November 21, 2024
DU LLBLabour LawSemester 4

Manju Saxena v. Union Of IndiaSupreme Court of IndiaCIVIL APPEAL NOs. 1176611767 OF 2018, Judgment Dated: 3.12.2018

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Bench: INDU MALHOTRA, J and ABHAY MANOHAR SAPRE, J.
Leave granted.
1.The present S.L.P.s arise out of the impugned Judgment dated 14.07.2017 passed
in L.P.A. No. 467/2017, and Order dated 13.09.2017 passed in Signature Not Verified R.P.
No. 380/2017 of the Delhi High Court, Digitally signed by ANITA ALHOTRA Date:
2018.12.03 17:00:42 IST Reason: wherein the High Court dismissed the L.P.A filed by the
Appellant against the 2nd Respondent HSBC Bank.

  1. Briefly stated, the factual matrix in which the present S.L.P. has been filed are
    summarised as under:
    2.1 The Appellant was appointed on 01.04.1986 as a “Lady Confidential Secretary”
    by the 2nd Respondent HSBC Bank, (hereinafter referred to as “the R2Bank”).
    Subsequently, on 23.04.1992 the Appellant came to be promoted as a “Senior
    Confidential Secretary” to the Senior Manager (North India) of HSBC.
    2.2 In May 2005, the post of “Senior ConfidentialSecretary” became redundant,
    as the Officer with whom the Appellant was attached, left the services of the R2
    Bank. Her services were utilized by giving her some other duties for the
    time being, till alternate jobs could be offered to her.
    The Management admittedly offered her four alternate jobs of Business
    Development Officer, (ii) Customer Service Officer, (iii) Clearing Officer, and
    (iv) Banking Services Officer. Each of these jobs were in the same pay scale.
    The Appellant has admitted in her Statement of Claim dated 20.03.2006, that she
    declined to accept any of these jobs on the ground that such jobs were either
    temporary in nature, or the claimant did not possess the experience or workknowledge to take up such jobs.
    2.3 On 01.10.2005, the Bank issued a Letter terminating the services of the
    Appellant on the ground that her current job had become redundant. The
    Appellant was offered several job opportunities, however, she did not choose any
    of these offers. The Bank had offered a generous severance package, which
    she was not prepared to accept. The Bank terminated her service, and
    paid 6 months’ compensation in lieu of Notice as per the contract of
    228
    employment. In addition, as a special case, the Bank paid Compensation, which
    was equivalent to 15 days’ salary for every completed year of service.
    The total amount paid to the Appellant was Rs. 8,17,071/.
    2.4 The Appellant raised an Industrial Dispute before the Regional Labour
    Commissioner under the Industrial Disputes Act, 1947 hereinafter referred to as
    the I.D. Act) on 03.10.2005, and sought enhancement of the severance
    package paid to her. It is relevant to note that the Appellant did not raise any claim
    for reinstatement to the R2Bank. Conciliation proceedings were commenced
    between the Appellant and R2Bank, wherein the Appellant made the following
    claims:
    HEADS AMOUNT (INR)
    Severance 69,99,600.00
    Provident Fund 8,90,111.60
    Gratuity 3,81,209.00
    Leave Encashment 86,541.40
    Compensation + Notice Pay 8,17,071.00
    TOTAL 91,74,533.00
    The Bank, in response, offered the following package:
    HEADS AMOUNT (INR)
    Severance 32,79,600.00
    Provident Fund 8,90,111.60
    Gratuity 3,81,209.00
    Leave Encashment 86,541.40
    Compensation + Notice Pay 8,17,071.00
    TOTAL 57,29,533.00
    The only difference between the two parties was with respect to the amount of
    Severance payable to the Appellant. Since the parties were unable to arrive at a settlement,
    the conciliation proceedings failed.
    2.5 The Appellant filed her Statement of Claim dated 20.03.2006, before the Central
    Government Industrial Tribunal (referred to as the CGIT”) claiming inter alia an enhanced
    severance package, waiver of outstanding Housing Loan and full pension. The Claim was
    opposed by the R2Bank. The R2Bank filed its Written Statement and contested the claim of
    the Appellant, stating that the Appellant was not a “workman” under the I.D. Act, 1947. The
    Bank further stated that they had followed the procedure outlined under the I.D. Act,
    while terminating the services of the Appellant. The Ld. CGIT passed an Award dated
    229
    01.06.2009, and directed the R2Bank to re instate the Appellant, with full
    terminal benefits.
    2.6 The R2Bank filed Writ Petition bearing No. W.P. (C) 11344/2009 the Delhi
    High Court to challenge the Award passed by the CGIT. The High Court vide Interim
    Order dated 22.03.2013 remanded the matter to the CGIT for fresh consideration on the
    point whether the Appellant could be considered to be a “Workman” as per the ID Act,
  2. The Writ Petition was kept pending during the pendency of the remand. The CGIT
    passed a fresh Award dated 15.07.2015 holding the Appellant to be “Workman” under the
    I.D. Act, 1947.
    The Ld. CGIT directed the R2Bank to reinstated the Appellant with continuity of
    service, full back wages, and all consequential benefits
    2.7 During the pendency of the Writ Petition, the Appellant had filed an Application
    under S. 17B of the I.D. Act, 1947 before the Delhi High Court seeking interi,
    maintenance. The High Court vide Interim Order dated 27.07.2012 directed payment of a
    monthly sum of Rs. 75,000/ to the Appellant, towards Interim
    Maintenance u/S. 17B of the I.D. Act, 1947.
    2.8 Aggrieved by the Order dated 27.07.2012, the R2Bank filed an L.P.A. before the Delhi
    High Court to challenge the amount awarded to the Appellant u/S. 17B. The Division Bench
    vide Order dated 24.08.2012, reduced the monthly sum payable to Rs. 58,330/ per month
    which was as per her last drawn salary.
    The S.L.P. filed by the Appellant being S.L.P. (C) No. 36513/2012 to challenge the
    Order dated 24.08.2012, came to be dismissed vide Order dated 07.01.2013.
    The Appellant accordingly has been paid back wages u/S. 17B at Rs. 58,330/ per month.
    2.9 The Appellant also raised a claim for waiver of the outstanding amount of the Housing
    Loan availed by her during the course of her service, which was outstanding on the date of
    her termination. The total amount of outstanding loan was approximately Rs. 22,16.702
    The Appellant challenged proceedings for recovery initiated by the R2Bank before
    the Delhi High Court in W.P. (C) No. 19451/2006. A Consent Order dated 18.03.2010 came
    to be passed whereby the outstanding amount of Rs. 22,16,702/ towards the Housing
    Loan,was to be adjusted from her back wages subject to the final outcome of the W.P. (C)
    No. 13344/2009.
    230
    2.10 The Writ Petition filed by the R2Bank was allowed by the learned Single
    Judge vide Judgment and Order dated 12.04.2017, and the Award passed by the
    CGIT came to be set aside.
    The High Court accepted the R2Bank’s submission, and held that the Appellant’s
    refusal to accept any of the four alternate positions offered to her, amounted to
    “abandonment” of her job. Hence there was no question of her services having been
    illegally terminated. The Appellant had had received monetary compensation under
    several heads, to the tune of Rs.1,07, 73, 736/-during the pendency of the Writ
    Petition, which was almost 13 times her legal entitlements. This included payments
    made under the various heads such as Compensation paid during termination,
    Gratuity, Payment towards Interim Award, Payments under S. 17B, Payment towards
    legal expenses. The Appellant was directed to refund the entire amount except the sum of
    Rs. 8,17,071/, which was the compensation paid at the time of termination.
    2.11 Aggrieved by the Judgment & Order dated 12.04.2017 in W.P. (C) 11334/2018,
    the Appellant filed L.P.A. No. 467/2017 before the Division Bench vide
    Judgment & Order dated 14.07.2017 dismissed the L.P.A. and upheld the Judgment of the
    learned Single Judge holding that the Appellant had abandoned her job.
    The Division Bench however modified the operative direction passed by the Ld.
    Single Judge for restitution of the amounts paid. The Division Bench ordered that
    the Appellant shall not be required to restitute the amount of Rs. 8,17,071/-
    paid at the time of termination, the litigation expenses, and the amounts paid
    under S. 17B of the I.D. Act, 1947.
    2.12 The Appellant filed Review Petition No. 380/2017 which was dismissed vide
    Order dated 13.09.2017.
    2.13 The Appellant has assailed the Judgment dated 14.07.2017 and Order
    dated 13.09.2017 passed by the Division Bench in the L.P.A. and the Review
    Petition, by the present S.L.P.s
  3. The Appellant was appearing in Person. Even though the Court had made a
    suggestion that a Counsel be appointed to represent her, she declined the same.
    The submissions made by the Appellants are:
    3.1 The Appellant submitted that she is entitled to a Severance Package of Rs. 69.99
    lakhs, which is equivalent to her last drawn salary of Rs. 58,330/ per month for a period
    10 years, i.e. 120 months. The calculations put forth by the Appellant is as follows:
    [Severance Package = Last drawn monthly Salary x 120 months];
    [Rs. (58,330 x 120) = Rs. 69,99,600/]
    231
    3.2 The Appellant submitted that she had been in “continuous service” for over
    20 years with the R2bank. Consequently, she was eligible for all benefits payable
    to a ‘workman’ under the I.D. Act.
    3.3 The Appellant further submitted that the terms of the Housing loan taken by her
    during the course of service, provided for certain relaxations and benefits to the
    employees. The Appellant submitted that her outstanding loan amount should be
    waived by the R2Bank.
    3.4 The Appellant submitted that the R2bank had been deducting T.D.S. on all the payments
    made to her during the pendency of the legal proceedings. The Appellant submits that this
    deduction is illegal, and she is entitled to a refund of a sum of Rs. 13,69,083/ deducted
    towards T.D.S.
  4. The R2Bank was represented by Mr. Dhruv Mehta, Sr. Adv. along with Mr. Gagan Gupta
    Adv, the Counsel for the R2bank inter alia submitted:
    4.1 It is the admitted position that the Appellant’s post had become redundant when her boss
    left the Bank. The Appellant was offered four alternate positions of
    (i) Business Development Officer, (ii) Customer Service Officer, (iii) Clearing
    Officer, and (iv) Banking Services Officer in the same pay scale. The Appellant
    however declined each of these offers. In these circumstances, her services came to be
    terminated. As a special case, a severance amount of Rs. 8,17,071/-
    was paid apart from the other benefits.
    4.2 It was further submitted that the Bank complied with all the mandatory
    requirements specified in S. 25F (a) and (b) of the I.D. Act. The compensation of
    Rs. 8,17,071/ granted to the Appellant, was computed in accordance
    with S. 25F (b) i.e. compensation equivalent to 15 days’ salary multiplied by the number of
    years of employment. The High Court had recorded that the Appellant had already
    received monetary benefits in excess of the compensation she was entitled to under the
    law. Therefore, the Appellant was not entitled to any additional amount.
    4.3 The R2Bank submitted that during Conciliation proceedings, they had offered a
    Severance Package of Rs. 32.79 lacs which was worked out on the basis of the last drawn
    Basic Salary + Monthly Allowances, for past 10 years (equalto120 months). The basic salary
    was Rs. 19,280/ and Monthly Allowances [H.R.A. + Medical + L.T.A. of Rs. 8,050/]. The
    total basic component was Rs. 27,330/ (19,280 + 8,050). The severance package by the
    Bank was computed as follows:
    232
    Severance Package = (Monthly basic component x 120 months) = Rs. 27,330 x 120
    = Rs. 32,79,600/
  5. We have perused the pleadings and Written Submissions made by the parties.
    5.1 It is the admitted position that the Bank had offered four alternative positions which
    were at par with her existing pay scale and emoluments. The Appellant was
    however not willing to accept any of the alternative positions offered to her. Nor was she
    willing to accept the redundancy package offered to her. In the circumstances the R2-
    Bank was justified in terminating the services of the Appellant, vide termination letter
    dated 01.10.2005.
    5.2 The Bank has complied with the statutory requirements under S. 25 F of the ID
    Act which lays down the conditions that an employer must comply, on the
    retrenchment of a workman. In the present case, the High Court has held that the Appellant
    had “abandoned” her job, on her refusal to accept any of the alternative position with the
    bank, on the same pay scale.
    5.3 The concept of “abandonment” has been discussed at length in the Judgment
    delivered by a 3 Judge Bench of the Supreme Court in The Buckingham & Carnatic Co. Ltd.
    v Venkatiah & Ors. [(1964) 4 SCR 265] wherein it was held that abandonment of service can
    be inferred from the existing facts and circumstances which prove that the employee
    intended to abandon service. This case was followed by a two judge bench in
    Vijay S Sathaye v. Indian Airlines Ltd. & Ors. [(2013) 10 SCC 253].
    In the case before us, the intentions of the Appellant can be inferred from her refusal to
    accept any of the 4 alternative positions offered by the R2Bank. It is an admitted position that
    the alternative positions were on the same pay scale, and did not involve any special training
    or technical knowhow. In any event, the claims raised by the Appellant before
    various forums were with respect to enhancement of compensation, which are monetary in
    nature The Appellant’s conduct would constitute a voluntary abandonment of service
    since the Appellant herself had declined to accept the various offers of service in the bank.
    Furthermore, even during conciliation proceedings she has only asked for an enhanced
    severance package and not reinstatement.
    Once it is established that the Appellant had voluntarily abandoned her service, she could not
    have been in “continuous service” as defined under S. 2(oo) of the I.D. Act. 1947.
    Section 25F of the I.D. Act, 1947 lays down the conditions that are required to be fulfilled by
    an employer, while terminating the services of an employee, who has been in “continuous
    service” of the employer. Hence, S. 25F of the I.D. Act, would cease to apply on her. The
    condition precedent for Retrenchment of an employee, as provided in S. 25F of the I.D. Act,
    1947 was discussed by a Constitution Bench of this Court in Hathisingh Manufacturing
    Ltd. v. Union of India [AIR 1960 SC 923] while deciding the constitutional validity of
    S. 25FFF. The Constitution Bench held:
    233
    “9. …Under Section 25F, no workman employed in an industrial
    undertaking can be retrenched by the employer until (a) the workman
    has been given one month’s notice in writing indicating the reasons for
    retrenchment and the period has expired or the workman has been paid
    salary in lieu of such notice, (b) the workman has been paid
    retrenchment compensation equivalent to 15 days’ average salary for every
    completed year of service and (c) notice in the prescribed manner is served on
    the appropriate Government….By S. 25F a prohibition against retrenchment,
    until the conditions prescribed by that Section are fulfilled in imposed.”
    S. 25F of the I.D. Act, 1947 is extracted herein below:
    “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].”
    In the present case, the R2Bank has paid the Appellant a sum of Rs. 8,17,071/, which
    included 6 months’ pay in lieu of Notice under S. 25F(a) and an additional amount calculated
    on the basis of 15 days’ salary multiplied by the number of years of service, in compliance
    with S. 25F(b). However, no Notice was sent to the Appropriate Government or
    authority notified, in compiance with S. 25F(c) of the I.D. Act. A three Judge Bench of this
    Court in Gurmail Singh & Ors. v State of Punjab & Ors.[(1991) 1 SCC 189] Held that
    the requirement of clause (c) of S. 25F can be treated only as directory and not mandatory.
    This was followed in Pramod Jha & ors. v State of Bihar & Ors.[(2003) 4 SCC 619]
    wherein it was held that compliance with S. 25F(c) is not mandatory.
    5.4 The Appellant has admittedly received an amount of Rs. 1,07,73,736/ under
    various heads:
    HEADS AMOUNT (IN RS.)
    Towards Notice Period 1,77,684/-
    Severance Pay 6,39,387/ –
    Gratuity 3,81,209/ –
    234
    Back Wages pursuant to Execution 8,00,000/-
    Towards Interim Award 33,19,096/- Payments
    made under S. 17B. 54,56,360/ –
    TOTAL 1,07,73,736/-
    The Appellant has claimed an amount of Rs. 69.99 lakhs. The Appellant has already
    received almost double the amount claimed by her.
  6. In light of the discussions above, the aforesaid amounts received by her may be
    treated as a final settlement of all her claims. The impugned Judgment of the Division
    Bench dated 14.07.2017, is modified to this extent. The Civil Appeals stand dismissed, with
    no order as to costs. All applications stand disposed of accordingly.

235
Ram Manohar Lohia Joint Hospital v. Munna Prasad Saini
CIVIL APPEAL NO. 5810 OF 2021, Judgment Dated: 20 September, 2021
Author: Sanjiv Khanna
Bench: Sanjiv Khanna, and R. Subhash Reddy
Leave granted.

  1. The appellants, Ram Manohar Lohia Joint Hospital and two others, have filed this appeal
    taking exception to the order and judgment dated 15.11.2018 whereby Lucknow Bench of the
    High Court of Judicature at Allahabad has upheld the order dated 20.01.2010 passed by the
    Labour Court, Lucknow directing reinstatement of the first respondent herein, namely, Munna
    Prasad Saini along with compensation of Rs.20,000/- (rupees twenty thousand only) for the
    period of unemployment and entitlement to full pay from the date of the said order.
  2. We have heard counsel for the parties at length and are inclined to partly interfere with the
    impugned order.
  3. The first aspect in the dispute is whether the first respondent workman was an employee of
    the second respondent, namely, Bombay Intelligence Security (I) Ltd. or an employee of the
    appellant Hospital.
  4. The Presiding Officer, Labour Court, Lucknow, Uttar Pradesh, in his order dated
    20.01.2010, has held that the first respondent was the employee of the appellant and not of the
    second respondent. In arriving at this conclusion, the Labour Court has relied upon the
    attendance register/duty chart and the medicine intend book of male ward from September
    2003 to June 2005. The Labour Court also records that in spite of direction given to the
    appellant to produce the attendance register/duty chart for the period, the records were not
    produced. In addition, the Labour Court has referred to the affidavit filed by the workman,
    and a copy of the duty chart for April and May, 2005, a copy of the salary payment register of
    July, 2004 and a copy of joining report and certificate issued by the appellant, all enclosed
    with the affidavit. Photocopies of these documents were obtained from the appellant by one
    Suraj Ram under the Right to Information Act, 2005. The Labour Court also took into account
    the ocular evidence of the first respondent that he had applied for the said post pursuant to
    newspaper advertisement dated 11.04.2003 and thereafter was appointed as a ward boy in the
    appellant hospital on a monthly salary of Rs.2,950/- on 01.09.2003.
  5. Learned counsel for the appellant submitted that the first respondent had impleaded the
    second respondent as respondent No.3 before the Labour Court, Lucknow and in paragraph
    19 of the details of the dispute, had referred to the Contract Labour (Regulation and
    Abolition) Act, 1970. It is asserted in the said paragraph that the appellant and the second
    respondent were neither registered under the aforesaid Act nor was the registration certificate
    issued by the Department of Labour. Our attention was drawn to Annexure P-1 to the present
    appeal which is a copy of Form No.6 issued by the Deputy Labour Commissioner, Lucknow,
    236
    Uttar Pradesh, whereby a licence was granted under the aforesaid Act to the second
    respondent. The licence mentions the date of amendment, fee paid for renewal and the date of
    expiry.
  6. We have considered these documents but would not like to interfere with the factual
    findings recorded by the Labour Court, which has been affirmed by the High Court with
    respect to the engagement of the first respondent by the appellant hospital. It has been
    explained to us that the first respondent had impleaded the second respondent as a corespondent in view of the stand taken by the appellant regarding the first respondent’s
    engagement through the second respondent, which factum was disputed by the first
    respondent. No doubt, the appellant has also placed before us Annexure P-4, an agreement
    dated 01.04.2003 between the appellant and the second respondent for engaging contractual
    workers, including 12 ward boys/aya/patient helpers, but this contract states that the payment
    will be made by the appellant to the second respondent every month within one week from the
    date of receipt of bill, which if required will be rectified to meet valid objections of the
    appellant. The reason why we would not like to rely upon the said agreement is that the
    Labour Court took notice of documents like attendance register/duty chart, copy of the joining
    report, salary payment register, etc. and then arrived at the conclusion with respect to the
    employer-employee relationship. The agreement would not by itself be a determinative factor
    as the first respondent is not a party to the agreement. The factual finding of the Labour Court
    is comprehensive and requires no interference. Thus, we are unable to accept the first
    contention of the appellant on the question of employer-employee relationship.
  7. However, on the question of reinstatement and compensation payable, we are inclined to
    accept the alternative submissions made by the appellant. The appellant is a hospital run by
    the State Government which requires approval of the State Government for creation of regular
    posts and for recruitment and appointment. The procedure as prescribed under the relevant
    extant rules has to be followed. The first respondent has not asserted or claimed that the
    procedure prescribed was followed for his selection and appointment. On the other hand, the
    appellant is right in relying upon letter dated 30.03.1999 issued by the Special Secretary,
    Government of Uttar Pradesh granting permission to appoint 28 workers on contractual basis
    at the appellant hospital. Thereafter, by another letter dated 29.03.2003, the Assistant
    Secretary, Government of Uttar Pradesh, had granted approval for 106 posts to be held on
    contract and creation of 111 posts in the regular pay-scale. With regard to the posts to be
    filled on contract, fixed salary was payable and no other facility was to be provided to such
    employees. Before granting further benefits or facilities, approval of the Government was
    necessary. It is the case of the first respondent that he was appointed on a fixed salary and was
    neither entitled to nor granted any perks or other facilities. The appellant has placed before us
    the list of 111 regular posts, which does not include ward boys. On the other hand, the list of
    106 contractual posts states that 35 ward boys/maids had to be appointed.
  8. Therefore, the appointment of the first respondent was on contractual basis and not to a
    regular post on proper selection in terms of the rules. Pertinently, the respondent has not
    indicated his educational qualifications and whether he has necessary qualifications to work
    237
    as a nurse or a ward boy. It is also obvious that the contractual term was over. In other words,
    the first respondent had worked with the appellant during the period September, 2003 to June,
  9. He has not worked thereafter. There is nothing on record to show and establish the
    appellant had not followed the rule ‘last to come, first to go’. This is neither alleged nor
    proved.
  10. In Deputy Executive Engineer v. Kuberbhai Kanjibhai, [(2019) 4 SCC 307] this Court
    had referred to several earlier judgments and had quoted with approval the ratio as expounded
    in Bharat Sanchar Nigam Limited v. Bhurumal, [(2014) 7 SCC 177] to the following
    effect:
    “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.
  11. 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]. 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.
  12. 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 lastcome-firstgo viz. while retrenching 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
    238
    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.”
  13. This dictum was again followed in State of Uttarakhand and Another v. Raj Kumar
    [(2019) 14 SCC 353] and Ranbir Singh v. Executive Eng. P.W.D. [2021 SCC OnLine SC
    670]
  14. In view of the facts stated above, it is clear that the first respondent was not a permanent
    employee but a contractual employee. There is no evidence to establish that the appellant had
    retained junior workers; such unfair trade practice is not alleged or even argued before us. The
    first respondent having worked for more than 240 days, termination of his services violated
    the mandatory provisions of Section 25F of the Industrial Disputes Act, 1947. Therefore, in
    the facts of the present case, we modify the order of the Labour Court by setting aside the
    direction for reinstatement and would enhance the compensation by awarding a lump sum
    amount.
  15. The High Court had stayed reinstatement of the first respondent but no order under
    Section 17B of the Industrial Disputes Act was passed. The first respondent has, however,
    filed an application before this Court under Section 17B to direct the appellant to pay the “last
    drawn wages”.
  16. In view of the aforesaid factual position, we are inclined to award a lump sum
    compensation of Rs.10,00,000/- (rupees ten lakhs only) to the first respondent.
  17. The appeal is, accordingly, partly allowed setting aside the direction for reinstatement,
    which is substituted with the direction of award of lump sum compensation of Rs.10,00,000/-
    (rupees ten lakhs only). The said amount would be paid within a period of ten weeks from the
    date of this order. In case payment is not made within the said period, the appellant would be
    liable to pay simple interest @ 0.5% per month from the date of this order till payment is
    made.

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