Gujarat High Court
Ahmedabad Municipal Transport Service ... vs Mangabhai Shivgar Gosai on 24 September, 2025
Author: A. S. Supehia
Bench: A.S. Supehia
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 1122 of 2016
In R/SPECIAL CIVIL APPLICATION/9202/2011
With
R/LETTERS PATENT APPEAL NO. 1124 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5680 of 2011
With
R/LETTERS PATENT APPEAL NO. 1125 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5849 of 2011
With
R/LETTERS PATENT APPEAL NO. 1126 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5850 of 2011
With
R/LETTERS PATENT APPEAL NO. 1127 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5851 of 2011
With
R/LETTERS PATENT APPEAL NO. 1128 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5852 of 2011
With
R/LETTERS PATENT APPEAL NO. 1129 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5853 of 2011
With
R/LETTERS PATENT APPEAL NO. 1130 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5854 of 2011
With
R/LETTERS PATENT APPEAL NO. 1131 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5855 of 2011
With
R/LETTERS PATENT APPEAL NO. 1132 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5856 of 2011
With
R/LETTERS PATENT APPEAL NO. 1133 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5857 of 2011
With
R/LETTERS PATENT APPEAL NO. 1134 of 2016
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In
R/SPECIAL CIVIL APPLICATION NO. 5858 of 2011
With
R/LETTERS PATENT APPEAL NO. 1135 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5859 of 2011
With
R/LETTERS PATENT APPEAL NO. 1136 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5860 of 2011
With
R/LETTERS PATENT APPEAL NO. 1137 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5861 of 2011
With
R/LETTERS PATENT APPEAL NO. 1138 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5862 of 2011
With
R/LETTERS PATENT APPEAL NO. 1139 of 2016
In
R/SPECIAL CIVIL APPLICATION NO. 5863 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA Sd/-
and
HONOURABLE MR.JUSTICE L. S. PIRZADA Sd/-
=============================================
Approved for Reporting Yes No
=============================================
AHMEDABAD MUNICIPAL TRANSPORT SERVICE THRO'TRANSPORT
Versus
MANGABHAI SHIVGAR GOSAI & ORS.
=============================================
Appearance:
MR HS MUNSHAW(495) for the Appellant(s) No. 1
MR JV JAPEE(358) for the Respondent(s) No.
1,10,11,12,13,14,15,16,2,3,4,5,6,7,8,9
=============================================
CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR.JUSTICE L. S. PIRZADA
Date : 24/09/2025
Page 2 of 16
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COMMON ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. The present Letters Patent Appeals have been filed by
the appellant - Ahmedabad Municipal Transport Service
(hereinafter referred to as "the appellant - AMTS") under
Clause 15 of the Letters Patent, 1860. These appeals are
directed against the common judgment and order dated
24.02.2016 passed by the learned Single Judge, whereby the
writ petitions filed by the appellant - AMTS challenging the
award dated 29.06.2010 passed by the Labour Court,
Ahmedabad in Reference (LCA) No.1086 of 2002, came to be
rejected.
2. By the aforesaid award, the Labour Court partly allowed
the reference and directed the appellant - AMTS to pay to the
respondent-employees compensation in accordance with
Section 25F of the Industrial Disputes Act, 1947 (in short "the
I.D. Act") for each year of service rendered by them.
3. Aggrieved by the said award, both the appellant - AMTS
as well as the respondent-employees preferred writ petitions
being Special Civil Application Nos.5680 of 2011, 9202 of 2011,
5849 of 2011 and 5863 of 2011. The learned Single Judge, by a
common judgment, allowed the writ petitions filed by the
respondent-workmen and rejected the writ petition filed by the
appellant - AMTS. The learned Single Judge has further
modified the award of the Labour Court and directed
reinstatement of the respondent-workmen with 50% back
wages and all consequential benefits.
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4. Being dissatisfied with the aforesaid directions, the
appellant - AMTS has preferred the present appeals.
5. At the outset, learned advocate Mr.H.S. Munshaw,
appearing for the appellant - AMTS, has invited the attention of
this Court to the interim order dated 13.07.2017 passed by the
Coordinate Bench in Civil Application No.10820 of 2016 filed in
the present Letters Patent Appeals. It is submitted that at the
relevant point of time, the appellant - AMTS had expressed its
willingness to pay a lump-sum compensation of Rs.4,00,000/-
to each of the respondent-workmen towards full and final
settlement of the dispute. However, as the respondent-
workmen did not agree to such settlement, the said amount
was ordered to be deposited before the Registry of this Court,
and subsequently, the workmen and their legal heirs have
withdrawn the same.
6. Learned advocate Mr. H. S. Munshaw, appearing for the
appellant - AMTS, has further submitted that the learned
Single Judge committed an error in directing the reinstatement
of the respondent-employees on the ground that they had
been terminated with a view to deny them the benefits of
regularization. It is submitted that the Reference (IT) No.137 of
2001, wherein the workmen similarly situated to the
respondent-workmen had claimed regularization upon
completion of 5 years and 900 days of service, has been
rejected by the Labour Court.
7. It is further pointed out that a specific contention was
raised both before the Labour Court and the learned Single
Judge that the appellant - AMTS was not in a position to
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continue employing the daily wagers, such as the respondent-
workmen, who were engaged as Watchmen/Security Officers.
This was on account of the fact that several buses were
withdrawn from service and even regularly appointed
employees were rendered idle for want of work.
8. Learned advocate Mr.Munshaw, has also drawn attention
to the fact that in similar circumstances, daily-rated Drivers
and Conductors had initiated proceedings for regularization.
The Industrial Tribunal, Ahmedabad, by award dated
24.12.2002 passed in Reference (IT) No.6802 of 2003 and
allied matters, had directed regularization of such workmen
upon completion of 5 years and 900 days of service. However,
this Court, vide judgment dated 10.08.2005, set aside the said
award, holding that daily-rated employees cannot
automatically claim permanency merely upon completion of 5
years and 900 days. It is further submitted that the contention
of the respondent-workmen in the present case that their
services were terminated to deny them such benefits, stands
misconceived and untenable. It is thus urged that, although
the learned Single Judge has recorded the financial incapacity
of the appellant - AMTS, the learned Single Judge has
nevertheless directed reinstatement of the respondent-
workmen with 50% back wages and consequential benefits,
which according to the appellant, was wholly unwarranted.
Accordingly, it is prayed that the judgment and order of the
learned Single Judge, as well as the award of the Labour Court,
may be quashed and set aside.
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9. Per contra, learned advocate Mr.J.V.Japee, appearing for
the respondent-workmen, has opposed the present appeals
and has submitted that the judgment and order passed by the
learned Single Judge call for no interference, as the same is
well-reasoned and is precisely passed on the basis of
appreciation of facts and law. He has invited the attention of
this Court to the categorical findings recorded by the learned
Single Judge, wherein it has been observed that the appellant-
AMTS had terminated the services of the respondent-workmen
only with a view to deny them the benefit of regularization.
10. Learned advocate Mr.J.V.Japee, appearing for the
respondent - workmen, has further pointed out the evidence
recorded before the Labour Court. He has particularly referred
to the cross-examination of the witnesses of the appellant-
AMTS, wherein they have admitted that the respondent-
workmen had completed 240 days in a year as well as five
years of continuous service. Reliance is also placed on
documentary evidence, such as identity cards issued to the
workmen and the records of GPF deductions from 30.04.1990
to 31.03.2000, which according to him, establish that the
respondent-workmen were appointed as Watchmen/Security
Guards on daily wages and had rendered continuous service
for more than five years. It is further submitted that the
termination of the respondent-workmen was illegal and that
they were unjustly deprived of the benefits of regularization,
pension and other consequential service benefits. In support of
his submissions, learned advocate Mr.Japee has relied upon
the decision of the Supreme Court in the case of Tapash Kumar
Paul Vs. Bharat Sanchar Nigam Limited and Another, (2014) 15
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SCC 313, to contend that employees, who have rendered long
years of service cannot be arbitrarily denied their rightful
benefits. It is urged that the present appeals being devoid of
merit, may not be entertained and deserve to be dismissed.
11. We have heard the learned advocates appearing for the
respective parties, at length.
12. It is not in dispute that by an interim order dated
13.07.2017 passed by the Coordinate Bench in Civil Application
(For Stay) No.10820 of 2016, while admitting these appeals,
the civil application was disposed of by directing the appellant
- AMTS to deposit a sum of Rs.4,00,000/- before the Registry of
this Court for each workman. The said amount was offered by
the appellant - AMTS as a lump-sum compensation in view of
the reinstatement. It is noted that the aforesaid amount has
been withdrawn by the workmen or their legal heirs, however,
learned advocate Mr.Japee submitted that such withdrawal was
made with a protest, keeping the rights of the workmen open.
13. The facts, as established from the pleadings, are that all
the respondent-workmen were appointed by the appellant -
AMTS either as Watchmen/ Security Guards on daily wages.
The evidence establishes that at the time of their termination,
all the respondent-workmen had completed 240 days in a year
and five years of service.
14. It is pertinent to note that the termination arose due to
the weak financial position of the appellant - AMTS and the
scrapping of buses. The respondent-workmen contend that
their services were terminated to deny them the benefit of
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regularization after completion of 5 years and 900 days of
service, as per the policy of the appellant - AMTS. However, we
do not find the submissions attractive.
15. We may further note that the learned Single Judge
recorded the fact that the present workmen had placed
reliance on the Reference (IT) No.137 of 2001 filed by their
colleagues Driver and Conductors before the Industrial
Tribunal, Ahmedabad, claiming regularization after completion
of 5 years and 900 days of service. The respondent-workmen
relied on the pendency of Reference (IT) No.137 of 2001 before
the learned Single Judge to substantiate their claim that their
termination violated Section 33 of the Industrial Disputes Act.
The learned Single Judge, accordingly, has considered this
aspect.
16. After the impugned judgment and order was passed by
the learned Single Judge, the claim of the Drivers-Conductors
of the appellant AMTS for regularization after completion of 5
years and 900 days was rejected by the Industrial Tribunal by
order dated 20.11.2021.
17. At this stage, it is also relevant to refer to another set of
similarly situated employees who had filed reference
proceedings and allied matters before the Industrial Tribunal
claiming regularization after completion of 5 years and 900
days (Reference (IT) No.52 of 2002). By an award dated
24.12.2005, the Tribunal had allowed their claim. The appellant
- AMTS challenged this award before this Court by filing
Special Civil Application No.6802 of 2003 and allied matters.
By judgment dated 10.08.2005, this Court set aside the award
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passed by the Tribunal granting regularization after completion
of 5 years and 900 days, and the said order has since become
final.
18. At this stage, we may record the observations made by
the learned Single Judge in the order dated 10.08.2005 passed
in Special Civil Application No.6802 of 2003 and allied matters.
The same is as under:
"13. So far as the contention, on behalf of the concerned
workmen, which has been accepted by the Industrial Dispute,
that as per the Resolution and policy of the petitioners all the
concerned workmen were to be made permanent on
completion of 5 years and 900 days automatically, but on
completion of 5 years and 900 days the concerned workmen
are not made permanent during the pendency of the aforesaid
Reference and the same is changing the service condition of
the workmen, is concerned, first of all, it is required to be
noted that it is the case of the petitioners that it is not that on
completion of 5 years and 900 days automatically a workman is
to be made permanent. According to the petitioners, they are
to be made permanent subject to availability of vacant
permanent posts. In the present case, even the permanent
drivers and conductors are being paid idle wages due to non-
availability of work and the buses/routes, as a result of which
even the concerned workmen were not in a position to get
work on daily-wage basis also. Therefore, there was no
question of making them permanent even on completion of 5
years and 900 days as daily-rated workmen. The contention
that by not making them permanent on completion of 5 years
and 900 days as daily-rated workmen during the pendency of
the aforesaid Reference,can be said to be change in service
conditions which led to breach of Section 33 of the I.D. Act, if
accepted, it would be stretching too much more particularly in
view of the factual scenario where the permanent employees
namely drivers and conductors are being paid idle wages due
to non-availability of work and reduction in number of buses,
which is even conceded by the Tribunal also. Under the
circumstances, by not making the concerned daily-rated
workmen permanent on completion of 5 years and 900 days
during the pendency of the Reference it cannot be said to be
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change in service condition of the concerned workmen who
were and are the daily-rated workmen and who are continued
in that capacity nor that it has led to breach of Section 33 of
the I.D.Act. In such facts and circumstances and in law
therefore the complaints under Section 33-A of the I.D. Act
were not maintainable. The Industrial Tribunal has materially
erred in directing the petitioners to make the concerned
workmen permanent on completion of 5 years and 900 days by
holding that there is breach of Section 33 of the I.D. Act.
14. So far as the further direction issued by the Industrial
Tribunal on the petitioners to run the 612 buses as per
schedule dated 15th January 2002 is concerned, such a
direction is not only arbitrary and illegal but also beyond the
scope of Sections 33 and 33-A of the I.D. Act. It is an admitted
position that the financial condition of the petitioners is not
sound and due to this amongst other factors the petitioners
had to effect reduction in number of buses plying on the road
which is evident from the fact that 131 buses were withdrawn.
Therefore, by virtue of the aforesaid direction, the petitioners
will be compelled to ply 612 buses though the buses are not
available. It is required to be noted here that all the concerned
workmen were serving as daily- rated workers and they were
offered the work as and when it is available. Considering the
aforesaid reasons and the precarious position of the AMTS
where the AMTS is facing financial crisis and inspite of such
sorry state of affairs of the AMTS and when the permanent
workmen are being paid the salary/idle wages without there
being any work or buses, even in absence of any right in favour
of the concerned workmen to get work, such a direction could
not have been issued by the Industrial Tribunal. Even in
absence of any right accrued in favour of the concerned
workmen who were working as daily-rated workmen and who
were offered work as and when it was available and due to
reduction of buses the petitioners cannot stick to the Schedule
dated 15th January 2002 of running 612 buses and if the
concerned workmen are not offered the work more particularly
in the factual scenario where the permanent workmen, i.e.,
drivers and conductors are being paid idle wages, it cannot be
said that there is a change in the conditions of service of the
concerned workmen and it has led to breach of Section 33 of
the I.D. Act. Under the circumstances, even the complaints
under Section 33-A of the ID Act were also not maintainable."
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19. The learned Single Judge, in the case of daily-rated
Drivers and Conductors / colleagues of the present workmen,
are concerned, has categorically noticed the financial
incapacity of the appellant - AMTS. It was recorded that even
the permanent Drivers and Conductors were being paid idle
wages due to non-availability of work and the withdrawal of
buses/routes. The plight of such employees, who were unable
to get any work owing to the unavailability of buses, was also
noted. The learned Single Judge further observed that the
policy of the appellant - AMTS did not provide for automatic
regularization of workmen upon completion of 5 years and 900
days.
20. While the learned Single Judge has set aside the award
after examining the scope of Section 33 of the Industrial
Disputes Act, it was also recorded that the financial condition
of the appellant - AMTS was weak. Among other factors, the
appellant - AMTS had to reduce the number of buses in
operation, as evidenced by the withdrawal of 131 buses. It was
recorded that all the workmen were serving as daily wagers,
employed as work was available. Considering the precarious
financial position of the appellant - AMTS, and the fact that
permanent employees were being paid idle wages without any
work, the Industrial Tribunal could not have directed
regularization.
21. It is not in dispute that the financial condition of the
appellant - AMTS was indeed precarious, and the scrapping of
buses resulted in the termination of daily-wage employees
such as the respondent-workmen. The Labour Court, being
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aware of this situation, directed payment of compensation for
each year of service under Section 25F of the Industrial
Disputes Act. Therefore, the contention of the respondent-
workmen that they were terminated solely to deny them
regularization does not merit acceptance, in view of the
observations recorded by the learned Single Judge in the order
dated 10.08.2005 as well as the Tribunal in Reference (IT)
No.137 of 2001.
22. Accordingly, the assumption by the learned Single Judge
that the workmen were terminated only to deny regularization
deserves to be set aside, as there was no evidence before the
Labour Court establishing that the terminations were
motivated solely by such intent.
23. The next issue for consideration is whether the
respondent-workmen are entitled to reinstatement or
compensation.
24. It is established from the record that each of the
workmen had completed 240 days of service and five years at
the relevant time, and therefore, the terminations were held
invalid by both the Labour Court and the learned Single Judge
in view of violation of Section 25F of the Industrial Disputes
Act. It is relevant to note that all the respondent-workmen
were ex-servicemen appointed as Watchmen/Security Officers
in 1997. During the pendency of proceedings, five workmen
passed away. The appellant - AMTS has produced a chart
detailing all 16 workmen. It is observed that, except for Shri
Rajguru Risal Singh Wat and Shri Shahabuddin Anwarmiya
Sheikh, all other workmen have either retired or passed away,
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who will reach the age of superannuation in the year
2026.There cannot be cavil on the proposition of law as
declared by the Apex court in the case of Tapash Kumar
Paul(supra), however the parameters enunciated by the
Supreme court for granting reinstatement will not apply to the
peculiar facts of this case.
25. Subsequently, the Supreme court in the case of Ranbir
Singh Versus Executive Eng. P.W.D., 2021 (14) S.C.C. 815 has
held thus:
"6 However, we notice that there is another line of decisions,
and the latest of the same, which is brought to our notice by
Shri Samar Vijay Singh, learned AAG, is Raj Kumar (supra). We
may refer only to paragraphs-9 and 10:
"9.In our opinion, the case at hand is covered by the two
decisions of this Court rendered in BSNL v.Bhurumal
[BSNL v. Bhurumal, (2014) 7 SCC 177 : (2014) 2 SCC
(L&S) 373] and Distt. Development Officer v. Satish
Kantilal Amrelia [Distt. Development Officer v. Satish
Kantilal Amrelia, (2018) 12 SCC 298 : (2018) 2 SCC
(L&S) 276] .
10. It is apposite to reproduce what this Court has held
in BSNL [BSNL v. Bhurumal, (2014) 7 SCC 177 : (2014)
2 SCC (L&S) 373] : (SCC p. 189, paras 33-35)
"33. It is clear from the reading of the aforesaid
judgments that the ordinary principle of grant of
reinstatement with full back wages, when the
termination is found to be illegal is not applied
mechanically in all cases. While that may be a position
where services of a regular/permanent workman are
terminated illegally and/or mala fide and/or by way of
victimisation, unfair labour practice, etc. However, when
it comes to the case of termination of a daily-wage
worker and where the termination is found illegal
because of a procedural defect, namely, in violation of
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Section 25-F of the Industrial Disputes Act, this Court is
consistent in taking the view that in such cases
reinstatement with back wages is not automatic and
instead the workman should be given monetary
compensation which will meet the ends of justice.
Rationale for shifting in this direction is obvious.
34. The reasons for denying the relief of reinstatement in
such cases are obvious. It is trite law that when the
termination is found to be illegal because of non-payment
of retrenchment compensation and notice pay as
mandatorily required under Section 25-F of the
Industrial Disputes Act, even after reinstatement, it is
always open to the management to terminate the
services of that employee by paying him the
retrenchment compensation. Since such a workman was
working on daily-wage basis and even after he is
reinstated, he has no right to seek regularisation [see
State of Karnataka v. Umadevi (3) [State of Karnataka v.
Umadevi (3), (2006) 4 SCC 1 : 2006 SCC (L&S) 753] ].
Thus when he cannot claim regularisation and he has no
right to continue even as a daily-wage worker, no useful
purpose is going to be served in reinstating such a
workman and he can be given monetary compensation by
the Court itself inasmuch as if he is terminated again
after reinstatement, he would receive monetary
compensation only in the form of retrenchment
compensation and notice pay. In such a situation, giving
the relief of reinstatement, that too after a long gap,
would not serve any purpose.
35. We would, however, like to add a caveat here. There
may be cases where termination of a daily-wage worker
is found to be illegal on the ground that it was resorted
to as unfair labour practice or in violation of the principle
of last come first go viz. while retrenching such a worker
daily wage juniors to him were retained. There may also
be a situation that persons junior to him were
regularised under some policy but the workman
concerned terminated. In such circumstances, the
terminated worker should not be denied reinstatement
unless there are some other weighty reasons for
adopting the course of grant of compensation instead of
reinstatement. In such cases, reinstatement should be
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the rule and only in exceptional cases for the reasons
stated to be in writing, such a relief can be denied.""
7 In the light of the state of the law, which we take note of, we
notice certain facts which are not in dispute. This is a case
where it is found that, though the appellant had worked for
240 days, appellant's service was terminated, violating the
mandatory provisions of Section 25F of the Act. The authority
involved in this case, apparently, is a public authority. At the
same time, it is common case that the appellant was a daily
wager and the appellant was not a permanent employee. It is
relevant to note that, in the award answering Issue No.1,
which was, whether the termination of the appellant's service
was justified and in order, and if not, what was the amount of
back wages he was entitled to, it was found, inter alia, that the
appellant could not adduce convincing evidence to establish
retention of junior workers. There is no finding of unfair trade
practice, as such. In such circumstances, we think that the
principle, which is enunciated by this Court, in the decision,
which is referred to in Raj Kumar (supra), which we have
referred to, would be more appropriate to follow. In other
words, we find that reinstatement cannot be automatic, and the
transgression of Section 25F being established, suitable
compensation would be the appropriate remedy."
26. In the present case also, the termination of the workmen,
who were engaged as daily wagers is found to be in violation of
section 25F of the I.D.Act. There is no evidence which
establishes unfair labour practice. The Labour Court has also
passed an awarded compensation. It is also undisputed that all
employees, including their legal heirs, have withdrawn the
lump-sum compensation of Rs.4,00,000/- deposited before this
Court, though under protest. Albeit, We have noticed that
there is no evidence which suggests that the respondents were
terminated only with a view to deny them regularization,
however, it is not denied that the AMTS has an policy of
regularizing daily wagers after completion of 900 days and five
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years. Considering that the workmen were ex-servicemen and
entitled to retirement benefits from the Army, and having
regard to the overall facts and circumstances, more
particularly, their duration in service, this Court is of the
opinion that to bring finality to the litigation and ensure just
compensation, the amount of compensation of Rs.4,00,000/-
per workman, as suggested by the appellant - AMTS, is
enhanced to Rs.10,00,000/- (Rupees Ten Lakhs Only). The
remaining amount of Rs.6,00,000/- shall be paid within eight
(08) weeks from the receipt of the copy of this judgment.
27. On an overall consideration, the present appeals are
PARTLY ALLOWED. The judgment and order of the learned
Single Judge, as well as the award, are modified to the
aforesaid extent. In the event that the amount is not paid
within the stipulated period, it shall carry interest at 9% per
annum. For workmen, who have passed away, the amount
shall be paid to their legal heirs upon due verification.
Sd/-
(A. S. SUPEHIA, J)
Sd/-
(L. S. PIRZADA, J)
MAHESH/01
