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  • Section 25-F of the Industrial Disputes Act, 1947
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  • Section 25-F of the Industrial Disputes Act, 1947
Smart Summary

Factual and Procedural Background

The appellants were daily-wage steno-typists, typists, machine operators and peons working in the Water and Land Management Institute (WALMI) under the Irrigation Department of the Government of Bihar. In 1990 they filed Writ Petition CWJC No. 8113 of 1990 in the Patna High Court, seeking regularisation and parity of wages with regularly appointed State employees performing similar duties. On 4 September 1992 the High Court disposed of that petition, directing the workers to submit a representation, to be decided within four months.

After the representation was filed, the Director/Chief Engineer of WALMI issued an order dated 5 November 1992 instructing Executive Engineers to terminate all daily-wage workers except certain land-losers. The appellants challenged this by filing Writ Petition CWJC No. 11702 of 1992. While the writ was pending, a clarificatory order dated 4 December 1992 reiterated that construction work at WALMI had ended, external funding had ceased, and regularisation was impossible. Accepting this justification, the Patna High Court dismissed the writ on 1 December 1992 (impugned order).

Subsequently, on 7 January 1993, WALMI issued a third order terminating all daily-wage labourers (including the appellants) with effect from 10 January 1993, purportedly in compliance with Section 25-F of the Industrial Disputes Act, 1947.

The appellants sought special leave to appeal. The Supreme Court granted leave and heard the matter, culminating in the present decision.

Legal Issues Presented

  1. Whether the termination of the appellants, justified by WALMI and the High Court on the ground that they were engaged solely for construction work that had ended, was lawful.
  2. Whether the appellants are entitled to reinstatement and back wages for the period between 5 November 1992 and 10 January 1993.

Arguments of the Parties

Appellants' Arguments

  • The claim that they were engaged exclusively for construction work is factually incorrect. An office order dated 5 August 1992 showed their postings with officers handling WALMI’s regular functions, evidencing engagement in routine institute work.
  • Because they were performing regular duties, their termination on the pretext of construction completion was arbitrary and illegal.
  • They had not been paid wages from 5 November 1992 to 10 January 1993, nor the statutory compensation and one month’s pay in lieu of notice mentioned in the 7 January 1993 order.

Respondents' Arguments

  • The appellants were hired for construction-related activities funded by USAID and the World Bank; with construction complete and funding discontinued, their services were no longer required.
  • Regularisation was impossible due to lack of ongoing work and financial resources.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court examined the office order dated 5 August 1992 and concluded that the appellants were in fact assigned to ongoing, non-construction functions of WALMI. Consequently, the very foundation for their termination—that they were only construction workers—was found to be erroneous.

Because the successive termination orders (5 November 1992, 4 December 1992 and 7 January 1993) relied on this incorrect premise, the Court held them legally unsustainable. The Court restored the appellants to the positions they held before those orders and directed payment of wages for 5 November 1992 to 10 January 1993.

Balancing institutional requirements, the Court permitted WALMI to reassess its staffing needs. Should daily-wage staff be found surplus, the institution may lawfully terminate excess personnel after proper assessment. Where regular vacancies exist, WALMI must initiate a regular selection process and consider the appellants without enforcing the usual age-limit disqualification. The appellants may continue as daily-wage employees until either regular selection occurs or surplus staff are removed.

Holding and Implications

Holding: The appeal is allowed. The termination orders dated 5-11-1992, 4-12-1992 and 7-01-1993 are set aside. The appellants shall be reinstated if they report for duty on or before 2-01-1995 and are entitled to wages for the period 5-11-1992 to 10-01-1993. The application for impleadment is rejected. No costs awarded.

Implications: The ruling directly reinstates the appellants and grants limited back wages. It authorises WALMI to conduct a staffing assessment and, if necessary, lawfully retrench surplus daily-wage workers or fill regular vacancies through a fair selection in which the appellants must be considered. The decision turns on fact-specific findings and does not announce a new legal precedent of general applicability.

    Anil Kumar Gupta And Others v. State Of Bihar And Others

    Order

    1. Special leave granted.

    2. We have heard counsel for the parties.

    3. This appeal is directed against the order dated 1-12-1992 passed by the Patna High Court dismissing the writ petition (CWJC No. 11702 of 1992) filed by the appellants.

    4. The appellants were employed as daily-wage employees in Water and Land Management Institute (for short ‘WALMI’) of the Irrigation Department of the Government of Bihar. They had been working on the posts of steno-typists, typists, machine operators and peons. The daily-wage employees, including the appellants, filed a writ petition (CWJC No. 8113 of 1990) in the Patna High Court seeking regularisation and equal wages and allowances on a par with the regularly appointed employees of the State Government performing the same or similar duties. The said writ petition was disposed of by the High Court by order dated 4-9-1992, with a direction that they may file a representation making out their grievances and that the authority concerned will consider the same in accordance with law. It was further directed that the said representation should be disposed of within a period of four months from the date of its filing. It appears that a representation was submitted by the daily-wage employees including the appellants. On 5-11-1992 an order was passed by the Director/Chief Engineer WALMI directing the Executive Engineers of the various zones to terminate the services of all the daily-wage workers except those whose land has been acquired for WALMI Complex by paying in advance pay for a month.

    5. Feeling aggrieved by the said order the appellants filed a writ petition giving rise to this appeal wherein the High Court, on 27-11-1992, while adjourning the matter to 11-12-1992, directed the Government Pleader to make a categorical statement as to whether the earlier direction of the Court was kept in mind by the authority concerned or not. Thereafter a fresh order dated 4-12-1992 was passed by the Director/Chief Engineer WALMI wherein, after stating that the order passed by the High Court in the earlier writ petition (CWJC No. 8113 of 1990) has been considered fully, it was recorded that while WALMI was under construction, financial aid was received from USAID and World Bank and that now the construction work of the Complex has ended and that financial aid received from USA also has been discontinued and that due to the completion of the construction work and full development of the Complex there was no more work in WALMI as such and it was impossible to regularise the appointments of daily-wage employees. On the basis of the said order the termination of the services of the appellants was justified before the High Court on the ground that since the appellants were employed for the purpose of construction work and since the construction work was over they could not be retained in employment. The High Court has accepted the said plea and has dismissed the writ petition of the appellants by the impugned order.

    6. Subsequent to the passing of the impugned order by the High Court a third order was passed on 7-1-1993 by the Director (CE) whereby the services of all the daily-wage labourers, including the appellants, were terminated in accordance with the provisions of Section 25-F of the Industrial Disputes Act, 1947 by giving 15 days' daily wages for each year of service and one month's wages in lieu of one month's prior notice. In the said order it was stated that the services of all the daily-wage labourers were being terminated from 10-1-1993 afternoon. This would show that the earlier order dated 5-11-1992 was superseded by order dated 7-1-1993 and the services of the appellants were terminated with effect from 10-1-1993.

    7. Shri L.R Singh, the learned counsel for the appellants, has urged that the justification for terminating the employment of the appellants which was put forward by the respondents before the High Court, namely, that the appellants were engaged for the purpose of construction work of the WALMI Complex is not correct. In order to show that the appellants were employed in connection with the regular work of WALMI, Shri L.R Singh has invited our attention to the office order dated 5-8-1992 which shows the posting of various employees and daily-wage workers employed in WALMI. On a perusal of the said order dated 5-8-1992 we find that the appellants were employed in connection with the regular work of WALMI and were posted with various officers such as Superintendent Engineer-cum-Professor (Engineering), Superintendent Engineer-cum-Professor (Agriculture) etc. This would show that the case put forward by the respondents to justify the termination of the employment of the appellants, namely, that they were engaged in connection with the construction work is not correct and that they were actually employed in connection with the regular work of WALMI. It must, therefore, be held that the services of the appellants have been wrongly terminated on the pretext that they were working on the construction side and since the construction work is over their services were no longer required.

    8. Shri Singh has also submitted that the appellants have not been permitted to work with WALMI ever since the passing of the order dated 5-11-1992 and in spite of the subsequent order dated 7-1-1993 they have not been paid their emoluments for the period 5-11-1992 to 10-1-1993 and that they have also not been paid the compensation as well as one month's pay in lieu of the notice indicated in the order dated 7-1-1993.

    9. Having regard to the aforesaid facts and the circumstances, we are of the view that the termination of the employment of the appellants on the basis of the orders dated 5-11-1992, 4-12-1992 and 7-1-1993 cannot be upheld and must be set aside. The appellants will be treated to be in employment on the same position which they were holding on the date of the passing of the said orders. They would also be entitled to their wages for the period from 5-11-1992 to 10-1-1993. We are not inclined to direct payment of wages for the period subsequent to 10-1-1993 till their reinstatement. The said period will, however, be counted as period of their service.

    10. It will be permissible for the respondents to make an assessment of the staff needs of WALMI and in case it is found that the number of employees working on daily-wage basis is in excess of the requirement for regular work in WALMI they can take necessary steps for terminating the services of the surplus staff including the appellants.

    11. The case of the appellants is that there are vacancies on regular posts against which they were working on daily-wage basis. If it is so the respondents should take steps to fill such regular vacancies by regular selection and the appellants, if they are found eligible, should be considered for such selection and their having crossed the age-limit should not come in their way for such consideration. The appellants may be allowed to continue on daily-wage basis till such regular selection is made or till steps are taken to remove the surplus staff after assessment of the staff needs of WALMI.

    12. The appellants be taken back if they report on duty on or before 2-1-1995.

    13. The appeal is allowed accordingly. The application for impleadment is rejected. No costs.

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    Anil Kumar Gupta And Others v. State Of Bihar And Others
    (Dec 15, 1994)