Singh Vs. Haryana State Agr. Marketing Board & ANR.  INSC 1208 (14
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.4334 OF
2009 (Arising out of SLP) No. 987/2009) Jagbir Singh ...Appellant Versus
Haryana State Agriculture Marketing Board & Anr. ...Respondents
The appellant was engaged as a daily wager by the Respondent No.
1, Haryana State Agriculture Marketing Board on September 1, 1995. He worked
with the Respondent No. 1 upto July 18, 1996. Thereafter, his services came to
his employment, the appellant was paid consolidated wages @ Rs. 1,498/- per
month. The appellant raised the industrial dispute contending that his services
were retrenched illegally in violation of Section 25F of Industrial Disputes
Act, 1947 (for short, `the Act, 1947'). He claimed reinstatement with
continuity of service and full back wages.
The Presiding Officer, Industrial Tribunal-cum-Labour Court,
Panipat, after recording evidence and hearing the parties held that the
appellant had worked for more than 240 days in the year preceding the date of
termination and that the Respondent No. 1 violated the provisions of Section
25F of the Act 1947 by not giving him notice, pay in lieu of notice and
retrenchment compensation before his termination. The Labour Court,
accordingly, vide its award dated September 16, 2005 declared that the
appellant was entitled to reinstatement with continuity of service and full
back wages from the date of demand notice, i.e., January 27, 1997.
The present Respondent Nos. 1 and 2 challenged the award before
the High Court for Punjab and Haryana. The High Court held that even if the
appellant had completed 240 days of service in a calendar year, he was neither
entitled to be reinstated nor could be granted back wages. The High Court 2 set
aside the award holding that it was not sustainable in law. It is this order of
the High Court that has been challenged by the appellant in this appeal by
The question that falls for our consideration is whether the High
Court, in a case such as this where termination of appellant was in
contravention of Section 25F, was justified in upsetting the award of the
Labour Court whereby the first respondent was directed to reinstate the
appellant with continuity of service and full back wages.
The learned counsel for the appellant strenuously urged that once
the termination of service of the appellant was held to be in violation of
Section 25F of the Act 1947, the Labour Court rightly ordered reinstatement
with continuity of service and full back wages and the High Court was not
justified in interfering with the just award passed by the Labour Court. On the
other hand, the learned counsel for the respondents supported the order of the
It is true that earlier view of this Court articulated in many
decisions reflected the legal position that if the termination of an employee
was found to be illegal, the relief of reinstatement with full back wages would
ordinarily follow. However, in recent 3 past, there has been a shift in the
legal position and in long line of cases, this Court has consistently taken the
view that relief by way of reinstatement with back wages is not automatic and
may be wholly inappropriate in a given fact situation even though the
termination of an employee is in contravention to the prescribed procedure.
Compensation instead of reinstatement has been held to meet the ends of
In U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey1, the
question for consideration before this Court was whether direction to pay back
wages consequent upon a declaration that a workman has been retrenched in
violation of the provisions of the Section 6-N of the U.P. Industrial Disputes
Act, 1947 (equivalent to Section 25F of `the Act, 1947') as a rule was proper exercise
of discretion. This Court considered a large number of cases and observed thus
The Industrial Courts while adjudicating on disputes between the management and
the workmen, therefore, must take such decisions which would be in consonance
with the purpose the law seeks to achieve. When justice is the buzzword in the
matter of adjudication under the Industrial Disputes Act, it would be wholly
improper on the part of the superior courts to make them apply the cold letter
of the statutes to act mechanically. Rendition of justice would bring within
its purview giving a person what is due to him and not what can be given to him
person is not entitled to get something only because it would be lawful to do
so. If that principle is applied, the 1 (2006) 1 SCC 479 4 functions of an
Industrial Court shall lose much of their significance.
changes brought about by the subsequent decisions of this Court, probably
having regard to the changes in the policy decisions of the Government in the
wake of prevailing market economy, globalisation, privatisation and
outsourcing, is evident.
Court, therefore, emphasised that while granting relief, application of mind on
the part of the Industrial Court is imperative. Payment of full back wages,
therefore, cannot be the natural consequence."
This Court in the case of Uttaranchal Forest Development Corpn. V.
M.C. Joshi2 held that relief of reinstatement with full back wages were not
being granted automatically only because it would be lawful to do so and
several factors have to be considered, few of them being as to whether
appointment of the workman had been made in terms of statute/rules and the
delay in raising the industrial dispute. This Court granted compensation
instead of reinstatement although there was violation of Section 6-N of the
U.P. Industrial Disputes Act, 1947 (equivalent to Section 25F) of the Act,
1947. This is what this Court said :
Although according to the learned counsel appearing on behalf of the appellant
the Labour Court and the High Court committed an error in arriving at a finding
that in terminating the services of the respondent, the provisions of Section
6-N of the U.P. Industrial Disputes Act were contravened, we will proceed on
the basis that the said finding is correct. The question, however, would be as
to 2 (2007) 9 SCC 353 5 whether in a situation of this nature, relief of
reinstatement in services should have been granted.
It is now
well settled by reason of a catena of decisions of this Court that the relief
of reinstatement with full back wages would not be granted automatically only
because it would be lawful to do so. For the said purpose, several factors are
required to be taken into consideration, one of them being as to whether such
an appointment had been made in terms of the statutory rules. Delay in raising
an industrial dispute is also a relevant fact."
In the case of State of M.P. & Ors. v. Lalit Kumar Verma3,
this Court substituted the award of reinstatement by compensation.
In yet another decision in the case of M.P. Administration v.
Tribhuwan4, this Court reversed the High Court's order directing reinstatement
with full back wages and instead awarded compensation. It was opined :
"12. In this case, the Industrial Court exercised its
discretionary jurisdiction under Section 11-A of the Industrial Disputes Act.
It merely directed the amount of compensation to which the respondent was
entitled had the provisions of Section 25-F been complied with should be
sufficient to meet the ends of justice. We are not suggesting that the High
Court could not interfere with the said order, but the discretionary
jurisdiction exercised by the Industrial Court, in our opinion, should have
been taken into consideration for determination of the question as to what
relief should be granted in the peculiar facts and circumstances of this case.
is required to be dealt with in the fact situation obtaining therein.
We, therefore, are of the opinion that keeping in view the
peculiar facts and circumstances of this case and particularly 3 (2007) 1 SCC
575 4 (2207) 9 SCC 748 6 in view of the fact that the High Court had directed
reinstatement with full back wages, we are of the opinion that interest of
justice would be subserved if the appellant herein be directed to pay a sum of
Rs. 75,000 by way of compensation to the respondent. This appeal is allowed to
the aforementioned extent."
the case of Sita Ram v. Moti Lal Nehru Farmers Training Institute5, this Court
considered the question as to whether the Labour Court was justified in
awarding reinstatement of the appellants therein:
The question, which, however, falls for our consideration is as to whether the
Labour Court was justified in awarding reinstatement of the appellants in
Keeping in view the period during which the services were rendered by the
respondent (sic appellants); the fact that the respondent had stopped its
operation of bee farming, and the services of the appellants were terminated in
December 1996, we are of the opinion that it is not a fit case where the
appellants could have been directed to be reinstated in service.
Indisputably, the Industrial Court, exercises a discretionary jurisdiction, but
such discretion is required to be exercised judiciously. Relevant factors there
for were required to be taken into consideration; the nature of appointment,
the period of appointment, the availability of the job, etc. should weigh with
the court for determination of such an issue.
Court in a large number of decisions opined that payment of adequate amount of
compensation in place of a direction to be reinstated in service in cases of this
nature would subserve the ends of justice. (See Jaipur Development Authority v.
Ramsahai [(2006) 11 SCC 684], M.P. Admn. v. Tribhuban [(2007) 9 SCC 748] and
Uttaranchal Forest Development Corpn. v. M.C. Joshi [(2007) 9 SCC 353])
Having regard to the facts and circumstances of this case, we are of the
opinion that payment of a sum of Rs.
to each of the appellants, would meet the ends of justice. This appeal is
allowed to the aforementioned extent.
facts and circumstances of this case, there shall be no order as to
5 SCC 75 7
Ghaziabad Development Authority & Anr. v. Ashok Kumar & Anr.6, this
Court again considered the question whether the Labour Court was justified in
awarding the relief of reinstatement with full back wages in favour of the
workman and held :
The first respondent was admittedly appointed on a daily wage of Rs. 17 per
day. He worked for a bit more than two years. It has not been disputed before
us that sanction of the State of U.P. was necessary for creation of posts. The
contention of the appellant before the Labour Court that the post was not
sanctioned after 31-3-1990 by the State was not denied or disputed. If there
did not exist any post, in our opinion, the Labour Court should not have
directed reinstatement of the first respondent in service.
statutory authority is obligated to make recruitments only upon compliance with
the equality clause contained in Articles 14 and 16 of the Constitution of
India. Any appointment in violation of the said constitutional scheme as also
the statutory recruitment rules, if any, would be void.
facts were required to be kept in mind by the Labour Court before passing an
award of reinstatement.
Furthermore, public interest would not be subserved if after such a long lapse
of time, the first respondent is directed to be reinstated in service.
are, therefore, of the opinion that the appellant should be directed to pay
compensation to the first respondent in stead and in place of the relief of
reinstatement in service.
Keeping in view the fact that the respondent worked for about six years as also
the amount of daily wages which he had been getting, we are of the opinion that
the interest of justice would be subserved if the appellant is directed to pay
a sum of Rs 50,000 to the first respondent. The said sum should be paid to the
respondent within eight weeks from date, failing which the same shall carry
interest at the rate of 12% per annum. The appeal is allowed to the aforesaid 6
(2008) 4 SCC 261 8 extent. However, in the facts and circumstances of this
case, there shall be no order as to costs."
In Mahboob Deepak v. Nagar Panchayat, Gajraula7, it was observed :
Such termination of service, having regard to the fact that he had completed
240 days of work during a period of 12 months preceding the said date, required
compliance with the provisions of Section 6-N of the U.P. Industrial Disputes
Act. An order of retrenchment passed in violation of the said provision although
can be set aside but as has been noticed by this Court in a large number of
decisions, an award of reinstatement should not, however, be automatically
factors which are relevant for determining the same, inter alia, are:
in making the appointment, the statutory rules, if any, had been complied with;
period he had worked;
whether there existed any vacancy; and (iv) whether he obtained some other
employment on the date of termination or passing of the award.
respondent is a local authority. The terms and conditions of employment of the
employees are governed by a statute and statutory rules. No appointment can be
made by a local authority without following the provisions of the recruitment
rules. Any appointment made in violation of the said rules as also the
constitutional scheme of equality as contained in Articles 14 and 16 of the
Constitution of India would be a nullity.
9. Due to
some exigency of work, although recruitment on daily wages or on an ad hoc
basis was permissible, but by reason thereof an employee cannot claim any right
to be permanently absorbed in service or made permanent in absence of any
statute or statutory rules. Merely because an employee has completed 240 days
of work in a year preceding the date of retrenchment, the same would not mean
that his services were liable to be regularised.
Applying the legal principles, as noticed hereinbefore, the relief granted in
favour of the appellant by the Labour Court is wholly unsustainable. The same
also appears to be somewhat unintelligible.
High Court, on the other hand, did not consider the effect of non-compliance
with the provisions of Section 6-N 7 (2008) 1 SCC 575 9 of the U.P. Industrial Disputes
Act, 1947. The appellant was entitled to
compensation, notice and notice pay.
12. It is
now well settled by a catena of decisions of this Court that in a situation of
this nature instead and in place of directing reinstatement with full back
wages, the workmen should be granted adequate monetary compensation. (See M.P.
Admn. v. Tribhuban [(2007) 9 SCC 748].)
this view of the matter, we are of the opinion that as the appellant had worked
only for a short period, the interest of justice will be subserved if the High
Court's judgment is modified by directing payment of a sum of Rs 50,000 (Rupees
fifty thousand only) by way of damages to the appellant by the respondent. Such
payment should be made within eight weeks from this date, failing which the
same will carry interest at the rate of 9% per annum."
It would be, thus, seen that by catena of decisions in recent
time, this Court has clearly laid down that an order of retrenchment passed in
violation of Section 25F although may be set aside but an award of
reinstatement should not, however, be automatically passed. The award of
reinstatement with full back wages in a case where the workman has completed
240 days of work in a year preceding the date of termination, particularly,
daily wagers has not been found to be proper by this Court and instead compensation
has been awarded. This Court has distinguished between a daily wager who does
not hold a post and a permanent employee.
the view of the High Court that the Labour Court erred in granting
reinstatement and back wages in the facts and circumstances of the present case
cannot be said to suffer from 10 any legal flaw. However, in our view, the High
Court erred in not awarding compensation to the appellant while upsetting the
award of reinstatement and back wages. As a matter of fact, in all the
judgments of this Court referred to and relied upon by the High Court while
upsetting the award of reinstatement and back wages, this Court has awarded
While awarding compensation, the host of factors, inter- alia,
manner and method of appointment, nature of employment and length of service
are relevant. Of course, each case will depend upon its own facts and
circumstances. In a case such as this where the total length of service
rendered by the appellant was short and intermittent from September 1, 1995 to
July 18, 1996 and that he was engaged as a daily wager, in our considered view,
compensation of Rs. 50,000/- to the Appellant by Respondent No. 1 shall meet
the ends of justice.
accordingly. Such payment should be made within six weeks from today failing
which the same will carry interest @ 9% per annum.
Appeal is partly allowed to the aforementioned extent with no
order as costs.
........................J (Tarun Chatterjee)
........................J (R. M. Lodha)
July 14, 2009.