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Supreme Court of India
K.V.Anil Mithra . vs Sree Sankaracharya Univ.Of … on 27 October, 2021Author: Ajay Rastogi
Bench: Ajay Rastogi, Abhay S. Oka
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 9067 OF 2014
K.V. ANIL MITHRA & ANR. ….APPELLANT(S)
VERSUS
SREE SANKARACHARYA UNIVERSITY
OF SANSKRIT & ANR. ….RESPONDENT(S)
WITH
CIVIL APPEAL NO(S). 9068 OF 2014
JUDGMENT
Rastogi, J.
1. The instant appeals have been preferred against the judgment
and order dated 4th January, 2010 setting aside the Award passed by
the Industrial Tribunal dated 14th November, 2005 answering the
reference in affirmative terms holding the termination of the
Signature Not Verified
Digitally signed by
appellants-workmen to be void being in violation of Section 25F of
DEEPAK SINGH
Date: 2021.10.27
18:24:54 IST
Reason:
the Industrial Disputes Act, 1947(hereinafter being referred to as the
1
“Act 1947”) with a direction of treating the workmen deemed to be in
service till their services are validly terminated with 50% back wages.
2. The brief facts culled out and relevant for the purpose are that
the 1st respondent-University was established by an Ordinance viz.
Sree Sankaracharya University of Sanskrit Ordinance, 1993. The
appointments of non-teaching staff in different categories, viz.,
Watchman, Attenders, Peons, Sweepers, Assistant Cooks, Assistant
Matrons, Drivers, Helpers, Waiters, Gardeners, Clerical Assistants
were made at different points of time on daily wage basis during the
period 1993-1995 under the orders of the then Vice Chancellor.
3. Their services came to be regularized by the 1st respondent
giving them the status of regular employees by an order dated 7 th
May, 1996. It appears that as some objections were raised
questioning the manner in which the regularisation had taken place,
the 1st respondent by a later order dated 24th March, 1997 de-
regularised the non-teaching staff/employees and in consequence
thereof, their services came to be terminated. So far as the order of
de-regularisation passed by the 1st respondent dated 24th March,
1997 is concerned, it has attained finality after the Division Bench of
2
the High Court of Kerala has upheld the order of de-regularisation
dated 24th March, 1997 taking note of the initial engagement as daily
wager and the appointment being without going through the process
of selection as prescribed under the scheme of University Ordinance
recorded a finding that the order of de-regularisation passed by the
authorities is valid and justified and left the question of non-
observance of the provisions of the Act 1947 open to be examined in
the appropriate proceedings known to law.
4. It may be further noticed that the grievance of the teaching and
non-teaching staff was jointly examined by the Division Bench of the
High Court while deciding the writ appeal under its common
impugned judgment dated 23rd March, 2000. Para 10 of the
judgment of the Division Bench of the High Court dated 23 rd March,
2000 relevant for the purpose is reproduced as under:-
10. Other point raised related to non-observance of the
requirements of the ID Act. As rightly observed by learned single
Judge, same is not to be decided in Article 226 applications since
appellants, if they are so advised and feel that they have a right
under the ID Act, can approach the forum. This position was
highlighted by apex Court in Basant Kumar Sarkar and Others Vs.
Eagle Rolling Mills Ltd.(AIR 1954 SC 1200) and Rajasthan State
Road Transport Corpn. Vs. Krishna(JT 1005(4) SC 343).
3
5. The appellants raised an industrial dispute pursuant to which
the appropriate Government made the reference order dated 8th April,
2003 for adjudication by the Industrial Tribunal as under:-
“Whether the de-regularization of regularized employees in the
Annexure appended and their subsequent termination by the
management of Sree Sankaracharya University of Sanskrit is legal
and justifiable? If not what relief they are entitled to?”
6. It may be noticed that the nature of appointment as a daily
wager was not the subject matter of reference and undisputedly, so
far as the order of de-regularisation dated 24th March, 1997 is
concerned, that was not open to be examined by the Tribunal
pursuant to a reference made as it has attained finality by the
judgment of the Division Bench of the High Court after recording a
finding that the 1st respondent-University was justified in passing the
order of de-regularisation of such employees who were appointed
without going through the process of selection prescribed under the
University Ordinance and were appointed on daily wage basis and
such appointments could not have been regularised by the 1 st
respondent-University.
7. The limited question in terms of the reference open to be
examined by the Tribunal was as to whether the termination
4
which has been given effect to by the 1st respondent was legal and
justified and if not, what relief the employee was entitled to.
8. The Industrial Tribunal, after taking into consideration the
material on record, returned a finding that the termination of the
appellants from service is in violation of Section 25F of the Act 1947
and as a natural consequence held the workman employee to be
deemed in service till their services are validly terminated with 50%
back wages. The relevant para 9 of the Award is as under:-
9. If we go through the pleadings in the written statement, it can
be seen that the service of the workmen which had started in various
dates in the year 1993, 94,95 and 96 had been regularized by the
university later through a proceedings dated 12.4.1996. From the
date of commencement of their service to the date of de-
regularization of their services, all of them were having continuous
service. About one year after from 12.4.96, their services were
terminated on the basis of decision of the syndicate of the university
dated 23.3.97. Such a decision was as per the judgment of the
Division Bench of the High Court in the earlier writ appeal judgment.
Therefore, from these admitted facts, it can be seen that all these
workmen were having continuous service and they had more than
240 days of service to their credit service. The management does
not have any case that the terminations effected on these workmen
concerned in this dispute were in compliance with Section 25-F of
the I.D. Act. On that sole ground it has to be declared that the
terminations effected in the case of workmen were in violation of Sec.
25-F of the I.D. Act. Therefore, they would deem to be in service till
their services are validly terminated strictly in accordance with
Industrial Disputes Act. In view of various decisions of the Supreme
Court and the settled position laid thereon, the only relief which can
be granted in this case is by way of declaration that the termination
of all workmen who had to their credit 240 days of continuous as
explained in Sec. 25 were illegal. As a natural consequence, all of
such workmen would deem to be in service till their services are
validly terminated. Because of that they entitled for full back wages
5
also in the ordinary course. However, such entitlement cannot be
treated as a matter of rule always. I think it will be appropriate, if
all the workmen concerned are given 50% of the backwages.
9. The Award of the Tribunal dated 14th November, 2005 came to
be challenged at the instance of the 1st respondent before the learned
Single Judge of the High Court of Kerala. The learned Single Judge
without disturbing the finding of fact recorded by the Tribunal in its
Award held that each of the workmen has completed more than 240
days of service in the preceding 12 months from the alleged date of
termination and their services were terminated without observance
of Section 25F of the Act 1947 but further proceeded on the premise
that if the order of appointment of the workmen was not valid and
has not been made in terms of the procedure prescribed under the
Ordinance, such irregular appointments are not entitled to seek
protection of the Act 1947 and further observed that retrenchment
referred to under Section 25F applies to properly employed persons
who are in service and set aside the Award by a judgment dated 25th
June, 2009. The relevant part is as under:-
“In my view, before proceeding to consider eligibility for relief
under Section 25F, the Tribunal should have considered whether
appointment of employees terminated was properly made. The
Syndicate of the University ordered termination only after finding
that the employees who got appointment was through irregular
6
ways. Section 25F does not apply to as case of termination of
illegally appointed employees. On the other hand, retrenchment
referred to in Section 25F applies to properly employed persons who
were in service. So much so, the order passed by the Industrial
Tribunal declaring the termination of the employees as illegal is only
to be set aside and I do so. Consequently, the terminated employees
are not entitled to compensation ordered by the Tribunal under
Section 25F. During pendency of the W.P., some of the terminated
employees were granted wages under Section 17B of the Industrial
Disputes Act, under orders of this Court. Besides this, they are not
entitled to any other relief. The W.P. is therefore allowed setting
aside Ext. P14 award of the Industrial Tribunal.”
10. That order of the learned Single Judge came to be confirmed by
the Division Bench of the High Court on writ appeal being preferred
at the instance of the present appellants under the impugned
judgment dated 4th January, 2010.
11. Mr. M.T. George, learned counsel for the appellants submits
that the finding of fact recorded by the Tribunal has been confirmed
by the High Court under the impugned judgment and it can be safely
noticed by this Court that the appellants were appointed on daily
wage basis in non-teaching staff category. Indisputedly, their
appointments were made without going through the process of
selection as being contemplated under the University Ordinance but
this is not the case of the respondents that either of the appellants
had either misrepresented/misled or committed fraud or either of
7
them is not eligible in seeking employment in non-teaching category
and it is also not being disputed that each of them had been in
continuous service of more than 240 days in the preceding 12
months from the alleged date of termination.
12. Learned counsel submits that admittedly there was a violation
of Section 25F of the Act 1947. In consequence thereof, no error was
committed by the Tribunal in passing an Award treating them to be
deemed in service with 50% back wages unless validly terminated,
obviously after compliance of the mandatory requirement as
contemplated under clauses (a) and (b) of Section 25F of the Act
1947.
13. Learned counsel further submits that the finding which has
been recorded by the learned Single Judge and confirmed by the
Division Bench under the impugned judgment that if the
appointments are not being made in accordance with the procedure
prescribed by law, such employees are not entitled to seek protection
of the Act 1947, is legally unsustainable in law as the nature of
appointments is not a pre-condition for compliance of Section 25F
and scheme of the Act 1947 contemplates that if the employee who
8
is a workman under Section 2(s) has been retrenched as
contemplated under Section 2(oo) and if was in continuous service
for more than 240 days in the preceding 12 months from the alleged
date of termination as contemplated under Section 25B of the Act,
the employer is under an obligation to comply with the mandatory
requirement of clauses (a) and (b) of Section 25F, its non-observance
as held by this Court, to be void ab initio bad with the consequential
order of reinstatement with full back wages and open for the
employer to pass a fresh order after due compliance in accordance
with law.
14. In support of his submissions, learned counsel placed reliance
on the judgments of this Court in State Bank of India Vs. Shri N.
Sundara Money1; L. Robert D’Souza Vs. Executive Engineer,
Southern Railway and Another2; Punjab Land Development and
Reclamation Corporation Ltd., Chandigarh Vs. Presiding
Officer, Labour Court, Chandigarh and Others3 and Nagar
1
1976(1) SCC 822
2
1982(1) SCC 645
3 1990(3) SCC 682
9
Mahapalika(Now Municipal Corpn.) Vs. State of U.P. and
Others4.
15. Per contra, Mr. R. Basant, learned senior counsel for the
respondents, while supporting the finding recorded by the Division
Bench of the High Court under the impugned judgment, submits that
after the finding has been recorded by the Division Bench in the
earlier round of litigation holding such appointments being conceived
in fraud and deceit are not entitled to seek protection of Section 25F
by those employees whose appointments have been declared as void
ab initio bad.
16. Learned counsel further submits that the term ‘retrenchment’
under Section 2(oo) although have been couched with the words “for
any reason whatsoever” but cannot be interpretated to protect those
who secured entry by backdoor and whose appointments are vitiated
by fraud and deceit as being observed by the Division Bench of the
High Court in the earlier round of litigation.
17. In support of his submission, learned counsel placed reliance
on the judgments of this Court in R. Vishwanatha Pillai Vs. State
4 2006(5) SCC 127
10
of Kerala and Others5; Rajasthan Tourism Development
Corporation Ltd. And Another Vs. Intejam Ali Zafri6 followed with
recent judgments in Satluj Jal Vidyut Nigam Vs. Raj Kumar
Rajinder Singh(Dead) through legal representatives and Others7
and Punjab Urban Planning and Development Authority and
Another Vs. Karamjit Singh8.
18. In the alternative, learned counsel further submits that
assuming that there was a violation of Section 25F of the Act 1947,
still there cannot be an automatic reinstatement as being considered
by this Court and each of the workmen had worked for a period 1993-
1997 and they were de-regularised by an order dated 24th March
1997, they may be entitled for reasonable compensation in lieu of
reinstatement looking to the period of service rendered by each of
them and further submits that granting 50% back wages is grossly
unfair as each of the workmen, during pendency of the litigation,
under Section 17B has received his last pay drawn and a total sum
of Rs. 36.68 lakhs has been paid to the contesting appellants-
5
2004(2) SCC 105
6 2006(6) SCC 275
7
2019(14) SCC 449
8 2019(16) SCC 782
11
workmen and in the given circumstances, the finding recorded by the
Division Bench does not call for any interference.
19. We have heard learned counsel for the parties and with their
assistance perused the material available on record.
20. It is an admitted case of the parties that Act 1947 is applicable
on the 1st respondent-University and they are under an obligation to
comply with the provisions of the Act 1947. It is also admitted that
the 1st respondent is the employer as defined under Section 2(g) and
the dispute which was raised is an industrial dispute as defined
under Section 2(k) and the present appellants are the workmen as
defined under Section 2(s) and the termination which was given effect
to by the 1st respondent was a retrenchment as defined under Section
2(oo) and it is not the case of the 1st respondent that their termination
falls in any of the exceptions defined under Section 2(oo) of the Act
1947.
21. Section 2(oo) relevant for the purpose is reproduced as under:-
(oo) “retrenchment means the termination by the employer of the
service of a workman for any reason whatsoever, otherwise than as
a punishment inflicted by way of disciplinary action, but does not
include—
(a) voluntary retirement of the workman; or
12
(b) retirement of the workman on reaching the age of
superannuation if the contract of employment between
the employer and the workman concerned contains a
stipulation in that behalf; or
[(bb) termination of the service of the
workman as a result of the non-renewal of
the contract of employment between the
employer and the workman concerned on
its expiry or of such contract being
terminated under a stipulation in that
behalf contained therein; or]
(c) termination of the service of a workman on the
ground of continued ill-health;]
22. The term ‘retrenchment’ leaves no manner of doubt that the
termination of the workman for any reason whatsoever, otherwise
than as punishment inflicted by way of disciplinary action are being
termed as retrenchment with certain exceptions and it is not
dependent upon the nature of employment and the procedure
pursuant to which the workman has entered into service. In
continuation thereof, the condition precedent for retrenchment has
been defined under Section 25F of the Act 1947 which postulates
that workman employed in any industry who has been in continuous
service for not less than one year can be retrenched by the employer
after clauses (a) and (b) of Section 25F have been complied with and
both the clauses (a) and (b) of Section 25F have been held by this
Court to be mandatory and its non-observance is held to be void ab
13
initio bad and what is being the continuous service has been defined
under Section 25B of the Act 1947. It may be relevant to quote
Section 25B and clause (a) and (b) of Section 25F of the Act 1947
which are reproduced as under:-
25B. Definition of continuous service.- For the purposes of this
Chapter
(1) a workman shall be said to be in continuous service for a period
if he is, for that period, in uninterrupted service, including service
which may be interrupted on account of sickness or authorised leave
or an accident or a strike which is not illegal, or a lock-out or a
cessation of work which is not due to any fault on the part of the
workman;
(2) where a workman is not in continuous service within the
meaning of clause (1) for a period of one year or six months, he shall
be deemed to be in continuous service under an employer—
(a) for a period of one year, if the workman, during a
period of twelve calendar months preceding the date
with reference to which calculation is to be made, has
actually worked under the employer for not less than–
(i) one hundred and ninety days in the case of a
workman employed below ground in a mine; and (ii) two
hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a
period of six calendar months preceding the date with
reference to which calculation is to be made, has
actually worked under the employer for not less than–
(i) ninety-five days, in the case of a workman employed
below ground in a mine; and (ii) one hundred and
twenty days, in any other case. Explanation.–For the
purposes of clause (2), the number of days on which a
workman has actually worked under an employer shall
include the days on which– (i) he has been laid-off
under an agreement or as permitted by standing orders
made under the Industrial Employment (Standing
Orders) Act, 1946 (20 of 1946), or under this Act or
under any other law applicable to the industrial
establishment; (ii) he has been on leave with full wages,
14
earned in the previous years; (iii) he has been absent
due to temporary disablement caused by accident
arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity
leave; so, however, that the total period of such
maternity leave does not exceed twelve weeks.]
25F. Conditions precedent to retrenchment of workmen.- No
workman employed in any industry who has been in continuous
service for not less than one year under an employer shall be
retrenched by that employer until—
(a) the workman has been given one month’s notice in
writing indicating the reasons for retrenchment and the
period of notice has expired, or the workman has been
paid in lieu of such notice, wages for the period of the
notice:
(b) the workman has been paid, at the time of
retrenchment, compensation which shall be equivalent
to fifteen days’ average pay [for every completed year of
continuous service] or any part thereof in excess of six
months; and
(c) notice in the prescribed manner is served on the
appropriate Government [or such authority as may be
specified by the appropriate Government by notification
in the Official Gazette].
23. The scheme of the Act 1947 contemplates that the workman
employed even as a daily wager or in any capacity, if has worked for
more than 240 days in the preceding 12 months from the alleged date
of termination and if the employer wants to terminate the services of
such a workman, his services could be terminated after due
compliance of the twin clauses (a) and (b) of Section 25F of the Act
1947 and to its non-observance held the termination to be void ab
15
initio bad and so far as the consequential effect of non-observance of
the provisions of Section 25F of the Act 1947, may lead to grant of
relief of reinstatement with full back wages and continuity of service
in favour of retrenched workman, the same would not mean that the
relief would be granted automatically but the workman is entitled for
appropriate relief for non-observance of the mandatory requirement
of Section 25F of the Act, 1947 in the facts and circumstances of each
case.
24. The salient fact which has to be considered is whether the
employee who has been retrenched is a workman under Section 2(s)
and is employed in an industry defined under Section 2(j) and who
has been in continuous service for more than one year can be
retrenched provided the employer complies with the twin conditions
provided under clauses (a) and (b) of Section 25F of the Act 1947
before the retrenchment is given effect to. The nature of employment
and the manner in which the workman has been employed is not
significant for consideration while invoking the mandatory
compliance of Section 25F of the Act 1947.
16
25. This can be noticed from the term ‘retrenchment’ as defined
under Section 2(oo) which in unequivocal terms clearly postulates
that termination of the service of a workman for any reason
whatsoever provided it does not fall in any of the exception clause of
Section 2(oo), every termination is a retrenchment and the employer
is under an obligation to comply with the twin conditions of Section
25F of the Act 1947 before the retrenchment is given effect to
obviously in reference to such termination where the workman has
served for more than 240 days in the preceding 12 months from the
alleged date of termination given effect to as defined under Section
25B of the Act.
26. This Court in State Bank of India(supra) while examining the
retrenchment of various nature of employments questioning the
interpretation of Section 2(oo) of the Act held as under:-
8. Without further ado, we reach the conclusion that if the workman
swims into the harbour of Section 25-F, he cannot be retrenched
without payment, at the time of retrenchment, compensation
computed as prescribed therein read with Section 25-B(2). But,
argues the appellant, all these obligations flow only out of
retrenchment, not termination outside that species -of snapping
employment. What, then, is retrenchment? The key to this vexed
question is to be found in Section 2(oo) which reads thus:
2. (oo) “retrenchment” means the termination by the employer of the
service of a workman for any reason whatsoever, otherwise than as
17
a punishment inflicted by way of disciplinary action, but does not
include—
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of
superannuation if the contract of employment between the employer
and the workman concerned contains a stipulation in that behalf;
or
(c) termination of the service of a workman on the ground of
continued ill-health;”
For any reason whatsoever — very wide and almost admitting of no
exception. Still, the employer urges that when the order of
appointment carries an automatic cessation of service, the period of
employment works itself out by efflux of time, not by act of employer.
Such cases are outside the concept of “retrenchment” and cannot
entail the burdensome conditions of Section 25-F. Of course, that a
one year and ten months “nine-days” employment, hedged is with
an express condition of temporariness and automatic cessation,
may look like being in a different street (if we may use a
colloquialism) from telling a man off by retrenching him. To retrench
is to cut down. You cannot retrench without trenching or cutting.
But dictionaries are not dictators of statutory construction where
the benignant mood of a law and, more emphatically, the definition
clause furnish a different denotation. Section 2(oo) is the master of
the situation and the Court cannot truncate its amplitude.
9. A breakdown of Section 2(oo) unmistakably expands the
semantics of retrenchment. Termination … for any reason
whatsoever are the key words. Whatever the reason, every
termination spells retrenchment. So the sole question is, has the
employee’s service been terminated? Verbal apparel apart, the
substance is decisive. A termination takes place where a term
expires either by the active step of the master or the running out of
the stipulated term. To protect the weak against the strong this
policy of comprehensive definition has been effectuated.
Termination embraces not merely the act of termination by the
employer, but the fact of termination howsoever produced. Maybe,
the present may be a hard case, but we can visualise abuses by
employers, by suitable verbal devices, circumventing the armour of
Section 25-F and Section 2(oo). Without speculating on possibilities,
we may agree that “retrenchment” is no longer terra incognita but
area covered by an expansive definition. It means “to end, conclude,
cease”. In the present case the employment ceased, concluded,
ended on the expiration of one year ten months nine days —
automatically may be, but cessation all the same. That to write into
18
the order of appointment the date of termination confers
no moksha from Section 25-F(b) is inferable from the proviso to
Section 25-F(1) [sic 25-F (a)]. True, the section speaks of
retrenchment by the employer and it is urged that some act of
volition by the employer to bring about the termination is essential
to attract Section 25-F and automatic extinguishment of service by
effluxion of time cannot be sufficient. An English
case R. v. Secretary of State was relied on, where Lord Denning,
3
M.R. observed:
“I think that the word ‘terminate’ or ‘termination’ is by
itself ambiguous. It can refer to either of two things —
either to termination by notice or to termination by
effluxion of time. It is often used in that dual sense in
landlord and tenant and in master and servant cases.
But there are several indications in this para to show
that it refers here only to termination by notice.”
Buckley, L.J. concurred and said:
“In my judgment the words are not capable of bearing
that meaning. As Counsel for the Secretary of State has
pointed out, the verb ‘terminate’ can be used either
transitively or intransitively. A contract may be said to
terminate when it comes to an end by effluxion of time,
or it may be said to be terminated when it is determined
at notice or otherwise by some act of one of the parties.
Here in my judgment the word ‘terminated’ is used in
this passage in para 190 in the transitive sense, and it
postulates some act by somebody which is to bring the
appointment to an end, and is not applicable to a case
in which the appointment comes to an end merely by
effluxion of time.”
Words of multiple import have to be winnowed judicially to suit the
social philosophy of the statute. So screened, we hold that the
transitive and intransitive senses are covered in the current context.
Moreover, an employer terminates employment not merely by
passing an order as the service runs. He can do so by writing a
composite order, one giving employment and the other ending or
limiting it. A separate, subsequent determination is not the sole
magnetic pull of the provision. A pre-emptive provision to terminate
is struck by the same vice as the post-appointment termination.
Dexterity of diction cannot defeat the articulated conscience of the
provision.
19
27. It was later followed in L. Robert D’Souza(supra) and held as
under:-
25. Assuming we are not right in holding that the appellant had
acquired the status of a temporary railway servant and that he
continued to belong to the category of casual labour, would the
termination of service in the circumstances mentioned by the
Railway Administration constitute retrenchment under the Act?
26. Section 25-F of the Act provides that no workman employed in
any industry who has been in continuous service for not less than
one year under an employer shall be retrenched by that employer
until the conditions set out in the Act are satisfied. The expression
“workman” is defined as under:
“2. In this Act, unless there is anything repugnant in
the subject or context,—
(s) “workman” means any person (including an
apprentice) employed in any industry to do any
skilled or unskilled manual, supervisory,
technical or clerical work for hire or reward,
whether the terms of employment be expressed or
implied, and for the purposes of any proceeding
under this Act in relation to an industrial dispute,
includes any such person who has been
dismissed, discharged or retrenched in
connection with, or as a consequence of, that
dispute, or whose dismissal, discharge, or
retrenchment has led to that dispute, but does
not include any such person—
(i) who is subject to the Army Act,
1950, or the Air Force Act, 1950, or
the Navy (Discipline) Act, 1934; or
(ii) who is employed in the police
service or as an officer or other
employee of a prison; or
(iii) who is employed mainly in a
managerial or administrative
capacity; or
(iv) who, being employed in a
supervisory capacity, draws wages
exceeding five hundred rupees per
20
mensem or exercises, either by the
nature of the duties attached to the
office or by reason of the powers
vested in him, functions mainly of a
managerial nature.”
27. There is no dispute that the appellant would be a workman
within the meaning of the expression in Section 2 (s) of the Act.
Further, it is incontrovertible that he has rendered continuous
service for a period over 20 years. Therefore, the first condition of
Section 25-F that appellant is a workman who has rendered service
for not less than one year under the Railway Administration, an
employer carrying on an industry, and that his service is terminated
which for the reasons hereinbefore given would constitute
retrenchment. It is immaterial that he is a daily-rated worker. He is
either doing manual or technical work and his salary was less than
Rs 500 and the termination of his service does not fall in any of the
excepted categories. Therefore, assuming that he was a daily-rated
worker, once he has rendered continuous uninterrupted service for
a period of one year or more, within the meaning of Section 25-F of
the Act and his service is terminated for any reason whatsoever and
the case does not fall in any of the excepted categories,
notwithstanding the fact that Rule 2505 would be attracted, it would
have to be read subject to the provisions of the Act. Accordingly the
termination of service in this case would constitute retrenchment
and for not complying with pro-conditions to valid retrenchment, the
order of termination would be illegal and invalid.
28. Later, in Punjab Land Development and Reclamation
Corporation Ltd., Chandigarh(supra), the Constitution Bench of
this Court examined the scope of the term ‘Retrenchment” under
Section 2(oo) of the Act in affirmative in paragraphs 14 and 82. The
relevant paras are as under:-
14. The precise question to be decided, therefore, is whether on a
proper construction of the definition of “retrenchment” in Section
2(oo) of the Act, it means termination by the employer of the service
of a workman as surplus labour for any reason whatsoever, or it
means termination by the employer of the service of a workman for
21
any reason whatsoever, otherwise than as a punishment inflicted by
way of disciplinary action, and those expressly excluded by the
definition. In other words, the question to be decided is whether the
word “retrenchment” in the definition has to be understood in its
narrow, natural and contextual meaning or in its wider literal
meaning.
82. Applying the above reasonings, principles and precedents, to the
definition in Section 2(oo) of the Act, we hold that “retrenchment”
means the termination by the employer of the service of a workman
for any reason whatsoever except those expressly excluded in the
section.
29. It leaves no manner of doubt that the nature of every
termination of a kind, by the service of a workman, for any reason
whatsoever, which the Legislature in its wisdom made a clarification
in its intention to be known to the employer that such of the workman
whose services, if to be terminated, will amount to retrenchment
under Section 2(oo) of the Act except those expressly excluded in the
section.
30. It is not open for us to examine the nature of employment
offered to the workman and the manner he had served the employer
is beyond the terms of reference made by the appropriate
Government dated 8th April, 2003 and the fact is that if the service of
the workman has been terminated, it will be termed to be a
retrenchment under Section 2(oo) of the Act provided it does not fall
under any of those expressly excluded under the section. In every
22
retrenchment, the employer is not under an obligation to comply with
the twin conditions referred to under clauses (a) and (b) of Section
25F of the Act but in a case where the workman has been in
continuous service for more than 240 days in the preceding 12
months before the alleged date of termination as contemplated under
Section 25B, the employer is under an obligation to comply with the
twin conditions referred to under clauses (a) and (b) of Section 25F
of the Act 1947.
31. The consistent view of this Court is that such non-observance
has been termed to be void ab initio bad and consequence in the
ordinary course has to follow by reinstatement with consequential
benefits but it is not held to be automatic and what alternative relief
the workman is entitled for on account of non-observance of
mandatory requirement of Section 25F of the Act 1947 is open to be
considered by the Tribunal/Courts in the facts and circumstances of
each case.
32. What appropriate relief the workman may be entitled for
regarding non-compliance of Section 25F of the Act 1947 has been
23
considered by this Court in Bharat Sanchar Nigam Limited Vs.
Bhurumal9. The relevant paras are as under:-
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 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) [(2006) 4 SCC 1]. 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
9
2014(7) SCC 177
24
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 the rule and
only in exceptional cases for the reasons stated to be in writing, such
a relief can be denied.
33. It has been further followed in District Development Officer
and Another Vs. Satish Kantilal Amralia10.
34. In the instant case, the appellants had served as a daily wager
in non-teaching staff category from the year 1993-1997 and their
services were terminated in sequel to the order dated 24th March,
1997 pursuant to which their services were de-regularized and that
has been upheld by the Division Bench of the High Court in writ
appeal preferred at the instance of the appellants in the earlier round
of litigation.
35. In the afore-stated facts, the High Court of Kerala in the earlier
round of litigation made certain adverse observations with regard to
the nature of appointment as a daily wager but still the alleged
termination was left open to examine the effect of non-observance of
10
2018(12) SCC 298
25
the Act, 1947 in the appropriate proceedings. Thus, what has been
observed by the Division Bench in its Judgment in the earlier round
of litigation may not have any relevance so far as the question which
has been examined by the Tribunal in answering the reference in
affirmative terms regarding non-observance of Section 25F of the Act
1947 and its consequential effect.
36. At the same time, the finding which has been recorded by the
learned Single Judge and confirmed by the Division Bench of the
High Court in the impugned judgment that if the appointment has
not been properly made after going through the process of selection
as provided under the statutory rules/Ordinance, as the case may
be, if such irregular appointments are being terminated, Section 25F
will not apply to a case of termination of such appointed employees.
The view expressed by the High Court in the impugned judgment, in
our considered view, is unsustainable in law and is not in conformity
with the scheme of the Act 1947 and deserves to be set aside.
37. The submission made by learned counsel for the respondents
that after the finding has been recorded by the Division Bench of the
High Court in the earlier round of litigation holding the seal of
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approval on the appointments of the appellants to an act which is
conceived in fraud and delivered in deceit, are not entitled to claim
benefit under Section 25F of the Act 1947. In our considered view,
the submission is without substance for the reason that
appointments are made in the instant case on daily wage basis under
the orders of the Vice Chancellor who is the competent/appointing
authority and merely because their appointments are not in
accordance with the procedure prescribed under the Ordinance
would not disentitle them from claiming protection under provisions
of the Act 1947.
38. The judgment in R. Vishwanatha Pillai(supra) on which
learned counsel for the respondents has placed reliance was a case
where the incumbent sought an appointment as Scheduled Caste
candidate. On complaint, it revealed that he was not a member of
the Scheduled Caste category and in that reference, a finding was
recorded that the appointment has been obtained by fraud. What
will be the consequence, it does not have any application in the facts
of the instant cases.
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39. So far as the judgment in Rajasthan Tourism Development
Corporation Ltd. and another(supra) is concerned, it was a case
where the workmen had not worked for 240 days in the calendar year
which is the condition precedent for attracting the provisions of
Section 25F of the Act 1947. In those circumstances, a passing
reference has been made regarding non-observance of Section 25F of
the Act 1947, which, in our view, may not be of any assistance to the
respondents.
40. The next judgment relied upon in Satluj Jal Vidyut
Nigam(supra) is the case of abolition of jagirs by virtue of the
Himachal Pradesh Abolition of Big Landed Estates and Land Reforms
Act, 1953. While examining the abolition of Jagirs under the Act,
reference has been made of fraud and deceit which has no application
in the facts of the instant case.
41. So far as the judgment in Punjab Urban Planning and
Development Authority and Another(supra) is concerned, it was a
case where three years’ service was required for seeking
regularization of service in terms of circular issued by the authority
under its policy dated 23rd January, 2001 and the incumbent had
28
not completed three years of service for seeking regularization but
due to some inadvertence, his name was included in the list of
candidates who were regularized and after a show cause notice, his
services were terminated. In that context, reference has been made
which may not have any remote application on the facts of the case.
42. In the facts and circumstances of the instant cases and looking
into the nature of service rendered by the appellants as daily wager
for a short period, while upholding the termination of the appellants
being in violation of Section 25F of the Act 1947, we consider it just
and reasonable to award a lumpsum monetary compensation of
Rs.2,50,000/- (Rupees two lakh fifty thousand) to each of the
appellants-workmen in full and final satisfaction of the dispute in
lieu of right to claim reinstatement with 50% back wages as awarded
by the Tribunal.
43. The respondents shall pay the compensation as awarded by this
Court to each of the appellants-workmen within a period of three
months.
44. In view of the foregoing discussion, the appeals succeed and are
partly allowed. The impugned judgment of the High Court dated 4th
29
January, 2010 is hereby set aside and the Award of the Industrial
Tribunal dated 14th November, 2005 is modified to the extent
indicated above.
45. Pending application(s), if any, stand disposed of.
…………………………….J.
(AJAY RASTOGI)
…………………………….J.
(ABHAY S. OKA)
NEW DELHI
OCTOBER 27, 2021
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