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State Of Maharashtra And Another v. Sarva Shramik Sangh, Sangli And Others
Factual and Procedural Background
In 1973 the State of Maharashtra created the Irrigation Development Corporation to operate 25 lift-irrigation schemes established after the 1972 drought. Two hundred fifty-six workmen (mostly pump operators and chowkidars) were engaged on these schemes, many for nearly a decade. On 15-5-1985 the Executive Engineer, Irrigation Department, served notices terminating their services with effect from 30-6-1985, offering statutory compensation on the footing that the schemes were being transferred to Vasantdada Shetkari Sahakari Sakhar Karkhana, a sugar factory.
One hundred sixty-three workmen, represented by Sarva Shramik Sangh, first challenged the transfer in a writ petition which ultimately failed in the Supreme Court. They then sought adjudication under the Industrial Disputes Act, 1947 (ID Act). By an award dated 21-5-1992 the Labour Court, Sangli, held the retrenchment illegal for non-compliance with Section 25-F and granted only retrenchment compensation.
The workmen’s writ petition under Article 227 succeeded before a Single Judge of the Bombay High Court on 14-9-2004, who treated the schemes as a “factory”, applied Section 25-N, and ordered reinstatement with continuity of service and 25 % back wages. The State’s letters patent appeal was dismissed for non-maintainability on 12-9-2005.
The State appealed to the Supreme Court (Civil Appeal 2565/2006); the Union filed a cross-appeal seeking 100 % back wages (Civil Appeal 2566/2006). Pending appeal, operation of the High Court judgment was stayed subject to Section 17-B wages.
Legal Issues Presented
- Whether the termination of services consequent upon transfer of the 25 lift-irrigation schemes is governed by Section 25-FF of the ID Act (transfer of undertaking) or by Section 25-N / Section 25-F (retrenchment) of the Act.
- If Section 25-FF applies, what is the appropriate relief—mere statutory compensation or reinstatement/back wages?
- Whether parity with an earlier group of 10 similarly-situated workmen, whose reinstatement with 25 % back wages had attained finality, mandates analogous relief for the present 163 workmen.
Arguments of the Parties
Appellants’ Arguments (State of Maharashtra & Executive Engineer)
- The case involves a bona-fide transfer of an undertaking; hence Section 25-FF exclusively governs the consequences, limiting the workmen’s entitlement to retrenchment compensation calculated as per Section 25-F.
- Section 25-N (three-month notice/previous permission) is inapplicable because the employment ended automatically on transfer; reliance placed on Anakapalle Coop. Agricultural and Industrial Society Ltd. v. Workmen (AIR 1963 SC 1489) and Maruti Udyog Ltd. v. Ram Lal.
- The Single Judge erred in ignoring the pleaded defence of transfer and in granting reinstatement.
Respondents’ Arguments (Sarva Shramik Sangh & Workmen)
- The termination amounts to illegal retrenchment from an industrial establishment employing over 100 workmen; failure to give three-month notice and obtain prior permission violates Section 25-N, warranting reinstatement with back wages.
- Even on the State’s own case, Section 25-F was breached; reliance placed on Anoop Sharma v. Public Health Division (2010 5 SCC 497).
- Parity principle: ten other workmen from the same schemes obtained final relief of reinstatement with 25 % back wages; inconsistent treatment would offend the doctrine that courts should avoid contradictory outcomes (citing Warlu v. Gangotribai and Nirmal Jeet Singh Hoon v. Irtiza Hussain).
- The Irrigation Department is an “industry” under the still-binding ratio of Bangalore Water Supply v. A. Rajappa, notwithstanding a pending reference to a larger Bench.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Anakapalle Coop. Agricultural & Industrial Society Ltd. v. Workmen, AIR 1963 SC 1489 | On transfer of undertaking, employment ends and workmen are only entitled to compensation computed as if retrenched. | Formed the basis for holding that Section 25-FF, not Section 25-N, governed the present transfer. |
| Central Inland Water Transport Corp. Ltd. v. Workmen, (1974) 4 SCC 696 | Followed Anakapalle; compensation is the sole relief on transfer. | Cited in Labour Court award to confine relief to compensation. |
| Workmen v. Karnataka Agro Proteins Ltd., 1992 1 LLJ 712 (Kant.) | Applied Sections 25-F and 25-FF in transfer situations. | Relied on by Labour Court to deny reinstatement. |
| Maruti Udyog Ltd. v. Ram Lal, (2005) 2 SCC 638 | Reiterated Anakapalle principles on Section 25-FF. | Invoked by appellants to support compensation-only relief. |
| Hariprasad case, AIR 1957 SC 121 | Termination on closure/transfer is not “retrenchment” under Section 2(oo). | Quoted in Anakapalle passage reproduced by the Court. |
| Bangalore Water Supply & Sewerage Board v. A. Rajappa, (1978) 2 SCC 213 | Broad definition of “industry”. | Accepted as binding for present purposes despite pending reconsideration. |
| State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1 | Reference to larger Bench on definition of “industry”. | Mentioned to note pending reconsideration but not followed. |
| Anoop Sharma v. Public Health Division, (2010) 5 SCC 497 | Illegality of retrenchment without compliance with statutory requirements justifies reinstatement. | Relied upon by respondents to defend High Court relief. |
| Warlu v. Gangotribai, 1995 Supp (1) SCC 37 | Court should avoid conflicting orders on identical subject-matter. | Used to argue for parity with earlier 10 workmen. |
| Nirmal Jeet Singh Hoon v. Irtiza Hussain, (2010) 14 SCC 564 | Prohibits contradictory orders in the same dispute. | Invoked to oppose differential relief. |
| State of Orissa v. Dandasi Sahu, (1988) 4 SCC 12 | Existing precedent continues to bind until overruled. | Supported application of Bangalore Water Supply ratio. |
| Worker’s Union v. Food Corporation of India, (1996) 9 SCC 439 | Article 142 power to grant equitable relief where prolonged delay caused hardship. | Guided moulding of relief in present judgment. |
| L. Parameswaran v. Chief Personal Officer, (2008) 3 SCC 649 | Article 142 used to protect benefits accrued over long service. | Cited to justify tailored relief without full reinstatement. |
Court's Reasoning and Analysis
The Supreme Court accepted that pumping water is a “manufacturing process”, bringing the schemes within the ID Act. Nevertheless, it found that the 25 schemes constituted a distinct unit whose ownership/management was transferred to the sugar factory. Relying heavily on Anakapalle, the Court concluded that Section 25-FF—not Section 25-N—governed the situation; therefore the workmen had no statutory right to reinstatement.
While recognising the legal position, the Court emphasised the State’s failure, as a welfare employer, to attempt absorption of the long-serving workmen either in other Irrigation Department activities or with the transferee employer. It also noted that ten comparable workmen had already obtained reinstatement with 25 % back wages, a result left undisturbed after dismissal of SLPs. To avoid inconsistent outcomes and in exercise of its powers under Article 142, the Court decided to mould relief so that the present 163 workmen receive benefits comparable in substance (though without actual reinstatement) to those earlier granted.
The Court therefore:
- Refused reinstatement given the long lapse of time and likely superannuation of most workmen.
- Granted continuity of service for calculating benefits.
- Awarded 25 % back wages (over and above Section 17-B wages already drawn) up to the date of superannuation, death, or the judgment, as applicable.
- Directed payment of consequential retirement benefits identical to those accorded to the earlier group of ten workmen.
- Ordered payments within three months and filing of a compliance report.
Holding and Implications
APPEALS DISPOSED OF WITH MODIFIED RELIEF.
The Supreme Court set aside the High Court’s direction of reinstatement but, utilising Article 142, awarded continuity of service, 25 % back wages and retirement benefits to all 163 workmen, categorised according to superannuation or death. No order of reinstatement was granted, and the Union’s cross-appeal for 100 % back wages was rejected.
Implications are confined to the parties: the State must compensate the workmen within three months and report compliance; the decision re-affirms that, while Section 25-FF limits statutory relief to compensation, equitable powers may be invoked to tailor remedies, especially to maintain parity among similarly situated employees. The judgment does not purport to lay down new precedent beyond its fact-specific exercise of Article 142.
H.L Gokhale, J.— 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 Sarva Shramik Sangh v. State of Maharashtra LPA No. 184 of 2005, as well as the judgment and order dated 14-9-2004 passed by a Single Judge of that High Court in Sarva Shramik Sangh v. State of Maharashtra (2004) 4 Mah LJ 1073, (2004) 6 Bom CR 706, 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 under the Industrial Disputes Act, 1947 (“the ID Act”, for short). The learned Single Judge had allowed the said writ petition, by the abovereferred order, and the Division Bench had left the said decision undisturbed.
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 Union representing the workmen concerned, and two of the workmen in the industrial establishment concerned 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 of Maharashtra Limited, sometime 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 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 Appellant 2 on 15-5-1985. The notice sought to terminate their services 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 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 No. 2376 of 1985, through the first respondent Trade Union, against the abovereferred Corporation and the appellants, 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 of the Corporation, but were employees of the State.
5. 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 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 petitioners are at liberty to seek appropriate legal remedy in the matter. The SLP is, therefore, disposed of accordingly.”
6. This led the workmen to seek reference of the industrial dispute under the ID Act. These references were numbered as Ref. ID Nos. 27 to 40, 42 to 70, 72 to 99 of 1997, 1 of 1988 to 35, 54, 63, 65, 72 to 92, 106 to 118 of 1988, 17 to 29 of 1989, 37, 38, 40 to 44 of 1989 covering 163 applicants.
7. In these 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 ID 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 Court Judge noted that the notices were issued on 25-6-1985, 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 25-N of the ID Act (which requires three 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 25-F of the ID Act, inasmuch as not even one month's notice had been given and hence the termination was illegal.
8. In the written statement filed by Appellant 2 before the Labour Court, it was stated in Para 3, that various schemes were carried out by the State Government at its own expense. In Para 4 it was contended that the workmen concerned were the employees of the Irrigation Department. In Para 14 thereof, it was stated that
“the termination is not by way of victimisation but as the irrigation scheme has been transferred to Shetkari Sahakari Sakhar Karkhana, Sangli, the employees are not entitled to retain in the services without any work”.
9. In the written statement there was no specific reference to Section 25-FF of the ID Act which deals with the transfer of undertakings. There was no reference to the said section in the judgment of the learned Judge either. We may however note that the learned Judge has noted this submission of the appellants in Para 8 of her order in the following words:
“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 Vasantdada Shetkari Sahakari Sakhar Karkhana Ltd., Sangli and on the 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….”
10. The learned Judge, however, noted that the workmen concerned were employed on a temporary basis. Having noted that, the learned Judge relied upon a judgment of the Karnataka High Court between Workmen v. Karnataka Agro Proteins Ltd. (1992) 1 LLJ 712 (Kant) on the application of Sections 25-F and 25-FF, 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 Coop. Agricultural and Industrial Society Ltd. v. Workmen AIR 1963 SC 1489 and also the subsequent judgment of this Court in Central Inland Water Transport Corpn. Ltd. v. Workmen (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 given the compensation in accordance with Section 25-F of the ID Act.
11. 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 25-F of the Industrial Disputes Act, 1947 after calculating their service period with the first party. The remaining claim stands rejected.
(iii) However, the first party is hereby directed to give preference to all those employees 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.
(v) The award be implemented within a month from the date of publication of this award.
(vi) No order as to costs.”
12. Being aggrieved by that judgment and order, the 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 wherein the workmen were employed, amounted to a “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 ID Act applied.
13. 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 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.
14. The learned Single Judge observed that the plea invoking Section 25-FF 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 25-N, and not merely Section 25-F of the ID Act. Section 25-N lays down the conditions precedent to retrenchment of workmen from industrial establishments wherein more than 100 workmen are employed, and sub-section (1)(a) thereof provides for three months' notice or pay in lieu thereof in the event of retrenchment. The learned Judge, 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% back wages to the workmen.
15. The operative part of the order of the learned Judge as contained in paras 11 to 14 of the judgment (2004) 4 Mah LJ 1073, (2004) 6 Bom CR 706 reads as follows: (Sarva Shramik Sangh case (2004) 4 Mah LJ 1073, (2004) 6 Bom CR 706, Mah LJ p. 1079)
“11. The award dated 21-5-1992 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% back wages. 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. Back wages 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% back wages till the date they secured employment within six months from today.
13. A few workmen have already reached the age of superannuation during the pendency of these proceedings. They shall be paid the back wages 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 up to the date of death of these workmen within three months from today.”
16. It is this order which was challenged in the letters patent appeal. The Division Bench, however, took the view that a letters patent appeal was not available against an order passed on the writ petition filed under Article 227 of the Constitution of India, and therefore dismissed LPA No. 184 of 2005 the said letters patent appeal. Being aggrieved by this order of the Division Bench LPA No. 184 of 2005 as well as of the learned Single Judge (2004) 4 Mah LJ 1073, (2004) 6 Bom CR 706, this appeal has been filed.
17. Leave was granted in this matter on 8-5-2006, and the operation of the impugned order (2004) 4 Mah LJ 1073, (2004) 6 Bom CR 706 was stayed subject to the compliance with the provisions of Section 17-B of the ID Act, 1947. The appeal has been pending since then, and a number of IAs have been filed by both the parties. When the appeal reached for final hearing, Ms Madhavi Divan, learned counsel appeared for the appellants, and Mr Vinay Navare, learned counsel appeared for the respondents.
Submissions on behalf of the appellants
18. The principal submission of Ms Madhavi Divan, learned counsel for the appellants is that this is a case of transfer of an undertaking. That was the very plea taken in para 14 of the written statement as noted above, and also reflected in the judgment of the Labour Court. The learned Single Judge of the High Court had clearly erred in ignoring this fact. Ms Divan submitted that in fact it was also the case of the respondents 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 Irrigation Department Corporation was not being transferred. Therefore, in her submission it is Section 25-FF which applies to the present case, and neither Section 25-N nor Section 25-F.
19. Besides, it was submitted, Section 25-F (sic Section 25-FF) would apply only as a measure of compensation that is to be provided for, and nothing more as laid down by a Constitution Bench of this Court in Anakapalle Society case AIR 1963 SC 1489. In that matter this Court has observed in para 16 as follows: (AIR p. 1495)
“16. The Solicitor General contends that the question in the present appeal has now to be determined not in the light of general principles of industrial adjudication, but by reference to the specific provisions of Section 25-FF 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 workmen engaged by the said undertaking comes to an end, and it provides for the payment of compensation to 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 Section 25-F, says the section, as if they had been retrenched. The last clause clearly brings out the fact that the termination of the services of the employees does not in law amount to retrenchment and that is consistent with the decision of this Court in Hariprasad case AIR 1957 SC 121, 1957 SCR 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 question whose services are terminated by the transfer of the undertaking should be entitled to compensation, and so, Section 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 Section 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, Section 25-FF makes a reference to Section 25-F for that limited purpose, and, therefore, in all cases to which Section 25-FF 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.”
This judgment in Anakapalle AIR 1963 SC 1489 has been consistently followed thereafter, including in a recent judgment of this Court in Maruti Udyog Ltd. v. Ram Lal (2005) 2 SCC 638.
Reply on behalf of the respondents
20. As far as the respondents are concerned, they have principally contended that Section 25-FF 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 Section 25-N. It is submitted that in view of Section 25-N(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 Section 25-N(1)(b) of the appropriate Government not having been sought, the retrenchment will have to be held illegal under sub-section (7) of Section 25-N. The learned Judge of the Labour Court had in any case held that it was a case of breach of Section 25-F, and the High Court had held that it was a case of breach of Section 25-N. Either of those findings justified the reinstatement with full back wages. Reliance was placed in this behalf on the judgment of this Court in Anoop Sharma v. Public Health Division (2010) 5 SCC 497.
21. However, more than that, the respondents have pointed out that another set of 10 workmen (Pandurang Vishnu Sandage and 9 others) working on the same lift irrigation schemes had subsequently filed separate references in the Labour Court bearing Ref. (IDA) 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% back wages. That judgment was challenged by the State of Maharashtra by filing Writ Petition No. 2729 of 1997. The said writ petition was dismissed WP (C) No. 2729 of 1997 by a Single Judge of the Bombay High Court, relying upon the decision in Sarva Shramik Sangh v. State of Maharashtra (2004) 4 Mah LJ 1073, (2004) 6 Bom CR 706 in the present matter. An appeal was filed by the appellants by preferring SLP (C) No. 773 of 2006. This Hon'ble Court dismissed SLP (C) No. 773 of 2006 the said SLP on the ground of delay. A review petition (Civil) bearing No. 379 of 2006 was filed. That was dismissed by the order passed on 26-9-2006 Review Petition No. 379 of 2006 in SLP (C) No. 773 of 2006. Thereafter a Curative Petition No. 164 of 2007 was filed. That also came to be dismissed on 21-2-2008 (2002) 4 SCC 388. Hence. It was, therefore, submitted that the appellants are bound by the decision in the aforesaid case of 10 workmen, and in any case this Court should not allow the present appeal as it will lead to a different result in the case of workmen who are similarly situated.
22. The respondents relied upon an order of this Court in Warlu v. Gangotribai 1995 Supp (1) SCC 37. It was a matter relating to the tenancy rights of the appellant, concerning the land spread over three survey numbers, which belonged to Respondent 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 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.
23. In support of the contention that the orders passed by this Court in the case of the other 10 workmen should be followed in the present case, reliance was placed on para 21 of a judgment in Nirmal Jeet Singh Hoon v. Irtiza Hussain (2010) 14 SCC 564. The judgment impugned in that matter directing eviction of the tenant had already been upheld in an earlier SLP, wherein the petitioner was also a party. Entertaining the second petition, on his behalf, would have amounted to reviewing the earlier order of this Court. This Court dismissed the petition by observing:
“21. … 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 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.
24. 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 (1978) 2 SCC 213. As against that, the counsel for the appellants pointed out that the judgment in Bangalore Water Supply (1978) 2 SCC 213 is pending for reconsideration before a larger Bench of this Court in view of the order passed by the Constitution Bench in State of U.P v. Jai Bir Singh (2005) 5 SCC 1.
25. The respondents, however, submitted that in the meanwhile the judgment in Bangalore Water Supply (1978) 2 SCC 213 will have to be followed until it 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 v. Dandasi Sahu (1988) 4 SCC 12. In that matter this Court has held that in the exercise of this Court's discretion 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
26. 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 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 the activity of the undertaking in which they were working, constituted a “factory” within the meaning of Section 2(m) of the said Act. Explanation (i) to Section 25-A of the ID Act, 1947, covers “factories” within the definition of an “industrial establishment”, and therefore Chapter V-A of the ID Act, 1947 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 the ID Act.
27. It is, however, contended on behalf of the appellant that 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 2(j) of the ID Act. As noted earlier, the reconsideration of the wide interpretation of the concept of “industry” in Bangalore Water Supply and Sewerage Board (1978) 2 SCC 213 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 Sahu (1988) 4 SCC 12, referred to above. The determination of the present pending industrial dispute cannot be kept undecided until the judgment of the larger Bench is received.
28. 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, and that this was not a case of retrenchment simpliciter. It was submitted that the 25 lift irrigation schemes by themselves constitute an undertaking. It may be that all the activities of the 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 held in Anakapalle Society case AIR 1963 SC 1489, in such a matter the only claim which the employees of the transferor concern can legitimately make, is a claim for compensation against the previous employer, since they are not being absorbed under the new employer.
29. 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 10 years. Section 25-FF contemplates compensation to be paid to the workmen 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 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.
30. In the instant case, the first appellant State Government, does not appear to have made any 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 Department has a very large number of activities, wherein these workmen could 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. 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.
31. It is also material to note that the Labour Court had directed the State Government to consider the absorption of these workmen. The respondents have placed it on record that in pursuance of a subsequent advertisement for employment in the 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 was pending in the Supreme Court. This attitude was not expected from a Welfare State.
32. In any case, having noted that another petition concerning 10 other workmen from the same lift irrigation schemes was dismissed, and SLP and curative petitions, therefrom, were also dismissed, a question arises for this 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 25-F as required by Section 25-FF.
33. 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 Vishnu Sandage and others were working on the same lift irrigation schemes. Those 10 workmen also got an award of reinstatement with 25% back wages. The writ petition of the appellants challenging that award was dismissed by the Bombay High Court, relying upon the judgment of the Single Judge in the present matter. 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% back wages and continuity in service 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% back wages, be now permitted to insist that when it comes to these 163 workmen, who are similarly situated, they be denied 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?
34. This Court has the authority to pass an 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 Worker's Union v. Food Corporation of India (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. This was because of long delay of about 6 years in determining their identity, in the proceeding before the Industrial Tribunal. Therefore, in view of the “human problem” involved in the matter, the Court laid down a procedure for identification of the workmen with a view to do complete justice, and also directed reinstatement with back wages @ 70% of the “normal earnings” of the workmen at piece rate, till their reinstatement. In L. Parameswaran v. Chief Personal Officer (2008) 3 SCC 649, the appellant had worked in an ex-cadre post for a very long time, and was reverted to his parent post, though not immediately when the policy decision to repatriate ex-cadre employees was taken. Working in the ex-cadre post for a long time did not confer any right to continue in that post or for pay protection. Considering, however, the long time spent in the ex-cadre post, this Court specifically invoked Article 142 to grant him protection of pay.
35. In the facts and circumstances of the present case also, 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 of 10 workmen. It will not be just and proper to restrict it to the rigours of the limited relief under Section 25-FF read with Section 25-F of the ID 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 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 Section 17-B of the ID Act, 1947, they will be entitled to 25% back wages and retirement benefits on a par with the other 10 workmen. Award of 25% back wages in their case will be adequate compensation.
36. Civil Appeal No. 2566 of 2006 has been filed by the abovereferred Trade Union, the respondent in Civil Appeal No. 2565 of 2006, against the same two judgments of the Single Judge (2004) 4 Mah LJ 1073, (2004) 6 Bom CR 706 and the Division Bench LPA No. 184 of 2005 of the Bombay High Court. The Union is aggrieved by the award of only 25% back wages to the workmen, and seeks an order of 100% back wages, contending that if the retrenchment is held to be bad in law, the back wages could not be restricted to anything less than 100% back wages. Mr Navare has appeared in support of this appeal, and Ms Divan has appeared to oppose the same. As can be seen from the narration of facts above, the Union is claiming reliefs for the present group of workmen on the basis of parity with the other group of 10 workmen viz. Pandurang Vishnu Sandage and others, and that submission has been accepted by us. Those workmen have been awarded only 25% back wages. That being so, the present group of workmen cannot be awarded back wages more than what have been awarded to the other 10 workmen. The claim for award of higher back wages cannot, therefore, be entertained.
37. In the circumstances, we dispose of the two appeals against the impugned judgment and order of the learned Single Judge of the Bombay High Court, dated 14-9-2004, in Sarva Shramik Sangh v. State of Maharashtra (2004) 4 Mah LJ 1073, (2004) 6 Bom CR 706, which is left undisturbed by the Division Bench, by passing the following order:
37.1 The 163 workmen concerned in the present matter, will be placed into three categories i.e (a) those who have already reached the age of superannuation; (b) those who are yet to reach the age of superannuation; and (c) those who have expired. They will be entitled to the reliefs in the following manner.
37.2 The benefits to the workmen in category (a) will be till the date of their superannuation, for category (b) till the date of this judgment, and for those in category (c) till the date of expiry of the workman concerned.
37.3 The workmen of all the three categories will be entitled to continuity of service until the date of superannuation, or until the date of this judgment, or until the date on which the workman concerned has expired, as the case maybe.
37.4 All the workmen will be entitled to 25% back wages over and above the last drawn wages that they have received under Section 17-B of the ID Act. The back wages shall be calculated until the date as mentioned in clause (iii) above.
37.5 All the workmen will be entitled to the same retirement benefits, if any (depending on their eligibility), as given to the other group of 10 workmen viz. Pandurang Vishnu Sandage and others.
37.6 All the aforesaid payments shall be made directly to the workmen concerned or their heirs, as the case maybe, within three months from the date of this judgment.
37.7 There shall not be any order of reinstatement.
37.8 The appellants will, thereafter, file a compliance report in the Labour Court at Sangli, with a copy thereof to the Registry of this Court.
37.9 Order accordingly.
37.10 Registry to send a copy of this judgment to the Labour Court, Sangli.
38. Both the appeals and all the IAs moved therein stand disposed of as above, with no order as to costs.
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