Gujarat High Court

Santram Spinners Limited vs Babubhai Magandas Patel on 5 August, 2022

Bench: Sandeep N. Bhatt

    C/SCA/10741/2008                               CAV JUDGMENT DATED: 05/08/2022




               IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                R/SPECIAL CIVIL APPLICATION NO. 10741 of 2008


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE SANDEEP N. BHATT

================================================================

1 Whether Reporters of Local Papers may be allowed No to see the judgment ?

2 To be referred to the Reporter or not ? No

3 Whether their Lordships wish to see the fair copy No of the judgment ?

4 Whether this case involves a substantial question No of law as to the interpretation of the Constitution of India or any order made thereunder ?

================================================================ SANTRAM SPINNERS LIMITED Versus BABUBHAI MAGANDAS PATEL ================================================================ Appearance:

MR DIPAK R DAVE(1232) for the Petitioner(s) No. 1

================================================================

CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT

Date : 05/08/2022

CAV JUDGMENT

1. The present petition, under Articles 226 and 227 of

the Constitution of India is filed by the company -

original petitioner, challenging the impugned judgment

and award dated 30.11.2007 passed by the Presiding

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Officer, learned Labour Court, Kalol (District: Mehsana)

in Reference (LCK) No.357 of 1997, by which the learned

Labour Court has reinstated the respondent - workman

in service with continuity of service along with 20%

backwages.

2. Brief facts of the case are as under:

2.1 The respondent - workman has raised an industrial

dispute inter alia claiming that he was working with the

petitioner company in Spinning Department as a

Technical Maintenance In-charge and was earning

Rs.9,000/- per month. It was further the case of the

respondent that he came to be terminated orally on

18.04.1997. Thereafter, the respondent - workman has

filed statement of claim and a copy of statement of claim is annexed herewith and therefore, the petitioner

has appeared and has filed its written statement to the

statement of claim, which is filed by the respondent -

workman and has pointed out the true and correct facts

before the learned Labour Court. It was further pointed

out by the petitioner that the respondent - workman

cannot be termed as workman within the meaning of

Section 2(S) of the Industrial Dispute Act, 1947. It was

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pointed out before the learned Labour Court that the

respondent - workman was working as a maintenance

consultant and was paid consultant fees but he was

never employed by the petitioner in fact he was working

as a consultant on contract basis.

2.2 The respondent - workman did not produce any

documentary evidence; such as appointment letter, wages

slip etc., to show that there was employer - employee

relationship. Further, the petitioner - company has

produced various documentary evidence; such as Bills,

TDS statement, etc., before the learned Labour Court to

show that the respondent - workman was working as

consultant.

2.3 The respondent - workman has been examined before the learned Labour Court. One Bhaveshbhai Amin,

Manager appeared on behalf of the petitioner company

and has been examined.

2.4 The learned Labour Court has passed the impugned

judgment and award dated 30.11.2007, as noted above.

Feeling aggrieved and dissatisfied with the impugned

judgment and award, the petition is filed.

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3. Heard learned Advocates.

4.1 Learned advocate Mr. Dipak R. Dave for the

original petitioner has submitted that the impugned

judgment and award passed the learned Labour Court is

absolutely illegal, unjust and improper. He has submitted

that the respondent - workman cannot be termed as

workman within the meaning of Section 2(S) of the

Industrial Disputes Act, 1947 and while passing the

award, the learned Labour Court has framed wrong

issues by putting the onus upon the petitioner company

to prove that the respondent - workman was working as

consultant and not as a workman.

4.2 Further, he has submitted that the learned Labour Court has not appreciated as per the settled law of

Hon'ble Supreme Court and it is the duty of the

respondent - workman to prove that he has been

employed with the petitioner. In this case, no proof of

whatsoever nature was produced by the respondent -

workman to show that he was working with the

petitioner. In absence of any documents, the learned

Labour Court ought not to have held that there was

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employer - employee relationship between the petitioner

and the respondent - workman.

4.3 Further, he has submitted that the learned Labour

Court has recorded finding that the bills, which have

been produced on record are in one hand writing and

there are some different amounts, therefore, the said

vouchers are complicated and cannot be believed and this

finding of learned Labour Court is perverse. In fact, on

the face of documents like bill-cum-voucher, which is

even shown to the respondent and in cross-examination

he has said that the same was signed by him and the

learned Labour Court ought not to have disbelieved the

said documents.

4.4 Further, he has submitted that the learned Labour Court has recorded finding that Form No.16A, which

has been produced on record by the petitioner shows

that if the respondent was consultant then there was no

need to deduct TDS. It has been recorded by the learned

learned Labour Court that Form No.16A has to be

filled in by the employer and this finding of learned

learned Labour Court is also perverse. In fact, in Form

No.16A itself, it has been written that the said TDS

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form was submitted by showing nature of payment as

consultant. The learned learned Labour Court has not

appreciated the fact that Form No.16A has to be filled

in irrespective of whether there was employer-employee

relationship or it was payment in the nature of

professional service or other payment. The finding that

only employer has to file Form No.16A deducting salary

of employee, is wholly perverse. In fact, Form No.16A

shows that the amount was paid as consultant.

4.5 Further, the learned learned Labour Court has not

at all looked into Form No.26K, which was produced by

the petitioner. It is categorically mentioned that for the

purpose of deduction of tax from fees for professional or

technical services, the said form has been filled in. Thus,

it is absolutely clear that the respondent was paid consultant fees and not salary. Further, the learned

learned Labour Court has failed to consider Form

No.26K and has held in absolutely illegal manner that

there was employer-employee relationship. The learned

learned Labour Court has wrongly held that the

petitioner has failed to prove that the respondent has

worked as consultant. In fact, the learned Judge has

wrongly attributed the burden of proof upon the

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petitioner. In absence of any documents on behalf of the

respondent, the learned learned Labour Court ought not

to have believed the case of the respondent and ought to

have dismissed the reference of the respondent. The

learned learned Labour Court has also miserably failed

in appreciating the oral evidence, which is adduced on

behalf of the petitioner. Minor discrepancies from the

cross-examination have been taken as a defence in favour

of the respondent and the learned learned Labour Court

has held that the respondent has been illegally

terminated, which is perverse.

4.6 Further, the learned learned Labour Court has not

appreciated that there is no evidence produced by the

respondent on record such as Appointment Letter, Wage

Sleep, etc., to prove employer-employee relationship. In absence of any evidence, reference of the respondent

ought to have been rejected by the learned learned

Labour Court . Further, the learned learned Labour

Court has not appreciated that Notification of B.LR.

Act, which was produced by the petitioner company to

show that B.LR. Act is applicable to the petitioner. Even

the plea of the jurisdiction, which has been taken at the

time of final argument, which goes to the root of the

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matter, ought to have been considered. The petitioner is

covered under the B.I.R. Act and, therefore, reference

ought not to have been entertained by the learned

learned Labour Court .

4.7 Further, the learned learned Labour Court has not

appreciated that the respondent ought to have produced

certain documents such as his Income Tax return to

show that he was working as an employee. The

respondent, while claiming TDS from Income Tax

Department, would have mentioned his status as salaried

person or professional and the learned learned Labour

Court ought to have drawn adverse inference in absence

of any documents produced by the respondent. In this

case the respondent suppressed his return before the

learned learned Labour Court , therefore, it ought to have been presumed that in his return, the respondent

would have claimed the adjustment of TDS as

consultant only. Further, the learned learned Labour

Court has not appreciated the fact that the respondent,

who was working as a consultant on the contract basis,

so as to harass the petitioner and extort money, has

filed false case and, therefore, the reference ought to

have been rejected with heavy cost. Further, the learned

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learned Labour Court has not appreciated the fact that

in a small contract like this where consultant is being

engaged, there is no practice of written contract but it

does not mean that the respondent was not working as

consultant. Further, the learned Judge has not

appreciated that the respondent has failed to prove that

he has completed 240 days of service before his alleged

termination. In absence of any proof produced by the

respondent to show that he has continuously worked or

that he has worked for 240 days in a year preceding his

alleged termination, no relief ought to have been granted

in favour of the respondent. Further, the learned Judge

has erred in granting backwages to the respondent. Even

as per the case of the respondent, he is a technical

expert person and, therefore, he is not expected to

remain idle. Grant of 20% backwages is, therefore, is absolutely illegal.

4.8 Further, learned Advocate Mr. Dave has placed

reliance upon the judgment of the Hon'ble Apex Court in

the case of State of Uttarkhand Vs. Sureshwati reported

in (2021) 3 SCC 108, more particularly para 17 and 18

are relevant and has submitted that in the

abovementioned judgment, the onus to prove is entirely

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upon the employee that he has worked continuously for

a period of 240 days in the petitioner institute as a

workman which in the present case, as per the

submissions of learned advocate Mr. Dave, the workman

has failed to prove such aspect of the matter. He has

placed reliance upon the judgment of the Hon'ble Apex

Court in the case of M.P. State Agro - Industries Development Corporation Ltd. versus Jai Prakash Gautam reported in 2022 LawSuit (SC) 172, more

particularly para 11 is relevant and the Hon'ble Apex

Court has observed that the respondent workman has

not responded even after the order passed by the learned

Labour Court for reinstatement in service and therefore,

he has prayed that though the petitioner company has

informed the respondent workman to join the service in

view of the order passed by the Learned Labour Court, the respondent company has not responded and has

failed to resume the duties and therefore, he has

submitted that the learned Labour Court has erred in

drawing adverse inference in view of the above cited

judgments against the petitioner institute by holding that

the petitioner company has not produced any

documentary evidence; like attendance register, payment

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as a workman in the petitioner - company.

4.9 Further, the petitioner has not filed any other

application with regard to the subject matter of this

petition, either before this Court or any other Court of

law in India, including the Hon'ble Supreme Court of

India. Further, even otherwise also, award dated

30.11.2007 passed by the learned learned Labour Court ,

Kalol in Reference (LCK) No.357 of 1997 is absolutely

illegal, unjust and improper and bad in the eye of law

and therefore, the same deserves to be quashed and set

aside by this Court.

5. Per contra, learned advocate Mr. D.J. Bhatt for the respondent - workman has submitted that the learned

learned Labour Court has not committed any error in granting the reinstatement with 20% backwages by

giving continuous effect in service. He has submitted that

impugned judgment and award passed by the learned

Labour Court is just and proper and with proper

reasons. He has submitted that the learned Labour Court

has rightly found the documents such as bill-cum-voucher

regarding the respondent workman, which is produced by

the present petitioner - employer at Exh.13/1 to 13/10

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and the learned Labour Court has found that though

there is variation in the amount of consultation fees paid

to the respondent workman but the learned Labour

Court has prima facie found that such vouchers are

complicated and in addition to that the learned Labour

Court has found that the employer has filed income tax

Form No.16A, by which the tax was deducted to the

income tax by the employer, which is showing that the

respondent is working as a workman - employee of the

petitioner company. He has submitted that the learned

Labour Court has rightly drawn inference against the

petitioner company as petitioner has failed to produce

any documentary evidence; like attendance register,

salary register to show that the respondent is not

workman in the petitioner company. Moreover, the

learned Labour Court has considered that the respondent workman could not sit idle and therefore, the learned

Labour Court has rightly considered 20% backwages and

has rightly awarded reinstatement with continuity in

service. He has submitted that the learned Labour Court

has found that the petitioner institute has failed to

establish by leading cogent and convincing reasons to

establish its case that the respondent workman is

working as a technical consultant and not as a workman

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in the petitioner - institute and therefore, he has

submitted that the learned Labour Court has not

committed any error in the eyes of law and therefore, he

has prayed to dismiss the present petition as the present

petition is meritless and in view of the above stated

reasons.

6.1 I have heard learned advocates for the respective

parties. I have considered the impugned judgment and

award passed by the Tribunal. I have perused the record

and proceedings of the learned Labour Court.

6.2 It is relevant to note that it is the case of the

petitioner company in the statement of claim that he

was working in Spinning Department of the Santram

Spinners Ltd. - present petitioner as a Technical Maintenance In-charge and was earning Rs.9,000/- per

month and the petitioner company has terminated his

services on 18.04.1997 by oral order, without any genuine

reason and without giving any notice or paying any

salary towards notice as well as without following any

required procedure for terminating his services. He has

further pleaded in the statement of claim that he has

issued notice to the petitioner company by registered post

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AD and the petitioner company has not responded to

that notice. It is also relevant to note that in the

written statement filed by the present petitioner before

the learned Labour Court that the petitioner company

has specifically disputed that the respondent company is

not covered within the definition of workman with a

view to Section 2(S) of the Industrial Dispute Act, 1947.

It is further case of the petitioner institute before the

learned Labour Court that the respondent workman is

rendering services as a maintenance consultant with the

petitioner company and consultancy fees is paid to him

and vouchers were also produced by the petitioner

institute where deduction of TDS for the purpose of

income tax is also produced by the petitioner company

and the bills, which are issued by the respondent

workman and is addressed to the petitioner company, clearly indicates that the bills are issued for the purpose

of consultation fees for the services rendered in the

petitioner company.

6.3 Further, it also transpires from the record that the

respondent workman himself was examined and also

cross-examined by the respective learned advocates where

the respondent workman has initially in the examination-

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in-chief has submitted that he was working in Spinning

Department with the Santram Spinners Ltd. - present

petitioner as a Technical Maintenance In-charge from the

last one year and his services were terminated on

18.04.1997 whereby in the cross-examination he has

submitted that he has studied English language and

Diploma in Textile and has also admitted that the sum

of payment, which is made by the petitioner company by

cheque, was received by him. He has also admitted in

his cross-examination that there is no evidence with him

that he was working as a workman in the petitioner

company and his salary is fixed as Rs.9,000/- per month.

He has also admitted and verified his signature at bills

and vouchers at Mark - 13/1 to 13/10. He has also

submitted that the petitioner company has paid total

amount of Rs.1,08,000/- to the respondent workman.

6.4 Further, it is also revealed from the record that the

petitioner company has examined its witness -

Bhaveshbhia Mohanbhai Amin, who was manager in the

petitioner company, has categorically stated that the

respondent was rendinging his services as a maintenance

consultant in the petitioner company and for that

services he was raising his bills or vouchers periodically

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and accordingly, the petitioner company was paying the

amount by way of cheque. Further, he has submitted

that there is signature of the respondent workman at

Mark - 13/2 to 13/10, which is identified by respondent

workman. He has submitted that Mark - 13/11 is the

certificate issued by the petitioner company and Mark

13/12 is TDS, which is deducted from the amount of

bills raised by the respondent workman. He has further

submitted that Mark- 13/13 and 13/14 are the documents

related to TDS and the said manager has categorically

denied that the respondent workman was not working as

a technical maintenance in-charge in the petitioner

company.

6.5 Further, he has deposed in a manner that where he

has disputed the claim made by the respondent workman and looking to the deposition of the respondent workman

and deposition of the manager, which is at Exh.16 and I

found that the respondent has failed to establish prima

facie that he was appointed as a workman in the

petitioner institute. On the contrary, the petitioner

institute has established its case that the respondent is

rendering his services as a technical consultant and for

that purpose, the petitioner company has produced ample

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documentary evidences from Mark - 13/1 to 13/10 and

13/11 to 13/13, and more particularly, the respondent has

admitted his signature on that document where he has

received payment towards his consultation fees. It is

pertinent to note that the learned Labour Court has

committed gross error in holding that those documents

are complicated and therefore, the learned Labour Court

has also erred in giving findings that since TDS is

deducted by the petitioner company and therefore, the

respondent is workman, who is serving in the petitioner

institute and in my opinion, this findings of the learned

Labour Court is highly erroneous and against the settled

proposition of law. The petitioner has successfully

established its defence by producing cogent and

convincing evidence in view of the vouchers, TDS

certificate, etc., and has also proved its case by cross- examining the respondent workman and also examining

the manager at Exh.16, therefore, in view of that the

learned Labour Court has committed gross error in

drawing adverse inference that the petitioner company

has not produced attendance register or payment register

before the learned Labour Court, therefore, adverse

inference should be drawn by inferring that the

respondent is working as a workman in the petitioner

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company, as pleaded by the respondent in the statement

of claim, this finding is also perverse and erroneous and

the citations, which are cited at Bar by the learned

advocate for the petitioner, are helpful in the facts and

circumstances of the present case.

The judgment of Hon'ble Apex Court in the case of

Sureshwati (supra), more particularly, para 17 and 18 is relevant, which is quoted herein below:

"[17] The Respondent has failed to prove that she had worked for 240 days during the year preceding her alleged termination on 8.3.2006. She has merely made a bald averment in her affidavit of evidence filed before the Labour Court. It was open to the Respondent to have called for the records of the School i.e. the Attendance Register and the Accounts, to prove her continuous employment till 8.3.2006. Since the School was being administered by the Government of Uttarakhand from 2005 onwards, she could have produced her Salary Slips as evidence of her continuous employment upto 08.03.2006. However, she failed to produce any evidence whatsoever to substantiate her case.

The reliance placed by the Respondent on the letter dated 20.6.2013 from the Block Development Officer, Roorkee cannot be relied upon. The letter acknowledges that the Respondent was on leave when the Government took over the School, and started receiving grants in aid. The Block

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Development Officer's recommendation to the Chief Education Officer, Haridwar to act in compliance with the Order dated 5.2.2010 passed by the Labour Court cannot be relied on, as the Award dated 5.2.2010 was set aside by the High Court.

[18] On the basis of the evidence led before the Labour Court, we hold that the School has established that the Respondent had abandoned her service in 1997, and had never reported back for work.

The Respondent has failed to discharge the onus to prove that she had worked for 240 days' in the preceding 12 months prior to her alleged termination on 8.3.2006. The onus was entirely upon the employee to prove that she had worked continuously for 240 days' in the twelve months preceding the date of her alleged termination on 8.3.2006, which she failed to discharge.

                     A     division      bench       of     this     Court        in
                     Bhavnagar          Municipal         Corpn.    v.        Jadeja
                     Govubha Chhanubha11 held that :

"7. It is fairly well-settled that for an order of termination of the services of a workman to be held illegal on account of non-

payment of retrenchment compensation, it is essential for the workman to establish that he was in continuous service of the employer within the meaning of Section 25- B of the Industrial Disputes Act, 1947. For

C/SCA/10741/2008 CAV JUDGMENT DATED: 05/08/2022

the respondent to succeed in that attempt he was required to show that he was in service for 240 days in terms of Section 25- B(2)(a)(ii). The burden to prove that he was in actual and continuous service of the employer for the said period lay squarely on the workman. The decisions of this Court in Range Forest Officer v. S.T.

Hadimani 12 , Municipal Corpn., Faridabad v. Siri Niwas 13 , M.P. Electricity Board v. Hariram14 , Rajasthan State Ganganagar S. Mills Ltd. v. State of Rajasthan15,: 2004 SCC (L&S) 1055] , Surendranagar District Panchayat v. Jethabhai Pitamberbhai16,and R.M. Yellatti v. Executive Engineer17 unequivocally recognise the principle that the burden to prove that the workman had worked for 240 days is entirely upon him. So also the question whether an adverse inference could be drawn against the employer in case he did not produce the best evidence available with it, has been the subject-matter of pronouncements of this Court in Municipal Corpn., Faridabad v. Siri Niwas and M.P. Electricity Board v. Hariram [M.P. Electricity Board v. Hariram, reiterated in RBI v. S. Mani, 2005 5 SCC

100. This Court has held that only because some documents have not been produced by the management, an adverse inference cannot be drawn against it."

And the judgment of the Hon'ble Apex Court in the

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case of Jai Prakash Gautam (supra) , more particularly para 11 is relevant, which is quoted herein below:

"[11] After we have heard the learned Counsel for the parties, in our considered view, the respondent

- workman had not responded even after offer of reinstatement was made by an order dated 29.10.2010 and that apart, he had served for the very short period of time during the period in 1989

- 1990. At the same time, his total period of service even as per his own statement, in different spells is from June 1989 to July 1990 as a daily wager, and no evidence has been placed on record by the respondent - workman to justify that he was not gainfully employed in the intervening period that entitles him from claiming back wages which was stayed by this Court by an interim order dated 06.08.2010. The relevant part of the Order is as under:

"Issue notice confined to the question of payment of back wages from the date of award till the date of reinstatement.

The execution of the award to that extent shall remain stayed."

Thus, in view of the above citations, the findings

given by the learned Labour Court are found perverse,

illegal and improper and the same is against the

materials available on record, therefore, I found that this

is a fit case where the supervisory powers, under Article

227 of the Constitution of India are required to be

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exercised, by interfering in the impugned judgment and

award passed by the learned Labour Court. Accordingly,

I hold that the if judgment and award passed by the

learned Labour Court is required to be quashed and set

aside, the ends of justice would be met.