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2006 INSC 380
Equivalent Citations
citation codes
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Disposition
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  • Section 10 of the Act
  • Section 10 of the Industrial Disputes Act
  • Article 226 of the Constitution
  • The Evidence Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Neutral Citations
2006 INSC 380
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 10 of the Act
  • Section 10 of the Industrial Disputes Act
  • Article 226 of the Constitution
  • The Evidence Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The respondent workman was engaged by the appellant-employer in 1989 (the exact month is disputed—August according to the employer and November according to the workman). His services were terminated on 13-11-1990. Nearly nine years later, on 15-12-1999, the workman raised an industrial dispute that was ultimately referred to the Labour Court, Gurdaspur. The Labour Court held the termination illegal, directed reinstatement with full back-wages from 25-02-1993, and placed the burden on the employer to disprove that the workman had completed 240 days of service in the year preceding termination.

The employer challenged that award through a writ petition before the Punjab and Haryana High Court. A learned Single Judge dismissed the petition, affirming the Labour Court's reasoning. The present civil appeal before the Supreme Court was filed by the employer against the High Court’s judgment.

Legal Issues Presented

  1. Whether the burden of proving completion of 240 days’ continuous service in the 12 months preceding termination lies on the workman or on the employer.
  2. Whether the considerable delay (approximately nine years) in raising the industrial dispute rendered the claim stale or otherwise barred.

Arguments of the Parties

Appellant (Employer)

  • The reference was unduly belated, and the Labour Court as well as the High Court failed to address this jurisdictional defect.
  • The Labour Court wrongly shifted the onus onto the employer; in law, the initial burden rests on the workman to establish that he had worked for 240 days in the relevant year.

No appearance was recorded on behalf of the respondent workman.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Range Forest Officer v. S.T. Hadimani (2002) 3 SCC 25 Onus is on the workman to prove completion of 240 days; affidavit alone is insufficient. Tre‐enforced to show that the Labour Court erred in shifting the burden to the employer.
State of Gujarat v. Pratamsingh N. Parmar (2001) 9 SCC 713 Referenced in passing on the definition of “industry.” Court said it was unnecessary to enter that question for current disposition.
Essen Deinki v. Rajiv Kumar (2002) 8 SCC 400 Affirms Hadimani on burden of proof. Relied on to overturn Labour Court’s contrary finding.
Rajasthan State Ganganagar S. Mills Ltd. v. State of Rajasthan (2004) 8 SCC 161 Reiterates that self-serving affidavits do not discharge the workman’s burden. Cited to underscore insufficiency of bare assertions by the workman.
Municipal Corporation, Faridabad v. Siri Niwas (2004) 8 SCC 195 Burden on workman; adverse inference for non-production of documents is discretionary. Adopted to negate automatic adverse inference against the employer.
M.P. Electricity Board v. Hariram (2004) 8 SCC 246 Adverse inference cannot be the sole basis for reinstatement when burden not discharged. Used to illustrate that the Labour Court’s approach was legally flawed.
Manager, RBI v. S. Mani (2005) 5 SCC 100 Initial burden lies on workman; contrary view is erroneous. Supported reversal of the High Court’s decision.
Batala Coop. Sugar Mills Ltd. v. Sowaran Singh (2005) 8 SCC 481 Onus regarding 240 days is on the workman. Reinforced main legal principle.
Surendranagar District Panchayat v. Dahyabhai Amarsinh (2005) 8 SCC 750 Affirms Hadimani, Siri Niwas and Hariram. Further authority for the same rule.
R.M. Yellatti v. Asst. Executive Engineer (2006) 1 SCC 106 Detailed exposition on burden of proof and evidentiary standards in 240-day cases. Quoted to emphasise that affidavits alone are inadequate.
ONGC Ltd. v. Shyamal Chandra Bhowmik (2006) 1 SCC 337 Latest reiteration of the burden-of-proof principle. Cited for contemporaneous consistency.
Nedungadi Bank Ltd. v. K.P. Madhavankutty (2000) 2 SCC 455 Stale disputes should not ordinarily be referred under s.10 of ID Act. Utilised to question the propriety of an almost nine-year delay.
S.M. Nilajkar v. Telecom District Manager (2003) 4 SCC 27 Delay can be fatal but must be assessed on facts; absence of limitation in ID Act. Used to frame the Court’s fact-specific approach on delay.
Shalimar Works Ltd. v. Workmen 1960 1 SCR 150 Long delay (4 years) was fatal to an industrial dispute. Part of the comparative analysis on stale claims.
Ratan Chandra Sammanta v. Union of India 1993 Supp (4) SCC 67 Lapse of time may extinguish both remedy and right. Cited in the context of delay argument.
Daily Rated Casual Labour v. Union of India (1988) 1 SCC 122 Background case on regularisation schemes for casual labour. Mentioned while discussing factual chronology in Nilajkar.
Sudamdih Colliery (BCCL) v. Workmen (2006) 2 SCC 329 Recent affirmation of principles on delay. Referenced for completeness of the delay jurisprudence.

Court's Reasoning and Analysis

The Supreme Court held that the Labour Court and, in turn, the High Court misdirected themselves on a fundamental question of law: onus probandi for establishing 240 days’ continuous service. Surveying a consistent line of authorities—from Range Forest Officer (2002) through ONGC (2006)—the Court re-affirmed that:

  • The claimant workman bears the initial burden to prove 240 days of work by cogent oral or documentary evidence, not by a self-serving affidavit.
  • Only after such prima facie evidence is led can any adverse inference for non-production of muster rolls be drawn against the employer; such inference is always discretionary.

Applying these principles, the Court found the Labour Court’s approach— placing the entire burden on the employer without first requiring proof from the workman—to be contrary to settled law and therefore perverse. As to the second issue, the Court observed that although no fixed limitation period exists, substantial delay can render a dispute stale; reliance was placed on Nedungadi Bank and related cases. Given an almost nine-year hiatus before the reference request, the Labour Court’s failure to consider staleness was an additional legal infirmity.

Holding and Implications

HELD: The appeal is allowed; the judgment of the Punjab and Haryana High Court is set aside. If, pursuant to the impugned orders, the respondent has already been reinstated, any salary or emoluments paid shall not be recovered. No order is made as to costs.

Implications: The decision fortifies the doctrinal position that the workman must first prove 240 days’ service and that significant, unexplained delay in raising an industrial dispute remains a critical, though fact-dependent, consideration. While no new legal test is formulated, the Court’s reaffirmation consolidates earlier jurisprudence and serves as binding clarification for Labour Courts and High Courts alike.

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    Chief Engineer, Ranjit Sagar Dam And Another v. Sham Lal .

    Arijit Pasayat, J.— Challenge in this appeal is to the judgment rendered by a learned Single Judge of the Punjab and Haryana High Court dismissing the writ petition filed by the appellants. By the impugned order the learned Single Judge upheld the order passed by the Presiding Officer, Labour Court, Gurdaspur who held that the burden lies on the employer to prove that the workman had not worked for 240 days or more in the year immediately preceding the termination. The alleged date of termination is 13-11-1990. According to the respondent, he joined in November 1989 whereas according to the appellant he joined in August 1989. Demand for making the reference was made on 15-12-1999 i.e after a long period of about 9 years. The workman was held to be entitled to full back wages from the date of demand notice i.e from 25-2-1993 till his actual reinstatement, as the termination of the services of the workman with effect from 13-11-1990 was held to be illegal.

    2. In support of the appeal, the learned counsel for the appellants submitted that the High Court has clearly lost sight of the fact that the claim was highly belated. No finding was even recorded by the Labour Court on this plea which was specifically raised. Further, the Labour Court had wrongly held that it was for the employer to prove that the workman concerned had not worked for 240 days or more in the year immediately preceding the date of termination.

    3. There is no appearance on behalf of the respondent.

    4. In a large number of cases the position of law relating to the onus to be discharged has been delineated. In Range Forest Officer v. S.T Hadimani (2002) 3 SCC 25 it was held as follows:

    “2. In the instant case, dispute was referred to the Labour Court that the respondent had worked for 240 days and his service had been terminated without paying him any retrenchment compensation. The appellant herein did not accept this and contended that the respondent had not worked for 240 days. The Tribunal vide its award dated 10-8-1998 came to the conclusion that the service had been terminated without giving retrenchment compensation. In arriving at the conclusion that the respondent had worked for 240 days, the Tribunal stated that the burden was on the management to show that there was justification in termination of the service and that the affidavit of the workman was sufficient to prove that he had worked for 240 days in a year.
    3. For the view we are taking, it is not necessary to go into the question as to whether the appellant is an ‘industry’ or not, though reliance is placed on the decision of this Court in State of Gujarat v. Pratamsingh Narsinh Parmar (2001) 9 SCC 713. In our opinion the Tribunal was not right in placing the onus on the management without first determining on the basis of cogent evidence that the respondent had worked for more than 240 days in the year preceding his termination. It was the case of the claimant that he had so worked but this claim was denied by the appellant. It was then for the claimant to lead evidence to show that he had in fact worked for 240 days in the year preceding his termination. Filing of an affidavit is only his own statement in his favour and that cannot be regarded as sufficient evidence for any court or tribunal to come to the conclusion that a workman had, in fact, worked for 240 days in a year. No proof of receipt of salary or wages for 240 days or order or record of appointment or engagement for this period was produced by the workman. On this ground alone, the award is liable to be set aside. However, Mr Hegde appearing for the Department states that the State is really interested in getting the law settled and the respondent will be given an employment on compassionate grounds on the same terms as he was allegedly engaged prior to his termination, within two months from today.”

    The said decision was followed in Essen Deinki v. Rajiv Kumar (2002) 8 SCC 400.

    5. In Rajasthan State Ganganagar S. Mills Ltd. v. State of Rajasthan (2004) 8 SCC 161 the position was again reiterated in para 6 as follows:

    “6. It was the case of the workman that he had worked for more than 240 days in the year concerned. This claim was denied by the appellant. It was for the claimant to lead evidence to show that he had in fact worked up to 240 days in the year preceding his termination. He has filed an affidavit. It is only his own statement which is in his favour and that cannot be regarded as sufficient evidence for any court or tribunal to come to the conclusion that in fact the claimant had worked for 240 days in a year. These aspects were highlighted in Range Forest Officer v. S.T Hadimani (2002) 3 SCC 25. No proof of receipt of salary or wages for 240 days or order or record in that regard was produced. Mere non-production of the muster roll for a particular period was not sufficient for the Labour Court to hold that the workman had worked for 240 days as claimed.”

    6. In Municipal Corpn., Faridabad v. Siri Niwas (2004) 8 SCC 195 it was held that the burden was on the workman to show that he was working for more than 240 days in the preceding one year prior to his alleged retrenchment. In M.P Electricity Board v. Hariram (2004) 8 SCC 246 the position was again reiterated in para 11 as follows:

    “11. The above burden having not been discharged and the Labour Court having held so, in our opinion, the Industrial Court and the High Court erred in basing an order of reinstatement solely on an adverse inference drawn erroneously. At this stage it may be useful to refer to a judgment of this Court in Municipal Corpn., Faridabad v. Siri Niwas (2004) 8 SCC 195 wherein this Court disagreed with the High Court's view of drawing an adverse inference in regard to the non-production of certain relevant documents. This is what this Court had to say in that regard:
    ‘15. A court of law even in a case where provisions of the Evidence Act apply, may presume or may not presume that if a party despite possession of the best evidence had not produced the same, it would have gone against his contentions. The matter, however, would be different where despite direction by a court the evidence is withheld. Presumption as to adverse inference for non-production of evidence is always optional and one of the factors which is required to be taken into consideration is the background of facts involved in the lis. The presumption, thus, is not obligatory because notwithstanding the intentional non-production, other circumstances may exist upon which such intentional non-production may be found to be justifiable on some reasonable grounds. In the instant case, the Industrial Tribunal did not draw any adverse inference against the appellant. It was within its jurisdiction to do so particularly having regard to the nature of the evidence adduced by the respondent.’ ”

    7. In Manager, Reserve Bank of India v. S. Mani (2005) 5 SCC 100 a three-Judge Bench of this Court again considered the matter and held that the initial burden of proof was on the workman to show that he had completed 240 days of service. The Tribunal's view that the burden was on the employer was held to be erroneous. In Batala Coop. Sugar Mills Ltd. v. Sowaran Singh (2005) 8 SCC 481, (2005) 7 Supreme 165 it was held as follows:

    “13. So far as the question of onus regarding working for more than 240 days is concerned, as observed by this Court in Range Forest Officer v. S.T Hadimani (2002) 3 SCC 25 the onus is on the workman.”

    The position was also examined in detail in Surendranagar District Panchayat v. Dahyabhai Amarsinh (2005) 8 SCC 750, (2005) 7 Supreme 307 and the views expressed in Range Forest Officer (2002) 3 SCC 25, Siri Niwas (2004) 8 SCC 195 and M.P Electricity Board (2004) 8 SCC 246 cases were reiterated.

    8. In R.M Yellatti v. Asstt. Executive Engineer (2006) 1 SCC 106 the decisions referred to above were noted and it was held as follows:

    “17. Analysing the above decisions of this Court, it is clear that the provisions of the Evidence Act in terms do not apply to the proceedings under Section 10 of the Industrial Disputes Act. However, applying general principles and on reading the aforestated judgments, we find that this Court has repeatedly taken the view that the burden of proof is on the claimant to show that he had worked for 240 days in a given year. This burden is discharged only upon the workman stepping in the witness box. This burden is discharged upon the workman adducing cogent evidence, both oral and documentary. In cases of termination of services of daily-waged earners, there will be no letter of appointment or termination. There will also be no receipt or proof of payment. Thus in most cases, the workman (the claimant) can only call upon the employer to produce before the court the nominal muster roll for the given period, the letter of appointment or termination, if any, the wage register, the attendance register, etc. Drawing of adverse inference ultimately would depend thereafter on the facts of each case. The above decisions however make it clear that mere affidavits or self-serving statements made by the claimant workman will not suffice in the matter of discharge of the burden placed by law on the workman to prove that he had worked for 240 days in a given year. The above judgments further lay down that mere non-production of muster rolls per se without any plea of suppression by the claimant workman will not be the ground for the Tribunal to draw an adverse inference against the management. Lastly, the above judgments lay down the basic principle, namely, that the High Court under Article 226 of the Constitution will not interfere with the concurrent findings of fact recorded by the Labour Court unless they are perverse. This exercise will depend upon the facts of each case.”

    The above position was again reiterated in a recent judgment in ONGC Ltd. v. Shyamal Chandra Bhowmik (2006) 1 SCC 3373.

    9. So far as delay in seeking the reference is concerned, no formula of universal application can be laid down. It would depend on the facts of each individual case.

    10. However, certain observations made by this Court need to be noted. In Nedungadi Bank Ltd. v. K.P Madhavankutty (2000) 2 SCC 455 it was noted at para 6 as follows:

    “6. Law does not prescribe any time-limit for the appropriate Government to exercise its powers under Section 10 of the Act. It is not that this power can be exercised at any point of time and to revive matters which had since been settled. Power is to be exercised reasonably and in a rational manner. There appears to us to be no rational basis on which the Central Government has exercised powers in this case after a lapse of about seven years of the order dismissing the respondent from service. At the time reference was made no industrial dispute existed or could be even said to have been apprehended. A dispute which is stale could not be the subject-matter of reference under Section 10 of the Act. As to when a dispute can be said to be stale would depend on the facts and circumstances of each case. When the matter has become final, it appears to us to be rather incongruous that the reference be made under Section 10 of the Act in the circumstances like the present one. In fact it could be said that there was no dispute pending at the time when the reference in question was made. The only ground advanced by the respondent was that two other employees who were dismissed from service were reinstated. Under what circumstances they were dismissed and subsequently reinstated is nowhere mentioned. Demand raised by the respondent for raising an industrial dispute was ex facie bad and incompetent.”

    11. In S.M Nilajkar v. Telecom District Manager (2003) 4 SCC 27 the position was reiterated as follows (SCC at pp. 39-40, para 17):

    “17. It was submitted on behalf of the respondent that on account of delay in raising the dispute by the appellants the High Court was justified in denying relief to the appellants. We cannot agree. It is true, as held in Shalimar Works Ltd. v. Workmen (1960) 1 SCR 150, AIR 1959 SC 1217 that merely because the Industrial Disputes Act does not provide for a limitation for raising the dispute, it does not mean that the dispute can be raised at any time and without regard to the delay and reasons therefor. There is no limitation prescribed for reference of disputes to an Industrial Tribunal; even so it is only reasonable that the disputes should be referred as soon as possible after they have arisen and after conciliation proceedings have failed, particularly so when disputes relate to discharge of workmen wholesale. A delay of 4 years in raising the dispute after even re-employment of most of the old workmen was held to be fatal in Shalimar Works Ltd. v. Workmen (1960) 1 SCR 150, AIR 1959 SC 1217. In Nedungadi Bank Ltd. v. K.P Madhavankutty (2000) 2 SCC 455 a delay of 7 years was held to be fatal and disentitled the workmen to any relief. In Ratan Chandra Sammanta v. Union of India 1993 Supp (4) SCC 67, (1994) 26 ATC 228 it was held that a casual labourer retrenched by the employer deprives himself of remedy available in law by delay itself; lapse of time results in losing the remedy and the right as well. The delay would certainly be fatal if it has resulted in material evidence relevant to adjudication being lost and rendered not available. However, we do not think that the delay in the case at hand has been so culpable as to disentitle the appellants to any relief. Although the High Court has opined that there was a delay of 7 to 9 years in raising the dispute before the Tribunal but we find the High Court factually not correct. The employment of the appellants was terminated some time in 1985-86 or 1986-87. Pursuant to the judgment in Daily Rated Casual Labour v. Union of India (1988) 1 SCC 122, (1987) 5 ATC 228 the Department was formulating a scheme to accommodate casual labourers and the appellants were justified in awaiting the outcome thereof. On 16-1-1990 they were refused to be accommodated in the Scheme. On 28-12-1990 they initiated the proceedings under the Industrial Disputes Act followed by conciliation proceedings and then the dispute was referred to the Industrial Tribunal-cum-Labour Court. We do not think that the appellants deserve to be non-suited on the ground of delay.”

    The above position was highlighted recently in Sudamdih Colliery of Bharat Coking Coal Ltd. v. Workmen (2006) 2 SCC 329, (2006) 1 Supreme 282.

    12. Above being the position, the impugned judgment of the High Court is indefensible and is set aside.

    13. The appeal is allowed without any order as to costs. In case the respondent has been reinstated pursuant to the order of the Labour Court or the High Court, salary and other emoluments paid to him shall not be recovered.

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    Chief Engineer, Ranjit Sagar Dam And Another v. Sham Lal .
    (Jul 3, 2006)