Supply Co. Ltd. Vs. Shamim Mirza  INSC 1892 (7 November 2008)
ORTABLE IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6585 0F
2008 (Arising out of S.L.P.(C) No. 7197 of 2006) KANPUR ELECTRICITY SUPPLY --
APPELLANT (S) CO. LTD.
CIVIL APPEAL NO.6586
0F 2008 (Arising out of S.L.P.(C) No. 9586 of 2006)
D.K. JAIN, J.:
a common issue is involved in both the appeals, these are being disposed of by
appeals are directed against two separate judgments rendered by the High Court
of Judicature at Allahabad, upholding the Awards of: Labour Court (4) Kanpur
in I.D. No.70 of 1997 and Industrial Tribunal (3) Kanpur in I.D. No.46 of 1997,
collectively referred to as "the adjudicatory authority", whereby the
appellant had been directed to reinstate the respective respondents - namely,
Shamim Mirza and Manoj Srivastava, the two workmen, with full back wages and
continuity in service.
appellant-company was constituted by the U.P. State Government under Section 5
of the Electricity (Supply) Act, 1948 and was charged with several duties, as
enumerated under Section 18 of the said Act, in relation to generation,
transmission and distribution of electricity within the State.
The appellant opened
various cash centres in different divisions and sub-divisions for collection of
electricity bills and for the said purpose, invited tenders for installation of
Bradma Machines on contract basis. One such contract was awarded to M/s Vivek
and Associates in the year 1995.
Under the agreed
terms and conditions, the machines were to be operated by the said concern,
through its employees, 2 for which it was to be paid Rs.175/- per day, per
The contract is
stated to have continued till the year 1997.
the respondent-workmen raised an industrial dispute, alleging that their
services had been illegally terminated by the appellant. Accordingly, the State
Government referred, under Section 4K of the U.P. Industrial Disputes Act, 1947
(for short `the Act'), the following dispute i.e. I.D. No.70 of 1997 for adjudication:
Industrial Dispute Whether removal/termination of services of the workman Shri
Shamim Mirza, son of Shri Atiq Mirza, Cashier, w.e.f. 2.9.1996 by the
Management is legal and justified? If not, to which relief/consequential
benefits and from which date, the workman concerned is entitled to?"
(Except for change of
name of the workman and date of termination of his services, the dispute
referred in I.D. No.46 of 1997 was on similar lines.)
case of the workmen in nutshell was that: they had been appointed as cashiers
at two sub-stations when the 3 appellant had adopted the policy of
centralisation of all the 16-17 sub-stations for the purposes of collection of
electricity bills; several new appointments were made for operating these new
machines; before their appointment as cashiers, they were all given six months
training for this work; apart from collecting the electricity bills, they were
also depositing the cash so collected in the Treasury in Chief Office as per
the instructions of the Assistant Engineer (D); suddenly their services were
terminated without assigning any reason and without giving any notice to them
whereas persons junior to them were still working on the posts of cashiers.
Their plea was that since the termination of their services was in violation of
the provisions contained in Sections 6N, 6P & 6Q of the Act, they were
entitled to be reinstated with continuity in service and with full back wages.
the written statement filed before the adjudicatory authority, the stand of the
appellant - management was that there was no relationship of employer and
employee between them and the applicants and hence the dispute was not an
industrial dispute; the post of the cashier was a promotion post which could be
filled up by promotion from the cadre of assistant cashier; the cash centres
were opened in various divisions and sub-divisions for the convenience of the
consumers for depositing their electricity bills;
tenders were invited
for installing Bradma Machines in these centres on contract basis; the tender
was awarded in favour of Vivek and Associates for the period from 1st July,
1995 to 30th June, 1996 which period was later extended upto 31st July, 1997
and that the contractor was responsible for the operation and upkeep of the
machines, though the cash was to be handled by appellant's cashier or its duly
authorised representative and, therefore, the question of applicants'
employment with the appellant did not arise at all. In other words, the stand
of the appellant was that the references in both the cases were factually and
legally incompetent as the applicants were not "workmen" within the
meaning of the Act.
consideration of the evidence produced by both the parties, the adjudicatory
authority formed the view that though no appointment letters had been filed by
the workmen but it had come in evidence that before taking the work, letters
were issued to them by an Assistant Manager of the appellant; though signatures
of the applicants did not appear in any of the columns of Electricity Cash and
Revenue (ECR) rolls but their designation as cashier had been mentioned on all
these sheets and in some of the letters there were signatures of the Assistant
Engineer; in the contract given to M/s Vivek and Associates for operating
Bradma machines it had been mentioned that it would be the responsibility of
the contractor to operate these machines at all the 16 sub-stations but the
cash was to be handled by the cashier of the appellant only but the appellant
had failed to prove that any of its other cashiers' had handled the job of cash
collection. It finally concluded that on the basis of the documents submitted
by the workmen and for lack of proper rebuttal to these documents, there was no
ground to presume that the 6 workmen were the employees of the contractor and
it stood proved that, in fact, they were in the regular employment of the
appellant as cashiers. Thus, it was held that the workmen having worked for
more than 240 days, their termination without notice and payment of
compensation as contemplated under Section 6N of the Act, was illegal.
aggrieved, the appellant filed writ petitions under Article 226 of the
Constitution, which have been dismissed by the impugned orders. The High Court
has held that the Labour Court/Industrial Tribunal having considered all the
aspects of the matter in the light of the evidence on record, no interference
in exercise of power under Article 226 of the Constitution was called for.
However, while dismissing the writ petition arising out of I.D. No.46 of 1997,
the High Court modified the Award to the extent that the workman in that case
would be entitled to 50% of the back wages pursuant to the Award.
have heard learned counsel for the parties.
counsel appearing for the appellant strenuously urged that both the
adjudicatory authorities as well as the High Court committed grave error by
acting on factually and legally erroneous premise. It was submitted that it was
a clear and definite stand of the appellant before the courts below that the
workmen were never employed by the appellant and they were the employees of the
contractor working on the Bradma Machines installed by him for collection of
the electricity bills from the consumers; there was no privity of contract between
the appellant and the workmen and, therefore, the provisions of the Act were
not attracted at all. Learned counsel contended that for determining the
employer-employee relationship both the courts have failed to apply the test
laid down by this Court & Ors.1 It was also submitted that having observed
that the workmen had neither produced the letters of appointment nor the salary
slips, the courts below committed a patent illegality in relying on the
documents 1 (2004) 1 SCC 126 8 signed by the staff of the appellant for
internal use to return a finding that the workmen were the regular employees of
the appellant, which had the effect of putting the onus on the employer to
prove that the workmen were not his employees. Reliance was placed on Range Forest
Officer claimant to prove that he had worked for a particular management.
Lastly, relying on Nagar Panchayat submitted that the courts below again erred
in awarding back wages to the workmen in routine.
contra, Mr. R. Venkataramani, learned senior counsel appearing for Shamim
Mirza, one of the workmen, supporting the decision of the High Court, submitted
that apart from the fact that the evidence produced by the workman was
sufficient to prove that he was discharging his duties as cashier and not as a
Bradma Machine Operator, even the official records show that he was working as
an employee of the appellant. Referring to the 2 (2002) 3 SCC 25 3 (2005) 13
SCC 428 9 application of the workman - Shamim Mirza, before the Labour Court,
inter alia, praying for summoning of some documents from the appellant,
including ECR register, vouchers showing payment of salaries by the appellant
to him, learned senior counsel vehemently argued that on appellant's failure to
produce these documents, the adjudicatory authority was justified in drawing
adverse inference against them. It was also urged that the service of the
workman having been terminated much after the expiry of the period of contract
of Vivek and Associates, it stands established that the workman was under the
control of the appellant and not the contractor. Relying on Bank of counsel
urged that the workman having produced more than prima facie evidence, no fault
could be found with the findings of fact recorded by both the courts below in
favour of the workman, this Court should be loathe to interfere.
Praveen Chaturvedi, learned counsel appearing for the other workman - Manoj
Srivastava, in order to buttress his 4 (2005) 10 SCC 792 10 argument that the
respondent was under the administrative control of the appellant, invited our
attention to an office note dated 26th July, 1994 (Ex.34) issued by the
Managing Director of the appellant to some of its cashiers, which included the
name of the respondent, threatening action against them for not depositing the
cash amounts collected by them. He, thus, contended that the document proves,
beyond doubt, the employer-employee relationship between the appellant and
considered the matter in the light of the material referred to and relied upon
by the adjudicatory authority, in our judgment, the High Court was justified in
declining to interfere in both the matters.
is trite that the burden to prove that a claimant was in the employment of a
particular management, primarily lies on the person who claims to be so but the
degree of proof, so required, varies from case to case. It is neither feasible
nor advisable to lay down an abstract rule to determine the employer-employee
relationship. It is essentially a question 11 of fact to be determined by
having regard to the cumulative effect of the entire material placed before the
adjudicatory forum by the claimant and the management.
is true that in the instant case, the workmen did not produce the letters of
appointment as also their salary slips but they have been successful in
adducing some contemporaneous documentary evidence, including ECR sheets
bearing the signatures of the workmen and that of another senior officer of the
appellant company (Ex.W-7, W- 10 to W-15), which shows that they were
collecting cash on behalf of the appellant; depositing it in the van or central
office of the appellant and were answerable to the officials of the appellant.
In this regard, Clause 5 of the terms and conditions of the contract awarded to
Vivek and Associates is also relevant, which provides as under:
"You will be
responsible for the operation of machines only. The cash handling is to be done
by K.E.S.A., Cashier or a representative of K.E.S.A. duly authorised by Dy.
has come in evidence of the witnesses examined on behalf of the workmen that it
was only the respondents who were collecting the cash and no other employee of
the appellant. No evidence was led by the appellant in rebuttal.
appellant was called upon to produce the official records but they failed to do
so, with the result the adjudicatory authority drew adverse inference against
the appellant. In the light of the factual scenario as emerging from the
evidence on record, we are convinced that the workmen had discharged the burden
which lay on them to prove the employer-employee relationship with the
appellant. It is also pertinent to note that in both the cases, evidence on
record shows the engagement of the workmen was prior to the award of contract
to M/s Vivek and Associates for the period starting 1st July, 1995. Workman
Shamim Mirza claims to have joined the appellant on 13th June, 1995 while
workman Manoj Srivastava claims to have joined on 17th June, 1994, which fact
was not controverted by the appellant. On the contrary, this fact stands proved
from Ex.34, an office note dated 26th July, 1994, containing 13 the name of
Manoj Srivastava as one of the defaulting cashiers. Workman Shamim Mirza has
also placed on record a certificate dated 9th September, 1996 issued by
Assistant Engineer, sub-station Kalyanpur, certifying that he had worked at the
cash collection office in the capacity of a cashier with effect from 13th June,
1995 to 31st August, 1996 with honesty and hard labour. Other than this, he had
also done good job on his directions at other places.
The stand of the
appellant on the said certificate was that this Assistant Engineer was not
competent to issue such a certificate. Be that as it may, the said document
does show that the workman did work with the appellant even prior to the award
of the contract to Vivek and Associates.
Shamim Mirza has also placed on record a copy of an office memorandum dated 5th
May, 2007, issued by the appellant indicating that another cashier, namely,
Kailash Verma, stated to be similarly situated and who had also obtained an
award in his favour, the appellant had arrived into an agreement with him. The
said person has 14 been reinstated in service by the appellant on the post of
a cashier in the pay scale of Rs.4200-100-6400 subject to his complying with
certain terms and conditions imposed on him, which does prima facie show that
the appellant has been adopting some sort of pick and choose policy.
regards the rulings of this Court relied upon by learned counsel for the
appellant, in our view, these are of little assistance to the appellant. All
these cases deal with the question of regularisation of the services of
workmen, in particular those who were engaged as daily wager or on contract or
for specific period/fixed term, which is not the case here. It is manifest that
the only dispute referred to the adjudicatory authority was in regard to the
termination of the services of the workmen without following the procedure laid
down in the Act.
the light of the aforenoted factual matrix and the evidence on record, we are
of the opinion that the courts below were justified in holding that both the
workmen have established their claim of having worked with the appellant 15
for more than 240 days as their employees. We find no reason whatsoever to
interfere with the impugned judgments to that extent.
next question for determination is whether the respondents are entitled to the
back-wages for the period they were out of service?
is true that once the order of termination of service of an employee is set
aside, ordinarily the relief of reinstatement is available to him. However, the
entitlement of an employee to get reinstated does not necessarily result in
payment of full or partial back-wages, which is independent of reinstatement.
While dealing with the prayer of back- wages, factual scenario, equity and good
conscience and a number of other factors, like the manner of selection;
of appointment; the period for which the employee has worked with the employer
etc.; have to be kept in view.
All these factors are
illustrative and no precise formula can be laid down as to under what
circumstances full or partial 16 back-wages should be awarded. It depends upon
the facts and circumstances of each case.
Singh5 a three-Judge
Bench of this Court has observed that there cannot be a strait jacket formula
for awarding relief of back-wages and an order of back-wages should not be
passed in a mechanical manner. It has been held that a host of factors, like
the manner and method of selection and appointment; the nature of appointment,
namely, whether ad hoc, short term, daily wage, temporary or permanent in
character; and the length of service, which the workman had rendered with the
employer are required to be taken into consideration before passing any order
for award of back-wages. [See: also Haryana State 5 (2005) 5 SCC 591 6 (2006) 9
SCC 434 7 (2006) 1 SCC 479 8 (2006) 7 SCC 180
in mind the afore-noted broad parameters, we are of the opinion that the facts
at hand do not warrant payment of back-wages to the respondents. In both the
cases, though the respondents have succeeded in establishing that they were in
the employment of the appellant when their services were terminated but nothing
has been brought on record to show that they were selected through a regular
recruitment process. It has also not been shown whether they were actually
qualified for the post of a cashier. Besides, on their own showing they had
worked with the appellant for about two years when their services were
terminated. These circumstances, in our view, disentitle them from their claim
for back wages.
orders of the High Court to the extent they affirm the directions of the
adjudicatory authority with regard to the payment of back wages are set aside.
for the aforesaid reasons, both the appeals are allowed to the extent indicated
above. However, in the circumstances, there will be no order as to costs.