Sharma Vs. Exec. Eng. Pub. Health Division No-1, Panipa  INSC 269 (9
APPELLATE JURISDICTION CIVIL APPEAL NO. 3478 OF 2010 (Arising out of SLP(C) No.
17965 of 2008) Anoop Sharma ...Appellant Versus Executive Engineer, Public
Health Division No.1 Panipat (Haryana) ...Respondent
only question which requires consideration in this appeal is whether the
Division Bench of Punjab and Haryana High Court erred in upsetting award dated
1.8.2002 passed by Industrial Tribunal-cum-Labour Court, Panipat (hereinafter
referred to as "the Labour Court") for reinstatement of the appellant
without even recording a finding that the same suffered from any jurisdictional
error or violation of the rules of natural justice or was vitiated by an error
of law apparent on the face of the record.
appellant was engaged/employed by the respondent as Mali-cum- Chowkidar with
effect from 11.10.1995. He was paid monthly wages at the rate of Rs.1900/-. His
service was discontinued with effect from 25.4.1998.
dispute raised by the appellant was referred by the Government of Haryana to
the Labour Court under Section 10(1)(c) of the Industrial Disputes Act, 1947
(for short, "the Act"). In the statement of claim filed by him, the
appellant pleaded that he had worked for a period of more than two years and
six months; that his service was discontinued with effect from 25.4.1998
without giving him notice or pay in lieu thereof or retrenchment compensation
and without complying with mandate of Section 25-N of the Act. Another plea
taken by the appellant was that no seniority list of the workers had been
prepared and persons junior to him, namely, Ramesh, Amarjit, Jagbir and Rohtash
were retained in service. In the written statement filed by the respondent, it
was pleased that the services of the appellant and other similarly situated
employees were discontinued because the State Government had issued
instructions to that effect in the wake of financial crisis. It was further
pleaded that the workman was offered compensation along with the letter of
termination, but he refused to accept the same and left the station and,
therefore, demand draft bearing No.056997 dated 25.4.1998 for a sum of
Rs.5,491/- was sent at his residence. For the sake of convenient reference, the
relevant portions of the written statement, as contained in the paper book of
this appeal, are extracted below:- "PRELIMINARY OBJECTION
as per rules prescribed in section 25-F of Industrial Dispute Act, the workman
was offered the amount of compensation with termination letter but the claimant
refused to take the same and soon after he left the station also. A demand
draft bearing No.056997 dated 25.4.98 amounting to Rs.5491/- was sent to the
18.8.1998 workman residence but he refused to accept it and registered letter received
back undelivered. The said draft/banker cheque was once again sent to the
claimant home address. 2nd time the same was received/accepted by the claimant.
Keeping-in-view the facts stated above the respondent is not at fault in any
manner so the present claim statement filed by the claimant is not maintainable
in any manner.
in reply to para no.1 of the claim statement it is stated that the claimant was
engaged as casual labour in 12/95 and his services were dispensed with on
25.498 due to financial crunch being experienced by the Govt. of Haryana as
already explained in para no.1 of the preliminary objection.
para no.1(a) of the claim statement is wrong and denied, the notice dated
25.4.98 along with a demand draft bearing No.056997 dated 25.4.98 amounting to
Rs.5491/- was offered to the claimant on dated 25.4.98 but the claimant refused
to take the same and soon after he left the station also, later on the said
draft was sent to the claimant residence which was received by him.
the para no.1(b) of the claim statement is wrong and denied as already
explained above the retrenchment compensation as per Section 25-F of the I.D.
Act was offered to the claimant on 25.4.98 but he refused to take the same and
soon after left the station also. The demand draft was sent to his home address
which was received by him.
xxx xxx d) xxx xxx xxx"
appellant appeared as WW-1 and reiterated the averments contained in the
statement of claim. On behalf of the respondent, Shri Ram Chander was examined
as MW-1. He stated that the appellant had worked as casual labour from December
1995 to 25.4.1998 with breaks and that he was given retrenchment compensation
with letter Ex. M-1 dated 25.4.1998, which he refused to accept. Shri Ram
Chander further stated that the amount of compensation was sent to the
appellant at his home address by demand draft Ext. M-3 dated 25.4.1998.
According to Shri Ram Chander, no person junior to the appellant was retained
in the department. However, no evidence was produced by the respondent to
corroborate the oral assertion of Shri Ram Chander that the appellant had
refused to accept the compensation.
considering the pleadings and evidence of the parties, the Labour Court
recorded the following conclusions:
the total number of employees in the department was about 400 and, therefore,
compliance of Section 25-N of the Act was mandatory before terminating the
services of the workman.
Ext. M-4 it is clear that the workman received the amount of compensation on
18.8.1998, i.e., after the months and 23 days.
plea of the management that compensation was refused by the workman is not
supported by any proof or other evidence.
workman is entitled to reinstatement with full back wages.
respondent challenged the award of the Labour Court in Writ Petition No.
6849/2004. By the impugned order, the Division Bench of the High Court allowed
the writ petition and set aside the award by observing that there was no reason
for the Labour Court to record a finding that the compensation was not offered
to the workman at the time of retrenchment.
Division Bench also held that the appellant cannot be reinstated in service
because he was not appointed against any sanctioned post and he was initially
employed without complying with the statutory provisions.
evinced from the following extract of the impugned order:
the course of arguments, learned counsel appearing for the petitioner argued
that in view of the nature of appointment of respondent No.1, he cannot be
ordered to be reinstated. The respondent has not shown before the Labour Court
or before this Court that he had been appointed on a sanctioned post in
consonance with the provisions of Articles 14 and 16 of the Constitution of
India. It has further not been shown that the entry in service of the
respondent was legal and in accordance with the statutory provisions and rules
framed thereunder. A person who has taken entry illegally by the back door cannot
be permitted to be reinstated in view of the law laid down by the Hon'ble
Supreme Court in recent judgments."
arriving at the aforementioned conclusion, the Division Bench relied upon the
judgments of this Court in Himanshu Kumar Vidyarthi v. State of Bihar AIR 1997
SC 3657, Municipal Council, Samrala v. Raj Kumar (2006) 3 SCC 81, Reserve Bank
of India v. Gopinath Sharma (2006) 6 SCC 221, Secretary, State of Karnataka v.
Uma Devi (2006) 4 SCC 1, U.P. Power Corporation Ltd. v. Bijli Mazdoor Sangh
(2007) 5 SCC 755 and Haryana Urban Development Authority v. Om Pal (2007) 5 SCC
Brijender Chahar, learned senior counsel for the appellant argued that the
finding recorded by the Labour Court on the issue of non- compliance of Section
25-F of the Act was a pure finding of fact based on correct appreciation of the
pleadings and evidence of the parties and the High Court committed a
jurisdictional error by interfering with the award of reinstatement. Learned
counsel submitted that even though the respondent had pleaded before the Labour
Court that compensation was offered to the appellant on the date of termination
of his service and he refused to accept the same but no evidence was produced
to substantiate the same. Learned counsel further argued that the alleged
violation of the doctrine of equality enshrined in Articles 14 and 16 of the
Constitution has no bearing on the appellant's case because appointment of
casual, daily wage and monthly rated employees do not require advertisement of
the post or consideration of the competing claims of all eligible persons.
Learned counsel pointed out that the respondent had not pleaded either before
the Labour Court or the High Court that the appellant's initial
engagement/employment was contrary to any statute or Articles 14 and 16 of the
Constitution and argued that in the absence of a specific plea having been
taken in that regard, High Court was not at all justified in setting aside the
award of reinstatement on the specious ground that the appellant's entry in the
service was not legal.
Sukhda Pritam, learned counsel for the respondent argued that the High Court
did not commit any error by setting aside the award of the Labour Court because
the finding recorded by it on the issue of violation of Section 25-F of the Act
was perverse. She submitted that before terminating the appellant's service,
the respondent had complied with the mandate of Section 25-F of the Act by
offering him demand draft of Rs.5,491/- but the Labour Court ignored this stark
fact and passed the award for reinstatement of the appellant with back wages.
have considered the respective submissions. At the outset, we deem it necessary
to mention that action taken by the respondent to terminate the services of
other similarly situated employees, namely, Rakesh Sharma son of Mulkh Raj
Sharma, Tejbir Singh, Ram Mehar Singh, Parveen Sharma, Babu Ram, Karan Singh,
Baldev Singh, Jaipal Singh, Naresh Kumar, Jagbir, Rakesh Sharma son of Chajju
Ram, Jai Singh, Balbir Singh and Ballu Nandwal without complying with Section
25-F of the Act was annulled by the Labour Court vide award dated 8.9.2000
passed in Reference Nos. 1330 to 1338, 1366, 1270, 1273, 1407 and 1525 of 1999
and Civil Writ Petition No. 3970/2001, LPA No. 8/2002 and Special Leave
Petition (Civil) No. 11475/2002 filed by the State of Haryana against the award
of the Labour Court were dismissed by the High Court and this Court
reading of the impugned order shows that the Division Bench of the High Court
set aside the award of the Labour Court without even adverting to the fact that
challenge to similar award passed in the cases of other employees was negatived
by the High Court and this Court. We have no doubt that if the Division Bench
had taken the trouble of ascertaining the status of the disputes raised by
other employees, then it would have discovered that the award of reinstatement
of similarly situated employees has been upheld by the High Court and this
Court and in that event, it may not have passed the impugned order. That apart,
we find that even though the Division Bench did not come to the conclusion that
the finding recorded by the Labour Court on the issue of non-compliance of
Section 25-F of the Act is vitiated by an error of law apparent on the face of
the record, it allowed the writ petition by assuming that the appellant's
initial engagement/employment was not legal and the respondent had complied
with the conditions of a valid retrenchment. In our view, the approach adopted
by the Division Bench is contrary to the judicially recognised limitations of
the High Court's power to issue writ of certiorari under Article 226 of the
Constitution - Syed Yakoob v. K.S. Radhakrishnan (1964) 5 SCR 64, Municipal
Board, Saharanpur v. Imperial Tobacco of India Ltd. (1999) 1 SCC 566, Lakshmi
Precision Screws Ltd. v. Ram Bhagat (2002) 6 SCC 552, Mohd. Shahnawaz Akhtar v.
Ist ADJ Varanasi JT 2002 (8) SC 69, Mukand Ltd. v. Mukand Staff and Officers'
Association (2004) 10 SCC 460, Dharamraj and others v. Chhitan and others 2006
(11) SCALE 292 and Assistant Commissioner, Income Tax, Rajkot v. Saurashtra
Kutch Stock Exchange Ltd. 2008 (12) SCALE 582.
Syed Yakoob v. K.S. Radhakrishnan (supra), the Constitution Bench of this Court
considered the scope of the High Court's jurisdiction to issue a writ of
certiorari in cases involving challenge to the orders passed by the authorities
entrusted with quasi judicial functions under the Motor Vehicles Act, 1939.
Speaking for majority of the Constitution Bench, Gajendragadkar, J. observed as
writ of certiorari can be issued for correcting errors of jurisdiction
committed by inferior courts or Tribunals; these are cases where orders are
passed by inferior courts or tribunals without jurisdiction, or in excess of
it, or as a result of failure to exercise jurisdictions. A writ can similarly
be issued where in exercise of jurisdiction conferred on it, the Court or
Tribunal acts illegally or improperly, as for instance, it decides a question
without giving an opportunity to be heard to the party affected by the order,
or where the procedure adopted in dealing with the dispute is opposed to
principles of natural justice. There is, however, no doubt that the
jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and
the Court exercising it is not entitled to act as an appellate Court. This
limitation necessarily means that findings of fact reached by the inferior
Court or Tribunal as a result of the appreciation of evidence cannot be
reopened or questioned in writ proceedings. An error of law which is apparent
on the face of the record can be corrected by a writ, but not an error of fact,
however grave it may appear to be. In regard to a finding of fact recorded by
the Tribunal a writ of certiorari can be issued if it is shown that in
recording the said finding, the Tribunal had erroneously refused to admit
admissible and material evidence, or had erroneously admitted inadmissible
evidence which has influenced the impugned finding. Similarly, if a finding of
fact is based on no evidence, that would be regarded as an error of law which
can be corrected by a writ of certiorari. In dealing with this category of
cases, however, we must always bear in mind that a finding of fact recorded by
the Tribunal cannot be challenged in proceedings for a writ of certiorari on
the ground that the relevant and material evidence adduced before the Tribunal
was insufficient or inadequate to sustain the impugned finding. The adequacy or
sufficiency of evidence led on a point and the inference of fact to be drawn
from the said finding are within the exclusive jurisdiction of the Tribunal,
and the said points cannot be agitated before a writ court. It is within these
limits that the jurisdiction conferred on the High Courts under Art. 226 to
issue a writ of certiorari can be legitimately exercised."
Section 25-B, which defines the term `continuous service' and Section 25-F(a)
and (b) of the Act, which mandates giving of one month's notice or pay in lieu
thereof and retrenchment compensation to the workman whose service is sought to
be terminated otherwise than by way of punishment or in accordance with the
express terms incorporated in the order of appointment, read as under:
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;
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.
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;
has been on leave with full wages, earned in the previous years;
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.
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;
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 (c) xxxx xxxx xxxx
analysis of the above reproduced provisions shows that no workman employed in
any industry who has been in continuous service for not less than one year
under an employer can be retrenched by that employer until the conditions
enumerated in Clauses (a) and (b) of Section 25-F of the Act are satisfied. In
terms of Clause (a), the employer is required to give to the workman one
month's notice in writing indicating the reasons for retrenchment or pay him
wages in lieu of the notice. Clause (b) casts a duty upon the employer to pay
to the workman at the time of retrenchment, compensation equivalent to fifteen
days' average pay for every completed year of continuous service or any part
thereof in excess of six months. This Court has repeatedly held that Section
25-F(a) and (b) of the Act is mandatory and non-compliance thereof renders the
retrenchment of an employee nullity - State of Bombay v. Hospital Mazdoor Sabha
AIR 1960 SC 610, Bombay Union of Journalists v. State of Bombay (1964) 6 SCR
22, State Bank of India v. N. Sundara Money (1976) 1 SCC 822, Santosh Gupta v.
State Bank of Patiala (1980) 3 SCC 340, Mohan Lal v.
of M/s. Bharat Electronics Ltd. (1981) 3 SCC 225, L.
D'Souza v. Executive Engineer, Southern Railway (1982) 1 SCC 645, Surendra
Kumar Verma v. Industrial Tribunal (1980) 4 SCC 443, Gammon India Ltd. v.
Niranjan Das (1984) 1 SCC 509, Gurmail Singh v. State of Punjab (1991) 1 SCC
189 and Pramod Jha v. State of Bihar (2003) 4 SCC 619. This Court has used
different expressions for describing the consequence of terminating a workman's
service/employment/ engagement by way of retrenchment without complying with
the mandate of Section 25-F of the Act. Sometimes it has been termed as ab
initio void, sometimes as illegal per se, sometimes as nullity and sometimes as
aside the legal semantics, we have no hesitation to hold that termination of
service of an employee by way of retrenchment without complying with the
requirement of giving one month's notice or pay in lieu thereof and
compensation in terms of Section 25-F(a) and (b) has the effect of rendering
the action of the employer as nullity and the employee is entitled to continue
in employment as if his service was not terminated.
question whether the offer to pay wages in lieu of one month's notice and
retrenchment compensation in terms of Clauses (a) and (b) of Section 25-F must
accompany the letter of termination of service by way of retrenchment or it is
sufficient that the employer should make a tangible offer to pay the amount of
wages and compensation to the workman before he ask to go was considered in
National Iron and Steel Company Ltd. v.
West Bengal (1967) 2 SCR 391. The facts of that case were that the workman was
given notice dated 15.11.1958 for termination of his service with effect from
17.11.1958. In the notice, it was mentioned that the workman would get one
month's wages in lieu of notice and he was asked to collect his dues from the
cash office on 20.11.1958 or thereafter during the working hours. The argument
of the Additional Solicitor General that there was sufficient compliance of
Section 25-F was rejected by this Court by making the following observations:
third point raised by the Additional Solicitor-General is also not one of
substance. According to him, retrenchment could only be struck down if it was
mala fide or if it was shown that there was victimisation of the workman etc.
Learned counsel further argued that the Tribunal had gone wrong in holding that
the retrenchment was illegal as Section 25-F of the Industrial Disputes Act had
not been complied with. Under that section, a workman employed in any industry
should not be retrenched until he had been given one month's notice in writing
indicating the reasons for retrenchment and the period of notice had expired,
or the workman had been paid in lieu of such notice, wages for the period of
the notice. The notice in this case bears the date November 15, 1958. It is to
the effect that the addressee's services were terminated with effect from 17th
November and that he would get one month's wages in lieu of notice of
termination of his service. The workman was further asked to collect his dues
from the cash office on November 20, 1958 or thereafter during the working
Section 25-F, had not been complied with under which it was incumbent on the
employer to pay the workman, the wages for the period of the notice in lieu of
the notice. That is to say, if he was asked to go forthwith he had to be paid
at the time when he was asked to go and could not be asked to collect his dues
afterwards. As there was no compliance with Section 25-F, we need not consider
the other points raised by the learned counsel."
State Bank of India v. N. Sundara Money (supra), the Court emphasised that the
workman cannot be retrenched without payment, at the time of retrenchment,
compensation computed in terms of Section 25-F(b).
legal position has been beautifully summed up in Pramod Jha v. State of Bihar
(supra) in the following words:
underlying object of Section 25-F is twofold. Firstly, a retrenched employee
must have one month's time available at his disposal to search for alternate
employment, and so, either he should be given one month's notice of the
proposed termination or he should be paid wages for the notice period.
the workman must be paid retrenchment compensation at the time of retrenchment,
or before, so that once having been retrenched there should be no need for him
to go to his employer demanding retrenchment compensation and the compensation
so paid is not only a reward earned for his previous services rendered to the
employer but is also a sustenance to the worker for the period which may be
spent in searching for another employment. Section 25-F nowhere speaks of the
retrenchment compensation being paid or tendered to the worker along with one
month's notice; on the contrary, clause (b) expressly provides for the payment
of compensation being made at the time of retrenchment and by implication it
would be permissible to pay the same before retrenchment. Payment or tender of
compensation after the time when the retrenchment has taken effect would
vitiate the retrenchment and non-compliance with the mandatory provision which
has a beneficial purpose and a public policy behind it would result in
nullifying the retrenchment."
the workman is retrenched by an oral order or communication or he is simply
asked not to come for duty, the employer will be required to lead tangible and
substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F
of the Act.
stage is now set for considering whether the respondent had offered
compensation to the appellant before discontinuing his engagement/employment,
which amounts to retrenchment within the meaning of Section 2(oo) of the Act.
In his statement, the appellant categorically stated that before discontinuing
his service, the respondent did not give him notice pay and retrenchment
compensation. Shri Ram Chander, who appeared as the sole witness on behalf of
the respondent stated that the compensation amounting to Rs.5,491/- was offered
to the appellant along with letter Ext. M-1, but he refused to accept the same.
The respondent did not examine any other witness to corroborate the testimony
of Ram Chander and no contemporaneous document was produced to prove that the
compensation was offered to the appellant on 25.4.1998. Not only this, the
respondent did not explain as to why the demand draft was sent to the appellant
after more than three months of his alleged refusal to accept the compensation
on 25.4.1998. If there was any grain of truth in the respondent's assertion
that the compensation was offered to the appellant on 25.4.1998 and he refused
to accept the same, there could be no justification for not sending the demand
draft by post immediately after the appellant's refusal to accept the offer of
compensation. The minimum which the respondent ought to have done was to
produce the letter with which draft was sent at the appellant's residence. The
contents of that letter would have shown whether the offer of compensation was
made to the appellant on 25.4.1998 and he refused to accept the same. However,
the fact of the matter is that no such document was produced. Therefore, we are
convinced that the finding recorded by the Labour Court on the issue of non-
compliance of Section 25-F of the Act was based on correct appreciation of the
pleadings and evidence of the parties and the High Court committed serious
error by setting aside the award of reinstatement.
judgment of the Constitution Bench in Secretary, State of Karnataka vs. Uma
Devi (supra) and other decisions in which this Court considered the right of
casual, daily wage, temporary and ad hoc employees to be regularised/continued
in service or paid salary in the regular time scale, appears to have unduly
influenced the High Court's approach in dealing with the appellant's challenge
to the award of the Labour Court. In our view, none of those judgments has any
bearing on the interpretation of Section 25- F of the Act and employer's
obligation to comply with the conditions enumerated in that section.
the cost of repetition, we consider it necessary to mention that it was not the
pleaded case of the respondent before the Labour Court and even before the High
Court that the appellant was engaged/ employed without following the statutory
rules or Articles 14 and 16 of the Constitution and that was the basis for
discontinuing his engagement. Therefore, the High Court was not justified in
relying upon the alleged illegality of the engagement/employment of the
appellant for upsetting the award of reinstatement.
the result, the appeal is allowed. The impugned order of the Division Bench of
High Court is set aside and the award passed by the Labour Court is restored.
If the appellant has not already been reinstated, the respondent shall do so
within one month from the date of receipt/production of copy of this order. The
respondent shall also pay the back wages to the appellant within a maximum
period of three months, failing which the appellant shall be entitled to
interest at the rate of 9% per annum from the effective date of reinstatement
i.e., 21.3.2000. The parties to bear their own costs.
..............................J. (G.S. Singhvi)
...............................J. (Asok Kumar Ganguly)
April 9, 2010.