# HARi NANDAN PRASAD & ANR v. EMPLOYER l/R TO MANGMT.OF FCI & ANR

- **Citation:** [2014] 2 S.C.R. 955
- **Court:** Supreme Court of India
- **Decided:** 2014-02-17
- **Case number:** Civil Appeal Nos. 2417-2418 of 2014
- **Bench:** K.S. Radhakrishnan, A.K. Sikri
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/hari-nandan-prasad-anr-v-employer-l-r-to-mangmt-of-fci-anr-29865
- **Pages:** 35

## Headnote

INDUSTRIAL DISPUTES ACT, 1947:
A
B
s:-25-F - Termination without any notice or pay in lieu of c
notice or retrenchment compensation - Termin~ted workers
worked for more than 240 days continuously preceding their
disengagement/termination - Held: Mandatory pre-condition
of retrenchment in paying the dues in accordance with s.25F having not been complied with, that is sufficient to render 0
the termination as illegal.
s.25-F - Reinstatement - Entitlement - Held: Relief of
reinstatement cannot be granted to the persons who were
engaged as daily wagers and whose services were terminated
in a distant past and where termination was held to be illegal
E
only on a technical ground of not adhering to the provisions
of s.25-F of the Act.
Power of Labour Court/Industrial Adjudicator - Scope of
- Held: The powers of the industrial adjudicator under the
F
Industrial Disputes Act are wide - By empowering the
adjudicator authorities under the Act, to give reliefs such as
a reinstatement of wrongfully dismissed or discharged
workmen, which may not be permissible in common law or
justified under the terms of the contract between the employer G
and such workmen, the legislature has attempted to frustrate
the unfair labour practices and secure the policy of collective
bargaining as a road to industrial peace - In order to achieve
the said objectives, the Labour Courts/Industrial Tribunals are
955 .
H
956
SUPREME COURT REPORTS
[2014] 2 S.C.R.
1 A given wide powers not only to enforce the rights but even to
create new rights, with the underlying objective to achieve
social justice - The said sweeping power conferred upon the
Tribunal is not unbridled - It is, thus, this fine balancing which
is required to be achieved while adjudicating a particular
s dispute, keeping in mind that the industrial disputes are settled
by industrial adjudication on principle of (air play and justice.
'
Regularization of daily wagers - Claim for - Held: When
there are posts available, in the absence of any unfair labour
practice the Labour Court would not give direction for
C regularization only because a worker has continued as daily
wage workerladhoc/temporary worker for number of years -
Further, if there are no posts available, such a direction for
regularization would be impermissible -
In these
circumstances giving of direction to regularize such a person,
D only on the basis of number of years put in by such a worker
as daily wager etc. may amount to backdoor entry into the
service which is an anathema to Art. 14 of the Constitution -
Further, such a direction would not be given when the
concerned worker does not meet the eligibility requirement of
E the post in question as per the Recruitment Rules - However,
wherever it is found that similarly situated workmen are
regularized by the employer itself under some scheme or
otherwise and the workmen in question who have approached
Industrial/Labour Court are at par with them, direction of
F regularization in such cases may be legally justified,
otherwise, non-regularization of the left out workers itself would
amount to invidious discrimination qua them in such cases
and would be violative of Art. 14 of the Constitution -
Constitution of India, 1950 - Article 14.
G
Termination of daily wagers - Circular issued by the
employer whereby any temporary worker employed for more
than 90 days was entitled for regularization of his service and
following the said circular, the company had regularized the ·
H services of 70-75 similarly situated casual workers - Claim for
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 957
TO MANGMT.OF FCI & ANR.
regularization by appellants-daily wagers - Held: In the instant
A
case, appellant no: 1 was not in service on the date when the
scheme was promulgated as his services were dispensed with,
4 years before that circular - Therefore, the relief of monetary
compensation in lieu of reinstatement would be more
appropriate in his case - However, in so far as appellant no. 2
B
was concerned, when

## Text

_Characters 0–39,713 of 68,919. This is a partial read: ask again with offset=39713 for what follows._

[2014] 2 S.C.R. 955
HARi NANDAN PRASAD & ANR.
v.
EMPLOYER l/R TO MANGMT.OF FCI & ANR.
(Civil Appeal Nos. 2417-2418 of 2014)
FEBRUARY 17, 2014
[K.S. RADHAKRISHNAN AND A.K. SIKRI, JJ.]
INDUSTRIAL DISPUTES ACT, 1947:
A
B
s:-25-F - Termination without any notice or pay in lieu of c
notice or retrenchment compensation - Termin~ted workers
worked for more than 240 days continuously preceding their
disengagement/termination - Held: Mandatory pre-condition
of retrenchment in paying the dues in accordance with s.25F having not been complied with, that is sufficient to render 0
the termination as illegal.
s.25-F - Reinstatement - Entitlement - Held: Relief of
reinstatement cannot be granted to the persons who were
engaged as daily wagers and whose services were terminated
in a distant past and where termination was held to be illegal
E
only on a technical ground of not adhering to the provisions
of s.25-F of the Act.
Power of Labour Court/Industrial Adjudicator - Scope of
- Held: The powers of the industrial adjudicator under the
F
Industrial Disputes Act are wide - By empowering the
adjudicator authorities under the Act, to give reliefs such as
a reinstatement of wrongfully dismissed or discharged
workmen, which may not be permissible in common law or
justified under the terms of the contract between the employer G
and such workmen, the legislature has attempted to frustrate
the unfair labour practices and secure the policy of collective
bargaining as a road to industrial peace - In order to achieve
the said objectives, the Labour Courts/Industrial Tribunals are
955 .
H
956
SUPREME COURT REPORTS
[2014] 2 S.C.R.
1 A given wide powers not only to enforce the rights but even to
create new rights, with the underlying objective to achieve
social justice - The said sweeping power conferred upon the
Tribunal is not unbridled - It is, thus, this fine balancing which
is required to be achieved while adjudicating a particular
s dispute, keeping in mind that the industrial disputes are settled
by industrial adjudication on principle of (air play and justice.
'
Regularization of daily wagers - Claim for - Held: When
there are posts available, in the absence of any unfair labour
practice the Labour Court would not give direction for
C regularization only because a worker has continued as daily
wage workerladhoc/temporary worker for number of years -
Further, if there are no posts available, such a direction for
regularization would be impermissible -
In these
circumstances giving of direction to regularize such a person,
D only on the basis of number of years put in by such a worker
as daily wager etc. may amount to backdoor entry into the
service which is an anathema to Art. 14 of the Constitution -
Further, such a direction would not be given when the
concerned worker does not meet the eligibility requirement of
E the post in question as per the Recruitment Rules - However,
wherever it is found that similarly situated workmen are
regularized by the employer itself under some scheme or
otherwise and the workmen in question who have approached
Industrial/Labour Court are at par with them, direction of
F regularization in such cases may be legally justified,
otherwise, non-regularization of the left out workers itself would
amount to invidious discrimination qua them in such cases
and would be violative of Art. 14 of the Constitution -
Constitution of India, 1950 - Article 14.
G
Termination of daily wagers - Circular issued by the
employer whereby any temporary worker employed for more
than 90 days was entitled for regularization of his service and
following the said circular, the company had regularized the ·
H services of 70-75 similarly situated casual workers - Claim for
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 957
TO MANGMT.OF FCI & ANR.
regularization by appellants-daily wagers - Held: In the instant
A
case, appellant no: 1 was not in service on the date when the
scheme was promulgated as his services were dispensed with,
4 years before that circular - Therefore, the relief of monetary
compensation in lieu of reinstatement would be more
appropriate in his case - However, in so far as appellant no. 2
B
was concerned, when the Circular was issued, he was in
service and within few months of the issuing of that Circular
he had completed 240 days of service - Non-regularization
of appellant No.2, while giving the benefit of that Circular to
other similar situated employees and regularizing them would, c
therefore, be clearly discriminatory.
Appellant no. 1 was engaged on daily wages as
. labourer in the exigency of the situation. He was
terminated from service after 3 years on the ground that
his services were no more required. No notice or notice
D
of pay or retrenchment compensation was given to him.
Appellant no. 2 was engaged on daily wages as casual
t_ypist. He was terminated after 4 years Both the
appellants raised industrial dispute. The Industrial
Tribunal held in both the cases that the termination was
E
F
in contravention of Section 25-F of the Industrial
Disputes· Act and ordered reinstatement and also
regularization of services from the date of termination and
50% back wages. The direction for regularization was
based on circular dated 6.5.1987 Issued by the
respondent whereby any temporary worker employed for
more than 90 days was entitled for regularization of his
service and following the said circular, the company had
regularized the services of 70-75 similarly situated casual
workers. The single judge of the High Court dismissed
G
the writ petitions filed by the respondent company. The
Division Bench of the High Court allowed the appeal of
the respondent holding that as both the appellants did
not render 10 or more years of service, their case did not
come even in the exception carved out in Uma Devi's
H
958
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A case. The Division Bench accepted that there was
infraction of Section 25-F of the Industrial Disputes Act,
however it held that the appellants were not entitled to
reinstatement because of the reason that they were
employed strictly as temporary workers without any
B stipulation or promise that they would be made
permanent and, therefo~e, reinstatement of such workers
was not warranted and they were entitled to get ~onetary
compensation only. Regarding compensation, the High
Court held that since both the appellants were paid the
c money equivalent to wages last drawn for number of
years when the writ petitions were pending under section
17-8 of the Act, they were duly compensated and no
further amount was payable.
In the instant appeals, the questions for
D consideration were: whether the termination of services
of appellants was illegal; if yes, whether in facts and
~ircumstances of the case, the appellants would be
entitled to reinstatement of service or whether the
monetary compensation in lieu of reinstatement would be
E justified; and whether the appellants were entitled to
regularization of their services.
Partly allowing the appeals, the Court
HELD: 1. Admitted facts are that both the appellant
F had worked for more than 240 days continuously
preceding their disengagement/termination. At the time of
their disengagement, ev_en when they had continuous
service for more than 240 days (in fact about 3 years)
they were not given any notice or pay in lieu of notice as
G well as retrenchment compensation. Thus, mandatory
pre-condition of retrenchment in paying the said dues in
accordance with Section 25-F of the l.D. Act was not
complied with. That is sufficient to render the termination
as illegal. Even the High Court in the impugned juagment
H rightly accepted this position. It is to be seen what relief
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R
959
TO MANGMT.OF FCI & ANR.
should be granted in such cases. Admittedly, both the
A
workmen were engagei':I on daily wages basis. Their
engagement was also in exigency of situation. Appellant
No.1 was disengaged way back in the year 1983. The
dispute in his case was referred for adjudication to
Industrial Tribunal in 1992 only. There was a time lag of B
9 years. Though no reasons were given for such an
abnormal delay, he seemed to have raised the industrial
dispute few years after his disengagement which can be ·
inferred from the reading of the award of the Industrial
Tribunal as that reveals that after his disengagement he c
kept on making representations only and he took
recou'rse to judicial proceedings only after Circular dated
6.5.1997 was issued as per which the respondent had
decided to regularize the services of all casual workmen
who had completed more than 90 days before 1996. 0
Appellant No.1 had worked on daily wages basis for
barely 3 years and· he was out of service for last 30 years.
Even when the Tribunal rendered his award in 1996, 13
years had elapsed since his termination. On these facts,
it would be difficult to give the relief of reinstatement to
E
the persons who were engaged.as daily wagers and
whose services were terminated in a distant past. And,
further where termination is held to be illegal only on a
technical ground of not adhering to the provisions of
Section 25-F_ of the Act (Paras 16 and 17] [971-G-H; 972F
A-G]
BSNL vs. Bhurumal 2013 (15) SCALE 131 ·relied on.
2. A close scrutiny of U.P. Power Corporation and
Bhonde case revealed that the law laid down In those G
cases was not contradictory to each other. In U.P. Power
Corporation, the Court recognized the powers of the
Labour Court and at the same time emphasized that the
Labour Court is to keep in mind that the.re should not be
any direction· of regularization if this offends the
H
. 960
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A provisions of Art.14 of the Constitution, on which
judgment in Umadevi Is primarily founded. On the other
hand, in Bhonde case, the Court has recognized the
principle that having regard to statutory powers conferred
upon the Labour Court/Industrial Court to grant certain
B reliefs to the workmen, which includes the relief of giving
the status of permanency to the contract employees,
such statutory power does not get denuded by the
judgment in Umadevi's case. It is clear from the reading
of this judgment that such a power is to be exercised
c when the employer has indulged in unfair labour practice
by not filling up the permanent post even when available
and continuing to engage workers on temporary/daily
wage basis and taking the same work from them which
were performed by the regular workers but paying them
0 much less wages. It is only when a particular practice is
found to be !Jnfair labour practice as enumerated in
Schedule IV of MRTP and PULP Act and it necessitates
giving direction under Section 30 of the said Act, that the
Court would give such a direction. [Para 29) [984-H; 985E A-E]
U.P. Power Corporation v. Bijli Mazdoor Sangh & Ors.
(2007) 5 SCC 755: 2007 (5) SCR 256; State of Maharashtra
v. R.S.Bhonde (2005) 6 SCC 751: 2005 (2) Suppl. SCR 763;
Secretary, State of Kamataka v. Uma Devi & Ors. {~006) 4
F SCC 1: 2006 (3) SCR 953; Maharashtra State Road
Transport Corporation & Anr. vs. Casteribe Rajya Parivahan
Karmchari Sanghatana (2009) 8 SCC 556 - relied on.
3. The judgment in Bhonde case was rendered under
MRTP and PULP Act and the specific provisions of that
G Act were considered to ascertain the powers conferred
upon the Industrial Tribunal/Labour Court by the said Act
At the same time, the powers of tne industrial adjudicator
un~er the Industrial Disputes Acf are equally wide. The
Act deals with .industrial disputes, provides for
H conciliation, adjudication and settlements, and regulates
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 961
TO MANGMT.OF FCI & ANR.
the rights of the parties and the enforcement of the
A
awards and settlements. Thus, by empowering the
adjudieato·r authorities under the Act, to give reliefs such
as a reinstatement of wrongfully dismissed or discharged
workmen, which may not be permissible in common law
or justified under the terms of the contract between the
employer and such workmen, the legislature has
attempted to frustrate the unfair labour practices and
secure the policy of collective bargaining as a road to
industrial peace. In order to achieve the said objectives,
B
the Labour Courts/Industrial Tribunals are given wide c
powers not only to enforce the rights but even to create
new rights, with the underlying objective to achieve social
justice. The aforesaid sweeping power conferred upon
the Tribunal is not unbridled. It is, thus, this fine balancing
which is required to be achieved while adjudicating a
0
particular dispute, keeping in mind that the industrial
disputes are settled by industrial adjudication on
principle of fair play and justice. Harmonious reading of
the said two judgments showed that when there are
posts available, in the absence of any unfair labour
practice the Labour Court would not give direction for
E
regularization only because a worker has continued as
dailY. wage worker/adhoc/temporary worker for number
of years. Further, if there are no posts available, such a
direction for regularization would be impermissible. In
these circumstances giving of direction to regularize
such a person, only on the basis of number of years put
in by such a worker as daily wager etc. may amoun' to
backdoor entry into the service which is an anathema to
Art.14 of the Constitution. Further, such a direction would
F
not be given when the concerned worker does not meet G
the eligibility requirement of the post in question as per
the Recruitment Rules. However, wherever it is found that
similarly situated workmen are regularized by the
employer itself under some scheme or othe'rwise and the
workmen in question who have approached Industrial/
H
962
SUPREME COURT REPORTS
[2014) 2 S.C.R.
A Labour Court are at par with them, direction of
regularization in such cases may be legally justified,
otherwise, non-regularization of the left over workers
itself would amount to invidious discrimination qua them
in such cases and would be violative of Art.14 of the
B Constitution. Thus, the Industrial adjudicator would be
achieving the equality by upholding Art. 14, rather than
violating this constitutional provision. [Paras 30 to 34]
[985-F-H; 986-A, D-E; 987-A, D-H; 988-A-B]
Bharat Bank Ltd. V. Employees of Bharat Bank Ltd.
C [1950] LLJ 921,948-49 (SC); New Maneckchowk Spinning &
Weaving Co.LtcJ..v. Textile Labour Association [1961] 1 LLJ
521,526 (SC) - relied on.
·
4. Appellant No.1 was not in service on the date when
D Scheme was promulgated i.e. as on 6.5.1987 as his
services were dispensed with 4 years before that Circular
saw the light of the day. Therefore, the relief of monetary
compensation in lieu of reinstatement would be more
appropriate in his case and the conclusion in the
impugned judgment qua him is unassailable, though for
E the different reasons. However, in so far as appellant No.2
was concerned, he was engaged on 5.9.1986 and
continued till 15.9.1990 when his services were
terminated. He even raised the Industrial dispute
immediately thereafter. Thus, when the Circular was
F issued, he was in service and within few months of the
issuing of that Circular he had completed 240 days of
service. Non-regularization of appellant No.2, while giving
the benefit of that Circular dated 6.5.1987 to other similar
situated employees and regularizing them would,
G therefore, be clearly discriminatory. On these facts, the
CGIT rightly held that he was entitled to the benefit of
scheme contained in Circular dated 6.5.1987. The Division
Bench in the impugned judgment has failed to notice this
pertinent and material fact which turns the scales in
H favour of appellant No.2. The High Court committed error
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 963
TO MANGMT.OF FCI & ANR.
in reversing the direction given by the CGIT, which was A
rightly affirmed by the single judge as well, to reinstate
appellant No.2 with 50% back wages and to regularize
him in service. He was entitled to get his case considered
in terms of that Circular. Had it been done, probably he
would have been regularized. Instead, his services were B
wrongly and illegally terminated in the year 1990. While
dismissing the appeal qua appellant No.1, the same is
accepted in so far as appellant No.2 is concerned. In his
case, the judgment of the Division Bench is set aside and
the award of the CGIT is restored. [Paras 37, 38] [988-E- c
H; 989-A-D]
Delhi Development Horticulture Employees Union vs.
Delhi Administration AIR 1992 SC 789 : 1992 (1) SCR 565;
Assistant Engineer, Rajasthan Development Corporation &
Anr. vs. Gitam Singh (2013) 5 SCC 136: 2013 (1) SCR 679; D
Mahatma Phule Agricultural University vs. Nasik Zilla Sheth
Kamgar Union (2001) 7 SCC 346: 2001 (3) SCR 1089 -
referred to.
Case Law Reference:
E
1992 (1) SCR 565
Referred to
Para 8
2006 (3) SCR 953
Relied on
Para 8
2007 (5) SCR 256
Relied on
Para 11
(2009) 8 sec 556
Relied on
Para 13
F
2013 (1) SCR 679
Relied on
Para 14
2013 (15) SCALE 13
Relied on
Para 17
2001 (3) SCR 1089
Referred to
Para 26
G
2005 (2) Suppl. SCR 763
Referred to
Para 26
[1950] LLJ 921,948-49 (SC) Relied on
Para 31
·[1961] 1 LLJ 521,526 (SC)
Relied on
Para 32
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
H
964
SUPREME COURT REPORTS
[2014] 2 S.C.R.
A
2417-2418 of 2014.
B
From the Judgment and Order dated 27.06.2008 of the
High Court of Jharkhand at Ranchi in LPA in Nos. 482 and 483
of 2005.
Lakshmi Raman Singh for the Appellants.
Ajit Pudussery, Joanne Pudussery for the Respondents.
The Judgment of the Court was delivered by
C
A.K. SIKRI, J. 1. Leave granted.
2. The two appellants have filed one combined Special
Leave Petition, which arises out of a common judgment dated
27.6.2008 passed by the Division Bench of the Jharkhand High
D
Court in two LPAs which had been filed ·by the respondent
herein viz. Food Corporation of India (FCI). The two appellants
were working on casual basis with the FCI. After certain time,
their services were dispensed with. Both of them raised
industrial dispute alleging wrongful termination which was
E
referred to the Central Government-cum- Industrial Tribunal
(CGIT). These proceedings culminated in two awards dated
12.12.1996 and 18.12.1996 respectively passed by the CGIT.
In both these awards, termination of both the appellants was
held to be illegal and they were directed to be reinstated with
50% back wages. The CGIT also ordered their regularization
F
in service. FCI filed Writ Petitions in both the cases challenging
these awards which were initially admitted sometime in the year
1988 and the operation of the awards was stayed. However,
orders were passed under Section 17-B of the Industrial
Disputes Act (ID Act) directing payment of full wages as last
G wages drawn to the appellants from the date of the award in
each case. These Writ Petitions were ultimately dismissed by
the learned Single Judge vide common judgment and order
dated 19.5.2005. As pointed out above, this judgment of the
learned Single Judge was challenged by the FCI by filing LPAs.
H
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R
965
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
These LPAs have been allowed by the Division Bench, thereby
A
setting aside the orders of the learned Single Judge as well
as awards passed by the CGIT. This is how two appellants are
before us in this appeal.
3. Before we proceed further, we deem it appropriate to
give the details of nature of employment of each of the
appellants with the FCI and tenure etc. as well as the gist of
the tribunal's awards.
Hari Nandan.
B
c
4. He was engaged on daily wages basis as Labourercum-Workman, in the exigency of the situation, at Food Storage
Depot, Jasidih by the Depot In-charge, FCI, Jasidih on 1st June
1980. On the ground that services of appellant No.1 were no
more required, he was disengaged w.e.f. 1.3.1983. While
0
doing so, no notice or notice pay or retrenchment
compensation was given to him. Appellant No.1 raised
industrial dispute which was referred to the CGIT by the Central
Government vide reference order dated 1.10.1992, with the
following terms of reference:
"Whether the action of the management of Food
Corporation of India, in retrenching Shri Hari Nandan
Prasad, Ex-Casual Workman, in contravention of Section
25-F of the LO.Act, 1947 and denying reinstatement with
E
full back wages and regularization of his service is legal
F
and justified? If not to what relief the concerned workman
is entitled to?"
5. The CGIT gave its award dated 12.12.1996 holding that
the termination was in contravention of Section 25-F of the
G
Industrial Disputes Act. The CGIT also, while ordering
reinstatement of appellant No.1, held that he was also entitled
to regularization of his services from the date of his stoppage
from service dated 1.3.1983. Back wages to the extent of 50%
were awarded. As far as direction for r'egularizatiorT-is
H
966
. SUPREME COURT REPORTS
[2014] 2 S.C.R.
A concerned, it was based on Circular issued by the FCI whereby
any temporary worker employed for more than 90 days was
entitled for regularization of his service. It was noted that as per
the said Circular the Management had regularized the services
of 70-75 similarly situated casual workers and therefore
B denying the same benefit to appellant No.1 amounted to
discrimination.
Gobind Kumar Choudhary.
6. Appellant No.2 was engaged on daily wages as casual
C Typist .at the District Office, FCI, Darbhanga against a vacancy
of Class-Ill post on 5.9.1986. He worked in the capacity till
15.9.1990 when his name was struck off the rolls. He also
raised industrial dispute which was referred to CGIT with
D
E
following terms of reference:
·
"Whether the action of the Management of Food
Corporation of India, Laaherisarai, Darbhanga is legal and
justified in retrenching Shri Govind Kumar Chaudhary, who
was working as Casual Typist, arbitrarily and in violation
of Section 25-F of the l.D.Act, and denying reinstatement
with full back wages and regularization of service is legal
and justified? If not to what relief the concerned workman
is entitled to?"
In his case, the award dated 18.12.1996 was made by the
F CGIT on almost identical premise, as in the case of appellant
No.1, supported by similar reasons.
7. The learned Single Judge while dismissing both the Writ
Petitions filed by the FCI concurred with the findings and
G reasons given by the CGIT.
H
8. In the LPAs before the Division Bench, the primary
contention of the FCI was that there could not have been any
direction of regularization of services even on the admitted
case of both the workmen, viz. merely on the ground that they
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 967
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
had worked for more than 240 days in a calendar year as
A
casual employees. It was also submitted that though the Disttict
Manager of the FCI was authorized to employ persons as
temporary workers, such an authority was given for employing
them for 7 days only and no more, and in case of violation of
this strict stipulation contained in the Circular issued by the FCI,
B
the concerned officer could be proceeded against
departmentally. It was further argued that even if such temporary
employment was to continue beyond stipulated period of 7
days, since these two workmen had worked on daily wages
basis, that too for a period of 3 years or so, there could not c .
have been any regularization of these workmen in view of the
judgments of this Court in the case of Delhi Development
Horticulture Employees Union vs. Delhi Administration AIR
1992 SC 789 and Constitution Bench judgment in the. case of
Secretary, State of Kamataka vs. Uma Devi & Ors. (2006) 4
0
SCC 1. These contentions have impressed the Division Bench
of the High Court, and accepted by it, giving the following
reasons:
"The Tribunal has apparently misconceived the principles
of law laid down in this context. In the case of Delhi
E
Development Horticulture Employees Union vs. Delhi
Administration (AIR 1992) SC 789) the Supreme Court
has categorically laid down that temporary employees,
even if they have worked for more than 240 days, cannot
claim any right or benefit for automatic regularization of
F
their services. Similar view has been taken in the case of
Post Master General, Kolkata & Ors vs. Tutu Das (Dutta),
reported in 2007 (5) SCC 317. More so, where no posts
are created or no vacancies to sanctioned posts exists,
only on the ground of working for more than 240 days,
G
regularization cannot be directed. Even in cases where
there are regular posts and vacancies, the procedure laid
down for appointment has to be followed.".
9. In so far as contention of the appellant predicated on
H
968
SUPREME COURT REPORTS
(2014] 2 S.C.R.
A
Circular dated 6.5.1997 is concerned, on the basis of which
they claimed that 70-75 persons had been regularized and
discriminatory treatment could not be meted to them, this
contention has been brushed aside by the High Court in the
impugned judgment in the following manner:
B
c
n
E
F
G
H
"The, contention of Mrs.Pal that there has been
discrimination as several persons were regularized on the
basis of the Circular of the Management dated 6.5.1987,
cannot be accepted. Reliance for this purpose on the case
of U.P. State Electricity Board vs. Pooran Chandra
Pandey reported in (2007) 11 SCC 92, is also of no help
to her. Firstly, there were several conditions and criteria
in the said Circular for regularization, but there is no finding
that the respondents workmen in these appeals fulfilled
such criteria. Secondly, in the case of U.P.State Electricity
Board matter (supra) the employees of the Co-operative
Society who were taken over by the Electricity Board
claimed that the decision of the Electricity Board dated
28.11.1996 permitting regularization of the employees
working from before 4.5.1990, will also apply to them as
they were also appointed prior to 4.5.1990 in the Society.
It was held that since the taken over employees were
appointed in the Society before 4.5.1990, they could not
be denied the benefit of the said decision of the Electricity
Board. There is nothing to show that the appointment of
the taken over employees was made by the Society without
following the procedure in that behalf, whereas in the
present case, the respondents workmen were not
appointed against vacant and sanctioned posts after
following the procedure of appointment.
Furthermore, in paragraph 6 of the judgment of the
Constitution Bench in the case of Secretary, State of
Kamataka vs. Uma Devi (2006) 4 SCC 1, it was held that
no Government order, notification or circular can be
substituted for the statutory rules framed under the authority
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R
969
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
of law. In para 16 of the judgment in the case of R. S. Garg
A
vs. State of U.P. (2006 (6) SCC 430), it has been held
that even the Government cannot make rules or issue any
executive instructions by way of regularization. Similar view
has been taken in the case of the Post Master General
(supra). Therefore, the respondent workmen cannot claim
B
regularization on the basis of the said Circular of the
Management dated 6.5.1987, nor the said judgment of the
U.P. Electricity Board (supra) is _of any help to them."
10. Heavily relying upon the judgment in the case of Uma
Devi (supra), the High Court has held that as both the
C
appellants did not render 10 or more years of service, their
cases po not come even in the exception carved out by the
Constitution Bench in Uma Devi's case.
11. Another contention raised by the appellants before the o
High Court was that the ratio of Uma Devi's case had no
relevance in the cases of industrial adjudication by the Labour
Courts/Industrial Tribunals. However, even this submission was
found to be meritless by the High Court taking support of the
judgment of this Court in U.P. Power Corporation Vs. Bij/i
E
Mazdoor Sangh & Ors. (2007) 5 SCC 755.
12. We may record here that the Division Bench accepted
that there was infraction of Section 25-F of the LO.Act in both
F
the cases. However, they were held not entitled to reinstatement
because of the reason that they were employed strictly as
temporary workers, without any stipulation or promise that they
would be made permanent and therefore reinstatement of such
workers was not warranted and they were entitled to get
monetary compensation only. As far as· compensation is
concerned, since both the appellants were paid the money. G
equivalent to wages last drawn, for number of years when the
Writ Petitions were pending, under Section 17 -B of the l.D. Act,
the High Court felt that the appellants were duly compensated
and no further amount was payable ..
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SUPREME COURT REPORTS
[2014] 2 S.C.R.
A
13. Challenging the validity of the approach of the High
Court, the learned counsel for the appellants submitted that the
entire thrust of the judgment of the High Court rests on the
decision of this Court in Uma Devi's case which was
impermissible as the said judgment is clarified by this Court
8 subsequently in the case of Maharashtra State Road
Transport Corporation & Anr. vs. Casteribe Rajya Parivahan
Karmchari Sanghatana (2009) 8 SCC 556, wherein it is held,
in categorical terms, that in so far as Industrial and Labour
Courts are concerned, they enjoy wide powers under Section
C 30(1)(b) of the Industrial Disputes Act to take affirmative action
in case of unfair labour practice and these powers include
power to order regularization/permanency. The Court has,
further, clarified that decision in Uma Devi limits the scope of
powers of Supreme Court under Article 32 and High Courts
under Article 226 of the Constitution to issue directions for
D regularization in the matter of public employment, but power to
take affirmative action under section 30(1)(b) of the l.D.Act
which rests with the Industrial/Labour Courts, remains intact. It
was, thus, argued that entire edifice of the impugned judgment
of the High Court erected on the foundation of Uma Devi
E (supra) crumbles.
14. The learned counsel for the FCI, on the other hand,
referred to the judgment in U.P. Power Corporation (supra) ·
wherein this Court has taken unambiguous view that the law laid
F down in Uma Devi is applicable to Industrial Tribunals/Labour
Courts as well. It was submitted that the judgment in U.P. Power
Corporation (supra) was not taken note of in the subsequent
judgment in Maharashtra State Road Transport Corporation
(supra) and this Court should follow the earlier judgment
G rendered in U.P.Power Corporation's case. The learned
counsel also relied upon the recent judgment of this Court in
the case of Assistant Engineer, Rajasthan Development .
Corporation & Anr. vs. Gitam Singh (2013) 5 SCC 136 to
contend that even when there is a wrongful termination of
H services of a daily wager because of non-compliance of the
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 971
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
provisions of Section 25-F of the LO.Act, such an employee is
A
not entitled to reinstatement but only monetary compensation.
On the aforesaid basis, the learned counsel pleaded for
dismissal of the appeal.
15. We have given considerable thoughts to the
8
submissions made by the learned counsel for the parties on
either side. It is clear from the aforesaid narratives that this case
has two facets, which are reflected even in the terms of
references as well on which the disputes were referred to the
CGIT. First refers to the validity of the termination and the other
one pertains to the regularization. Twin issues, which have, thus,
C
to be gone into, are: (1) whether termination of service of the
appellants was illegal?
Related issue here would be that if it is illegal, then whether
in the facts and circumstances of this case, the appellants would
D
be entitled to. reinstatement in service or monetary
compensation in lieu of reinstatement would be justified?
(2) whether the appellants are entitled to regularization of
their services?
We would also record that both the issues, in the facts of
this case, are somewhat overlapping which would become
apparent, with the progression of our discussion on these
issues.
Reg.: Validity of termination.
16. This issue hardly poses any problem. Admitted facts
E
F
are that both the appellant had worked for more than 240 days
continuously preceding their disengagement/termination. At the
G
time of their disengagement, even when they had continuous
service for more than 240 days (in fact about 3 years} they were
not given any notice or pay in lieu of notice as well as
retrenchment compensation. Thus, mandatory pre-condition of
retrenchment in paying the aforesaid dues in accordance with
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SUPREME COURT REPORTS
[2014) 2 S.C.R.
A Section 25-F of the l.D. Act was not complied with. That is
sufficient to render the termination as illegal. Even the High
Court in the impugned judgment has accepted this position and
there was no quarrel on this aspect before us as well. With this,
we advert to the issue of relief which should be granted in such
B cases, as that was the topic of hot debate before us as well.
17. Admittedly, both the workmen were engaged on daily
wages basis. Their engagement was also in exigency of
situation. In so far as appellant No.1 is concerned, he was
disengaged way back in the year 1983. The dispute in his case
C was referred for adjudication to CGIT in 1992 only. There is a
time lag of 9 years. Though no reasons are appearing on
record for such an abnormal delay, it seems that he had raised
the industrial dispute few years after his disengagement which
can be inferred from the reading of the award of the CGIT as
D that reveals that after his disengagement he kept on making
representations only and he took recourse to judicial
proceedings only after Circular dated 6.5.1997 was issued as
per which the FCI had decided to regularize the services of all
casual workmen who had completed more than 90 days before
E 1996. Be that as it may, at this juncture what we are highlighting
is that appellant No.1 had worked on daily wages basis for·
barely 3 years and he is out of service for last 30 years. Even
when the Tribunal rendered his award in 1996, 13 years had
elapsed since his termination. On these facts, it would be
F difficult to give the relief of reinstatement to the persons who
were engaged as daily wagers and whose services were
terminated in a distant past. And, further where termination is
held to be illegal only on a technical ground of not adhering to
the provisions of Section 25-F of the Act. Law on this aspect,
G as developed over a period of time by series of judgments
makes the aforesaid legal position very eloquent. It is not
necessary to traverse through all these judgments. Our purpose
would be served by referring to a recent judgment rendered by
this very Bench in the case of BSNL vs. Bhuruma/ 2013 (15)
H SCALE 131 which has taken note of the earlier case law
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 973
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
relevant to the issue. Following passage from the said judgment A
would reflect the earlier decisions of this Court on the question
of reinstatement:
"The learned counsel for the appellant referred to two
judgments wherein this Court granted compensation 8
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.
C
In the case of lncharge Officer & Anr. vs. Shankar Sheffy
(2010) 9 sec 126, it 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 D
reinstatement. In this judgment of Shankar Shetty, this
trend was reiterated by referring to various judgments, as
is clear from the following discussion.
Should an order of reinstatement automatically follow E
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.
F
In Jagbir Singh vs. Haryana State Agriculture Mktd.
Board (2009) 15 SCC 327 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. Vs. Uday Narain Pandey (2006) 1 SCC 479, G
Uttaranchal Forest Department Corpn. Vs. M. C.Joshi
(2007) 9 SCC 353, State of M.P. vs. La/it Kumar Verma
(2007) 1 SCC 575, M.P.Admn. vs. Tribhuban (2007) 9
SCC 748, Sita Ram vs. Moti Lal Nehru Farmers Training
Institute (2008) 5 SCC 75, Jaipur Development Authority H
974
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2014) 2 S.C.R.
vs. Ramsahai (2006) 11 SCC 684, GOA vs. Ashok Kumar
(2008) 4 SCC 261 ahd Mahboob Oeepak vs. Nagar
Panchayat, Gajraula (2008) 1 SCC 575 and stated as
follows: (Jagbir Singh case, SCC pp.330 & 335 paras 7
& 14).
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.
It would be, thus, seen that by a catena of decisions
rn 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.
Jagbir Singh has been applied very recently in
Telegraph Deptt. Vs. Santosh Kumar Seal (2010) 6 SCC
773, wherein this Court stated: (SCC p. 777, para 11)
In view of the aforesaid legal position and the fact
that the workmen were engaged as daily wagers about 25
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 975
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
years back and they worked hardly for 2 or 3 years, relief A
of reinstatement and back wages to them cannot be said
to be justified and instead monetary compensation would
subserve the ends of justice.
Taking note of the judgments referred to in the aforesaid
8
paragraphs and also few more cases in other portion of the said
judgment, the legal position was summed up in the following
manner:
"It is clear from the reading of the aforesaid
judgments that the ordinary principle of grant of C
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 D
practice etc.