year 1988 and continuing their services on
temporary basis is an unfair labour practice on the part of
the Corporation. Therefore, it was contended that the
Tribunal was right in directing the workmen concerned to
be regularised and that the law laid down in Umadevi (3)
[State of Karnataka v. Umadevi (3), (2006) 4 SCC 1 : 2006
SCC (L&S) 753] had no application to cases of industrial
adjudication.
xxx xxx
xxx
27. Further, it is very clear from the facts that all the
workmen concerned have got the qualifications required
for their regularisation, except one of them and have been
employed by the Corporation even prior to 1985 in the
posts through various irregular means. The Tribunal has
got every power to adjudicate an industrial dispute and
impose upon the employer new obligations to strike a
balance and secure industrial peace and harmony
between the employer and workmen and ultimately
deliver social justice which is the constitutional mandate
as held by the Constitution Bench of this Court in a
catena of cases. This abovesaid legal principle has been
laid down succinctly by this Court in Bharat Bank Ltd. v.
Employees [AIR 1950 SC 188], the relevant paragraph of
the said case is extracted hereunder: (AIR p. 209, para 61)
61. "We would now examine the process by which an
Industrial Tribunal comes to its decisions and I have no
hesitation in holding that the process employed is not
judicial process at all. In settling the disputes between the
employers and the workmen, the function of the Tribunal is
not confined to administration of justice in accordance with
law. It can confer rights and privileges on either party
which it considers reasonable and proper, though they may
not be within the terms of any existing agreement. It has
not merely to interpret or give effect to the contractual
rights and obligations of the parties. It can create new
rights and obligations between them which it considers
essential for keeping industrial peace. An industrial dispute
as has been said on many occasions is nothing but a trial
of strength between the employers on the one hand and the
workmen's organisation on the other and the Industrial
Tribunal has got to arrive at some equitable arrangement
for averting strikes and lock-outs which impede production
of goods and the industrial development of the country. The
Tribunal is not bound by the rigid rules of law. The process
it employs is rather an extended form of the process of
collective bargaining and is more akin to administrative
than to judicial function. In describing the true position of
an Industrial Tribunal in dealing with labour disputes, this
Court in Western India Automobile Assn. v. Industrial
Tribunal [(1949-50) 11 FCR 321] quoted with approval a
passage from Ludwig Teller's well known work on the
subject, where the learned author observes that: (FCR p.
345)
"... industrial arbitration may involve the extension of an
existing agreement or the making of a new one, or in
general the creation of new obligation or modification of
old ones, while commercial arbitration generally concerns
itself with interpretation of existing obligations and
disputes relating to existing agreements.‟
The views expressed in these observations were adopted
in its entirety by this Court. Our conclusion, therefore, is
that an Industrial Tribunal formed under the Industrial
Disputes Act is not a judicial tribunal and its
determination is not a judicial determination in the
proper sense of these expressions."
It has been further held by this Court in LIC v. D.J.
Bahadur [(1981) 1 SCC 315 : 1981 SCC (L&S) 111] , as
follows: (SCC p. 334, para 22)
22. "The Industrial Disputes Act is a benign measure,
which seeks to pre-empt industrial tensions, provide the
mechanics of dispute resolutions and set up the necessary
infrastructure, so that the energies of the partners in
production may not be dissipated in counterproductive
battles and the assurance of industrial justice may create a
climate of goodwill."
Thus, the powers of an Industrial Tribunal/Labour Court
to adjudicate the industrial dispute on the points of
dispute referred to it by the appropriate government have
been well established by the legal principles laid down by
this Court in a catena of cases referred to supra.
Therefore, the Tribunal has rightly passed an award
directing the Corporation to regularise the services of the
concerned workmen.
28. Whether the appointment of the workmen concerned in
the services of the Corporation is irregular or illegal?
31. In the case on hand, the workmen concerned were
employed by the Corporation initially through contractors.
Thereafter, on issuance of the Notification dated 8-12-1976
by the Central Government abolishing contract labour for
the posts of watch and ward, dusting and cleaning jobs in
the Corporation under Section 10(1) of the Contract
Labour (Regulation and Abolition) Act, 1970, the
Corporation and the workmen concerned arrived at a
settlement under Section 18(1) of the Act, wherein a
cooperative society was formed in the name of "Thai
Security Service Priyadarshini Indira Cooperative Society"
for their welfare, thus dispensing with intermediary
contractors. During the pendency of the sanction from the
Central Government of the alleged "policy decision", the
workmen concerned were appointed directly from 13-1-
1988 to 29-2-1988 and thereafter, they were employed
continuously without written orders by the Corporation. It
is the contention of the learned Senior Counsel on behalf
of the Corporation that the services of the workmen
concerned cannot be regularised as their appointment
was originally and initially through contractors and
thereafter, without following any procedure of selection
and appointment as per the Recruitment Rules and
therefore, the same is illegal by placing reliance on the
decision of this Court in para 43 of Umadevi (3) case
[State of Karnataka v. Umadevi (3), (2006) 4 SCC 1 :
2006 SCC (L&S) 753]. Further, this Court in Ajaypal
Singh v. Haryana Warehousing Corpn. [(2015) 6 SCC 321
: (2014) 13 Scale 636] opined that when a workman is
initially appointed in violation of Articles 14 and 16 of the
Constitution of India, then the employer at the time of re-
employment of the retrenched workman cannot take the
plea that the initial appointment was in violation of the
abovementioned provisions. The relevant paragraph of
Ajaypal Singh case [(2015) 6 SCC 321 : (2014) 13 Scale
636] is extracted hereunder: (SCC p. 329, para 17)
17. "...The provisions of the Industrial Disputes Act and
the powers of the Industrial and Labour Courts provided
therein were not at all under consideration in Umadevi
(3) case [State of Karnataka v. Umadevi (3), (2006) 4 SCC
1 : 2006 SCC (L&S) 753] . The issue pertaining to unfair
labour practice was neither the subject-matter for
decision nor was it decided in Umadevi (3) case [State of
Karnataka v. Umadevi (3), (2006) 4 SCC 1 : 2006 SCC
(L&S) 753] ."
The plea of the Corporation that the reason for not
regularising the workmen concerned under the Certified
Standing Orders of the Corporation is allegedly due to the
fact that the appointment of the workmen concerned was
made without following due procedure under the
Recruitment Rules and that their appointments were
illegal. This plea cannot be accepted by us in view of the
legal principle laid down by this Court in the above
decision, wherein it is clearly laid down that the
Corporation cannot deny the rights of the workmen by
taking the plea that their initial appointment was contrary
to Articles 14 and 16 of the Constitution."
(emphasis
supplied)
***
15. In view of above, it is accordingly observed that the Supreme
Court has therefore, carefully created a special class of cases,
wherein, the claim of unfair labour practice of continuing daily
wagers/ad hoc employment/casual workers for long periods and
regularization has withstood scrutiny by an Industrial
Adjudicator under the Industrial Disputes Act, 1947.
16. Learned counsel for the appellant has drawn our attention to
the para 17 of Umrala, wherein, the Supreme Court has
mandated that a person who has completed 240 days of
continuous service, becomes entitled to regularization. The para
17 of the Judgment reads thus:-
"17. In view of the reasons stated supra and in the light of
the facts and circumstances of the present case, we hold
that the services of the concerned workmen are permanent
in nature, since they have worked for more than 240 days
in a calendar year from the date of their initial
appointment, which is clear from the evidence on record.
Therefore, not making their services permanent by the
appellant-Panchayat is erroneous and also amounts to
error in law. Hence, the same cannot be allowed to
sustain in law."
17. In the present case, we are not talking of a few days or 240
days but a period of 43 years i.e. since the year 1972, when the
petitioner has rendered satisfactory, blemishless and
uninterrupted services to the respondent. To say the least, the
denial of regular appointment to the appellant has resulted in
depriving him of regular pay scale, emoluments as well as leave
benefits etc to the appellant which tantamounts to an extremely
unfair labour practice and exploitation of the services of the
poor worker."
29. Thus, in the light of the observations of the Supreme Court in
Ajaypal Singh (supra), ONGC (supra) and Umrala Gram Panchayat
(supra) as also of this Court in Ram Singh (supra), I find that the
petitioner‟s reliance on the decision of the Supreme Court in Uma
Devi (supra) and of this Court in Anil Lamba (supra) is wholly
misconceived. In my opinion, once the Tribunal was of the view that
the petitioner was indulging in unfair labour practice, it was well
within its domain to pass an order directing the petitioner to regularize
the respondents‟ services. The petitioner has failed to make out any
ground to interfere with the discretion exercised by the Industrial
Tribunal in directing the petitioners to regularize the services of the
respondents/workmen. There is no gainsaying that the writ
jurisdiction and powers of superintendence of this Court have to be
exercised only sparingly to ensure that the subordinate courts do not
exceed their own jurisdiction and exercise it as and when required, or
when there has been a manifest failure of justice, or when the
principles of natural justice have been flouted. In my opinion, no such
eventuality has occurred in the present case so as to warrant the
exercise of powers of this Court under Articles 226 and 227 of the
Constitution.
30. For the aforesaid reasons, the writ petitions being meritless are
dismissed as such with no order as to costs.
(REKHA PALLI)
JUDGE
MARCH 28, 2019
aa
