# STATE OF MAHARASHTRA AND ANR v. SARVA SHRAMIK SANGH, SANGLI AND ORS

- **Citation:** [2013] 17 S.C.R. 992
- **Court:** Supreme Court of India
- **Decided:** 2013-10-21
- **Case number:** Civil Appeal No. 2565 of 2006
- **Bench:** H.L. Gokhale, RANJAN GOGOi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-maharashtra-and-anr-v-sarva-shramik-sangh-sangli-and-ors-28844
- **Pages:** 24

## Headnote

Labour Laws:
c
Industrial Disputes Act, 1947 - ss. 25FF, 25F and 25N -
Termination of services of workmen - Due to transfer of the
undertakings - Labour Court held the workmen's entitlement
to retrenchment compensation u/s. 25F - High Court held that
the case was of breach of s. 25N and they were entitled to .
0
reinstatement with continuity of service and 25% of back
wages - Held: The Court in exercise of its power u!Art. 142 of
the Constitution, to do complete justice held the workmen
entitled to continuity of service with 25% backwages with retiral
benefits - In the facts of the case they cannot be reinstated -
E Constitution of India, 1950 - Art. 142.
256 workmen employed with the industrial
establishment of the State Government, were terminated
from service. Some of the workmen accepted the
retrenchment compensation. 163 workmen approached
F the Labour Court, who directed that there would be no
reinstatement, but the workmen were entitled to
retrenchment compensation in accordance with s. 25F of
the Industrial Disputes Act, 1947. The writ petition u/Art.
227 of the Constitution against the -0rder of the Labour
G Court was allowed holding that it was a case of breach
of s. 25N and not merely s. 25F of the Act. The award was
set aside on the ground that three months notice or pay
in lieu thereof was not given and hence the workmen
were entitled to reinstatement with continuity of service.
H
992
STATE OF MAHARASHTRA v. SARVA-SHRAMIK
993
SANGH, SANGLI
25% backwages were also awarded. The Writ Appeal
A
against he order of Single Judge was dismissed as, not
maintainable. Hence the present cross appeals by the
State as well as the Trade Union.
The State contended that the present case was
covered by 25FF. The Trade Union claimed relief on .the. 8
basis of parity with' the other group of to workmen,
wherein order of reinstatement was granted with 25%
backwages and the order had attained finality. It was
contended that any other order deviating from the
judgment in the case of 10 workmen would result in
C
making conflicting orders. The Trade Union also claimed
100% back wages.
Disposing of the appeals, the Court
HELD: 1. The workmen concerned were engaged as o
pump operators and chowkidars etc. on 25 lift irrigation
schemes, which were carrying out the process of
pumping water. The process of pumping water~is
specifically
covered
under
the
definition
of
"manufacturing process" under Section 2 (k)(ii) of The
E
Factories Act, 1948. Thus, the workmen concerned were
~ngaged in a "manufacturing process". Once that is
established; it follows that the activity of the undertaking
in which they were working, constituted a "factory'; within
the meaning of Section 2(m) of the said Act. The
explanation (i) to. Section 25A of the Industrial Disputes
Act, 1947, covers the "factories" within the definition of
an "industrial establishment", and therefore Chapter VA
F
of the 1947 Act applies to "manufacturing process" of
pumping water. Hence, it cannot be denied that the
G
undertaking in which the workmen concerned were
employed:was covered under the provisions of 1947 #!ct.
[Para 19] [1008-G-H; 1009-A-B]
.
State of Orissa VS. Dandasi Sahu 1988 (4) sec 12: 1988
(1) Suppl. SCR 562 - relied on.
H
994
SUPREME COURT REPORTS
[2013) 17 S.C.R.
A
Bangalore Water Supply and Sewerage Board vs. A.
Rajappa and Ors. 1978 (2) SCC 213: 1978 (3) SCR 207 -
referred to.
2. It may be that all the activities of irrigation
8 department may not have been transferred, but a separate
unit thereof, consisting of the 25 lift irrigation schemes,
has come to be transferred to a sugar factory. In such a
matter the only claim which the employees of the
transferor concern can legitimately make, is a claim for
C compensation against the previous employer, since they
are not being absorbed under the new employer. [Para
21] [1009-G-H; 1010-A-B]
Anakapa//e Co-operative Agricultural and Industrial
Society Ltd. vs. V\(orkmen and Ors. AIR 1963 SC 1489: 1963
D Suppl. SCR 730 - relied

## Text

_Characters 0–39,839 of 45,283. This is a partial read: ask again with offset=39839 for what follows._

A
B
[2013] 17 S.C.R. 992
STATE OF MAHARASHTRA AND ANR.
v.
SARVA SHRAMIK SANGH, SANGLI AND ORS.
(Civil Appeal No. 2565 of 2006)
OCTOBER 21, 2013
[H.L. GOKHALE AND RANJAN GOGOi, JJ.]
Labour Laws:
c
Industrial Disputes Act, 1947 - ss. 25FF, 25F and 25N -
Termination of services of workmen - Due to transfer of the
undertakings - Labour Court held the workmen's entitlement
to retrenchment compensation u/s. 25F - High Court held that
the case was of breach of s. 25N and they were entitled to .
0
reinstatement with continuity of service and 25% of back
wages - Held: The Court in exercise of its power u!Art. 142 of
the Constitution, to do complete justice held the workmen
entitled to continuity of service with 25% backwages with retiral
benefits - In the facts of the case they cannot be reinstated -
E Constitution of India, 1950 - Art. 142.
256 workmen employed with the industrial
establishment of the State Government, were terminated
from service. Some of the workmen accepted the
retrenchment compensation. 163 workmen approached
F the Labour Court, who directed that there would be no
reinstatement, but the workmen were entitled to
retrenchment compensation in accordance with s. 25F of
the Industrial Disputes Act, 1947. The writ petition u/Art.
227 of the Constitution against the -0rder of the Labour
G Court was allowed holding that it was a case of breach
of s. 25N and not merely s. 25F of the Act. The award was
set aside on the ground that three months notice or pay
in lieu thereof was not given and hence the workmen
were entitled to reinstatement with continuity of service.
H
992
STATE OF MAHARASHTRA v. SARVA-SHRAMIK
993
SANGH, SANGLI
25% backwages were also awarded. The Writ Appeal
A
against he order of Single Judge was dismissed as, not
maintainable. Hence the present cross appeals by the
State as well as the Trade Union.
The State contended that the present case was
covered by 25FF. The Trade Union claimed relief on .the. 8
basis of parity with' the other group of to workmen,
wherein order of reinstatement was granted with 25%
backwages and the order had attained finality. It was
contended that any other order deviating from the
judgment in the case of 10 workmen would result in
C
making conflicting orders. The Trade Union also claimed
100% back wages.
Disposing of the appeals, the Court
HELD: 1. The workmen concerned were engaged as o
pump operators and chowkidars etc. on 25 lift irrigation
schemes, which were carrying out the process of
pumping water. The process of pumping water~is
specifically
covered
under
the
definition
of
"manufacturing process" under Section 2 (k)(ii) of The
E
Factories Act, 1948. Thus, the workmen concerned were
~ngaged in a "manufacturing process". Once that is
established; it follows that the activity of the undertaking
in which they were working, constituted a "factory'; within
the meaning of Section 2(m) of the said Act. The
explanation (i) to. Section 25A of the Industrial Disputes
Act, 1947, covers the "factories" within the definition of
an "industrial establishment", and therefore Chapter VA
F
of the 1947 Act applies to "manufacturing process" of
pumping water. Hence, it cannot be denied that the
G
undertaking in which the workmen concerned were
employed:was covered under the provisions of 1947 #!ct.
[Para 19] [1008-G-H; 1009-A-B]
.
State of Orissa VS. Dandasi Sahu 1988 (4) sec 12: 1988
(1) Suppl. SCR 562 - relied on.
H
994
SUPREME COURT REPORTS
[2013) 17 S.C.R.
A
Bangalore Water Supply and Sewerage Board vs. A.
Rajappa and Ors. 1978 (2) SCC 213: 1978 (3) SCR 207 -
referred to.
2. It may be that all the activities of irrigation
8 department may not have been transferred, but a separate
unit thereof, consisting of the 25 lift irrigation schemes,
has come to be transferred to a sugar factory. In such a
matter the only claim which the employees of the
transferor concern can legitimately make, is a claim for
C compensation against the previous employer, since they
are not being absorbed under the new employer. [Para
21] [1009-G-H; 1010-A-B]
Anakapa//e Co-operative Agricultural and Industrial
Society Ltd. vs. V\(orkmen and Ors. AIR 1963 SC 1489: 1963
D Suppl. SCR 730 - relied on.
3. Many of the workmen concerned were engaged
for a period of about 10 years. Section 25FF of 1947 Act
contemplates compensation to be paid to the workmen
E on account of their retrenchment, resulting from transfer
of the undertaking. The retrenchment, however, is
required to be effected only if the previous employer is
not continuing the workmen concerned in any of his
activities or establishments, or when they are not being
F absorbed under the new employer. Continuation of
service under the existing employer, or re-engagement
under the new one, should be the preferred approach,
when such an occasion arises. Termination of services
should normally be the last resort. In the instant case,
State Government does not appear to have made any
G efforts either to absorb these workmen in other activities
of the irrigation department, or to have insisted upon the
sugar factory to absorb them. This is because the lift
irrigation schemes were going to be continued by the
transferee sugar factory, and in any case the Irrigation
· H department has a very large number of activities, wherein
STATE OF MAHARASHTRA v. SARVA SHRAMIK
995
SANGH, SANGLI
these workmen could have been absorbed. When the
A
State Government is in the picture, it is expected that it
shows a little better attitude than the one which is often
displayed by a private sector employer. It is possible that,
in a given situation, the State Government may have its
own economic compulsions which justify termination of
B
services. But, there must be either an effort to absorb
such surplus workmen, or in any case the difficulties of
the Government, if any, necessitating the termination,
ought to be explained. [Para 22] [1010-B-G]
4. This Court has the authority to pass an
C
appropriate order in exercise of its jurisdiction for doing
complete justice in a matter pending before it: This
authority under Article 142 of the Constitution will also
have to be read as coupled with a duty to do complete
justice in a given case. In the facts and circumstances of D
the present case, accepting that the termination did result
on account of transfer of the undertaking, the relief to be
given to the workmen will have to be moulded to be
somewhat similar to that given to the other group cif 10
workmen. It will not be just and proper to restrict it to the
E
rigours of the limited relief under Section 25FF read with
25F of the 1947 Act. Prior to the termination of their
services on 30.6.1985, many of the workmen concerned
had put in a service of about 10 years. Inasmuch as so
many years have gone since then, most of them must
F
have reached the age of superannuation. In the.
circumstances, there cannot be any order of
reinstatement. However, they will be entitled to continuity
of service, and although they have been receiving last
drawn wages under s.17 B of the 1947 Act, they will be
G
entitled to 25% backwages and retirement benefits on par
with the other 10 workmen. Award of 25% backwages in
their case will be adequate compensation. [Para 26 and
27] [1012-B-C, G-H; 1013-A-C]
H
996
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A
Food Corporation of India Worker's Union vs. Food
Corporation of India and Anr. 1996 (9) SCC 439: 1996 (3)
Suppl. SCR 605; L. Parameswaran vs. Chief Personal Officer
and Ors .. 2008 (3) SCC 649: 2008 (2) SCR 1015 - relied on.
8
5. The claim of the Trade Union for 100% backwages
cannot be accepted. The Union is claiming reliefs for the
present group of workmen on the basis of parity with the
other group of 10 workmen which has been accepted by
this Court. Those workmen have be·en awarded only 25%
backwages. That being so, the present group of
C workmen cannot be awarded backwages more than what
have been awarded to the other 10 workmen. The claim
for award of higher backwages cannot, therefore, be
entertained. [Para 28] [1013-D-G]
D
Workmen of Karnataka Agro Protines Ltd. vs. Karnataka
Agro Proteins Ltd. and Ors. 1992 LLJ 712; Central Inland
Water Corporation Ltd. vs. The Workmen and another (1974)
4 SCC 696: 1975 (1) SCR 153; Maruti Udyog Ltd. vs. Ram
Lal and Ors. 2005 (2) SCC 638: 2005 (1) SCR 790; Anoop
E Sharma vs. Executive Engineer, Public Health Division No. 1,
Panipat (Haryana) 2010 (5) SCC 497; Warlu vs. Gangotribai
and Anr. 1995 (Supp) 1 SCC 37; Nirmal Jeet Singh Hoon
vs. lrtiza Hussain and Ors. 2010 (14) SCC 564: 2010 (14)
SCR 109; State of UP. vs. Jai Bir Singh 2005 (5) SCC 1:
F 2005 (1) Suppl. SCR 20 - referred to.
Case Law Reference:
1992 LLJ 712
referred to
Para 9
1975 (1) SCR 153
referred to
Para 9
G
2005 (1) SCR 790
referred to
Para 14
2010 (5) sec 497
referred to
Para 15
1995 (Supp) 1 sec 37
referred to
Para 16
H
STATE OF MAHARASHTRA v. SARVA SHRAMfK,
997
SANGH, SANGLI
2010 (14) SCR 109
referred to
Para 17
A
2005 (1) Suppl. SCR 20
referred to
1988 (1) Suppl. SCR 562 relied on
1978 (3) SCR 207
referred to
1963 Suppl. SCR 730
relied on
1996 (3) Sup_pl. SCR 605 relied on
2008 (!) SCR 1015
relied on
Para 18
Para 20
Para 20
Para 21
Para 26
Para 26
CIVIL APPELLATE JURISDICTION : Civil Appeal· No.
2565 of 2006.
B
c
From the Judgment & Order dated 12.09.2005 &
14.09.2004 of the High Court of Judicature at Bombay in Letter
Patents Appeals No. 92 of 2005 in W.P .. No. 2699 of 1933.
D.
WITH
C.A. No. 2566 of 2006
· Madhavi'Divan, Sanjay V. Kharde (for Asha G~palan Nair)
E
for the Appellants.
Vinay Navare, Keshav Ranjan, Satyajeet Kumar, Abha R.
Sharma for the Resp-ondents.
F
The Judgment of the Court was delivered by
H.L. GOKHALE J. 1. Civil Appeal No.2565 of 2006 seeks
to challenge the judgment and order dated 12.9.2005 passed
by a Division Bench of the Bombay High Court in Letter Patents
Appeal No.184 of 2005, as well as the judgment and order
G
dated 14.9.2004 passed by a Single Judge of that High Court
in Writ Petition No.2699 of 1993, wherefrom the said Letters
Patent Appeal arose. The said Writ Petition had been filed by
the respondents to challenge the award dated 21.5.1992
rendered by the Labour Court, Sangli, in a .group Reference
H
998
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A under the Industrial Disputes Act, 1947 (l.D. Act, for short). The
learned Single Judge had allowed the said Writ Petition, by the
above referred order, and the Division Bench had left the said
decision undisturbed.
8
2. The State of Maharashtra through Secretary Irrigation
Department, and Executive Engineer Irrigation Department,
Sangli, are the appellants herein, whereas Sarva Shramik
Sangh, Sangli, a Trade Uniori representing the workmen
concerned, and two of the workmen in the concerned Industrial
C Establishment are the respondents to this appeal.
Facts leading to this appeal are this wise:-
3. The Government of Maharashtra established a
corporation named as the Irrigation Development Corporation
D of Maharashtra Limited, sometimes in December 1973. This
Corporation was a Government of Maharashtra undertaking. It
set up 25 lift irrigation schemes to provide free services to
farmers. The corporation was established in the aftermath of a
terrible drought which afflicted the State in the year 1972. Some
E 256 workmen were employed to work on the irrigation· schemes
'of the said Corporation. Though it was claimed that the
workmen were casual and temporary, the fact remains that
many of them had put in about 10 years of service when they
were served with notices of termination by the appellant No.2
on 15.5.1985. The notice sought to terminate their services
F w.e.f. 30.6.1985, and offered them 15 days compensation for
every completed year of service. The retrenchment was being
effected because according to the appellants the lift irrigation
schemes, on which these workmen were working, were being
transferred to a sugar factory viz. Vasantdada Shetkari
G Sahakari Sakhar Karkhana, Sangli.
4. It is not disputed that some of the workmen accepted
the retrenchment compensation, though a large number of them
did not. Some 163 out of them filed Writ Petition bearing
H No.2376 of 1985, through the first respondent Trade Union,
STATE OF MAHARASHTRA v. SARVA SHRAMIK
999
SANGH, SANGLI [H.L. GOKHALE, J.]
against the above referred Corporation and the appellants,
A
seeking to restrain the transfer of the undertaking. The petition
was dismissed by the Bombay High Court and hence, a
Special Leave Petition was preferred to this Court being SLP
No.1386 of 1986, The appellants defended the said petition by
pointing out that the workmen concerned were not employees s
of the Corporation, but were employees of the State. This Court,
therefore, dismissed the said SLP by its order.dated
11.11.1986 by observing as follows:-
"Having regard to the statement in the counter affidavit of C
the Executive engineer, the State of Maharashtra, that the
Petitioners were employees of the State and not the
Corporation, we do not see how the reliefs sought against
the Corporation can be granted in this petition. If the
Petitioners desire to seek any reliefs against the State
Government and if such relief is permissible, the
D
Petitioners are at liberty to seek appropriate legal remedy
in the matter. The SLP is, therefore, disposed of
accordingly."
5. This led the workmen to seek Reference of the Industrial
E
Dispute under the 1.0. Act. These References were numbered
as Ref. l.D. Nos.27 to 40, 42 to 70, 72 to 99197, 1/88 to 35,
54, 63, 65, 72 to 92, 106 to 118/88, 17 to 29/89, 37, 38, 40 to
44/89 covering 163 applicants.
6. In the5e References, it was contended on behalf of the
. workmen that their retrenchment was illegal, inasmuch as the
requirement of the adequate statutory notice as required under
the l.D. Act, was not complied with. On the face of it, there was
a shortfall of a few days in giving the notice. The learned Labour
F
, Court Judge noted that the notices were issued on 25.6.1985,
G
and the services were terminated w.e.f. 30.6.1985. The
workmen contended that the lift irrigation schemes wherein they
were working, were in fact Industrial Establishments, and that
inasmuch as more than 100 workmen were employed therein,
the provision of Section 25N of the l.D. Act (which requires three
H
1000
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A months' advance notice prior to termination) was applicable,
but had not been complied with. The learned Judge of the
Labour Court did not deal with that submission, but held that in
any· case there was a violation of Section 25F of the l.D. Act,
inasmuch as not even one month's notice had been given and
B hence the termination was illegal.
7. In the Written Statement filed by the appellant No.2
before the Labour Court, it was stated in paragraph 3, that
various schemes were carried out by the State Government at
its own expense. In paragraph 4 it was contended that the
C workmen concerned were the employees of the Irrigation
Department. In paragraph 14 thereof, it was stated that "the
termination is not by way of victimization but as the irrigation
scheme has been transferred to Slletkari Sahakari Sakhar
Karkhana, Sangli, the employees are not entitled to retain in
D the services without any work."
8. In the written statement there was no specific reference
to Section 25FF of the l.D. Act which deals with the transfer of
undertakings. There was no reference to the said section in the
E judgment of the learned Judge either. We may however note
that the learned Judge has noted this submission of the
appellants in paragraph 8 of her order in the following words:-
F
G
"8 ...... However, in the present case, it is clear that all those
schemes where the Second Party workmen were working
were sold by the State Government to the Vasantdada
Shetkari Sahakari Sakhar Karkhana Ltd., Sangli and on
said reason their services were terminated. As such, it is
clear that those schemes are transferred to the Sugar
Industry. Hence, there is no control of the First Party
employer on those schemes ....... "
9. The learned Judge, however, noted that workmen
concerned were employed on a temporary basis. Having noted
that, the learned Judge relied upon a judgment of Karnataka
H Hiah Court between Workmen of Karnataka Agro Pralines Ltd.
STATE OF MAHARASHTRA v. SARVA SHRAMIK
1001
SANGH, SANGLI [H.L. GOKHALE, J.]
v. Karnataka Agro Proteins Ltd. and Ors. reported in 1992 LLJ
A
page 71:2, on the application of Section 25F and 25FF, and
held that the only claim that the workmen could make was for
compensation. The Karnataka High Court had referred to and
followed the law laid down in Anakapalle Co-operative
Agricultural and Industrial Society Ltd. v. Workmen and Ors.
B
reported in AIR 1963 SC 1489, and also the subsequent
judgment of this court in Central Inland Water Corporation Ltd.
v. The Workmen and another reported in (1974) 4 SCC 696
to the same effect. The Labour Court, therefore, directed that
there would not be any reinstatement, but the workmen will be c
given the compensation in accordance with Section 25F of the
1.0. Act. The Award of the Labour Court reads as follows:-
"Award:
(I)
The claim is partly allowed.
(II)
All the employees are entitled to receive the
retrenchment compensation under Section 25F of
Industrial Disputes Act, 1947 after calculating their
service period with the First Party. The remaining
claim stands rejected.
(Ill)
However; the First Party is hereby dir~ctecl \o give
preference to all those empJoyees whenever some
additional work to new project are started or work
is available.
(IV)
It is informed that some employees have died. In
respect of such employees their legal heirs are
entitled to receive the compensation amount. ·
D
E
F
(V)
The award be implemented within in a month from
G
the date of publication of this Award.
(VI}
No order as to costs."
10. Being aggrieved by that judgment and order, the
H
1002
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A respondents filed Writ Petition bearing No.2699 of 1993 before
a Single Judge of the Bombay High Court invoking Article 227
of the Constitution of India. The learned Single Judge who heard
the matter took the view that the process of pumping water
wh·erein the workmen were employed, amounted to a
B 'manufacturing process' under Section 2(k) of the Factories
Act, 1948, and therefore, the lift irrigation .schemes were in the
nature of a 'factory' as defined under Section 2(m) of the said
Act, and hence, an 'Industrial Establishment' to which the l.D.
Act applied.
c
11. The learned Single Judge then held that since ·
according to the State Government, the workmen were
employed by the Irrigation Department, the plea that their
services were required to be terminated on account of the
transfer of the undertaking could not be accepted. This was on
D the footing since the other activities of the Irrigation Department
continued even after the transfer. of the lift irrigation schemes.
the workmen concerned could certainly be absorbed into other
activities of the irrigation department.
E
12. The learned Single Judge observed that the plea
invoking Section 25FF could not be permitted to be raised in
the High Court, inasmuch as transfer was a mixed question of
facts and law. According to the learned Judge, it.was a case
of breach of Section 25N, and not merely 25F of the l.D. Act.
F Section 25N lays down the conditions precedent to
retrenchment of workmen from Industrial Establishments
wherein more than 100 workmen are employed, and subsection (1 )(a) thereof provides for three months' notice or pay
in lieu thereof in the event of retrenchment. The learned Judge,
G therefore, set-aside the award, since three months' advance
notice or pay was not given, and held that the workmen were
entitled to reinstatement with continuity of service. The learned
Judge awarded 25% backwages to the workmen. The
operative part of the order of the learned Judge as contained
1-l
in par<i~raphs 11 to 14 of the judgment reads as follows:-
STATE OF MAHARASHTRA v. SARVA SHRAMIK
1003
SANGH, SANGLI [H.L. GOKHALE, J.]
"11. The award dated 21st May 1992 passed by the
Labour Court, Sangli is set aside. The workmen concerned
in the References are entitled to reinstatement with
continuity of service and 25% backwages. All workmen
who are interested in employment must report for duty
within two months from the date of this order. The
Respondents will give them employment by reinstating
them with continuity of service within a month thereafter.
Backwages shall be paid to the workmen, computed at
25% within three months of their reinstatement in service.
12.There are some workmen who have been
absorbed in other departments of the State Government
or have secured employment elsewhere. These workmen
shall be paid 25% backwages till the date they secured ·
employment within six mo!Jths from today.
13. A few workmen have already reached the age
of superannuation during the pendency of these
proceedings. They shall be paid the backwages "computed
at 25% till the date they attained the age of superannuation
within three months from today.
14. I am informed that some workmen have expired
during the pendency, of. the proceedings in court. The
Respondents shall pay to the heirs of these workmen 25%
of back wages upto the date of death of these workmen
within three months from today."
13. It is this order which was challenged in the Letters
Patent Appeal. The Division Bench, however, took the view that
A
B
c
D
E
F
a Letters Patent Appeal was not available against an order
passed on the Wirt Petition filed under Article 227 of the
G
Constitution of India, and therefore dismissed the said Letters
Patent Appeal. Being aggrieved by this order of the Division
Bench as well as of the learned Single Jooge, this appeal has
been filed. Leave was granted in this matter on 8.5.2006, and
the operation of the impugned order was stayed subject to the
H
1004
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A compliance of the provisions of Section 178 of the l.D. Act,
1947. The appeal has been pending since then, and a number
of I.As have been filed by both parties. When the appeal
reached for final hearing, Ms. Madhavi Diwan, learned counsel
appeared for the appellants, and Mr. Vinay Navare, learned
s counsel appeared for the respondents.
Submissions on behalf of the appellants:-
14. The principal submission of Ms. Madhavi Diwan,
learned counsel for the appellants is that this is a case of
· C transfer of an undertaking. That was the very plea taken in
paragraph 14 of the written statement as noted above, and also
reflected in the judgment of the Labour Court. The learned
Single Judge had clearly erred in ignoring this fact. Ms. Diwan
submitted that in fact it was also the case of the respondents
D themselves that retrenchment of their services took place
because of the transfer of the undertaking. She submits that the
lift irrigation schemes constituted an undertaking, and the
ownership of the management of the undertaking was being
transferred, and it was not relevant that the ownership of the
E Irrigation Department Corporation was not being transferred.
Therefore, in her submission it is the Section 25FF which
applies to tb.e present case, and neither Section' 2SN nor
Section 25F. Besides, Section 25F would apply only as a
measure of compensation that is to be provided for, and
F nothing more as laid down by a Constitution Bench of this Court
in Anakapalle Society's case (supra). In that matter this Court
has observed in paragraph 1-6 as follows:-
"16. The Solicitor-General contends that the question
in the present af)peal has now to be determined not in the
G
light of general principles of industrial adjudication, but by
reference to the specific provisions of s. 25FF itself. He
argues, and we think rightly, that the first part of the section
postulates that on a transfer of the ownership or
management of an undertaking, the employment of
H
workmen engaged by the said undertaking comes to an
STATE OF MAHARASHTRA v. SARVA SHRAMIK
1005
SANGH, SANGLI [H.L. GOKHALE, J.]
end, and it provides for the payment of compensation to
A
the said employees because of the said termination of their
services, provided, of course, they satisfied the test of the
length of service prescribed by the section. The said part
further provides the manner in which and the extent to
which the said compensation has to be paid. Workmen
shall be entitled to notice and compensation in accordance
with the provisions of s. 25-F, says the section, as if they
had been retrenched. The last clause.clearly brings out the
B
· fact that the termination of the services of the employees
does not in law amount to retrenchment and that is c
consistent with the decision of this Court in Hariprasad's
case
[1957]1SCR121 : AIR 1957 SC 121. The
Legislature, however, wanted to provide that though such
termination may not be retrenchment technically so-called,
as decided by this Court, nevertheless the employees in
0
question whose services are terminated by the transfer of
the undertaking should be entitled to compensation, and
so, s. 25-FF provides that on such termination
compensation would be paid to them as if the said
. termination was retrenchment. The words "as if' bring out
the legal distinction between retrenchment defined by
s. 2(oo) as it was interpreted by this Court and termination
of services consequent upon transfer with which it deals.
In other words, the section provides that though termination
of services on transfer may not be retrenchment, the
workmen concerned are entitled to compensation as if the
said termination was retrenchment. This provision has
been made for the purpose of calculating the amount of
compensation payable to such workmen; rather than
provide for the measure of compensation over again,
E
F
s. 25FF makes a reference to s. 25-F for that limited
G
purpose, and, therefore, in all cases to which
s. 25FF applies, the only claim which the employees of the
transferred concern can legitimately make is a claim for
compensation against their employers. No claim can be
made against the transferee of the said concern."
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SUPREME COURT REPORTS
[2013] 17 S.C.R.
A
This judgment in Anakapal/e (supra) has been consistently
followed thereafter, including in a recent judgment of this Court
in Maruti Udyog Ltd. v. Ram Lal and Ors. reported in 2005
(2) sec 638.
8 Reply on behalf of the respondents:-
15. As far as the respondents are concerned, they have
principally contended that Section 25FF has no application to
the present case, and the learned Single Judge of the High
Court has rightly held that this is a case which is covered under
C Section 25N. It is submitted that in view of Section 25N(1 )(a),
the workmen had to be given three months' prior notice or
notice pay. That having not been done, and the prior permission
under.25N(1)(b) of the appropriate government not having been
sought, the retrenchment will have to held illegal under subD Section (7) of 25N. The learned Judge of the Labour Court had
in any case held that it was a case of breach of Section 25F,
and the High Court had held that it was a case of breach of
Section 25N. Either of those findings justified the reinstatement
with full backwages. Reliance was placed in this behalf on the
E judgment of this Court in Anoop Sharma v. Executive
Engineer, Public Health Division No.1, Panipat (Haryana)
reported in 20j.0 (5) sec 497.
----
16. However, more than that, the respondents have
pointed out that another set of 10 workmen (Pandurang Vishnu
F Sandage and 9 others) working on the same lift irrigation.
schemes had subsequently filed separate References in the
Labour Court bearing Ref. (l.D.A.) No.37 to 45 of 1991 and 1
of 1992, and the Labour Court gave an award on 30.12.1996,
that those 10 workmen were entitled to reinstatement with 25%
G backwages. That judgment was challenged by the State of
Maharashtra by filing Writ Petition No.2729 of 1997. The said
Writ Petition was dismissed by a Single Judge of Bombay High
Court, relying upon the decision in Writ Petition No.2699 of
1993 in the present matter. An appeal was filed by the
H appellants by preferring SLP (C) No.773 of 2006. This Hon'ble
STATE OF MAHARASHTRA v. SARVA SHRAMIK 1007
SANGH, SANGLI [H.L. GOKHALE, J.]
Court dismissed the said SLP on the ground of delay. A
A
Review Petition (Civil) bearing No.379 of 2006 was filed. That
was dismissed by the order passed on 26.9.2006. Thereafter
a Curative Petition No.164 of 2007 was filed. That also came
to be dismissed on 21.2.2008. It was, therefore, submitted that
the appellants are bound by the decision in the aforesaid case
B
of 10 workmen, and in any case this Court should not aHow the
present appeal as it will lead to a different result in the case of
workmen who are similarly situated. The respondents relied
upon an order of this Court in the case of Warlu v. Gangotribai
and Anr. reported in 1995 (Supp) 1 sec 37. It was a matter c
relating to the tenancy rights of the appellant, concerning the
land spread over three survey numbers, which belonged to the
Respondent no.1. Three writ petitions arising out of the revenue
proceedings filed by him were dismissed by the High Court.
Two SLPs therefrom were found to be time barred and
therefore dismissed. As far as the third SLP is concerned, this
Court declined to entertain the same for the sole reason that
D
any such interference will result in making conflicting orders
regarding tenancy rights in the same land. It was therefore,
submitted by Mr. Navare, the learned counsel for the respondent
that the appellants should suffer by the principle of estoppel by
record.
17. In support of the contention that the orders passed by
E
this Court in the case of the blher 10 workmen should be
followed in the present case, reliance was placed on paragraph
F
21 of a judgment in the case of Nirmal Jeet Singh Hoon v. lrtiza
Hussain and Ors. reported in 2010 (14) SCC 564. The
judgment impugned in that matter directing eviction of tenant
had already been upheld in an earlier SLP, wherein the
Petitioner was also a party. Entertaining the second petition,
G
on his behalf, would have amounted to reviewing the earlier
order of this Court. This Court dismissed the petition by
observing "The law does not permit two contradictory and
inconsistent orders in the same case in respect of the same
subject matter". It was therefore submitted that the order of the
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1008
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A
Labour Court in the case of the other 10 workmen had attained
finality, and the appellants cannot be permitted to take a different
position in the present matter when the workmen in both the
matters were similarly situated.
8
18. The appellants had submitted that the Irrigation
Department is not an industry. In that behalf, it was pointed out
on behalf of the workmen that it is too late to raise this
submission in view of the judgment of this Court in Bangalore
Water Supply and Sewerage Board v. A. Rajappa & Ors.
reported in 1978 (2) sec 213. As against that, the counsel for
C the appellants pointed out that the judgment in Bangalore Water
Supply (supra) is pending for re-consideration before a larger
bench of this Court in view of the order passed by the
Constitutior')/Bench in State of UP. v. Jai Bir Singh reported
in 2005 (5) SCC 1. The respondents, however, submitted that
D in the meanwhile the judgment in Bangalore Water Supply
(supra) will have to be followed until ii is overruled, since the
proposition therein continues to hold good. Reliance is placed
in that behalf, on the approach adopted by this Court in such a
situation, in a matter concerning Arbitration in State of Orissa
E
v. Dandasi Sahu reported in 1988 (4) SCC 12. In that matter
this Court has held that in the exercise of this Court's discretion
'
.. ,
...
F
under Article 136, it would not be ·justified to allow a party to
further prolong or upset adjudication of old and stale disputes
till the decision of the larger bench is received.
Consideration of the rival submissions:-
19. (i) To begin with, we must note that the workmen
concerned were engaged as pump operators and chowkidars
etc. on 25 lift irrigation schemes, which were carrying out the
G process of pumping water. The process of pumping water is
specifically covered under the definition of "manufacturing
process" under Section 2 (k)(ii) of The Factories Act, 1948 ..
Thus, the workmen concerned were engaged in· a
"manufacturing process". Once that is established, it follows that
H the activity of the undertaking in which they were working·
STATE OF MAHARASHTRA v. SARVA SHRAMIK 1009
SANGH, SANGLI [H.L. GOKHALE, J.)
constituted a "factory" within the meaning of Section 2(m) of the
A
said Act.
(ii) The explanatic;>n (i) to Section 25A of l.D. Act, 1947,
covers the "factories" within the definition of an "industrial
establishment", and therefore Chapter VA of the l.D. Act, 1947
B
applies to "manufacturing process" of pumping water. Hence,
it cannot be denied that the undertaking in which the workmen
concerned were employed was covered under the provisions
of l.D. Act.
20. It is, however, contended on behalf of the appellant that
C
the said undertaking was being run by the irrigation department
of the first appellant, and the activities of the irrigation
department could not be considered to be an "industry" within
the definition of the concept under Section 2U) of the l.D. Act.
As noted earlier, the reconsideration of the wide interpretation
D
of the concept of "industry" in Bangalore Water Supply and
Sewerage Board (supra) is pending before a larger bench of
this Court. However, as of now we will have to follow the
interpretation of law presently holding the field as per the
approach taken by this Court in State of Orissa v. Dandasi
E
Sahu (supra), referred to above. The determination of the
present pending industrial dispute cannot be kept undecided
until the judgment of the larger bench is received.
21. Having stated that however, the objection raised by the
appellants to the judgment rendered by the Single Judge of the
Bombay High Court is required to be looked into viz. that the
appellants had effected a transfer of an undertaking which
resulted into termination of services of the workmen concerned,
F
and that this was not a gise of retrenchment simpliciter. It was
submitted ttiaf the 25 lift irrigation schemes by themselves
G
constitute an undertaking. It may be that all the activities of
irrigation department may not have been transferred, but a
separate unit thereof, consisting of these 25 lift irrigation
schemes, has come to be transferred to a sugar factory. As
H
1010
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A held in Anakapalle Society's case (supra), in such a matter the
only .claim which the employees of the transferor concern yan
legitimately make, is a claim for compensation against the
previous employer, since they are not being absorbed under
the new employer.
B
22. Having stated this, we have also to note the conduct
of the appellants. It appears that many of the workmen
concerned were engaged for a period of about 1 O years.
Section 25FF contemplates compensation to be paid to the
workmen on account of their retrenchment, resulting from
C transfer of the undertaking. The retrenchment, however, is
required to be effected only if the previous employer is not
continuing the workmen concerned in any of his activities or
establishments, or when they are not being absorbed under the _
new employer. Continuation of service under the existing
D employer, or re-engagement under the new one, should be the
preferred approach. when such an occasion arises. Termination
of services should normally be the last resort. In the instant
case, the first appellant - State Government, does not appear
to have made any efforts either to absorb these workmen in
E other activities of the irrigation department, or to have insisted
upon the sugar factory to absorb them. This is because the lift
irrigation schemes were going to be continued by the transferee
sugar factory, and in any case the Irrigation department has a
very large number of activities, wherein these workmen could
F have been absorbed. When the State Government is in the
picture, we do expect a little better attitude than the one which
is often displayed by a private sector employer. It is possible
that, in a given situation, the State Government may have its
own economic compulsions which justify termination of services.
G But, there must be either an effort to absorb such surplus
• workmen, or in any case the difficulties of the Government, if
any, necessitating the termination, ought to be explained. We
. do not find any such efforts or explanation placed on record.
23. It is also material to note that the Labour Court had
H directed the State Government to consider the absorption of
STATE OF MAHARASHTRA v. SARVA SHRAMIK
1011
SANGH, SANGLI [H.L. GOKHALE, J.]
these workmen. The respondents have placed it on record that . A
in pursuance of a subsequent advertisement for employment
in th~ irrigation department, the first respondent-union had
written to the authorities concerned to absorb these workmen,
but the Government took a bureaucratic attitude to inform the
Union that no such decision could be taken, since the matter B
was pending in the Supreme Court. This attitude was not
expected from a Welfare State.
24. In any case, having noted that another petition
concerning 1 O other workmen from the sam~ lift irrigation C
schemes was dismissed, and SLP and Curative Petitions,
therefrom, were also dismissed, a question arises for ihis Court
to consider that assuming .this was a case of transfer of
undertaking, should the relief to the affected workmen be
restricted only to the compensation under Section. 25F as
required by S 25 FF.
D ·
25. The learned counsel for the respondents has referred
to a few cases arising out of revenue proceedings and the rent
act, indicating what should be the approach in such a situation.
These 163 workmen and the other 10 workmen viz. Pandurang. E
Vishnu Sandage and others were working on the same lift
irrigation schemes. Those 10 workmen also got an award of
reinstatement with 25% backwages. The writ petition of the
appellants challenging that award was dismissed by the
Bombay High Court, relying upon the judgment of the Single
F
Judge in the present mater. The SLP and the Curative Petitions-
-- therefrom also came to be dismissed, although on the ground
of gross delay. The fact, however, remains that as far as those
10 workmen are concerned.the order of relief in their case viz.
reinstatement with 25% backwages and continuity in service G
was left undisturbed. Therefore, a question arises" should the
Government having been lethargic in the case of those 10
workmen, where it suffered an order of reinstatement with 25%
backwages, be now permitted to insist that when- it comes to
these 163 workmen, who are similarly situated, they be denied
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1012
SUPREME COURT REPORTS
[2013] 17 S.C.R.
A
a comparable relief? And in any case, should this Court treat
the two sets of workmen differently, in the matter of relief, only
because the SLP against some of them got dismissed on
account of delay, whereas the SLP concerning the others
survived for final arguments?
B
26. This Court has the authority to pass an appropriate
ordei:- in exercise of its jurisdiction for doing complete justice
in a matter pending before it. This authority under Article 142
cif the Constitution will also have to be read as coupled with a
duty to do complete justice in a given case. In Food
C
Corporation of India Worker's Union v. Food Corporation of
lndi_a & Anr. reported in 1996 (9) SCC 439, this Court was
faced with a situation where there was a delay in reinstatement
of the specified workmen despite this Court's earlier order.