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AMICUS AI
Citation Codes
Neutral Citations
2007 INSC 194
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • U.P Forest Development Corporation Act
  • Articles 12, 14, and 16 of the Constitution of India
  • Order of the Division Bench dated 19-7-2004 passed in Regional Manager, U.P SRTC v. Kamal Kumar (no specific act/article title mentioned)
  • Section 6-N of the U.P Industrial Disputes Act, 1947
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Cites
Cited by
Citation Codes
Neutral Citations
2007 INSC 194
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • U.P Forest Development Corporation Act
  • Articles 12, 14, and 16 of the Constitution of India
  • Order of the Division Bench dated 19-7-2004 passed in Regional Manager, U.P SRTC v. Kamal Kumar (no specific act/article title mentioned)
  • Section 6-N of the U.P Industrial Disputes Act, 1947
Smart Summary

Factual and Procedural Background

The appellant, U.P. Forest Development Corporation (a statutory corporation and successor to the U.P. Forest Corporation), engages seasonal workers as the need arises. The respondent was engaged as a daily-wage worker from 1 August 1989 until his services were terminated on 24 November 1991. Claiming to have completed 240 days of continuous work in the year preceding termination, the respondent did not immediately challenge his dismissal. Approximately six years later, on 2 September 1996, he invoked conciliation proceedings. When conciliation failed, the State of Uttaranchal referred the dispute to the Labour Court, which on 28 April 2003 ordered reinstatement with 50 % back wages from 9 September 1997 for contravention of Section 6-N of the U.P. Industrial Disputes Act, 1947. The Corporation’s writ petition partially succeeded in the High Court, which reduced back wages to 25 %. The present appeal challenges that modified award.

Legal Issues Presented

  1. Whether reinstatement with back wages is an appropriate remedy where a daily-wager’s services were terminated and the industrial dispute was raised after a considerable delay.
  2. What relief—if any—should be granted in light of the respondent’s short tenure, delayed claim, and the evolving jurisprudence on irregular/temporary appointments.

Arguments of the Parties

Appellant’s Arguments

  • The respondent was only a seasonal daily-wager engaged on a temporary basis; therefore the orders of reinstatement and back wages are unsustainable.
  • The long delay of six years in raising the industrial dispute should disentitle the respondent to reinstatement.

Respondent’s Arguments

  • The facts of the case do not warrant interference with the Labour Court’s award as modified by the High Court.
  • Reliance was placed on the unreported order of this Court in Regional Manager, U.P. SRTC v. Kamal Kumar to support reinstatement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sudamdih Colliery of BCCL v. Workman, (2006) 2 SCC 329 There is no universal formula regarding delay in raising industrial disputes; each case depends on its own facts. Used to emphasise that relief is discretionary and fact-specific where reference is sought belatedly.
Haryana State Electronics Development Corpn. Ltd. v. Mamni, (2006) 9 SCC 434 Compensation may be awarded instead of reinstatement in cases of temporary employment and delay. Cited as an example supporting compensation in lieu of reinstatement.
North-Eastern Karnataka RTC v. Ashappa, (2006) 5 SCC 137 Similar authority favouring monetary compensation rather than reinstatement. Referred to illustrate consistent judicial approach.
U.P. State Road Transport Corpn. v. Man Singh, (2006) 7 SCC 752 Long delay and temporary status justify denying reinstatement and granting lump-sum compensation. Relied upon extensively to craft the present relief of compensation.
Gurmail Singh v. Principal, Govt. College of Education, (2000) 9 SCC 496 Back wages may be declined where the workman remained absent/delayed raising dispute. Cited (through Man Singh) to highlight discretionary nature of back-wage relief.
State of Rajasthan v. Ghyan Chand, (2006) 7 SCC 755 Compensation awarded instead of reinstatement in comparable circumstances. Referenced as part of a line of cases endorsing compensation.
State of M.P. v. Arjunlal Rajak, (2006) 2 SCC 711 Authority for granting monetary compensation in lieu of reinstatement. Listed to reinforce the compensatory approach.
Nagar Mahapalika (now Municipal Corpn.) v. State of U.P., (2006) 5 SCC 127 Further precedent granting compensation rather than reinstatement. Cited alongside similar cases to justify the chosen remedy.
Secy., State of Karnataka v. Umadevi (3), (2006) 4 SCC 1 The State must comply with Articles 14 and 16; irregular appointments cannot be regularised automatically. Relied upon to show that post-Umadevi, reinstatement/regularisation of daily-wagers must be scrutinised stringently.
Regional Manager, U.P. SRTC v. Kamal Kumar (unreported, 19-7-2004) Cited by respondent for reinstatement; Court clarified it is not authority for universal reinstatement. Distinguished on facts; not followed.

Court's Reasoning and Analysis

The Supreme Court accepted, arguendo, that the termination contravened Section 6-N of the U.P. Industrial Disputes Act. The pivotal question, however, was the nature of relief. The Court observed:

  • The respondent’s engagement was as a daily-wager and lasted only from August 1989 to November 1991.
  • The industrial dispute was raised six years after termination; such delay, though not barred by limitation, materially affects the appropriate relief.
  • Jurisprudence after Umadevi (3) recognises that reinstatement/regularisation of irregular appointees conflicts with constitutional requirements under Articles 14 and 16.
  • A line of recent Supreme Court decisions (Sudamdih Colliery, Mamni, Ashappa, Man Singh, etc.) favours awarding monetary compensation instead of reinstatement where the employment was temporary and the claim delayed.
  • The unreported decision in Kamal Kumar was distinguishable and did not mandate reinstatement in every case.

Balancing these factors, the Court concluded that reinstatement—even with reduced back wages—was disproportionate. Instead, a lump-sum monetary compensation would meet the ends of justice.

Holding and Implications

HELD: The appeal is allowed in part; the orders of the Labour Court and High Court are set aside to the extent of directing reinstatement and back wages. In their place, the respondent is awarded a lump-sum compensation of Rs 75,000. No order as to costs.

Implications: The decision reinforces the emerging judicial trend of substituting reinstatement with monetary compensation when (i) the worker was a temporary/daily-wage employee, (ii) there is substantial delay in raising the dispute, and (iii) constitutional principles against irregular appointments—post-Umadevi (3)—are implicated. The ruling affects only the parties, setting no new precedent but aligning with consistent Supreme Court practice in similar matters.

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    Uttaranchal Forest Development Corpn. v. M.C Joshi .

    S.B Sinha, J.— Leave granted.

    2. The appellant (Corporation) herein is a corporation incorporated under the U.P Forest Development Corporation Act. It is a successor of U.P Forest Corporation. It engages seasonal workers as and when any requirement arises therefor. The respondent was employed as a daily-wager by the Corporation on or about 1-8-1989. His services were terminated on 24-11-1991. He allegedly completed 240 days of continuous work in a period of twelve months preceding the order of termination. He did not raise any industrial dispute for a long time. He approached the Conciliation Officer on or about 2-9-1996 i.e after a period of about 6 years. Conciliation efforts between the parties having failed, a reference was made by the State of Uttaranchal for adjudication of the following dispute to the Labour Court:

    “Whether dispensation with the services of Shri Mohan Chand Joshi, son of Shri N.B Joshi, Field Assistant w.e.f 24-11-1991 by the employer is valid and/or legal? If not, what benefit/damages along with other benefits is the workman entitled to?”

    3. By reason of an award dated 28-4-2003, the Labour Court opining that the appellant herein contravened the provisions of Section 6-N of the U.P Industrial Disputes Act, 1947, directed the reinstatement of the respondent with 50% of back wages with effect from 9-9-1997. Aggrieved thereby and dissatisfied therewith, a writ petition was filed by the appellant herein which was allowed in part by reason of the impugned judgment reducing the back wages to 25%.

    4. Ms Rachana Srivastava, the learned counsel appearing on behalf of the appellant would submit that keeping in view the fact that the respondent was appointed as a daily-wager on a temporary basis and that too for seasonal work, the impugned judgment cannot be sustained.

    5. Ms Rachana Joshi Issar, the learned counsel appearing on behalf of the respondent, on the other hand, urged that it is a fit case where this Court, having regard to the fact situation obtaining in the case, should not interfere with the impugned judgment. Our attention in this behalf is drawn to an order of the Division Bench of this Court dated 19-7-2004 passed in Regional Manager, U.P SRTC v. Kamal Kumar.

    6. The fact that the respondent was appointed as a daily-wager is not in dispute. He had worked with the Corporation for a very short period namely from 1-8-1989 to 24-11-1991. As noticed hereinbefore, an industrial dispute was raised only on 2-9-1996.

    7. The Conciliation Officer purported to have condoned the delay. He could not do so. There is no dispute that the U.P Industrial Disputes Act does not provide for any period of limitation. But it is now well settled that the relief to which a workman would be entitled to in such a situation would depend upon the facts and circumstances of each case.

    8. We may notice that recently this Court in Sudamdih Colliery of Bharat Coking Coal Ltd. v. Workman (2006) 2 SCC 329, JT (2006) 1 SC 411 opined:

    “10. 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.”

    9. Although according to the learned counsel appearing on behalf of the appellant the Labour Court and the High Court committed an error in arriving at a finding that in terminating the services of the respondent, the provisions of Section 6-N of the U.P Industrial Disputes Act were contravened, we will proceed on the basis that the said finding is correct. The question, however, would be as to whether in a situation of this nature, relief of reinstatement in services should have been granted. It is now well settled by reason of a catena of decisions of this Court that the relief of reinstatement with full back wages would not be granted automatically only because it would be lawful to do so. For the said purpose, several factors are required to be taken into consideration, one of them being as to whether such an appointment had been made in terms of the statutory rules. Delay in raising an industrial dispute is also a relevant fact.

    10. In Haryana State Electronics Development Corpn. Ltd. v. Mamni (2006) 9 SCC 434, AIR 2006 SC 2427 this Court directed payment of compensation. Similar orders were passed in North-Eastern Karnataka Rt. Corpn. v. Ashappa (2006) 5 SCC 137 and U.P SRTC v. Man Singh (2006) 7 SCC 752.

    11. In Man Singh (2006) 7 SCC 752 it was held:

    “7. The respondent admittedly raised a dispute in 1986 i.e after a period of about 12 years. It may be true that in an appropriate case, as has been done by the Labour Court, delay in raising the dispute would have resulted in rejection of his claim for back wages for the period during which the workman remains absent as has been held by this Court in Gurmail Singh v. Principal, Govt. College of Education (2000) 9 SCC 496. But the discretionary relief, in our opinion, must be granted upon taking into consideration all attending circumstances. The appellant is a statutory corporation. Keeping in view the fact that the respondent was appointed on a temporary basis, it was unlikely that he remained unemployed for such a long time. In any event, it would be wholly unjust at this distance of time i.e after a period of more than 30 years, to direct reinstatement of the respondent in service. Unfortunately, the Labour Court or the High Court did not consider these aspects of the matter.
    8. Keeping in view the peculiar facts and circumstances of this case, we are of the opinion that instead and in place of the direction for reinstatement of the respondent together with back wages from 1986, interest of justice would be subserved if the appellant is directed to pay a sum of Rs 50,000 to him. Similar orders, we may place on record, have been passed by this Court in State of Rajasthan v. Ghyan Chand (2006) 7 SCC 755, State of M.P v. Arjunlal Rajak (2006) 2 SCC 711, Nagar Mahapalika (now Municipal Corpn.) v. State of U.P (2006) 5 SCC 127 and Haryana State Electronics Development Corpn. Ltd. v. Mamni (2006) 9 SCC 434, AIR 2006 SC 2427.”

    12. The unreported decision of this Court in Regional Manager, U.P SRTC v. Kamal Kumar whereupon, Ms Issar had placed strong reliance is not an authority for the proposition that in each and every case an order of reinstatement is required to be passed. The fact of the said matter is not known. Furthermore it was passed in a review petition. It appears that one of the questions which arose for consideration was whether services of a daily-wager should be regularised or not and in that situation, while directing that the workman concerned to be reinstated only as a daily-wager but the case of the workman for regularisation was directed to be considered in terms of a purported scheme existing in this behalf.

    13. The legal position has since undergone a change in the light of a Constitution Bench decision of this Court in Secy., State of Karnataka v. Umadevi (3) (2006) 4 SCC 1 wherein this Court held that “State” within the meaning of Article 12 of the Constitution of India is under a constitutional obligation to comply with the provisions contained in Articles 14 and 16 of the Constitution of India.

    14. We are, therefore, of the opinion that keeping in view the nature and period of services rendered by the respondent herein as also the period during which he had worked and the fact that he had raised an industrial dispute after six years, interest of justice would be met if the impugned judgments are substituted by an award of compensation for a sum of Rs 75,000 in favour of the respondent.

    15. We direct accordingly. This appeal is allowed to the aforementioned extent.

    16. In the facts and circumstances of the case, there shall, however, be no order as to costs.

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    Comments

    Uttaranchal Forest Development Corpn. v. M.C Joshi .
    (Feb 23, 2007)