Madras High Court
The Managing Director vs N.Anantharasu on 20 October, 2022
W.P.Nos.13152 to 13163 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 20.10.2022
CORAM
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
W.P.Nos.13152 to 13163 of 2016
and
W.M.P.Nos.11524 to 11534 of 2016
W.P.No.13152 of 2016:
1.The Managing Director,
Tamil Nadu Water Supply and Drainage Board,
31, Kamarajar Salai,
Chennai – 5.
2.Executive Engineer,
Urban Division,
Tamil Nadu Water Supply and Drainage Board,
149, New Vinayagar Koil St,
Kangayam – 638701.
3.Executive Engineer,
Tamil Nadu Water Supply and Drainage Board,
No.1171, Muthuya Complex 3rd Floor,
Mettur Road, Erode – 638 011.
4.Assistant Executive Engineer,
Maintenance Division,
Tamil Nadu Water Supply and Drainage Board,
Seenivasa Nagar,
Vasavi College Post,
Bhavani – 638316. ... Petitioners
Vs.
Page 1 of 21
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
1.N.Anantharasu
2.The Presiding Officer,
Labour Court, Salem. ... Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India
for issuance of a Writ of Certiorari, calling for the records made in Award
Dated 29.01.2015 in I.D.No.6 of 2003 on the file of Labour Court, Salem
and quash the same.
For Petitioners : Mr.S.Ravindran
Senior Counsel
For Mrs.S.Mekhala
(in all 12 W.Ps)
For R1 : Mr.V.Ajoy Khose
For Mr.M.Muthupandian
(in all 12 W.Ps)
For R2 : Labour Court
(in all 12 W.Ps)
COMMON ORDER
The writ petitions on hand have been instituted challenging the
Awards passed in I.D.Nos.6, 9, 10, 11, 12, 15, 19, 322, 324, 325, 326, 367
of 2003 respectively dated 29.01.2015 on the file of the Labour Court,
Salem.
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
2. The writ petitioner is Tamil Nadu Water Supply and Drainage
Board. The petitioner / Board is a Statutory authority established under the
Tamil Nadu Water Supply and Drainage Board Act, 1970. The respondents /
Workmen filed I.D.Nos.6, 9, 10, 11, 12, 15, 19, 322, 324, 325, 326, 367 of
2003 against the petitioner / TWAD Board, under Section 2(A)(2) of the
Industrial Disputes Act, 1947. The respondent/workmen served under the
petitioner Board as Electrical Assistant from the year 1999 to 2002. The
respondents / workmen alleged before the Labour Court that they were
orally terminated by the authorities of the petitioner / Board with effect from
01.08.2002. Question the oral termination, the Industrial Disputes were filed
before the Labour Court.
3. The petitioner / Board contested the case by filing the counter
statement. The petitioner contended that the workmen did not work under
the TWAD Board and they were engaged by the private contractor, who
have contracted with TWAD Board for execution of certain works. Schemes
were maintained through contractors and based on the contracts executed,
these workmen were engaged by the private contractors and served in the
projects. The employment came to an end soon after the expiry of the
contract between the TWAD Board and the private contractors. There was
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
no employer-employee relationship existed between the workmen and the
petitioner / TWAD Board, since the TWAD Board had not appointed the
these workmen / respondents. The Labour Court allowed the I.Ds and
ordered for the reinstatement of the workmen with continuity of services
and 25% of back wages. Thus, the petitioner / Board is constrained to move
these present writ petitions.
4. The learned Senior Counsel appearing on behalf of the petitioners /
Board contended that the very findings in the impugned Awards regarding
the burden of proof is legally untenable. The workmen, who filed the
petitions before the Labour Court, pleaded that they were appointed by the
competent authorities of the TWAD Board and orally terminated by such
authorities. Thus, the burden of proof is on the workmen, who made such
statements and it for the workmen to establish that the employer-employee
relationship between the Board and the workmen existed for establishing
the cause of action and to maintain the dispute before the Labour Court. In
this regard, the Labour Court also held that the workmen are bound to prove
employer-employee relationship. However, erroneously arrived a
conclusion that the Management has not produced the documents in this
regard and therefore, the workmen could not be blamed.
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
5. The learned Senior Counsel appearing on behalf of the petitioners
reiterated that the Labour Court erroneously held that since in respect
Exhibit P3 notice dated 08.01.2010 calling for records, the respondent did
not produce and therefore, it could not be held that the Workmen had not
proved the completion of 480 days of service in 24 calender months,
without noticing that the said notice has been given 7 years after the
pendency of the dispute. The relevancy of the documents were also not
proved by the Workmen before the Labour Court. Exhibits P1 and P2 orders
do not relate to the petitioners. Exhibit P1 order is in respect of the demands
concerning the NMRs claim. Exhibit order P2 refers to the order of the
authority under the Permanent Status Act with regard to some other
Workmen. Therefore, reliance on the above two orders of the Labour Court
is perverse.
6. There was no need to engage contract labourers and the standing
orders referred to the service conditions of the workmen / Board. There is
no provision for engagement of the contract labourers through private
contractors. The Labour Court erroneously formed an opinion that Ex R1 to
R7 refer to the period of non-employment of the Workmen. However, those
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
documents were filed to prove that there is prevalence of engagement of
contractors. Therefore, the findings of the Labour Court that the employer-
employee relationship existed between the Board and the Workmen is
perverse and factually incorrect. The Finding of the the Labour Court that
the non-employment of the petitioners was in violation of the Sections 25-F,
25-G, 25-N, 25-H is completely baseless. No proof had been given to
establish the oral termination allegedly effected by the Board on
01.08.2002. Thus, the Awards of the Labour Court are liable to be set aside.
7. In support of the contentions raised, the learned Senior Counsel
appearing on behalf of the petitioners relied on the judgment of Hon'ble
Supreme Court of India in the case of Workmen of Nilgiri Coop. Mkt.
Society Ltd. Vs. State of Tamil Nadu and Others reported in [(2004) 3
SCC 514], wherein, the Apex Court made the following observations:
Burden of proof
“47. It is a well-settled principle of law that the person
who sets up a plea of existence of relationship of employer and
employee, the burden would be upon him.
48. In N.C. John v. Secy., Thodupuzha Taluk Shop and
Commercial Establishment Workers' Union [1973 Lab IC 398 :
(1973) 1 LLJ 366 (Ker)] the Kerala High Court held : (LAB IC
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
p. 402, para 9)
The burden of proof being on the workmen to
establish the employer-employee relationship an
adverse inference cannot be drawn against the
employer that if he were to produce books of
accounts they would have proved employer-
employee relationship.
49. In Swapan Das Gupta v. First Labour Court of
W.B. [1976 Lab IC 202 (Cal)] it has been held : (LAB IC para
10)
Where a person asserts that he was a workman of
the company and it is denied by the company, it is
for him to prove the fact. It is not for the company
to prove that he was not an employee of the
company but of some other person.”
8. The learned counsel for the respondents / Workmen objected the
said contentions raised on behalf of the petitioners by stating that the
Workmen had filed about 16 documents before the Labour Court, which
would establish that they were directly engaged by the petitioner / Board.
The respondents / Workmen were performing their duties and
responsibilities directly under the control of the Board authorities and the
schemes were implemented by the petitioner / Board by engaging the
respondents / workmen. The respondents / Workmen were illegally
terminated orally with effect from 01.08.2002. Thus, the Workmen raised
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
disputes before the Labour Court. The petitioner / Board has engaged more
than 15,000 Workmen for execution of various schemes as per the
Government Policies. Near about 10,000 Workmen alone served as
permanent employees of the Board. The remaining employees were not
brought under the regular establishment nor the benefit of regularisation
was granted to the Workmen. Thus, the Board has kept these Workmen as
daily wage employees and extracted work, but not extended the benefit of
regularisation and permanent absorption, enabling these employees to
become the regular employees.
9. The respondents / Workmen served in the Board from the year 1999
to 2002 continuously and for more than 480 days. Therefore, they are
entitled to be brought under the regular establishment in the time scale of
pay. There is no written order of termination issued to the respondents /
Workmen. No enquiry was conducted. Even show cause notice was not
issued to the Workmen. The retrenchment compensation was also not
granted. The Workmen were not provided with an opportunity to defend
their case. Thus, the unilateral decision taken by the petitioner / Board is to
be set aside.
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
10. The Labour Court adjudicated the issues. The findings of the
Labour Court reveals that the respondents / Workmen served in-between the
years 1999 to 2002 and two employees alone served from the year 1996 and
1998 respectively. The Labour Court found that the respondents / Workmen
were terminated orally and there is no written order of termination. The
findings reveals that the respondents/workmen served from the year 1999 to
2002 continuously without any break in service and they are not contract
labourers. The Workmen were serving under the supervision and control of
the authorities of the petitioner / Board. However, the counter statement of
the petitioner / Board was also considered by the Labour Court to the extent
that the respondents / Workmen were not appointed by the competent
authorities of the petitioner / Board. The petitioner / Board has stated that
these Workmen were engaged through private contractors, with whom, the
petitioner / Board entered into a contract for execution of certain schemes.
Therefore, the respondents / Workmen are not the employees of the Board
nor appointed by the competent authorities of the Board in accordance with
the Recruitment Rules in force. The Board has stated before the Labour
Court that no NMRs were engaged in the Board's services after the year
1996. When the Board took a policy decision not to engage NMRs / daily
wage employees after the year 1996, the very contention of the Workmen
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
that they were appointed by the Board is untenable.
11. In respect of the statements made by the Board and the Workmen,
the Labour Court formed an opinion that there was an employer-employee
relationship existed between the Board and the respondents / Workmen.
Further, the Labour Court formed an opinion that the respondents /
Workmen served more than 480 days of service and therefore, they are
entitled to be regularised in the Board's services. However, the Labour
Court recognised the contract entered into between the private contractor
and the petitioner / Board. The Management's documents 1 to 7 revealed
that the petitioner/Board executed contracts in favour of the private
contractors for execution of various schemes implemented by the Board.
12. Considering the arguments as advanced between the respective
parties to the lis on hand and considering the findings of the Labour Court
in the impugned Awards, this Court has to consider the scope of
regularisation and permanent absorption of these contract labourers in the
sanctioned post of the petitioner / Board and also the alleged oral
termination pleaded by the respondents / Workmen.
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
13. It is not in dispute that the respondents / Workmen served for
execution of certain schemes implemented by the Board, but the nature of
engagement or appointment if any made is to be considered for the purpose
of granting of regularisation and permanent absorption. Pertinently, the
respondents / Workmen had not filed any documents to establish that they
were appointed by the competent authorities by the petitioner / Board in
accordance with the Recruitment Rules in force.
14. If the Workmen pleads that no appointment order was issued, then
oral termination if at all by the authorities also to be taken note of. Question
of oral termination would arise only if the workmen is appointed by the
Board, which is the 'State' within the meaning of Article 12 of the
Constitution of India. Board being a Statutory authority has to follow the
provisions of the Statutes and the Rules scrupulously. The documents filed
by the respondents / Workmen reveal that no such document regarding
order of appointment or any reference to that effect were filed. In the
absence of any such valid appointment in accordance with the Recruitment
Rules applicable to the petitioner / Board, question of regularisation or
permanent absorption would not arise at all.
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
15. The benefit of regularisation or permanent absorption are to be
granted only in accordance with the Service Rules in force. Even illegal and
irregular appointments or back door appointments cannot be regularised nor
such Workmen can be brought under the regular establishment in the time
scale of pay. The persons appointed through back door must be allowed to
go out from the door, through which they entered. Thus, the benefit of
regularization and permanent absorption cannot be granted in a routine
manner.
16. The Conferment of Permanent Status Act would not be applicable
to the employees engaged by the Board, since the Board has got its own
Service Rules for appointment, governing the service conditions. When the
Special Rules governing the service conditions are in force for the petitioner
/ Board employees, then the General Act is inapplicable. In other words, the
Special rules will prevail over the General laws and thus, the service
conditions including appointment as far as the Board's service are
concerned, it must be made in consonance with the provisions of the Special
rules, which is in force as far as the petitioner Board is concerned. Thus, it
is not as if the contract labourers, who were engaged by the contractors for
execution of certain schemes can be brought under the regular establishment
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
of the TWAD Board in the time scale of pay, which is to be construed as
back door entries.
17. When the respondents / Workmen could not able to prove that
they were appointed by the competent authorities by the Board in
consonance with the Rules, then they are not entitled for the regularisation
or permanent absorption and in the event of granting the benefit of
permanent absorptions, the Fundamental Rights of all other citizen, who all
are eligible for such permanent appointment through open competitive
process are infringed.
18. That exactly is the reason why Courts have repeatedly held that
appointments are to be made strictly in accordance with the rules in force
and by providing equal opportunity and by adhering to the principles
enunciated in the equality clause under the Indian Constitution.
19. The facts and circumstances established before the Labour Court
and the findings of the Labour Court unambiguously reveals that the
respondents / workmen were engaged for execution of certain contractual
works implemented by the Board through Private contractors. Thus, these
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
workmen were engaged by the private contractors for execution of scheme
related works for the TWAD Board. Thus, they cannot be allowed to take
undue advantage of the services rendered for execution of scheme related
works through private contractors. If such benefit is extended, then it will
result in unconstitutionality.
20. Regarding oral termination, the Court has to consider, whether the
person has been appointed by the TWAD Board in the present case. Only if
the appointment is proved, then alone, the question of considering the oral
termination would arise. In the event of not establishing the appointment by
the competent authorities of the Board in accordance with the Rules,
question of considering the oral termination would not arise at all.
Therefore, the Labour Court has primarily failed to ascertain, whether the
respondents / workmen were appointed by the competent authorities of the
Board in accordance with the rules in force. The Board has stated in their
counter statement that the practice of appointing daily wage employees
(NMR) were abolished from the year 1996 onwards. Thus, as per the
statement of the respondents / workmen, they were engaged as contract
labourers from the year 1999 to 2002. Thus, the burden of proof lies on the
workmen to establish that they were appointed by Board authorities. But,
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
the respondents / workmen could not able to file any document to prove that
they were appointed by the authorities of the Board or directly engaged by
the Board authorities for execution of scheme related works. While
execution of scheme related works, providing instructions to such contract
labourers would not confer any right to claim permanent absorption in
Board's services. The Board has executed the scheme related works through
the private contractors. The private contractors engage labourers. While
conducting inspection, the Board's authorities have to give instructions for
maintaining the quality of work and other related issues. Therefore, the
supervision or providing instructions by the Board authorities, while
executing the scheme related works, would not confer any right on the
workmen to claim that they were controlled by the Board's authorities and
therefore, they are the direct employees of the Board. Thus, the Labour
Court has misconstrued the employer-employee relationship and
erroneously formed an opinion that such a relationship existed between the
petitioner Board and the respondents / workmen. In order to establish the
employer-employee relationship, there must be adequate evidence, since the
petitioner TWAD Board is a Statutory authority and a 'State' within the
meaning of Article 12 of the Constitution of India.
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
21. In the present cases, the Labour Court has proceeded based on
presumptions and assumptions regarding the employer-employee
relationship. There is no document to establish that the respondents /
workmen were appointed by the competent authorities of the petitioner
Board in accordance with the Service Rules.
22. Assuming that contract labourers were supervised or engaged by
the Board authorities in violation of the Recruitment Rules in force or any
scheme related works for a temporary period, such employees are not
entitled for regularisation or permanent absorption in Board's Service. The
Board's Services are governed by the Special Rules including the Rules for
Recruitment. Thus, the General Statutes are not applicable and thus, the
petitions filed under the General Statutes are not entertainable. The Special
Rues governing the service conditions of the Board will prevail over the
General law and therefore, the Labour Court has committed an error in
entertaining the petition for the purpose of granting the relief. Thus, the
findings of the Labour Court are perverse and not based on the principles of
law.
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
23. Casual daily wage employees or contract labourers are engaged by
the Boards, Government undertaking etc., while implementing the scheme
related works or to meet out certain public exigencies. However, those daily
rated employees and contract labourers are very much aware of the fact that
they were not appointed in accordance with the Recruitment Rules in force,
which all are applicable to the respondent / Board. Once these labourers
accepted the terms and conditions of their engagement / employment, they
are estopped from seeking regularisation or permanent absorption against
the sanctioned post, which is to be filled up strictly by following the Rules
in force and by providing equal opportunity to all the persons, who all are
aspiring to secure public employment. Once the employees accepted the
terms and conditions of their services, they cannot turn around and claim
permanent absorption in violation of the Service Rules in force, since the
initial appointment was back door appointment and thus, the benefit of
regularisation if granted would infringe the rights of all the citizen, who all
are longing to secure public employment through open competitive process.
24. Granting any relief in violation of the service conditions and rules
of the Board would result in unconstitutionality as the initial appointment of
these labourers were not made in accordance with the rules applicable to the
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
Board. Once the initial appointment was not established or found irregular
or illegal, then regularisation or permanent absorption cannot be granted. In
the present case, the respondents / Workmen have not even established their
appointment through documents and evidences. When the appointment
made by the competent authority of the Board itself has not been established
in the manner known to law, then the question of considering the oral
termination and reinstatement would not arise at all.
25. Thus, the awards of the Labour Court are perverse as the awards
are not based on any concrete evidence regarding the appointment of the
respondents / Workmen in Board's Services in accordance with Rules.
26. The learned Senior counsel appearing on behalf of the
petitioner/Board brought to the notice of this Court that a sum of
Rs.4,95,000/- (Rupees Four Lakh Ninety Five Thousand only) has already
been deposited before the Labour Court, Salem and the respondents /
workmen were permitted to withdraw 25% of the deposited amount. If the
said amount has already been withdrawn, then the balance amount lying in
the deposit along with the accrued interest is directed to be disbursed in
favour of the petitioner/Board.
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
27. In this regard, the petitioner/Board is at liberty to submit an
application before the Labour Court, Salem for withdrawal of the deposited
amount.
28. In view of the discussion made in the aforementioned paragraphs,
this Court has no hesitation in arriving a conclusion that the Awards of the
Labour Court are perverse and not in consonance with the established
principles of law.
29. Consequently, the Awards passed in I.D.Nos.6, 9, 10, 11, 12, 15,
19, 322, 324, 325, 326, 367 of 2003 respectively dated 29.01.2015 on the
file of the Labour Court, Salem are quashed and all the writ petitions stand
allowed. However, there shall be no order as to costs. Consequently,
connected miscellaneous petitions are closed.
20.10.2022
Jeni/kak
Index : Yes
Speaking order
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
To
The Presiding Officer,
Labour Court,
Salem.
https://www.mhc.tn.gov.in/judis
W.P.Nos.13152 to 13163 of 2016
S.M.SUBRAMANIAM, J.
Jeni/kak
W.P.Nos.13152 to 13163 of 2016
20.10.2022
https://www.mhc.tn.gov.in/judis
