# MARKETING FEDERATION LTD. AND ANR v. MAHARASHTRA STATE COOPERATIVE COTTON GROWERS' MARKETING FEDERATION EMPLOYEES UNION AND ANR

- **Citation:** [1994] 1 S.C.R. 289
- **Court:** Supreme Court of India
- **Decided:** 1994-01-24
- **Case number:** Civil Appeal No. 5117 of 1992
- **Bench:** P.B. Sawant, R.M. Sahai
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/marketing-federation-ltd-and-anr-v-maharashtra-state-cooperative-cotton-growers-12094
- **Pages:** 27

## Headnote

B
Service and Labour Law: Maharashtra State Cooperative Cotton
Growers' Marketing Federation-Cotton Monopoly Procurement C
Scheme--Perennial and seasonal employees engaged by Federation-Dispute
regarding permanency of employees-Reference to Industrial
Tribunal-Award, known as Patankar Award, directing that those employees
who had put in 240 days of continuous service should be treated as permanent
employees-Temporary perennial employees made permanent as per D
Award-Application by Union of seasonal employees after 6 years of Award,
claiming permanency of seasonal employees on the basis of Patankar
Award-Held, Patankar Award does not refer to seasonal employees-Industrial Tribunal was not called upon to adjudicate dispute with regard to
permanency of seasonal employees nor the Award had directed seasonal
employees to be made permanent.
E
Seasonal employment and seasonal employees-Difference between-Explained.
Model Standing Order 4-B-Held, does not apply to seasonal
employees.
F
The Maharashtra Cooperative Marketing Federation appointed by
the State Government as its chief agent to implement the Cotton. Monopoly
Procurement Scheme, employee seasonal employees for procurement and
processing of cotton as the activities extended over 4-6 months in a year. G
For the purpose of marketing and maintenance of accounts which activities continued throughout the year the Federation engaged perennial
employees. Seasonal employees ~umbered twice the number of perennial
employees.
In the year 1973 an industrial dispute arose between the Marketing H
289
290
SUPREME COURT REPORTS
[1994) 1 S.C.R.
A
Federation and its employees. The Government, by an order dated 30th
May, 1973, referred to the Industrial Tribunal the dispute which included
the demand of the employees that the workmen who had put in three
months aggregate service for 78 or more working days in aggregate, should
be confirmed. The Tribunal by its award dated 31st August, 1984, known
B as the Patankar Award, held that the employees who had put in 240 days
of continuous service would be treated as permanent employees. Consequently, the temporary perennial employees were made permanent but the
seasonal employees continued as such without demur.
Later the Marketing,Federation was replaced by the Maharashtra
C State Cotton Growers Marketing Federation Ltd., appellant No. 1. The
entire staff of the Marketing Federation including the seasonal staff
engaged under the Cotton Scheme was taken over by the appellant-Federation on the terms and conditions applicable under the previous arrange·
ment.
D
The respondent-Union of the seasonal employees, in 1990, filed a
complaint under the Maharashtra Recognition of Trade Unions and PPrevention of Unfair Labour Practices Act, 1971, contending that the
Patankar Award had directed the Marketing Federation to make permanent the seasonal employees who had completed 240 days of service and
E
since those seasonal employees who had worked for 240 days in 1982-83
and 1983-84 cotton seasons were not made permanent there was unfair
labour practice under Items 5, 6 and 9 of Schedule IV to the Act. The
respondent-Union claimed to quash the termination of service of the said
employees at the end of the season and to make them permanent from the
p
date they completed 240 days of continuous service in 1983-84 cotton
season. The Industrial Court allowed the claim. It directed the appellants
not to terminate the services of the seasonal employees with effect from
30.4.1991), to absorb the said employees in compliance with the provisions
of the Patankar Award and the Agreeml'nt dated 18.1.1984 and also by
giving the benefit of the Government Letter dated 18.1.19&5. The appellantG Federation's writ petition and Letters Patent Appeal were dismissed by the
High Court. Hence the appeal by Special Leave.
1t was contended on behalf of the appellant-Federation that the
assumption that the Patankar Award had directed to give permanency also
H to the seasonal employees who h

## Text

_Characters 0–39,872 of 68,765. This is a partial read: ask again with offset=39872 for what follows._

MAHARASHTRA STATE COOPERATIVE COTTON GROWERS'
A
MARKETING FEDERATION LTD. AND ANR.
v.
MAHARASHTRA STATE COOPERATIVE COTTON GROWERS'
MARKETING FEDERATION EMPLOYEES UNION AND ANR.
JANUARY 24, 1994
[P.B. SAWANT AND R.M. SAHAI, JJ.]
B
Service and Labour Law: Maharashtra State Cooperative Cotton
Growers' Marketing Federation-Cotton Monopoly Procurement C
Scheme--Perennial and seasonal employees engaged by Federation-Dispute
regarding permanency of employees-Reference to Industrial
Tribunal-Award, known as Patankar Award, directing that those employees
who had put in 240 days of continuous service should be treated as permanent
employees-Temporary perennial employees made permanent as per D
Award-Application by Union of seasonal employees after 6 years of Award,
claiming permanency of seasonal employees on the basis of Patankar
Award-Held, Patankar Award does not refer to seasonal employees-Industrial Tribunal was not called upon to adjudicate dispute with regard to
permanency of seasonal employees nor the Award had directed seasonal
employees to be made permanent.
E
Seasonal employment and seasonal employees-Difference between-Explained.
Model Standing Order 4-B-Held, does not apply to seasonal
employees.
F
The Maharashtra Cooperative Marketing Federation appointed by
the State Government as its chief agent to implement the Cotton. Monopoly
Procurement Scheme, employee seasonal employees for procurement and
processing of cotton as the activities extended over 4-6 months in a year. G
For the purpose of marketing and maintenance of accounts which activities continued throughout the year the Federation engaged perennial
employees. Seasonal employees ~umbered twice the number of perennial
employees.
In the year 1973 an industrial dispute arose between the Marketing H
289
290
SUPREME COURT REPORTS
[1994) 1 S.C.R.
A
Federation and its employees. The Government, by an order dated 30th
May, 1973, referred to the Industrial Tribunal the dispute which included
the demand of the employees that the workmen who had put in three
months aggregate service for 78 or more working days in aggregate, should
be confirmed. The Tribunal by its award dated 31st August, 1984, known
B as the Patankar Award, held that the employees who had put in 240 days
of continuous service would be treated as permanent employees. Consequently, the temporary perennial employees were made permanent but the
seasonal employees continued as such without demur.
Later the Marketing,Federation was replaced by the Maharashtra
C State Cotton Growers Marketing Federation Ltd., appellant No. 1. The
entire staff of the Marketing Federation including the seasonal staff
engaged under the Cotton Scheme was taken over by the appellant-Federation on the terms and conditions applicable under the previous arrange·
ment.
D
The respondent-Union of the seasonal employees, in 1990, filed a
complaint under the Maharashtra Recognition of Trade Unions and PPrevention of Unfair Labour Practices Act, 1971, contending that the
Patankar Award had directed the Marketing Federation to make permanent the seasonal employees who had completed 240 days of service and
E
since those seasonal employees who had worked for 240 days in 1982-83
and 1983-84 cotton seasons were not made permanent there was unfair
labour practice under Items 5, 6 and 9 of Schedule IV to the Act. The
respondent-Union claimed to quash the termination of service of the said
employees at the end of the season and to make them permanent from the
p
date they completed 240 days of continuous service in 1983-84 cotton
season. The Industrial Court allowed the claim. It directed the appellants
not to terminate the services of the seasonal employees with effect from
30.4.1991), to absorb the said employees in compliance with the provisions
of the Patankar Award and the Agreeml'nt dated 18.1.1984 and also by
giving the benefit of the Government Letter dated 18.1.19&5. The appellantG Federation's writ petition and Letters Patent Appeal were dismissed by the
High Court. Hence the appeal by Special Leave.
1t was contended on behalf of the appellant-Federation that the
assumption that the Patankar Award had directed to give permanency also
H to the seasonal employees who had put in 240 days work in a year, was
MARKETING FEDERATION LTD. v. EMPLOYEES UNION
291
. erroneous since the terms of reference, the statement of claim ef workmen A
, --(
and the written statement filed by the Marketing Federation indicated that
the dispute related to and, therefore, the relief was given in respect of only
perennial employees.
The respondent-Union of seasonal employees contended that though
there was no specific reference to the seasonal employee!i in either the
terms of reference or the statement of claim or the Award, in the written
statement the Marketing Federation had referred to the Seasonal
employees and it had understood the demand for permanency with refer-
"t.-
ence to seasonal employees.
Allowing the appeal, this Court
HELD: 1.1. The Patankar Award does not refer to seasonal
employees. It cannot be said that the Industrial Tribunal was ca!led upon
B
c
to adjudicate the dispute with regard to the permanency of the seasonal
employees or that the award made by the said Tribunal had directed the D
seasonal employees who had put in 240 days of work to be made per-
,.. "T"-
manent. The direction can be read either as a direction to make the
temporary perennial employees and temporary seasonal employees as
permanent perennial employees and permanent seasonal employees
respectively or as a direction relating only to perennial employees. Bnt in
no case, it can be read as a direction to make seasonal employees as
permanent employees, as in the nature of things such a direction, if given,
would have been highly inequitous and discriminatory to the perennial
employees - whether temporary or permanent. 1he procurement and
processing operations under the Cotton Scheme do not last for more than
4-6 months and, in any case, not more than 8 months. To make the
seasonal employees permanent and give them all the benefits of the perennial employees would mean that they would get the salary and all other
benefits throughout the year without putting in work throughout the year
as the perennial employees have to do. [309-E-H; 310-A, B]
E
F
1.2. There is nothing in the statement of claim filed on behltlf of the G
Union of employees in support of the demand for permanencY.. of employees
--
to suggest that the Union had in contemplation the case of seasonal
employees. The statement of claim would show that the Union was concerned with the temporary perennial workmen and not with seasonal
workmen. The Union knew that even among the perennial workmen there H
292
SUPREME COlJRT REPORTS
[1994] 1 S.C.R.
A
were some permanent and others temporary and they were espousing the
cause of the said temporary workmen. That is also clear from the fact that
the demand is raised in the context of the alleged requirement of the large
number of permanent staff. The Union was particular in pointing out that
the temporary workmen could be terminated at any time. As regards the
B
c
seasonal employees, their services are terminated every year, after every
season and they are re-engaged according to the seniority list for the
successive seasons, as there is seasonal work under the Cotton Scheme
and some workmen have necessarily to be employed for such work. Therefore, the statement made in the statement of claim could not even remotely
be connected with the seasonal employees. [308-D; 309-A, B]
~
1.3. The statements made by the Marketing Federation in its written
statement to the effect that the Union's demand for making permanent the
employees who had put in three month's continuous service was not
justified since the said period was to short to judge the capacity and ability
D of the employee and that it was willing to make permanent those employees
who had completed three years of continuous service, make it clear that
even the Federation had understood the demand as relating only to perennial employees and not to seaso1.al employees. Knowing it fully well that
the Federation had also seasonal employees who had to be continued from
season to season for seasonal work, it could not have made the statements
E
in connection with the permanent seasonal employees. The statements of
the Federation pointing out that since it required for carrying out it<i
activities workmen both on temporary basis and on seasonal basis depending upon the nature of the workload, no period should be laid down in
respect of such purely temporary and seasonal employees and the rule of
F
permanency should apply only to employees who were recruited against
the permanent posts and not to those who were purely temporary or casual
employees or seasonal employees, would show that if at all the seasonal
employees were in the contemplation of the Marketing Federation, they
were the temporary seasonal employees and not the permanent seasonal
employees. By the very nature of their employment, the temporary seasonal
G employees can be made perm~nent only as permanent sea~onal employees
and not as permanent perennial employees~ In any case, it cannot be said
that the Federation was referring to the permanency of the permanent·
seasonal employees. [308-G-H; 309-A-E]
H
· 2.1. There is a difference between seasonal employment and seasonal
MARKETING FEDERATION L1D. v. EMPLOYEES UNION
293
employees. The employments which are only seasonal may require only A
seasonal employees and there are no perennial employees on their staff.
On the other hand, an employment may have both perennial and seasonal
work as in the instant case, and hence require both kinds of workmen.
Further, seasonal employees may be permanent or temporary. The permanent employees are employed from season to season successively and
are entitled on that account for retention allowance and certain other B
benefits during the off-season because of their permanency as seasonal
employees which is different from permanency a;; perennial employees. The
Temporary seasonal employees are not obviously entitled to the said
benefits as the permanent seasonal employees since the temporary
employees are not engaged from season to season but only when there is C
an increase in work. [306-B-D]
2.2. In the instant case, since there is a need of seasonal employees
and there is no work available to be given to them for a part of the year,
the Cotton Scheme has always to maintain a distinction between the D
perennial employees and seasonal employees and has to provide them with
different service conditions though some of the service condition may be
common. It is the failure to understand the nature of the operations and
the nature of the employment required under the Cotton Scheme which is
responsible for the impugned decisions of the Industrial Court and the
~~~~~~
E
2.3. The fact that even the seasonal workmen and their Uni:m did
not undei·stand either the demand adjudicated by the Industrial Tribunal
or the award given by it as referring to the seasonal employees, is clear
from the subsequent events. After the Patankar Award which was given on
F
31.8.1984, all the then seasonal employees continued as seasonal employees
throughout, and the Marketing Federation made only the temporary
perennial employees permanent perennial employees as per the direction
of the Award. None of the seasonal employees was made permanent except
when he was recruited in the vacancies occurring in the post of permanent
perennial employees. But that was not because of the Patankar Award. It G
was as per the understanding between the parties. The Union never raised
any objection to the same. The three settlements entered into between the
parties on 12.6.1980, 11.12.1981 and 22.12.1982 not only did not speak a
word about making any seasonal employee who had put in 240 days of
work, permanent, but spoke about all other matters relating to them. H
294
SUPREME COURT REPORTS
(1994) 1 S.C.R.
A
Besides, the recommendations made by the Bhuibhar Committee as accepted by the State Government, would show that the seasonal employees i
were not on the agenda of the industrial dispute adjudicated by the
Industrial Tribunal. It categorically stated .that the demand made by the
seasonal employees subsequent to Patankar Award (pursuant to which the
B committee itself was <tppointed) for employment throughou~ 12 months
could not be accepted since the financial burden would f~I on the cultivators and consequently would affect the Cotton Scheme itself. That
recommendation was accepted by the Government. (310-E-H; 311-A]
2.4. The agreement of 18.1.1984 by which the recommendations of the
C Bhuibhar Committee were accepted, shows that the problems of the
seasonal employees were all along kept separate and were dealt with
separately from the problems of the perennial employees. Had the dispute
with regard to the permanency of the seasonal employees been referred for
adjudiration to the Industrial Tribunal and had the Patankar Award
related ~a the seasonal employees, there would have been no need to enter
D into the agreements of 12.6.1980, 11.12.1981 and 22.12.1982. There would
also have been no need to appoint the special Committee to study the
problems of the seasonal employees including the problem of their permanency, and there would have been no need for the agreement of 18.1.1984
which followed the recommendations of the Committee. (311-E-G]
E
F
2.S. The demand of the seasonal employees even before the Bhuibhai:
Committee was to give employinent to them for 12 months. The demand was
not for maJdng them perennial employees. A demand merely for permanency in their case in effect involves two demands, viz., (i) to abolish the
seasonal employment and to make it perennial and (ii) offer making it
perennial, to make the erstwhile seasonal employees permanent. These are
two different things and it is the omission to understand the significance of
the said difference, which has led to the present confusion. (312-F, G]
2.6. The letter dated 9.11.1984 only speaks of the employees who were
G with the Marketing Federation to be absorbed on the 'as is' basis by the
appellant-Federation which means that the perennial and seasonal
employees were to be taken over as such employees only. The letter did not
mean that those who were seasonal employees should be taken over as
perennial employees. (314-D]
I
H
2.7. This Court* as well as the High Court, relying upon the letter
MARKETING FEDERATION LTD. v. EMPLOYEES UNION
295
dated 18:1.1985, had assumed that the Patankar Award applied to the A
seasonal employees. The presumption was contrary to facts and, therefore,
the decision was per incuriam. That letter does not improve the matter. The
cases of some of the employees having been decided on incorrect facts will
have, therefore, to be treated as isolated instances and on the basis of such
cases it cannot be said that the seasonal employees wh" have put in 240
days' work should be made permanent perennial employees. (314-H]
*Maharashtra State Cooperative Cotton Growers' Marketing Federation
Ltd. v. Shripati Pandurang Khade and Ors., (1989) Supp. 1 S.C.C. 226, held
per incuriam.
3.1. The Model Standing Orders do not apply to seasonal employees.
The seasonal employees are governed by their own service conditions,
which have in material respects no relation to the service conditions of the
perennial employees who are governed by the said Model Standing Orders.
(315-B]
3.2. By the appointment letters, the Model Standing Orders have
been incorporated in the other service conditions of the seasonal
employees only to the extent that the specific service conditions of the
seasonal employees are silent on the aspects covered by the Model StandB
c
D
ing Orders and which orders would necessarily apply to the seasonal
employees. The Model Standing Orders, therefore, are applicable to the E
seasonal employees mutatis mutandis. It cannot be said that all the Model
Standing Orders are applicable to the seasonal employees. (315-C]
3.3. Model Standing Order No. 4-B in particular does not apply to
seasonal emp-Ioyees. It is applicable to the perennial employees only. It
speaks of temporary workmen in any establishment of a seasonal nature
or in other establishment during a period of preceding 12 months. The
appellant Federation's establishment is not of a seasonal nature. It is only
some employees employed therein who are seasonal. (315-E]
F
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5118 of G
1992.
From the Judgment and Order dated 27.3.1992 of the Bombay High
Court in W.P. No. 2749 of 1990.
WITH
H
296
SUPREME COURT REPORTS
[1994] 1 s.c.R ..
A
Civil Appeal No. 5117 of 1992,
B
c
From the Judgment and Order dated 27.3.1992 of the Bombay !figh
Court in L.P.A. No. 9 of 1992.
Dipankar P. Gupta, Solicitor General, V.R. Reddy, Additional
Solicitor General, V.A. Bobde, A.K. Sanghi, Ravindra Bana, Subodh Dharmadhikari and A.S. Bhasme for the Appellants.
R.S. Kulkarni, P. Gaur, Ms. Gunwant Dara, Ms. Nandini Gore and
Jitendra Sharma for the Respondents.
The Judgment of the Court was delivered by
SAWANT, J. 1. The crucial question that falls for consideration in
tJ;ie present case is whether the award dated 31.8.1984 of the Industrial
Tribunal (hereinafter referred to as 'Patankar Award') is is applicable to
. D the seasonal employees involved in the present proceedings. To appreciate
the controversy between the parties, the facts and events which preceded
and succeeded the said award have also to be looked into.
E
2. The State Government under Section 42 of the Maharashtra Raw
Cotton (Procurement, Processing and Marketing) Act, 1971, appointed the
Maharashtra Cooperative Marketing Federation (hereinafter referred to as
'Marketing Federation'), a cooperative society, as the chief agent to implement the Cotton Monopoly Procurement Scheme [the 'Cotton Scheme'].
The Marketing Federation was before that date engaged in the marketing
of several commodities. From that date onwards till 31.8.1984, it continued
F
to act as the chief agent of the State Government for procurement, processing and marketing C'f cotton as well. For this purpose it recruited and
maintained a separate se_ction with a separate staff. The staff consisted of
those who were needed throughout the year and those who were needed
only during the season. The cotton trade (which expression will include
procurement, processing and manufacturing of cotton) in Maharashtra is
G mostly in Vidarbha, Marathwada and Khandesh region, and commences
roughly in the first week of November and extends upto April of the nextyear. In Western Maharashtra, there is hardly any crop of cotton and the
season there commences in August and ends in Novelllber of the same
year. The Cotton Scheme introduced by the Government has three aspects,
H (i) procurement, (ii) processing and (iii) marketing. The first two activities
•
MARKETINGFEDERATIONLTD. v. EMPLOYEESUNIONISAWANr,J.)
297
extend over four to six months in a year depending upon the extent of the A
availability of the crop. The third stage viz., marketing and also the function
of maintenance of accounts are spread over throughout the year. The
seasonal employees are needed only for the first two stages viz., procurement and processing which last for a limited period as stated above. The
seasonal employees engaged in the said two activities consist of Weighment
Clerks, Seed Clerks, Heap Clerks, Ginning Supervisors, Press Supervisors
etc. who work at the collection centres and the processing centres. On an
average, the seasonal employees are about twice the number of the perennial employees.
3. It appears that an industrial dispute having arisen between the
employees and the Marketing Federation, the same was referred by the
State Government for adjudication to the Industrial Tribunal consisting of
Shri G.K. Patankar by the reference order of 30.5.1973. The terms of
reference show that in all 16 demands of the employees were referred to
B
c
the said Tribunal and one of the demands with which we are concerned D
was demand No. 4 relating to permanency. That demand read as follows:
"Demand No. 4: Pennanency:- All the workmen wh~ have put in
three months aggregate service for 78 or more working days in
aggregate in spite of any intervening breaks should be immediately
confirmed in writing as permanent workmen."
E
4. None of the demands referred to the Tribunal including the
aforesaid demand No. 4 suggested that they related to the seasonal
employees. All the demands were in relation to the perennial employees .
The statement of claim filed in the Reference by the Union on behalf of F
the workmen, did not also refer anywhere to the seasonal employees. On
the other hand, in relation to the aforesaid demand for permanency, it .
referred to all temporary workmen and specifically pointed out that at that
time, there were about 400 workmen who had put in more than five years'
service. But still they were termed as temporary. It also observed that the G
work of the Marketing Federation had increased considerably and it required a large number of permanent staff, and that the services of the
temporary workmen could be terminated at any time which was inequitable. In its written statement, the Marketing Federation also proceeded
on the basis that all the said demands· related only to the perennial
employees. While, however, referring to the aforesaid demand for per- H
298
SUPREME COURT REPORTS
[1994] 1 S.C.R.
A
manency, the written statement observed as follows:
B
c
D
E
"9. With regard to demand No. 4" Permanency" the Federation
states all employees who have completed 3 years of continuous
service. The period mentioned in the statement of claim for all
employees who have put in 3 months continuous service for making
them permanent is too small a period to judge the capacity and
ability of the employee. The Federation, therefore, agrees in principle that an employee should not remain temporary for a long
time and 3 months period of service for permanency is too short
for judging the capacity and ability of an employee before he is
made permanent in the organisation.
10. With regard to the contents of para 13 of the statement of
claim, the Federation states that for carrying out the activities of
the Federation it has to employ workmen either on temporary basis
or on seasonal basis depending upon the nature of work load of
different activities that the Federation has to discharge at the
instance of the State Government. The Federation, therefore, feels
that no peri~d should be laid down in respect of purely temporary
and in seasonal employment. In the submission, therefore, of the
Federation, the rule of permanency should apply only to employees
who are recruited against the permanent post and it should not
apply to the purely temporary or casual employees or seasonal
employees who have to be recruited in times of emergency."
5. We have quoted the aforesaid two paragraphs from the said
written statement verbatim, for an argument has been advanced by the
F
respondent-Union of workmen, that notwithstanding the fact that the
demands as raised and the statement of claim filed on behalf of the
workmen in the Reference did nowhere refer to the seasonal employees,
the reference by the Marketing Federation to the workmen employed on
seasonal basis in the written statement as above, shows that the industrial
G dispute referred to the 1 -ibunal and the Tribunal's award related to the
seasonal employees as well. We will deal with this argument at its proper
place.
6. Shri Patankar while giving his award on 31.8.1984 disposed of the
said demand for permanency in para 19 of the award in the following
L
H cryptic language: -
•
i-
-~
MARKETING FEDERATION LTD. v. EMPLOYEESUNION[SAWANI,J.)
299
19. The next demand is in respect of permanency. It is alleged by A
the Union that the workers who have put in three months of
aggregate service and have put in 78 or more days as working days
in spite of any breaks in service, be made permanent. The Federation opposes this demand and contends that it is willing to confirm
all the employees who have put in three years of continuous service.
Considering, therefore, the arguments advanced for both the sides,
it appears that it would be proper to direct that those employees
who have put in 240 days of continuous service be treated as
permanent employees".
B
· 7. It will be apparent from the aforesaid portion of the award, which C
is the only direction in the award relating to the said demand that the
direction also did not refer to the seasonal employees. There is no dispute
that after this award, the same system of seasonal employees continued till
the present order dated 14.9.1990 of the Industrial Court with which we
are concerned and from which the present proceedings have arisen. There D
is also no dispute that as per the Patankar Award, the temporary perennial
employees were made permanent but the seasonal employees on the date
of the award continued as such without demur. On the other hand, subsequently, there were four settlements entered into between the Marketing
Federation and the Union of seasonal employees. The first settlement is uf
12.6.1980 and related to (i) revision of consolidated salary and annual E
increment in the consolidated salary of certain categories of the seasonal
employees; (ii) redesignation of some of the categories of the said
employees; (iii) retention allowance to be paid to them; and (iv) absorption
of the seasonal employees in the permanent vacancies in the perennial
posts according to seniority and merit. It may be mentioned here that the F
settlements on increments in the consolidated salary specifically stated that
those of the seasonal employees who had to put in more than three seasons
of employment would be entitled to two increments. So also, the settlement
on retention allowance stated that the seasonal employees on consolidated
salary shall be disengaged at the end of the season, and during the period
of non-employment, they would be entitled to 25 per cent of the monthly G
wages prevailing in the past cotton season and that it would not exceed half
month's wages during the year. It, however, mentions that the retention
allowance would be paid to the seasonal employees till they were
reemployed at the commencement of the next cotton season. The next
settlement is of 11.12.1981. It spoke of the vacancies of the perennial clerks, H
300
SUPREME COURT REPORTS
(1994] 1 S.C.R.
A
stenographe1 . peons and watchmen at the Head Office and Divisional and
Sub-divisional offices being filled in from the seasonal employees on
seniority- cum- merit basis and the seasonal employees above 58 years of
age being not c !igible for such appointments. It also spoke of all vacancies
in class III and IV cadres of the cotton department of the Marketing
B
c
D
E
F
Federation being filled in from among the seasonal employees again on
seniority-cum-merit basis. It then spoke of the seasonal employees, excluding watchmen, who had put in eleven months or more of employment
during 1979-80 season including technical breaks being regularised in the
pay-sea,~ of Rs. 130-400/-. That te1 m of the settlement was clar~fied by -
further stating that the said seasonal employees would be regularised
according to Divisional seniority and on the basis of seniority-cum-merit.
The clarification further mentions that the said appointment would not
change the nature of their duties and they would not be paid retention
allowance. The settlement further stated that excluding the said employees
who were regularised, others would be entitled to the interim hikes of
certain amounts in their consolidated salaries. The settlement also
provided that the agricultural graduates from among the seasonal
employees would be suitably trained and appointed as Graders. This
settlement made an important provision for appointment of a committee
to consider the problems of the seasonal employees. The Committee was
to consist of a representative each of the cotton cultivators, the Marketing
Federation, the State Government and the seasonal employees. The Committee was to submit its recommendation before February, 1982 and the
State Government was to take a decision thereon within one month of the
recommendations and implement the acceptable recommendations. The
matters which were to be referred to the Committee were mentioned in
the schedule to the settlement and they were (i) the strength of the seasonal
employees requ~ed to be employed in every zone considering the nature
of duties, features ,of cotton season etc.; (ii) whether the technical breaks
were _necessary in the case of some of the seasonal employees who were
then employed fo'r nine to twelve months; (iii) ways and means to ensure
G employment for maximum period for seasonal employees; (iv) the strength
of the permanent, i.e., p~rennial employees; (v) pay-scales to be granted
to the seasonal employees who were to be regularised and to decide the
modality of annual increment to be granted to them; (vi) the need to
change the then-·system of paying retention allowance and to suggest
H
change in the system.
--
-,
MARKETING FEDERATION LID. v. EMPLOYEESUNION(SAWANf,J.) 301
8. There is no dispute that pursuant to this settlement, a Committee A
headed by one Shri Bhuibhar was appointed. Before the report of the said
Committee was received, there was yet another settlement m 22.12.1982
between the Union of the seasonal employees and the Marketing Federation. One of the terms of the settlement was that the Bhuibhar Committee
should submit its report to the Government within one month of the date B
of that settlement and that the Government should take decision on the
said report at the earliest. There was also a provision made for interim
increase in the monthly consolidated wages of some of the categories of
the seasonal employees. The said interim relief was to be adjustable while
implementing the recommendations of the Committee. It is obvious from
this settlement that it was necessitated because of the delay in the submisC
sion of the report by the Committee.
9. The Bhuibhar Committee submitted its report on 1.12.1983. Some
of the recommendations and the Government's reaction on the same are
relevant for our purpose. They are mentioned below:-
(1) Since, if the demand of the seasonal employees for employment
D
- ......_.
throughout the year was accepted the financial burden would fall on the
cultivators and would affect the Cotton Monopoly Procurement Scheme, it
was not proper to provide 12 months' employment to the seasonal
employees and burden the said scheme. The Government accepted this E
recommendation.
(2) There should be increase in the sanctioned strength of the
perennial employees viz., Clerks, Peons and Watchmen in different zones
and at different Sub-zonal offices. The Government accepted it.
(3) There should be an increase in the sanctioned strength of the
seasonal employees. However, since this aspect required an indepth study,
the matter should be entrusted to a management consultant. The Government accepted this suggestion.
F
G
( 4) The seasonal employees should be given pay-scale of Rs. 16010-210-15-285-EB-20-465. The Government accepted the said pay-scale.
(5) The part-time seasonal employees should be given the pay-scale
of Rs. 105-5-145-10-205-15-210. An annual increment for three years of
completed seasonal employment was also recommended. The Government H
302
SUPREME COURT REPORTS
[1994] 1 S.C.R.
A
accepted the recommendation.
B
c
D
E
F
(6) The vacancies in Class III and IV cadres in all offices (including
the cotton and non-cotton department) should be filled in from the
seasonal employees. The Government accepted the recommendation.
(7) In regions other than Wes tern Maharashtra, the seasonal
employees should be given employment for a minimum period of six
months, and in Western Maharashtra, annual plans should be made to
make it possible to furnish employment for a minimum period of six months
to them.
10. The Government accepted the recommendation in principle, but
also suggested to the Federation that they make necessary planning for
sending seasonal employees from Western Maharashtra to Vidarbha for a
minimum period t>f six months.
11. Pursuant to the said report, and the Government's reactions to
it, an agreement was entered into between ~he Marketing Federation and
the Union of the seasonal employees on 18.1.1984. In the preamble, it was
stated that the agreement was entered into pursuant to the recommendations of the Bhuibhar Committee as accepted by the Government and the
agreement was to be effective from 1.11.1982. The agreement also stated
that the Government had suggested that the agreement should ensure that
for the next five years, Cotton Scheme shall not be burdened and it was
pursuant to the aforesaid directive of the State Government that the
Marketing Federation and the seasonal employees' Union had agreed to
its terms. Incidentally it may be stated that it is the same Union which
signed the said agreement which is the contesting respondent before us.
The agreement then specifically stated that the Marketing Federation had
agreed to implement the decision of tlie Government in respect of the
recommendations of the Bhuibhar Committee except recommendation No.
33 which had suggested that the vacancies in class III and IV cadre in all
G the offices of the Federation including the cotton and non-cotton departments should be filled in from the seasonal employees. Instead the agreement provided that it is only the vacancies in the cotton department which
will be filled in from among the seasonal employees. The agreement stated
that during the period of five years, the Union shall not raise any demand
H tending to impose additional financial burden on the Cotton Scheme.
MARKETING FEDERATION LTD. v. EMPLOYEESUNION[SAWANf,J.)
303
12. On 31.8.1984, the present appellant No. 1 viz., the Maharashtra A
State Cooperative Cotton Growers' Marketing Federation Ltd. was constituted for the first time as a society registered under the Maharashtra
Cooperative Societies Act, 1960 with the express object f.9f taking over from
the Marketing Federation as the chief agent of the State Government, the
Cotton Monopoly Procurement Scheme. The staff of the -Marketing B
Federation engaged in the Cotton Scheme was to be taken over by the
appellant-Federation. Accordingly, the entire staff of the Marketing
Federation including the seasonal staff engaged under the Scheme was
taken over by the appellant-Federation on the same terms and conditions.
As a result, the appellant-Federation on the relevant date had perennial
staff of about 2200 persons and seasonal staff of about 4,500 persons.
C
13. On 27.9.1988, for the first time, certain complaints were filed by
the Union of the seasonal employees, Aurangabad, under the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practices
Act, 1971 (hereinafter referred to as the 'Act'). In the complaints, it was D
stated that since as per the Patankar Award, the seasonal employees who
had put in 240 days of service were not made permanent, the appellantFederation had committed an unfair labour practice within the meaning of
the said Act. The Industrial Court dismissed the said complaint holding
· that the Patankar Award did not apply to the seasonal employees. On
28.9.1989 some seasonal employees from Amravati zone made the very E
same complaint under the Act before the Industrial Court, Nagpur. The
same was also dismissed.
·
14. Ther:eafter on 20.4.1990, the respondent-Union filed the present
complaint under the Act before the Industrial Court, Nagpur which has F
given rise to the present proceedings. This complaint was heard by another
member constituting the Industrial Court. The grievance made in the
complaint was that those seasonal employees who had worked for 240 Clays
in 1982-83 and 1983-84 were not made permanent and inasmuch as the
Patankar Award had directed the Marketing Federation to .make permanent seasonal employees who had completed 240 days of service, there G
was an unfair labour practice under Items 5, 6 and 9 of Schedule IV to the
Act. The relief claimed was to quash the termination of the services of the
said employees at the end of the season and to make the employees
permanent from the date they completed 240 days of continuous service in
1983-84 Cotton Season. The further relief claimed was that the practice of H
304
SUPREME COURT REPORTS
[1994] 1 S.C.R.
A
continuing the employees under reference as seasonal or casual be
declared as unfair labour practice and the direction be issued to the
appellants to cease to indulge in it. The incidental relief claimed was that
the appellants should be directed to pay the arrears of wages and all seivice
benefits to the concerned employees treating· them as permanent from
B
c
1983-84 Cotton Season. The Industrial Court by its impugned order of
14.9.1990 (i) allowed the said complaint, (ii) declared that the appellants
had engaged in and were engaging in unfair labour practices as contemplated by Items 5, 6 and 9 of Schedule IV to the Act, (iii) directed the
appellants to cease and desist from indulging in the said unfair labour
practices and (iv) directed them not to terminate the services of the
concerned employees w.e.f. 30.4.1990, (v) directed the appellants to absorb
and make permanent the said employees in compliance with the provisions
of the Patankar Award and the agreement dated 18.1.1984 and also by
giving the benefit of the Government letter dated 18.1.1985 and to grant
arrears of wages by processing their cases in the light of the directions given
D in the said letter which was referred to by the High Court in its decision
in Shripati Pandurang Khade & Ors. v. Zonal Manager, M.S. Co-op. Marketing Federation Ltd. Ors., (1987) Mh. U 694.
15. The appellants challenged the said order by a writ petition in the
High Court. The learned Single Judge dismissed the petition holding that
E
the Patankar Award had become final and since it had given the direction
to make permanent even the seasonal employees who had put in the more
than 240 days of service, the writ petition had no merit. The Letters Patent
Appeal filed before the Division Bench of the High Court was also dismissed on the same ground by the impugned decision dat-ed-2-7.3.1992. It
F
is against the said decision that the present appeals have come before us.
16. Before we advert to the respective contentions of the parties, it
would be advantageous to clear some conceptions regarding the nature of
the operations involved in the Cotton Scheme, the category of the staff
employed and the character of the seasonal employment under it. Although
G some attempt was made before us on behalf of the respondent-Union to
show that the operation of procuring and processing of cotton is carried
on throughout the year, there is nothing on record to support the said
contention. On the other hand, the record shows that out of the three
operations under the Scheme, the procurement and processing of cotton
H lasts on an average only for six months from November to April in the
---
- \-
- -+--
•
_MARKETING FEDERATION LTD. v. EMPLOYEES UNION [SAWANf, J.]
305
principal cotton regions, viz., Vidharbha, Marathwada and West Khandesh A
and rarely extends beyond that period depending upon the cotton crop. In
fact, if the crop is less, the said period even ends earlier. In Western
Maharashtra, where there is scant crop of cotton, the procurement and
processing season lasts only for about four months from August to November. Hence the staff needed for procurement and processing is only for
ahout six months on an average but never beyond 7 to 8 months in any
year.