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Government Of Nct Of Delhi Petitioner v. Sh. D.S Bawa & Anr. S

Delhi High Court
May 17, 2010
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Judgment Summary — Rajiv Sahai Endlaw, J.

Factual and Procedural Background

The petitioner challenged an ex parte award dated 22 February 1993 of the Labour Court directing reinstatement of respondent no. 2 (a workman) with full back wages and continuity of service, and also challenged the Labour Court's order dated 27 November 1995 dismissing the petitioner's application to set aside that ex parte award.

The Labour Court, on the basis of ex parte evidence by respondent no. 2, found that respondent no. 2 had been working as a daily rated muster roll worker with the petitioner since 5 May 1984 and that his services had been terminated in May 1987 without any reason. The Labour Court found respondent no. 2 had worked for more than 240 days in the relevant year preceding termination and held the termination violative of section 25f of the i.d act; it directed reinstatement and parity of pay with regular employees (without increments). The Labour Court also recorded that the petitioner appeared before the Conciliation Officer but not before the Labour Court.

This Court issued notice in the writ petition. By order dated 25 July 1997 recovery proceedings were stayed subject to the petitioner depositing Rs. 1,61,562 in Court; Rs. 3,000 of that was released to respondent no. 2 for litigation expenses. Respondent no. 2 applied under section 17b of the i.d act and was allowed Rs. 92,678.43 (for last drawn/minimum wages up to 28 February 1997). On appeal, the Division Bench ordered release of that sum from the deposit and directed further deposits and payments under section 17b for the subsequent period. The petitioner failed to fully comply with section 17b orders, leading to vacation of an interim order on 19 September 2000. Trial court records were later not traceable. The parties were heard on further directions.

Legal Issues Presented

  1. Whether the ex parte award dated 22 February 1993 and the order dated 27 November 1995 dismissing the petitioner's application to set aside that award should be set aside.
  2. Whether respondent no. 2, a daily rated muster roll worker, was validly terminated without compliance with provisions of the i.d act (notably section 25b / 25f) and therefore entitled to reinstatement with back wages and continuity of service.
  3. Whether non-compliance by the petitioner with orders under section 17b of the i.d act justifies dismissal of the writ petition.
  4. If reinstatement is not appropriate after the long delay and lapse of time, what consequential relief (reinstatement versus lump-sum compensation) should be granted to the workman.

Arguments of the Parties

Petitioner's Arguments

  • The petitioner sought setting aside of the ex parte award, asserting lack of notice after transfer of the dispute from one Labour Court to another and claiming it was unaware of the transferee Labour Court's hearing dates.
  • On regularization policy, the petitioner relied on a DG, CPWD policy that a muster roll labourer must render a minimum of 240 days of continuous service in each of two consecutive years to be eligible for consideration for regularization; petitioner provided daily counts (e.g., 134 days in 1984, 248 in 1985, 106 in 1986) to contend respondent did not meet the policy requirement for regularization.
  • The petitioner asserted that after 3 July 1986 the respondent abandoned his duties and did not turn up for work.
  • The petitioner stated it had made certain payments during the litigation and later filed a reply that it had paid Rs. 1,61,562; Rs. 21,650; and Rs. 1,88,816 (total Rs. 3,72,028) to respondent no. 2.

Respondent no. 2's Arguments

  • The respondent sought reinstatement and contended he had worked the requisite number of days and had been wrongly terminated; his evidence before the Labour Court was unrebutted in the absence of the petitioner.
  • The respondent (through counsel) urged dismissal of the writ petition on the ground that orders under section 17b of the i.d act had not been complied with by the petitioner, relying on a Single Judge's order dated 4 May 2010 in WP(C) No. 21069/2005.
  • The respondent's counsel relied on precedents where reinstatement of casual/daily wagers was ordered (e.g., Krishan Singh; Anoop Sharma) to support reinstatement as a daily rated worker.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Hindustan Zinc Ltd. v. Industrial Tribunal, (2001) 10 SCC 211 Deplores practice of dismissing writ petitions for non-compliance with Section 17B without considering merits. The Court relied on this dictum to reject the submission that non-compliance with section 17b automatically warrants dismissal of the writ petition; the Court declined to dispose of the petition solely on that ground.
Krishi Upaj Mandi Samita Bada Malhara v. Yashwant Singh Bundela (Madhya Pradesh High Court) Followed Hindustan Zinc Ltd. dicta to set aside an order of automatic dismissal because of non-compliance with Section 17B. Cited as supportive authority for the proposition that automatic dismissal for non-compliance is not appropriate; used to justify not dismissing the present writ petition.
M/s Hindustan Carbide P. Ltd. v. NCT of Delhi, W.P.(C) No. 817/1999 (Single Judge, 11 Oct 2002) A Single Judge had taken a similar view (to the Single Judge in WP(C) No.21069/2005) reportedly supporting dismissal for non-compliance. Noted by the Court as reflecting a contrary Single Judge view; distinguished in light of the Supreme Court's dicta in Hindustan Zinc Ltd.
Shakuntala's Export House (P) Ltd. v. Secretary (Labour); Municipal Corporation Of Delhi v. Begh Raj; D.K. Yadav v. J.M.A. Industries Ltd., (1993) 3 SCC 259 Authoritatively indicates that abandonment/absenteeism amounts to misconduct and that misconduct requires a proper inquiry before penal consequences flow. The Court applied this principle to hold that the petitioner could not rely on abandonment without having conducted the required inquiry; absence of such inquiry meant abandonment was not established.
Krishan Singh v. Executive Engineer, Haryana State Agricultural Marketing Board, 2010 III AD (S.C) 525 Recent decision where reinstatement was ordered for a daily wager only. The respondent relied on this precedent in support of reinstatement; the Court considered it but, given facts and delay, chose compensation instead of reinstatement.
Anoop Sharma v. Executive Engineer, Public Health Division Case of a casual workman who was granted reinstatement. Relied upon by respondent's counsel for reinstatement; Court noted the reliance but did not follow reinstatement because of the unique facts of delay and lapse of time here.
Order of a Single Judge in WP(C) No. 21069/2005 (4 May 2010) Applied by respondent's counsel to argue that non-compliance with Section 17B should lead to dismissal of the writ petition. The Court observed that the Single Judge order did not discuss whether non-compliance alone justified dismissal; the Court did not treat it as determinative and declined to dismiss the writ petition solely on that basis.

Court's Reasoning and Analysis

The Court approached the matter in two phases: first addressing the contention that the writ petition be dismissed for non-compliance with section 17b orders, and second addressing the substantive merits and appropriate relief.

On the question of non-compliance with section 17b, the Court noted that the respondent relied on Single Judge orders that had dismissed writ petitions for such non-compliance. However, the Court relied on the Supreme Court's dictum in Hindustan Zinc Ltd. v. Industrial Tribunal that deprecated disposing of writ petitions for non-compliance without dealing with merits. The Court observed that a Division Bench of another High Court followed that dictum to set aside an order of automatic dismissal. Having considered these authorities and the procedural history in the present case (including earlier invocation of vacation of interim order by the workman), the Court concluded that automatic dismissal of the writ petition on grounds of non-compliance was not appropriate.

Turning to merits, the Court noted it was admitted that respondent no. 2 was a daily rated muster roll employee and that petitioner itself admitted respondent had worked for more than 240 days in the 12 months preceding 2 July 1986 (the date services were dispensed with). The Court held that the provisions of section 25b and 25f of the i.d act thus applied and that the petitioner could not have terminated services without complying with those statutory requirements — which it had not done. The Labour Court's finding based on unrebutted ex parte evidence that respondent had offered his services was accepted by this Court because the petitioner chose not to contest the Labour Court proceedings.

The Court considered the petitioner's defence of abandonment. It held that abandonment is tantamount to misconduct and requires a proper inquiry before adverse consequences can follow, citing authority (including D.K. Yadav). The petitioner had not conducted any such inquiry and therefore could not establish abandonment.

Despite these findings in favour of respondent on illegality of termination, the Court considered equitable and practical factors in selecting an appropriate remedy. Notable factors were:

  • The respondent raised the dispute only after a delay of approximately three years from 2 July 1986; the absence of an explanation for that delay detracted from his claim (a daily rated worker is expected to raise disputes promptly).
  • A very long period — nearly a quarter of a century — had elapsed since the respondent last worked for the petitioner; reinstating him now could be detrimental to industrial harmony and could precipitate further disputes and controversies (the Court observed that the spirit of the i.d act is to promote industrial harmony).
  • The respondent sought reinstatement as a daily rated worker only; the petitioner stated there was no vacancy and that the practice of engaging daily rated workers had been stopped.

Balancing the illegality of termination against the long delay and the practical consequences of reinstatement after many years, the Court determined that awarding lump-sum compensation in lieu of reinstatement and back wages would be the appropriate and final remedy in the circumstances.

The Court also took into account payments already made by the petitioner during the litigation (various deposits and sums released to the respondent). The petitioner had informed the Court of aggregate payments amounting to Rs. 3,72,028. The Court specified that amounts already deposited in Court (and any interest accrued) should be released to the respondent and that the petitioner should pay an additional lump-sum amount, failing which interest at 9% per annum would be payable on the balance.

Holding and Implications

Holding:

The Court modified the award and issued the following core directions:

  • The petitioner shall pay a further lump-sum amount of Rs. 3,00,000 (Three lacs only) to respondent no. 2 in full and final settlement of all claims of respondent no. 2 against the petitioner under the award or otherwise (inclusive of any arrears under the Section 17B order).
  • Any amounts lying deposited in Court together with any interest accrued thereon shall be released forthwith to respondent no. 2.
  • The balance amount shall be paid within six weeks from the order, failing which it shall carry simple interest at 9% per annum.
  • The respondent no. 2 is awarded costs of Rs. 15,000 payable by the petitioner along with the amounts aforesaid.
  • The writ petition is disposed of and the award is modified in terms stated above.

Implications:

  • Direct effect: The petitioner must make the monetary payments ordered (release of deposited sums and payment of Rs. 3,00,000 and costs). The remedy granted substitutes lump-sum compensation for reinstatement and back wages.
  • Broader precedential effect: The Court did not purport to set a new precedent; it followed established principles (e.g., that misconduct/abandonment requires inquiry, and that automatic dismissal for non-compliance with section 17b without deciding merits is deprecated by higher authority) and exercised equitable discretion on remedy given the long delay and changed circumstances. The decision resolves the parties' dispute on the facts before the Court but does not establish a novel legal rule beyond applying cited authorities.

Signed: RAJIV SAHAI ENDLAW, J.

Show all summary ...

Rajiv Sahai Endlaw, J.:—1. The petitioner by this writ petition impugns the ex parte award dated 22nd February, 1993 of the Labour Court directing the petitioner to reinstate the respondent no. 2 workman with full back wages and continuity of service as well as the order dated 27th November, 1995 dismissing the application of the petitioner for setting aside of the ex parte award.

2. The Labour Court on the basis of the ex parte evidence of the respondent no. 2 workman found that the respondent no. 2 workman was working as a daily rated casual muster roll worker with the petitioner since 5 May, 1984; the services of respondent no. 2 workman had been terminated in May, 1987 without assigning any reason. The Labour Court found that the respondent no. 2 workman had worked for the petitioner for more than 240 days in a calendar year preceding the date of his termination and the petitioner could not have terminated the services of the respondent no. 2 workman without complying with the provisions of section 25f of the i.d act and which had not been done. The action of the petitioner was thus held to be in violation of the provisions of law and the respondent no. 2 workman was held entitled to reinstatement. It was further found on the basis of ex parte evidence of the respondent no. 2 workman that the work being performed by the respondent no. 2 workman was the same as being performed by the regular employees. The respondent no. 2 workman was thus also held entitled to be paid at the same scale as being paid to the regular employees, however without any increment. The award also records that though the petitioner had appeared before the Conciliation Officer but chose not to appear before the Labour Court; instead, the Deputy Director (Horticulture), Development Division-II, Public Works Department of the Delhi Administration was found to have showed utter negligence and ignorance in not participating in the matter inspite of knowledge of the proceedings.

3. The Labour Court, vide order dated 27 November, 1995, has dismissed the application of the petitioner for setting aside of the ex parte award for the reason of the application having been filed after the expiry of 30 days from the date of publication of the award and the Labour Court having become functus officio. However, it was also observed that the petitioner had knowledge of the proceedings and had thus no case for setting aside of the ex parte award.

4. This Court issued notice of the writ petition. Subsequently, vide order dated 25 July, 1997, recovery proceedings were stayed subject to the petitioner depositing a sum of Rs. 1,61,562/- in this Court. Out of the said amount, a sum of Rs. 3,000/- was permitted to be released to the respondent no. 2 workman towards litigation expenses. The respondent no. 2 workman applied under section 17b of the i.d act. The said application was allowed and the petitioner was directed to pay Rs. 92,678.43p to the respondent no. 2 workman towards last drawn/minimum wages from the date of the award till 28 February, 1997. The petitioner preferred an appeal against the order under section 17b of the i.d act. The Division Bench in LPA No. 386/1998, vide order dated 18 September, 1998 allowed the sum of Rs. 92,678.43p (supra) to be released to the respondent no. 2 workman out of Rs. 1,61,562/- deposited earlier by the petitioner in this Court. The petitioner was directed to deposit a further sum of Rs. 21,657/- in this Court and also directed to make payment under section 17b of the i.d act to the respondent no. 2 workman for the period subsequent to 28 February, 1997. Rule was issued in the writ petition on 17 February, 1999. The petitioner failed to comply with the order under section 17b of the i.d act leading to the vacation of the interim order on 19 September, 2000. The Trial Court record was requisitioned on 5 December, 2007. However, the same was not traceable. On 2 December, 2008 the petitioner was again directed to pay the arrears under section 17b of the i.d act in terms of earlier directions of this Court. The counsels have been heard.

5. The counsel for the respondent no. 2 workman has at the outset stated that the present writ petition is liable to be dismissed summarily for the reason of the order under section 17b of the i.d act having not been complied by the petitioner till date inspite of orders/directions aforesaid. Reliance in this regard is placed on order dated 4 May, 2010 of a Single Judge of this Court in WP(C) No. 21069/2005. In the said order, the Single Judge of this Court on the contention of the workman that the order under section 17b of the i.d act was un-complied, dismissed the writ petition. However, there is no discussion in the said order as to whether on such non compliance the writ petition is liable to be dismissed.

6. I find that another Single Judge of this Court in M/s Hindustan Carbide P. Ltd. v. NCT of Delhi W.P(C) No. 817/1999 decided on 11 October, 2002 has also taken a similar view. I however find that the Supreme Court in Hindustan Zinc Ltd. v. Industrial Tribunal (2001) 10 SCC 211 has deprecated the practice of disposing off the writ petitions for the reason of non-compliance with the order under Section 17B, without dealing with the merits. The Division Bench of the Madhya Pradesh High Court in Krishi Upaj Mandi Samita Bada Malhara v. Yashwant Singh Bundela, following the aforesaid dicta set aside the order of a Single Judge directing automatic dismissal of the writ petition because of non compliance of Section 17B of the Act. Besides, in the present case, it transpires that the respondent no. 2 workman had earlier also complained of non compliance of the order under section 17b of the i.d act and filed CM No. 1061/2000 in this Court. However, the said CM was disposed of with the order only of vacation of the interim order. It was not deemed appropriate at that stage to dismiss the writ petition. The counsel for the respondent no. 2 workman has not been able to show as to how inspite of the said order, the respondent no. 2 workman has now become entitled to dismissal of the writ petition for the same reason. The respondent no. 2 workman having availed the benefit of vacation of the interim order cannot now seek the dismissal of the writ petition also. The same would tantamount to review of the order dated 19 September, 2000 and for which no case is made out.

7. That brings me to the merits of the controversy. It is the admitted position that the respondent no. 2 workman was a daily rated muster roll employee. On enquiry, the counsel for the respondent no. 2 workman states that he is seeking reinstatement as a daily rated muster roll employee only and not as a regular employee. It is however stated that if the seniority of the respondent no. 2 workman in the muster roll is maintained, the respondent no. 2 workman would have a much better chance of regularization.

8. The petitioner at the outset has sought setting aside of the ex parte award and an opportunity to contest the same on merits. However, neither is a case for setting aside of the ex parte made out nor is it deemed expedient now, after 17 years to relegate the parties to the status quo ante. The petitioner also in the writ petition admits that it had knowledge of the industrial dispute. Its version is that the dispute was transferred from one Labour Court to the other and the petitioner was not sent any notice from the transferee Labour Court and was unaware of the date of hearing before the transferee Labour Court. However, it is admitted that the petitioner of its own had traced the case and had written to the Labour Court seeking certain information. In fact, the Labour Court has in the award as well as in the order dismissing the application for setting aside of the ex parte award commented adversely on the said conduct of the officials of the petitioner. This Court also from time to time enquired from the petitioner as to what action had been taken against the erring official of the petitioner. However, save for stating that disciplinary proceedings had been initiated against such official, no information has been given. Once it is admitted that the petitioner was aware of the proceedings before the transferee Labour Court, the non appearance and non participation of the petitioner therein is inexplicable and the petitioner has no case for setting aside of the ex parte award.

9. The counsel for the petitioner next contends that as per the policy decision laid down by DG, Central Public Works Department, New Delhi, only a muster roll labourer who renders minimum 240 days of continuous service in each of the two consecutive years is eligible to be considered for regularization in the said Department subject to availability of vacancies. It is contended that the respondent no. 2 workman worked from 5 May, 1984 to 31st December, 1984 i.e for 134 days, from 1 January, 1985 to 31 December, 1985 i.e for 248 days and from 1 January, 1986 to 2 July, 1986 i.e for 106 days. It is contended that since the respondent no. 2 workman did not fulfill the basic requirement of minimum continuous service of 240 days in two consecutive years, he was not eligible to be considered for regularization. It is further the case of the petitioner that with effect from 3rd July, 1986, the petitioner abandoned his duties.

10. It thus stands admitted by the petitioner itself that the respondent no. 2 workman had worked with it for more than 240 days in the 12 months preceding 2 July, 1986 when his services were admittedly dispensed with. The provisions of section 25b and 25f of the i.d act thus become applicable. The petitioner could not have terminated the services of the respondent no. 2 workman without compliance with law and which has admittedly not been done. The further case of the petitioner is that it is the respondent no. 2 workman who after 2 July, 1986 did not turn up for duty. The case of the respondent no. 2 workman is otherwise i.e that he was not given employment. The petitioner having chosen not to contest the proceedings before the Labour Court has only itself to blame. The Labour Court on the basis of unrebutted evidence of the respondent no. 2 workman held that the respondent no. 2 workman had offered his services. The petitioner failed to establish a case of abandonment. Moreover, abandonment amounts to misconduct which requires proper enquiry (see Shakuntala's Export House (P) Ltd. v. Secretary (Labour), Municipal Corporation Of Delhi v. Begh Raj, 117 (2005) DLT 438 & D.K Yadav v. J.M.A Industries Ltd.., (1993) 3 SCC 259). The petitioner admittedly did not conduct any enquiry as it was required to do if the respondent no. 2 workman had absented/absconded.

11. No case, therefore, of setting aside of the ex parte award in so far as it declares the termination to be illegal, is made out.

12. The question however arises as to the relief to be granted to the respondent no. 2 workman. In this context, the conduct of the respondent no. 2 workman of raising the dispute after three years of 2 July, 1986 becomes relevant. Though there is no time limit prescribed for raising the dispute but in the present case no reason has come out for the respondent no. 2 to have raised the dispute after the long span of three years. A daily rated muster roll worker is expected to raise the dispute immediately. The delay gives credence to the plea of the petitioner, though not substantiated, of abandonment/absenteeism on the part of the respondent no. 2 workman.

13. Coupled with the aforesaid is the circumstance of long time having been elapsed. The respondent no. 2 workman has not worked for the petitioner for nearly quarter of a century. Imposing the respondent no. 2 workman now on the petitioner is not found to be conducive to the industrial harmony being the spirit running throughout the I.D Act. Further, the respondent no. 2 workman was only a daily rated worker. The counsel for the respondent no. 2 workman as aforesaid admits that reinstatement would also be as a daily rated worker. The only case is that such reinstatement may enable regularization/absorption of the respondent no. 2 workman with the petitioner. The counsel for the petitioner on the contrary states that there is no vacancy and the practice of engaging daily rated workers has also since been stopped. I thus wonder whether the order of reinstatement would not lead to further controversies/disputes. The parties have already been litigating since the year 1989 and the endeavour of this Court should be to grant a relief which would put an end to the misery through litigation rather than encourage it. Considering all the circumstances, I had also called upon the parties to address on the relief of the lumpsum compensation to be paid in lieu of reinstatement and back wages etc. The counsel for the respondent no. 2 workman has relied on the recent dicta in Krishan Singh v. Executive Engineer, Haryana State Agricultural Marketing Board 2010 III AD (S.C) 525 (in that case also reinstatement was ordered as daily wager only) and Anoop Sharma v. Executive Engineer, Public Health Division (also a case of a casual workman who was granted the relief of reinstatement).

14. However, for the reasons aforesaid in the facts and circumstances of the present case, the award of compensation rather than of reinstatement is found to be appropriate. Ofcourse, compensation has to be such which is in lieu of the order of reinstatement and back wages etc.

15. The details of the payments deposited during the pendency of the writ petition have already been narrated herein above. The petitioner has also filed reply to CM No. 4503/2005 stating that it has made payment of Rs. 1,61,562/-, Rs. 21,650/- and Rs. 1,88,816/-, i.e of the total sum of Rs. 3,72,028/- to the respondent no. 2 workman. Considering that all the aforesaid payments are without the respondent no. 2 workman having done any work and further that if the order of reinstatement as daily wager was to be made, the respondent no. 2 workman would have continued to earn the minimum wages, which recently stood revised, from the petitioner, it is deemed expedient that besides the payments aforesaid already made (and of which the respondent no. 2 workman would not be liable to refund any part to the petitioner), the petitioner shall pay a further sum of Rs. 3,00,000/- (Three lacs only) to the respondent no. 2 workman in lumpsum settlement of all claims of the respondent no. 2 workman against the petitioner under the award or otherwise (and inclusive of arrears if any under the Section 17B order). In payment of the said amount, the amounts if any lying deposited in this Court together with interest if any accrued thereon be released forthwith to the respondent no. 2 workman. The balance amount be paid within a period of six weeks hereof, failing which it shall incur simple interest at 9% per annum. The award impugned in the petition is modified in terms of above and the writ petition is disposed of. The respondent no. 2 workman is also awarded costs of this proceeding of Rs. 15,000/- payable by the petitioner along with the amounts aforesaid.

RAJIV SAHAI ENDLAW, J.