# Nagar Palika Parishad v. Presiding Officer, Labour Court & Anr

- **Citation:** (2016) 8 ILRA 935
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-08-08
- **Bench:** Ashwani Kumar Mishra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/nagar-palika-parishad-v-presiding-officer-labour-court-anr-44288
- **Pages:** 19

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8 All. Nagar Palika Parishad Vs Presiding Officer, Labour Court & Anr.
935
(2016) 8 ILRA 935
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 08.08.2016

BEFORE

THE HON'BLE ASHWANI KUMAR MISHRA, J.

Writ C No.- 25467 Of 2013
&
Connected With Other Cases

Nagar Palika Parishad ...Petitioner
Versus
Presiding Officer, Labour Court & Anr. ...Respondents

Counsel for Petitioner:
Sahab Tiwari, Saurabh Tiwari

Counsel for Respondent:
A.K. Dixit, Jamal Khan, S.C., Sunil Kumar Tripathi

U.P. Industrial Disputes Act, 1947 - Section 6-N - Illegal Termination - Daily Wage Employee -
Non-Existent Post -- Workman engaged as Tax Collector on daily wages, terminated without payment of
retrenchment compensation -- Labour Court held termination violative of Section 6-N and awarded
reinstatement with continuity of service and 50% back wages -- Employer, a local authority and 'State' under
Article 12, specifically pleaded before Labour Court that engagement was never against any sanctioned or
vacant post and that constitutionally mandated recruitment procedure was never followed -- Held: Where
employer is 'State' or instrumentality of State, existence of sanctioned post, manner of recruitment and
compliance with Articles 14 and 16 remain relevant considerations even in industrial adjudication. (Para 1)
Relief of Reinstatement - Not Automatic - Compensation in Lieu Thereof -- Held: Reinstatement
with full back wages consequent upon finding of violation of Section 6-N/Section 25-F is not an automatic
relief, particularly where workman engaged on daily wages for short duration -- Monetary compensation in
lieu of reinstatement better subserves ends of justice in such cases, subject to exceptions such as unfair
labour practice or mala fide termination, none of which established here. (Para 2)
Reinstatement Against Non-Existent Post - Violative of Articles 14 and 16 -- Held: Since no
evidence led by workman to show engagement was against any sanctioned vacant post following due
procedure, and specific plea of employer in this regard remaining unrebutted, direction of reinstatement
against non-existent post, or conferring status of permanency through back-door engagement, would itself
offend Articles 14 and 16 of the Constitution. (Para 3)
Quantification of Compensation - Amount Already Realised in Execution -- Held: Considering
workman had worked little over two years more than a decade ago, monetary compensation of Rs. 2,00,000/-
held appropriate in lieu of reinstatement -- Since amount exceeding this sum already realised by workman in
execution proceedings, no further amount held payable and no recovery directed from workman, amount
already paid treated as full and final settlement of claim under Section 6-N. (Para 4)
Connected Proceedings Under Section 33-C(2) - Consequential Setting Aside -- Held: Order passed
under Section 33-C(2) of the Industrial Disputes Act granting regular pay-scale to workman, being founded on
same erroneous premise of subsisting post and valid recruitment, cannot be sustained and is liable to be set
936 INDIAN LAW REPORTS ALLAHABAD SERIES

aside -- No direction for payment of salary could accordingly be issued in workman's connected writ petition.
(Para 5)
Writ Petition No. 25467 of 2013 Allowed In Part -- Award of Labour Court modified to extent that workman
held entitled to monetary compensation of Rs. 2,00,000/- alone in lieu of reinstatement, treated as satisfied by
amount already paid, no further recovery or payment directed -- Connected Writ Petition No. 48995 of 2015
Allowed, order under Section 33-C(2) set aside -- Connected Writ Petition No. 31497 of 2016 Dismissed --
Parties to bear their own costs.
Case Law Discussed
1. State of U.P. vs. Charan Singh, 2015 (8) SCC 150
2. Bhuvanesh Kumar Dwivedi vs. M/s Hindalco Industries Ltd., 2014 (142) FLR 20
3. K.V.S. Ram vs. Bangalore Metropolitan Transport Corporation, 2015 (144) FLR 994
4. Harjinder Singh vs. Punjab State Warehousing Corporation, 2010 (3) SCC 192
5. Krishan Singh vs. Executive Engineer, 2010 (125) FLR 187
6. Bharat Sanchar Nigam Limited vs. Bhurumal, 2014 (7) SCC 177
7. BSNL vs. Man Singh, (2012) 1 SCC 558
8. Incharge Officer & Anr. vs. Shankar Shetty, (2010) 9 SCC 126
9. Jagbir Singh vs. Haryana State Agriculture Mktg. Board (and connected decisions)
10. Telecom District Manager vs. Keshab Deb
11. A. Umarani vs. Registrar, Coop. Societies
12. Secy., State of Karnataka vs. Umadevi (3), (2006) 4 SCC 1
13. Coal India Ltd. vs. Ananta Saha
14. Metropolitan Transport Corporation vs. V. Venkatesan
15. Bhavnagar Municipal Corporation vs. Jadeja Govubha Chhanubha, AIR 2015 SC 609
16. Rajasthan State Agricultural Marketing Board vs. Mohan Lal, 2013 (14) SCC 543
17. Hari Nandan Prasad and another vs. Employer I/R to Management of Food Corporation of India and
another, 2014 (7) SCC 190
18. U.P. Power Corporation vs. workmen (referred)
19. Maharashtra State Road Transport Corporation vs. Karamchari Union (referred)
20. State of U.P. and another vs. Hind Majdoor Sabha and others, 2011 (5) ALJ 249
21. Raj Kumar vs. Jalagaon Municipal Corporation, 2013 (2) SCC 751

(Delivered by Hon'ble Ashwani Kumar Mishra, J.)

1. Dispute between Nagar Palika Parishad, Firozabad and its workman Kamal Kumar has
given rise to filing of these three writ petitions. These petitions have been heard together and are
being disposed of by this common judgment.

2. Writ Petition No. 25467 of 2013 has been filed by Nagar Palika Parishad, Firozabad,
challenging an award passed by Presiding Officer, Labour Court, U.P. Firozabad, dated 15.4.2013
in Adjudication Case No.35 of 2009. By the award, reference has been answered in favour of the
workman, holding that his termination from service w.e.f. 22.7.2004 without complying with the
requirement of Section 6-N of the U.P. Industrial Disputes Act, 1947 is bad in law, and relief of
reinstatement alongwith continuity of service together with 50% back wages has been awarded. A
sum of Rs.1500/- towards cost of litigation has also been awarded to the worker.

While entertaining the writ petition, following interim order was passed on
7.5.2013:-
8 All. Nagar Palika Parishad Vs Presiding Officer, Labour Court & Anr.
937
"Sri A.K. Dixit, the learned counsel for the respondent no.2 will file a counter
affidavit within three weeks.

List for admission thereafter.

In the meanwhile, the effect and operation of the award passed by the Labour
Court shall remain stayed provided the petitioner reinstates the workman within three weeks from
today and file an affidavit to that effect."

Parties are at issue regarding compliance of the aforesaid order.

3. Writ Petition No.48995 of 2015 is also filed by the Nagar Palika Parishad, Firozabad,
challenging an order passed in Misc. Case No.16 of 2014, under Section 33-C(2) of the Industrial
Disputes Act, awarding a sum of Rs.92,320/- towards salary payable from 1.6.2014 to 30th
November, 2014 alongwith cost of litigation amounting to Rs.1,000/-. In this petition, an interim
protection has been granted on 12.10.2015, staying the order upon the condition of deposit of 50%
of the amount payable, which was permitted to be withdrawn by the workman.

4. Writ Petition No.31497 of 2016 has been filed by the worker Kamal Kumar for a
direction upon Nagar Palika Parishad, Firozabad, to pay salary to him from month to month, and
for deciding his application. Upon this writ petition, an order has been passed on 20th July, 2016
for the earlier writ petition to be connected, and that is how the matters have been placed before this
Court.

5. The main writ petition for the present purposes is the Writ Petition No.25467 of 2013,
wherein the award itself is under challenge, and the subsequent two writ petitions to a great extent
are dependent upon the outcome of the first petition. In such circumstances, the Writ Petition
No.25467 of 2013 is taken up first.

6. It transpires from the record that a writ petition no.41096 of 2004 was filed by the
workman alongwith another person, seeking relief of regularization in the employment of Nagar
Palika Parishad, Firozabad. This petition was disposed of on 8th February, 2007. Operative portion
of the order dated 8.2.2007 is reproduced:-

"Considering the facts and circumstances of the case the petitioners may file a
fresh representation before respondent no.2 and that will be considered in accordance with law
within a period of two months from the date of production of certified copy of this order.

It is made clear that this order will not come in the way of the petitioner if the
respondents are interested to take work any further.

With these observations, this petition is disposed of."
938 INDIAN LAW REPORTS ALLAHABAD SERIES

7. In compliance of the directions so issued on 8.2.2007, workman's representation was
rejected vide order dated 27.4.2007, holding that respondent workman was never appointed, nor
had worked as a regular employee. The order records that the workman was engaged on daily wage
basis to collect house and water tax as a contract employee, and he failed to furnish account. Upon
expiry of term, his engagement automatically came to an end. It is, therefore, stated that since
workman was never appointed, question of his termination does not arise, nor regularization of his
services is permissible. This order dated 27.4.2007 then came to be challenged before this Court by
filing Writ Petition No.50561 of 2007, which was dismissed on the ground of alternative remedy. A
special appeal no.1547 of 2007 filed thereafter also was dismissed on 12.1.2009. It is thereafter that
conciliation proceedings were initiated in the matter, which failed, resulting in making of reference
of dispute to the Labour Court under Section 4-K of the U.P. Industrial Disputes Act. Written
statements were filed by the workman and the employer. Evidence in the form of statement of the
parties/their witnesses and other documentary evidence were also adduced. Labour Court has
ultimately returned a finding that workman remained in continuous employment of Nagar Palika
Parishad from 6.11.2001 to 22.7.2004, on daily wages, as Tax Collector, and his services were
illegally terminated w.e.f. 23.7.2004. Relief of reinstatement alongwith continuity of service with
50% back wages has been allowed.

8. I have heard Sri Sahab Tiwari, learned counsel for the Nagar Palika Parishad, Firozabad,
and Sri S.N. Dubey, learned counsel appearing for the workman Kamal Kumar, and have perused
the materials available on record.

9. The workman in his written statement has stated that he was engaged w.e.f. 6.11.2001 by
the executive officer, pursuant to an order of Chairman. In the Municipalities Act, 1916, power
exists for appointing permanent or temporary workman, but as per the workman, the order in his
case contained no stipulation that appointment is temporary. As per the workman, work of tax
collector is permanent in nature, and as such his appointment was permanent from the very
beginning. Reference is also made in his statement to various work performed and the persons with
whom he worked. It is then stated that although his work was permanent, but he was not given any
permanent post, due to which he filed writ petitions. Continuous working from 6.11.2001 to
22.7.2004 is also claimed.

10. Petitioner employer, on the other hand disputed the claim by asserting that Chairman
had no authority to appoint any person without advertising the post and obtaining approval of State.
Appointment on the post of Tax Collector has been denied, and it is asserted that no appointment
order was issued. As per employer, the workman was engaged through contractor for some time on
daily wages, without there being any vacant post in existence, purely due to exigency of work. A
specific plea is taken that ever since workman claims his appointment, no post remained vacant,
and that is why workman approached the Writ Court. In the absence of post, claim of reinstatement
has been denied. Petitioner asserts that Nagar Palika Parishad, Firozabad, is a local authority
constituted under the Act of 1916, and is a 'State' within the meaning of Article 12 of the
Constitution of India. It is stated that engagement of employee is regulated by statutory provisions.
Appointment could be made only after due publication of vacancy, by the authority competent,
8 All. Nagar Palika Parishad Vs Presiding Officer, Labour Court & Anr.
939
against a post duly sanctioned by the State. It is stated that there was no vacant post of Tax
Collector, nor any appointment order was ever issued to the respondent workman. In the written
statement also, it was pleaded that no vacancy existed or was advertised, nor any appointment letter
was issued to the workman, and that engagement of the workman was through a Contractor, and he
was paid at the daily rate basis, and no employee employer relationship came into being, but all
such objections have not been considered. Continuance of workman for three years is specifically
denied, and it is alleged that no termination could be said to have been effected in the absence of
any appointment itself.

11. On behalf of workman, it is stated that workman had been appointed by the Chairman,
but admittedly no order of appointment has been brought on record. Reference has been made to
engagement of workman by the Executive Officer w.e.f. 6.11.2001 on the basis of directions issued
by the Chairman but such order is also not on record. However, it is stated that there was no
complaint with regard to working of respondent workman.

12. Labour Court, on the basis of evidence brought before it, has disbelieved the case of
employer about engagement of workman on contract basis, and it has been held that working of
respondent from 6.11.2001 to 22.7.2004 was continuous. Labour Court, however, has not examined
the question as to whether the engagement of workman was against any sanctioned vacant post, nor
it has been considered as to whether the procedure for a valid recruitment by State agency had been
followed or not. Although a specific issue was raised by the petitioner employer regarding
appointment being bad due to non-following of procedure as well as non-availability of vacant post
in the written statement but the workman failed to demonstrate that any valid appointment against a
vacant post was made and the award is absolutely silent on such crucial aspects. A perusal of the
award goes to show that Labour Court found engagement of respondent workman to be purely on
daily wage basis. Labour Court has confined its award only to the aspect relating to non-payment of
retrenchment compensation and consequent violation of Section 6-N of the U.P. Industrial Disputes
Act.

13. It is undisputed that Nagar Palika Parishad, Firozabad is a local authority, and in
matters relating to engagement of its employees, the statutory provisions as well as dictum of
Article 16 of the Constitution of India was applicable. It is nowhere claimed that any recruitment
proceeding in consonance with Article 16 of the Constitution of India was undertaken before
engaging the respondent workman. No evidence has been led on behalf of the worker on this
aspect, despite a specific objection taken in this regard before the Labour Court. On the aspect of
existence of vacant post also no evidence was led by the workman. The engagement of respondent
workman, therefore, was purely to meet exigency of work, on daily wage, and was apparently not
against any post.

14. So far as challenge made by the employer to the award is concerned, it is to be noticed
that though a case was set up by the employer about engagement being made on contract basis, but
no evidence to support such a plea has been adduced before the Labour Court. The finding returned
by the Labour Court about continuous working of workman is based upon appreciation of materials
940 INDIAN LAW REPORTS ALLAHABAD SERIES

brought on record, which has not been shown to be erroneous or perverse. From the stand taken by
the employer, engagement of workman on daily wage basis is not in dispute. It is further not in
dispute that no retrenchment compensation was paid. In view of the finding returned by the Labour
Court that the workman had continued for more than 240 days in a calender year, and had not been
paid any retrenchment compensation before terminating his services, the finding returned by the
Labour Court about violation of Section 6-N of the U.P. Industrial Disputes Act is clearly made out
and requires no interference.

15. Once it is held that termination of respondent workman was in teeth of Section 6-N of
the U.P. Industrial Disputes Act, it follows that termination is bad in law. The question which then
arises is as to what is the relief, to which workman was entitled in law?

Sri S.N. Dubey has urged that once termination is held to be illegal, due to nonpayment of retrenchment compensation, workman is entitled to reinstatement alongwith back
wages, and the Labour Court is not required to go into other aspects like availability of post,
manner of engagement etc. For such purposes, reliance has been placed upon decisions of the Apex
Court in State of U.P. Vs. Charan Singh [2015 (8) SCC 150], Bhuvanesh Kumar Dwivedi Vs. M/s
Hindalco Industries Ltd. [2014 (142) FLR 20], and K.V.S. Ram Vs. Bangalore Metropolitan
Transport Corporation [2015 (144) FLR 994] to contend that payment of compensation in place of
reinstatement has been disapproved. It is also urged that unless award is found to be illegal on
account of some error of law, relief of reinstatement cannot be substituted with lump sum
compensation. Reliance has also been placed upon a judgment of the Apex Court in Harjinder
Singh Vs. Punjab State Warehousing Corporation, reported in 2010 (3) SCC 192. Consideration of
initial illegality in making of appointment was disapproved in the matter, as no such plea was taken
before the Labour Court. Krishan Singh Vs. Executive Engineer, reported in 2010 (125) FLR 187,
is also to similar effect. These two judgments apparently have no applicability in the facts of the
present case, as the employer had taken a specific ground about non-existence of post as well as
non-observance of procedure contemplated for a valid appointment in its written statement.

16. On the other hand, judgments are relied upon, to contend that where employer is a
'State' or 'Agency or instrumentality of State' issues regarding existence of post, manner of
recruitment, length of service etc. are relevant considerations. Learned counsel for the petitioner
employer has relied upon a recent decision of the Apex Court reported in 2014 (7) SCC 177
(Bharat Sanchar Nigam Limited Vs. Bhurumal). Para 29 to 35 of the said decision dealt with a
similar exigency, where a worker engaged on daily wage had been terminated without complying
with the provisions of Section 25-F of the Industrial Disputes Act. Following proposition has been
laid down by the Hon'ble Supreme Court in Paras 29 to 35, which is reproduced:-

"29. The learned counsel for the appellant referred to two judgments wherein this
Court granted compensation instead of reinstatement. In the case of BSNL vs. Man Singh [(2012) 1
SCC 558], this Court has held that when the termination is set aside because of violation of Section
25-F of the Industrial Disputes Act, it is not necessary that relief of reinstatement be also given as a
matter of right. In the case of Incharge Officer & Anr. vs. Shankar Shetty [(2010) 9 SCC 126], it
8 All. Nagar Palika Parishad Vs Presiding Officer, Labour Court & Anr.
941
was held that those cases where the workman had worked on daily wage basis, and worked merely
for a period of 240 days or 2- 3 years and where the termination had taken place many years ago,
the recent trend was to grant compensation in lieu of reinstatement.

30. In this judgment of Shankar Shetty (supra), this trend was reiterated by
referring to various judgments, as is clear from the following discussion: (SCC pp 127-28, paras 24)
"2. Should an order of reinstatement automatically follow in a case where the
engagement of a daily wager has been brought to end in violation of Section 25-F of the Industrial
Disputes Act, 1947 (for short "the ID Act")? The course of the decisions of this Court in recent
years has been uniform on the above question.

3. In Jagbir Singh v. Haryana State Agriculture Mktg. Board5, delivering the
judgment of this Court, one of us (R.M. Lodha,J.) noticed some of the recent decisions of this Court,
namely, U.P. State Brassware Corpn. Ltd. V. Uday Narain Pandey6, Uttaranchal Forest
Development Corpn. V. M.C. Joshi7, State of M.P. v. Lalit Kumar Verma8, M.P. Admn
v.Tribhuban9, Sita Ram v.Moti Lal Nehru Farmers Training Institute10, Jaipur Development
Authority v. Ramsahai11, GDA v. Ashok Kumar12 and Mahboob Deepak v.Nagar Panchyat,
Gajraula13 and stated as follows: (Jagbir Singh case5, SCC pp.330 & 335 paras 7 & 14)

'7. It is true that the earlier view of this Court articulated in many decision
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 past, there has
been a shift in the legal position and in a 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 of the prescribed procedure. Compensation instead of reinstatement has been held to
meet the ends of justice.

* * *

14. It would be, thus, seen that by a catena of decisions in recent time, this Court
has clearly laid down that an order of retrenchment passed in violation of Section 25-F although
may be set aside but an award of reinstatement should not, however, 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.'

4. Jagbir Singh5 has been applied very recently in Telegraph Deptt. V. Santosh
Kumar Seal14, wherein this Court stated: (SCC p.777, para 11)
942 INDIAN LAW REPORTS ALLAHABAD SERIES

'11. In view of the aforesaid legal position and the fact that the workmen were
engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of
reinstatement and back wages to them cannot be said to be justified and instead monetary
compensation would subserve the ends of justice.'"

31. In the case of Telecom District Manager v. Keshab Deb15 the Court
emphasized that automatic direction for reinstatement of the workman with full back wages is not
contemplated. He was at best entitled to one months' pay in lieu of one month's notice and wages of
15 days of each completed year of service as envisaged under Section 25-F of the Industrial
Disputes Act. He could not have been directed to be regularized in service or granted /given a
temporary status. Such a scheme has been held to be unconstitutional by this Court in A.Umarani v.
Registrar, Coop.Societies16 and Secy., State of Karnataka v. Umadevi(3)17.

32. It was further submitted by the learned counsel for the appellant that likewise,
even when reinstatement was ordered, it does not automatically follow full back wages should be
directed to be paid to the workman. He drew our attention of this Court in the case of Coal India
Ltd. Vs. Ananta Saha18 and Metropolitan Transport Corporation v. V. Venkatesan19.

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 malafide and/or by way of
victimization, 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 procedural defect, namely
in violation of Section 25-F of the Industrial Disputes Act, this Court is consistent in taking the view
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.

34. 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
regularization [See: State of Karnataka vs. Uma Devi(3)17]. Thus when he cannot claim
regularization 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.
8 All. Nagar Palika Parishad Vs Presiding Officer, Labour Court & Anr.
943
35. 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 it was resorted to as unfair
labour practice or in violation of the principle of last come first go viz. while retrenching such a
worker daily wage juniors to him were retained. There may also be a situation that persons junior
to him wee regularized under some policy but the concerned workman 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
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."

Similar views are expressed by the Apex Court in Bhavnagar Municipal Corporation
Vs. Jadeja Govubha Chhanubha AIR 2015 SC 609; Rajasthan State Agricultural Marketing Board
Vs. Mohan Lal 2013 (14) SCC 543 and 2014 (16) SCC 440. Judgment in BSNL Vs. Bhurumal
(supra) has been reiterated in Hari Nandan Prasad and another Vs. Employer I/R to Management of
Food Corporation of India and another, 2014 (7) SCC 190. The question as to what relief is to be
granted to a workman employed by State Authorities when termination is found to be bad on
account of non-payment of retrenchment compensation has been dealt with extensively. Paragraphs
23 to 40 of the judgment is apposite and thus reproduced:-

"23. Before we advert to this question, it would be necessary to examine as to
whether the Constitution Bench judgment in Uma Devi case have applicability in the matters
concerning industrial adjudication. We have already pointed out above the contention of the
counsel for the appellants in this behalf, relying upon Maharashtra State Road Transport case that
the decision in Uma Devi would be binding the Industrial or Labour Courts. On the other hand,
counsel for the FCI has referred to the judgment in U.P.Power Corporation for the submission that
law laid down in Uma Devi equally applies to Industrial Tribunals/Labour Courts. It, thus,
becomes imperative to examine the aforesaid two judgments at this juncture.

24. A perusal of the judgment in U.P. Power Corporation would demonstrate that
quite a few disputes were raised and referred to the industrial tribunal qua the alleged termination
of respondent Nos.2 and 3 in that case. Without giving the details of those cases, it would be
sufficient to mention that in one of the cases the tribunal held that after three years of their joining
in service both respondents 2 and 3 were deemed to have been regularized. The appellants filed the
Writ Petition which was also dismissed. Challenging the order of the High Court, the appellants
had approached this Court. It was argued that there could not have been any regularization order
passed by the Industrial Court in view of the decision in Uma Devi. Counsel for the workmen had
taken a specific plea that the powers of the industrial adjudicator were not under consideration in
Uma Devi's case and that there was a difference between a claim raised in a civil suit or a Writ
Petition on the one hand and one adjudicated by the industrial adjudicator. It was also argued that
the labour court can create terms existing in the contract to maintain industrial peace and
therefore it had the power to vary the terms of the contract.
944 INDIAN LAW REPORTS ALLAHABAD SERIES

25. While accepting the submission of the appellant therein viz. U.P. Power
Corporation, the Court gave the following reasons: (U.P. Power Corpn. case, SCC pp.758, para 68)

"6. It is true as contended by learned counsel for the respondent that the question
as regards the effect of the industrial adjudicators' powers was not directly in issue in Umadevi
case. But the foundation logic in Umadevi case is based on Article 14 of the Constitution of India.
Though the industrial adjudicator can very the terms of the contract of the employment, it cannot
do something which is violative of Article 14. If the case is one which is covered by the concept of
regularization, the same cannot be viewed differently.

7. The plea of learned counsel for the respondent that at the time the High Court
decided the matter, decision in Umadevi case was not rendered is really of no consequence. There
cannot be a case of regularization without there being employee-employer relationship. As noted
above the concept of regularization is clearly linked with Article 14 of the Constitution. However, if
in a case the fact situation is covered by what is stated in para 45 of Umadevi case the industrial
adjudicator can modify the relief, but that does not dilute the observations made by this Court in
Umadevi case about the regularization.

8. On facts, it is submitted by learned counsel for the appellants that Respondent
No.2 himself admitted that he never worked as a pump operator, but was engaged as daily wage
basis. He also did not possess the requisite qualification. Looked at from any angle, the direction
for regularization, as given, could not have been given in view of what has been stated in Umadevi
case."

It is clear from the above that the Court emphasized the underline message
contained in Umadevi's case to the effect that regularization of a daily wager, which has not been
appointed after undergoing the proper selection procedure etc. is impermissible as it was violative
of Art.14 of the Constitution of India and this principle predicated on Art.14 would apply to the
industrial tribunal as well inasmuch as there cannot be any direction to regularize the services of a
workman in violation of Art.14 of the Constitution. As we would explain hereinafter, this would
mean that the industrial court would not issue a direction for regularizing the service of a daily
wage worker in those cases where such regularization would tantamount to infringing the
provisions of Art.14 of the Constitution. But for that, it would not deter the Industrial
Tribunals/Labour Courts from issuing such direction, which the industrial adjudicators otherwise
possess, having regard to the provisions of Industrial Disputes Act specifically conferring such
powers. This is recognized by the Court even in the aforesaid judgment.

26. For a detailed discussion on this aspect, we proceed to discuss the ratio in the
case of Maharashtra State Road Transport Corporation (supra). In that case the respondent
Karamchari Union had filed two complaints before the Industrial Court, Bombay alleging that the
appellant-Corporation had indulged in unfair labour practice qua certain employees who were
engaged by the appellant as casual labourers for cleaning the buses between the years 1980-1985.
8 All. Nagar Palika Parishad Vs Presiding Officer, Labour Court & Anr.
945
It was stated in the complaints that these employees were made to work every day at least for 8
hours at the depot concerned of the Corporation; the work done by them was of permanent nature
but they were being paid a paltry amount; and even when the post of sweepers/cleaners were
available in the Corporation, these employees had been kept on casual and temporary basis for
years together denying them the benefit of permanency:

26.1. After adjudication, the Industrial Court held that the Corporation had
committed unfair labour practice under items 5 and 9 of Schedule IV to the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practice Act, 1971 (MRTU and
PULP Act). As a consequence, it directed the Corporation to pay equal wages to the employees
concerned which was being paid to Swachhaks and also pay arrears of wages to them.

26.2. In the second complaint, the Industrial Court returned the finding that the
Corporation was indulging in unfair labour practice under Item 6 of Schedule IV, by continuing
these employees on temporary/casual/daily wage basis for years together and thereby depriving
them the benefits of permanency. The direction in this complaint was to cease and desist from the
unfair labour practice by giving them the status, wages and all other benefits of permanency
applicable to the post of cleaners, w.e.f. 3.8.1982.

27. The Corporation challenged these two orders of the Industrial Court before the
High Court of Judicature at Bombay in five separate Writ Petitions. These were disposed of by the
learned Single Judge vide common judgment dated 2.8.2001 holding that complaints were
maintainable and the finding of the Industrial Court that the Corporation had indulged in unfair
labour practice was also correct.

28. The Corporation challenged the decision of the learned Single Judge by filing
LPAs which were dismissed by the Division Bench on 6.5.2005. This is how the matter came before
the Supreme Court. One of the contentions raised by the appellants before this Court was that there
could not have been a direction by the Industrial Court to give these employees status, wages and
other benefits of permanency applicable to the post of cleaners as this direction was contrary to the
ratio laid down by the Constitution Bench of this Court in Umadevi (supra). The Court while
considering this argument went into the scheme of the MRTU and PULP Act. It was, inter-alia,
noticed that complaints relating to unfair labour practice could be filed before the Industrial Court.
The Court noted that Section 28 of that Act provides for the procedure for dealing with such
complaints and Section 30 enumerates the powers given to the Industrial and Labour Courts to
decide the matters before it including those relating to unfair labour practice. On the reading of
this section, the Court held that it gives specific power to the Industrial/Labour Courts to declare
that an unfair labour practice has been engaged and to direct those persons not only to cease and
desist from such unfair labour practice but also to take affirmative action. Section 30(1) conferring
such powers is reproduced below:
946 INDIAN LAW REPORTS ALLAHABAD SERIES

"30. Powers of Industrial and Labour Courts.- (1)Where a court decides that any
person named in the complaint has engaged in, or is engaging in, any unfair labour practice, it may
in its order-

(a)declare that an unfair labour practice has been engaged in or is being engaged
in by that person, and specify any other person who has engaged in, or is engaging in the unfair
labour practice;

(b) direct all such persons to cease and desist from such unfair labour practice,
and take such affirmative action (including payment of reasonable compensation to the employee
or employees affected by the unfair labour practice, or reinstatement of the employee or employees
with or without back wages, or the payment of reasonable compensation), as may in the opinion of
the Court be necessary to effectuate the policy of the Act;

(c) where a recognized union has engaged in or is engaging in, any unfair labour
practice, direct that its recognition shall be cancelled or that all or any of its rights under subsection(1) of Section 20 or its right under Section 23 shall be suspended."

29. It was further noticed that Section 32 of the Act provides that the Court shall
have the power to decide all connected matters arising out of any application or a complaint
referred to it for decision under any of the provisions of this Act. The Court then extensively quoted
from the judgment in Uma Devi in order to demonstrate the exact ratio laid down in the said
judgment and thereafter proceeded to formulate the following question and answer thereto:

"The question that arises for consideration is: have the provisions of the MRTU
and PULP Act been denuded of the statutory status by the Constitution Bench decision in
Umadevi? In our judgment, it is not."

30. Detailed reasons are given in support of the conclusion stating that the MRTU
and PULP Act provides for and empowers the Industrial/Labour Courts to decide about the unfair
labour practice committed/being committed by any person and to declare a particular practice to
be unfair labour practice if it so found and also to direct such person ceased and desist from unfair
labour practice. The provisions contained in Section 30 giving such a power to the Industrial and
Labour Courts vis-à-vis the ratio of Uma Devi are explained by the Court in the following terms:
(Maharashtra SRTC case, SCC pp. 573-74, paras 32-33 & 36)

"32. The power given to the Industrial and Labour Courts under Section 30 is very
wide and the affirmative action mentioned therein is inclusive and not exhaustive. Employing
badlis, casuals or temporaries and to continue them as such for years, with the object of depriving
them of the status and privileges of permanent employees is an unfair labour practice on the part of
the employer under Item 6 of Schedule IV. Once such unfair labour practice on the part of the
employer is established in the complaint, the Industrial and Labour Courts are empowered to issue
preventive as well as positive direction to an erring employer.
8 All. Nagar Palika Parishad Vs Presiding Officer, Labour Court & Anr.
947
33. The provisions of the MRTU and PULP Act and the powers of the Industrial
and Labour Courts provided therein were not at all under consideration in Umadevi. As a matter of
fact, the issue like the present one pertaining to unfair labour practice was not at all referred to,
considered or decided in Umadevi.