State F.C.C.W. Store Ltd. & Anr Vs. Ram Niwas & Anr  Insc 279 (8 July 2002)
K.G. Balakrishnan. D.P.Mohapatra,J.
question that arises for determination in these appeals is whether on the facts
and circumstances of the case the termination of service of the respondents is
'retrenchment' in terms of section 2(oo) of the Industrial Disputes Act, 1947
(for short 'the ID Act') ? The further question that arises for consideration
in this connection is whether section 2(oo)(bb) of the ID Act has any
application in the case ? The factual matrix of the case relevant for
considering the questions raised may be stated thus :
year 1993 the appellants have been entrusted with the responsibility of
procuring wheat and supply the same to Haryana Warehousing Corporation. On
account of non-availability of godowns heavy stock of grain had to be stored in
the open area at Hasanpur Mandi. For watching and keeping care of the stock
lying in the open area necessity of watchman/chowkidar was felt and sanction
was sought by the District Manager of the appellant Society. The Managing
Director having sanctioned the engagement of watchman/chowkidar the respondents
were appointed on contract basis on payment of daily wages till the stocks are
disposed of or for a period of three months. It was made clear in the order of
the Managing Director that the number of chowkidars/Labourers kept by the
District Manager should come down with the clearance of stock lying in the
open. The respondents continued. The respondent Ram Niwas was engaged on
25.5.1993 whereas respondent Shiv Kumar was engaged on 2.6.93. The engagement
of both the respondents was terminated with effect from 26.4.1994, after the
stock lying in the open was cleared.
the provisions of section 25(f) of the ID Act were not complied with before
disengagement /termination of the respondents.
Industrial Dispute raised by the respondents was referred by the State
Government under section 10(1) of the Act to the Labour Court, Faridabad for adjudication.
term of reference was "Whether the termination of service of Shri Shiv
Kumar is legal and justified? If not to what relief he is entitled to"?
Similar order of reference was passed in the case of the other respondent.
Before the Labour Court the workmen concerned took the stand that the
disengagement/termination of their service was per se invalid as the order of
disengagement was passed without complying with the mandatory condition
prescribed under section 25 (f) of the ID Act. Therefore they claimed
reinstatement in service with all the consequential benefits.
the claim the appellant society pleaded the case that the workmen concerned
were appointed on ad hoc basis for a specific purpose and for a specified
period; as such their disengagement/termination of service after the stock of
wheat lying in open area in the mandi was cleared and the period specified in
the appointment order had expired, did not amount to termination within the
meaning of section 2(oo) of the ID Act, and therefore section 25(f) of the Act
was not applicable in the case.
the parties led oral and documentary evidence in support of their case.
Court on consideration of the evidence on record held that it is evident from Exh.MW
1/ 2 - the order issued by the Managing Director, that the workmen were engaged
by the management for specific purpose and for specified period. Referring to
certain decisions of this Court the Labour Court came to the conclusion that
the workmen were entitled to no relief in the case. The Labour Court decided
the Award accordingly.
workmen filed writ petitions before the High Court assailing the Award of the Labour
High Court as evident from the discussions by its judgment dated 22nd
September, 2000 allowed the writ petitions, set aside the Award passed by the Labour
Court and ordered reinstatement of the writ petitioners in the service with all
the consequential benefits and with full wages from the date of demand notice.
From the discussions in the judgment it is clear that the High Court while
taking the decision has placed reliance mainly on the fact that no contract of
service between the management and the workmen was produced by the Management
and there was no material to show that at the time of appointment the workmen
had been told that their appointment was for a specified period and for a
specific work. The said judgment is under challenge in these appeals.
the case turns on the interpretation of section 2(oo)(bb) of the ID Act it will
be convenient to quote the said section before proceeding to consider merits of
In this Act, unless there is anything repugnant in the subject or context (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 (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 termination of the service of a workman on the ground of continued
ill-health." On a plain reading of the statutory provision it is clear
that any termination of service of a workman by the employer for any reason
whatsoever comes within the meaning of the expression 'retrenchment' as defined
in section 2(oo) of the Act. Further the section further provides certain
exceptions to the wide and comprehensive definition of the term 'retrenchment'.
The exceptions are :
of appointment inflicted by way of disciplinary action
Voluntary retirement of the workman
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
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
of the service of a workman on the ground of continued ill-health."
follows therefore that if the case of termination of the workman comes within
any of the exceptions enumerated in the section then the said termination will
not be a case of 'retrenchment' within the meaning of section 2(oo).
case of Uptron India Ltd. vs. Shammi Bhan and anr. 1998 (6) SCC 538 this Court
considering the definition of 'retrenchment' in section 2(oo) observed:
definition of "retrenchment" was introduced in the Act by Act 43 of
1953 with effect from 24.10.1953. Clause (bb) was inserted in the definition by
Act 49 of 1984 with effect from 18.8.1984.
definition is conclusive in the sense that "retrenchment" has been
defined to mean the termination of the service of a workman by the employer for
any reason whatsoever. If the termination was by way of punishment as a consequence
of disciplinary action, it would not amount to "retrenchment".
Originally, there were two other exceptions, namely,
retirement of the workman and
of the workman on reaching the age of superannuation if the contract of employment
contained a stipulation to that effect.
Amending Act 49 of 1984, two further exceptions were introduced in the
definition by inserting clause (bb) with effect from 18.8.1984; one was the
termination of service on the ground of continued ill-health of the workman and
the other was termination of service on account of non-renewal of the contract
of employment on the expiry of the term of that contract. If such contract of
employment contained a stipulation for termination of service and the services
of the workman are terminated in accordance with that stipulation, such
termination, according to clause (bb) would also not amount to
position was reiterated in Harmohinder Singh vs. Kharga Canteen, Ambala Cantt. (2001)
5 SCC 540.
such a case the question of complying with the conditions precedent to
retrenchment of workman provided in section 25(f) of the Act will not arise. In
the present case the Labour Court relying on the oral and documentary evidence
cited on behalf of the management, particularly the order of the Managing
Director sanctioning the engagement of the workmen concerned held that the
engagement/appointment of the workmen concerned was for a specific purpose and
for a particular period and since the purpose for their engagement/appointment
was over and the period of appointment had expired their disengagement was in
terms of the contract of service, and therefore, not a 'retrenchment' within
the meaning of section 2(oo) of the Act. The High Court has not recorded a
finding that there was no contract of service between the management and the
workmen concerned. In view of the evidence on record the High Court could not
and indeed has not recorded any finding that there was no contract of service
between the management and the workmen concerned. Since there exists a contract
of service with the terms and conditions as noted earlier the position is
inescapable that the case of disengagement/termination of the workman concerned
did not amount to retrenchment.
facts and circumstances of the case the Labour Court rightly came to the conclusion that the workmen were
entitled to no relief in the case. The High Court was clearly in error in
interfering with the Award passed by the Labour Court. Accordingly, the appeals are allowed. The Judgments of the
High Court in CWP No.9471/99 and CWP No. 9472/99 dated 22.9.2000 allowing the
writ petitions filed by the respondent workmen are set aside and the Award of
the Tribunal is restored. There will, however, be no order for costs.