WA nos.5569-70.2013 & conn.ID Act FINAL...

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IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 10th DAY OF JANUARY 2014

PRESENT

THE HON' BLE MR. D.H.WAGHELA, CHIEF JUSTICE

AND

THE HON' BLE MR. JUSTICE S.N. SATYANARAYANA

WA Nos.5569-5570/2013 & WA Nos.5654-77/2013

C/w

WA Nos.5678-5703/2013 (L-RES/L-TER)

WA Nos.5569-5570/2013 & WA Nos.5654-77/2013

BETWEEN 1. BANGALORE ELECTRICITY SUPPLY COMPANY LTD

CORPORATE OFFICE, K R CIRCLE,

BANGALORE-560001 REPRESENTED BY ITS CHIEF GENERAL MANAGER (EL.)

2. KARNATAKA POWER TRANSMISSION CORPORATION LIMITED CORPORATE OFFICE CAUVERY BHAVAN BANGALORE-560009 REPRESENTED BY ITS DIRECTOR (ADMN. & HR)

... COMMON APPELLANTS

(By Sri SRIRANGA S, SUMANA NAGANAND, ADVS. FOR JUST LAW) AND : 1. S.JYOTHI

D/O S SHIVALINGAIAH AGED ABOUT 35 YEARS C/O INDIAN EMPLOYEES UNION

RRRR

: 2 :

# 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010

2. R SRINIVASA S/O RAMAKRISHNAIAH AGED ABOUT 44 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010

3. H T PUTTACHAMMA

D/O THIMMAPPA AGED ABOUT 44 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010

4. SURESHA S S/O SADASHIVAIAH AGED ABOUT 37 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS,

3RD BLOCK, RAJAJINAGAR, BANGALORE-560010

5. C N SUMATHI D/O C NARASIMHEGOWDA AGED ABOUT 41 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010

6. R VENUGOPAL

S/O C RAJU AGED ABOUT 37 YEARS C/O INDIAN EMPLOYEES UNION # 502/40, 54TH CROSS, 3RD BLOCK, RAJAJINAGAR, BANGALORE-560010.

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7. D T ARUNA KUMARA

S/O D THIPPESWAMY

AGED ABOUT 38 YEARS

C/O INDIAN EMPLOYEES UNION

# 502/40, 54TH CROSS,

3RD BLOCK, RAJAJINAGAR,

BANGALORE-560010

8. N S SHIVAMAHADEVAIAH

S/O SIDDARAMAIAH

AGED ABOUT 42 YEARS


# 502/40, 54TH CROSS,


BANGALORE-560010

9. A MUNIRAJU

S/O D.ANNAIAPPA

AGED ABOUT 37 YEARS


# 502/40, 54TH CROSS,


BANGALORE-560010

10. P PRAKASH

S/O L J PUTTAIAH

AGED ABOUT 47 YEARS


# 502/40, 54TH CROSS,


BANGALORE-560010

11. M C RAJA RAMESH BABU

S/O M CHALAPATHY

AGED ABOUT 35 YEARS


# 502/40, 54TH CROSS,


BANGALORE-560010

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12. ANIL K BIRADAR

S/O KASHINATH

AGED ABOUT 33 YEARS


# 502/40, 54TH CROSS,


13. D. SUAJTHA PATIL

D/O DEVIDAS PATIL

AGED ABOUT 35 YEARS


# 502/40, 54TH CROSS,


... COMMON RESPONDENTS

(By Sri N G PHADKE, ADV.,)

THESE WRIT APPEALS ARE FILED U/S 4 OF THE

KARNATAKA HIGH COURT ACT PRAYING TO SET

ASIDE THE ORDER PASSED IN THE WRIT PETITION

3279-91/12 C/W 7359-60/12 & 9731-41/12 DATED

5/2/13.

WA Nos.5678-5703/2013

BETWEEN : 1. BANGALORE ELECTRICITY SUPPLY

COMPANY LTD., CORPORATE OFFICE K R CIRCLE, BANGALORE 560 001 REPRESENTED BY CHIEF GENERAL MANAGER (EL.)

2. KARNATAKA POWER TRANSMISSION

CORPORATION LIMITED CORPORATE OFFICE CAUVERY BHAVAN BANGALORE 560 009 REPRESENTED BY DIRECTOR (ADMIN & HR)

... COMMON APPELLANTS (By Sri SRIRANGA S, JUST LAW)

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AND :

1. S JYOTHI

D/O S SHIVALINGAIAH

AGED ABOUT 35 YEARS


# 502/40 54TH CROSS 3RD BLOCK

RAJAJINAGAR,

BANGALORE 560 010

2. R SRINIVASA

S/O RAMAKRISHNAIAH

AGED ABOUT 44 YEARS



RAJAJINAGAR,

BANGALORE 560 010

3. H T PUTTACHAMMA

D/O THIMMAPPA

AGED ABOUT 44 YEARS



RAJAJINAGAR,

BANGALORE 560 010

4. SURESHA S

S/O SADASHIVAIAH

AGED ABOUT 37 YEARS



RAJAJINAGAR, BANGALORE 560 010

5. C N SUMATHI

D/O C NARASIMHEGOWDA

AGED ABOUT 41 YEARS



RAJAJINAGAR, BANGALORE 560 010

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6. R VENUGOPAL

S/O C RAJU

AGED ABOUT 37 YEARS



RAJAJINAGAR,

BANGALORE 560 010

7. D T ARUNA KUMARA

S/O D THIPPESWAMY

AGED ABOUT 38 YEARS



RAJAJINAGAR,

BANGALORE 560 010

8. N S SHIVAMAHADEVAIAH

S/O SIDDARAMAIAH

AGED ABOUT 42 YEARS



RAJAJINAGAR,

BANGALORE 560 010

9. A MUNIRAJU

S/O ANNAIAPPA

AGED ABOUT 37 YEARS



RAJAJINAGAR,

BANGALORE 560 010

10. P PRAKASH

S/O L J PUTTAIAH

AGED ABOUT 47 YEARS



RAJAJINAGAR,

BANGALORE 560 010

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11. M C RAJA RAMESH BABU

S/O M CHALAPATHY

AGED ABOUT 35 YEARS



RAJAJINAGAR,

BANGALORE 560 010

12. ANIL K BIRADAR

S/O KASHINATH

AGED ABOUT 33 YEARS



RAJAJINAGAR,

BANGALORE 560 010

13. D. SUJATHA PATIL

D/O DEVIDAS PATIL

AGED ABOUT 35 YEARS


# 502/40 54TH CROSS, 3RD BLOCK

RAJAJINAGAR,

BANGALORE 560 010.

... COMMON RESPONDENTS (By Sri N G PHADKE, ADV.,) THESE WRIT APPEALS ARE FILED U/S 4 OF THE

KARNATAKA HIGH COURT ACT PRAYING TO SET

ASIDE THE ORDER PASSED IN THE WRIT PETITION

3279-91/12 C/W 7359-60/12 & 9731-41/12 DATED

24/4/13.

THESE APPEALS HAVING BEEN RESERVED,

COMING ON FOR PRONOUNCEMENT THIS DAY,

THIS DAY, CHIEF JUSTICE DELIVERED THE

FOLLOWING:

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C.A.V. JUDGMENT

1. These writ appeals under section 4 of the Karnataka

High Court Act, 1961 arise from three batches of

petitions which were directed against the common award

and order dated 19.8.2011 of the Industrial Tribunal,

Bangalore in Industrial Dispute No.145/2010. For the

sake of convenience, the appellants herein are

hereinafter described as ‘the employers’ or “BESCOM’’

and 13 workmen concerned are described as ‘the

workmen’. All the parties having been duly

represented, delay in filing of the appeals having been

condoned and learned Advocates appearing on either

side having requested for and agreed to hearing of the

appeals for final disposal, they are heard in extenso at

the admission stage.

2. The industrial dispute regarding termination of

service of the workmen by the employers from

01.03.2010 was referred to the Tribunal by the

Government, specifying the dispute to be as to whether

it was lawful for the management to terminate the

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services of the workmen, while the conciliation

proceedings were pending.

By the award dated 19.08.2011, impugned before

learned single Judge of this Court, the order as under

was made by the Industrial Tribunal.

“The Reference is disposed off with a

direction to the second party No.1/BESCOM

to provide future employment of the grade of

Assistants, whenever vacancy arises, in the

event the first party workmen applying for

the said post/vacancies in terms of the

Notification. This order shall be complied by

adhering to the reservation policy of the

Government of India and by relaxing age

restriction.

The seniority list of the first party

workmen shall be maintained while

providing them regular employment. The

date of their entry into service on ad hoc

basis shall be considered only for the

purpose of calculating terminal benefits.

They are not entitled for any back

wages.”

3. The challenge to above award and order of the

Tribunal by the employers as well as the workmen was

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resolved by the impugned order dated 05.02.2013 of

learned single Judge on the basis of a joint memo of

settlement dated 02.02.2013, which read as under:

“The respondents humbly submit that, in

the background of the orders of the Hon’ble

Industrial Tribunal, and the directions of

this Hon’ble Court to explore a compromise

before the ‘Lok Adalat’, we are positively

inclined to absorb the petitioners, in the

permanent cadre, but for the fact that the

existing rules do not provide for such

absorption.

However, if that difficultly is removed by

an order of this Court to absorb them

notwithstanding anything we are ready to

obey such orders readily as Assistant/Junior

Meter Reader irrespective of the petitioners

qualification without any consequential

benefits, and continuity of service in the

interest of justice.

The petitioners and respondents are

agreed to withdraw the cases”.

On the basis of the above memo, learned single Judge

directed that, as a one time measure, the workmen shall

be absorbed as Assistant/Junior Meter Reader without

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consequential benefits, continuity of service and back

wages within six weeks, without it being a precedent in

other cases.

4. The appellants-employers have now called into

question the above order of learned single Judge on the

plea that no mandamus could have been issued to

absorb the workmen in service in contravention of the

Regulations and in view of the law declared by the

Hon’ble Supreme Court in a series of decisions. It is

pleaded that, even if the parties have agreed upon the

terms of compromise, the Court could not have accepted

such terms and issued mandamus to perpetuate an

illegality. The appellants are also stated to have filed

applications (I.A. I & II of 2013) seeking recalling of the

impugned order dated 05.02.2013, but learned single

Judge was pleased to dismiss the applications on

24.04.2013. That Order dated 24.04.2013, holding that

the Chief General Manager of the BESCOM had signed

the joint memo with a bona fide intention to settle the

dispute and had not committed any illegality or

misconduct or violation of any Regulations of the

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BESCOM, is also challenged in the other set of writ

appeals [Nos.5678 to 5703/2013]. The main ground in

those appeals is that learned single Judge ignored the

affidavit of the Chief General Manager stating that he did

not place the matter before the Board of Directors, prior

to signing the joint memo and the signing was an

inadvertent mistake. It is contended that if officers of

the company were allowed to take decision or enter into

contract that binds the company without prior approval

of its Board of Directors, it will violate Section 291 of the

Companies Act, 1956 and would seriously affect the

functioning of the company.

5. After reference to decision of the Apex Court in

Secretary, State of Karnataka Vs. Umadevi [2006(3)

SCC 1], it is further contended for the appellants that

when a compromise goes against public policy,

prescription of a statute or a mandatory direction of the

Court, it would be ineffective and no mandamus or

direction could have been issued to perpetuate an

illegality. As against that, learned counsel appearing for

the workmen submitted that, as the workmen had

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signed the joint memo dated 02.02.2013 for settlement

and did not propose to renege on agreed terms, they

have not filed their appeals; but in case the appeals were

to be entertained by taking into consideration the other

contentions of the employers, the grounds taken by the

workmen in their original petitions may also be

considered and appropriate final orders may be made in

these appeals. Parties on both sides having agreed on

such course of action, the appeals are heard on all the

grounds agitated before this Court, as regards legality

and justifiability of the original orders of termination of

service and relief, if any, required to be granted to the

workmen concerned.

6. There is no dispute about the facts that the

appellant-BESCOM is a Government Company engaged

in distribution and supply of power in the designated

area within the State of Karnataka; and the respondent-

workmen were engaged on contract basis for working in

“Soujanya Counters” opened for better services to

consumers. Such employees were initially engaged in

service of the appellant during the first half of the year

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2003 after issuing notification in that regard, inviting

applications from eligible candidates. Even as the service

of such employees, including the respondent-workmen

was proposed to be terminated upon expiry of the period

of contract in the year 2004, the workmen approached

this Court by way of WP No.15333/2004 and

26044/2004 on 31.03.2004, with a prayer to absorb

them in service as permanent employees. This Court

issued an interim order to maintain status quo on

07.04.2004. Those petitions were disposed by order

dated 03.07.2009 with an order directing the appellant-

employer to consider representation of the workmen

regarding absorption in service. Pursuant to that order,

the appellant decided the representation by order dated

28.01.2010, rejecting the representation and

simultaneously terminating their services with effect

from 01.03.2010.

7. Therefore, the workmen raised an industrial dispute

before the Additional Labour Commissioner and

Conciliation Officer on 04.02.2010, demanding

engagement of the workmen in the running of Soujanya

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Counters. Their services were, however, dispensed with

on 01.03.2010. Thereafter, the work carried on in

Soujanya Counters was awarded to another institution

on contract basis and a tender-notice was also published

for award of the contract on 06.03.2010, pursuant to

which the contract was awarded to Golden Detective

Services for the period from 01.04.2010 to 28.02.2011.

The failure report of the conciliation proceeding was

submitted on 22.06.2010 and the Industrial Dispute in

the following terms was referred on 09.07.2010 to the

Industrial Tribunal for adjudication.

The agreed true translation of the terms of

reference of the industrial dispute read as under:

“ The managements of KPTCL, Corporate

Office, Cauvery Bhavan, Bangalore-9 and

Bangalore Electricity Supply Company,

Corporate Office, K.R.Circle, Bangalore-1

have, inspite of obtaining from S.Jyothi,

R.Srinivasa, H.T.Puttachamma, S.Suresh,

C.N.Sumathi, R.Venugopal, D.T.Arun

Kumar, N.S.Shivamahadevaiah, A.Muniraju,

P.Prakash, M.C.Raja Ramesh Babu, Anil

K.Biradar, Sujatha Patil, continuous service

without providing facilities applicable to

permanent employees during the pendency

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of conciliation proceedings, terminated them

from employment from 01.03.2010. Is this

lawful?

2. If it is not so, what relief are the workmen

entitled to?”

8. Upon the dispute in the above terms being referred

to the Industrial Tribunal, Bangalore, and being

registered therein as ID No.145/2010, the Tribunal

adjudicated on the basis of pleadings and evidence of the

parties and culled out the following three issues, besides

the main points of reference;

“1. Whether this reference is invalid by the

reason of the dispute relating to discharge,

termination or dismissal and the grant of

relief to such workmen having been referred

to this Industrial Tribunal, despite, such

subject being not included in III Schedule

which bestows jurisdiction on the Industrial

Tribunal?

2. Whether the Management of the

second party proves that non-existing

dispute has been referred to this Tribunal for

adjudication?

3. In addition to the points of dispute

whether the first party workmen are entitled

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to reliefs claimed for in the statement of

demands submitted before this Tribunal ? ”

9. The Tribunal has, in its award dated 19.08.2011

decided the above issue No.1 with the finding that the

reference had not become invalid only for the reason that

the nature of the dispute did not fall under any category

enumerated from Sl. Nos.1 to 10 of the III Schedule.

The second issue is also decided in the negative with the

opinion that the dispute took the character of an

industrial dispute and could not be thrown away only for

the reason that it was not espoused by a trade union.

The third issue was also decided in the negative on the

basis that the case of the workmen fell under the

exception clause (bb) of sub-section (oo) of section 2 of

the Industrial Disputes Act, 1947. Then, on

appreciation of the facts of the case, the Tribunal held

that there was no element of illegality in the action of the

employer, but granted the relief of direction to BESCOM

to provide future employment of the grade of Assistants

to the workmen whenever vacancy arises and the

workmen applies in terms of the notification notifying

the vacancies. The BESCOM was also directed to

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maintain seniority list of the workmen and the date of

their entry into service on ad hoc basis was directed to

be considered only for the purpose of calculating

terminal benefits. The award made in these terms was

called into question by parties on either side, and the

petitions in that regard were disposed by the order dated

05.02.2013, based on written consent terms dated

02.02.2013, and that order as well as the order dated

24.04.2013 dismissing the applications to recall that

order are impugned in these appeals.

10. The above backdrop of facts and the course of

litigation clearly indicate that, while the original terms of

reference were about legality of termination of service of

the workmen after continuous service and during

pendency of conciliation proceedings, the Tribunal

deviated from proper adjudication thereof and granted

relief which was meaningless and uncalled for, while

justifying and legalizing the termination of service in

issue. As seen earlier, although the original

appointments of the workmen were purely on contract

basis and for the purpose limited by the express terms of

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the contracts, the workmen had in fact continued in

service by series of successive back to back orders. The

total period of such service of each of the workmen

concerned, till 31.03.2004 was as under:

Sl.No.

Name of the Workman

Period of Service from

(upto 31.03.2004)

No. of Orders/ Contracts

Total Period of Service

(in Months/Days)

1 S.A.Jyothi

B.A.,

13.01.20

00

10 48 months, 13 days

2 R.Srinivasa

B.E.,

13.01.20

00

10 48 months, 13

days

3 H.T.Puttuchamma B.A.,

13.01.20

00

10 48 months, 13

days

4 S.Suresh

B.Com.,

13.01.20

00

10 48 months, 13

days

5 C.N.Sumathi 13.01.20

00

10 48 months 13

days

6 R.Venugopal B.Com.,

13.01.20

00

10 48 months, 13

days

7 D.T.Arun Kumar B.A.,

13.01.20

00

10 48 months, 13

days

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8 N.S.Shiva

Madaiah B.A.,

01.03.20

01

8 35 months 10

days

9 A. Muniraju

B.A.,

21.01.20

03

3 13 months, 10

days

10 P.Prakash

M.A.,

21.01.20

03

3 13 months, 10

days

11 M.C.Raja Ramesh Babu B.Com.,

20.05.20

02

5 29 months 22

days

12 Anil K.Biradar 12.06.20

02

5 28 months, 29

days

13 D.Sujatha

Patil

21.02.20

03

3 12 months 7

days

The above details are provided on a memo submitted by

BESCOM before this Court and the common format of

the contract, similarly provided by BESCOM, clearly

stipulated in Clause (5) of the contract as under:

“5. That the said candidate of the Soujanya

counter shall not have any claim or right for

continuation in the service or for

permanency or for any preference in the

KPTCL Service.”

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As seen earlier in paragraph 6 hereinabove, the

workman continued in the service of BESCOM from

01.04.2004 till the decision in W.P.Nos.15333/2004

and 26044/2004, and thereafter till 01.03.2010, under

the interim order to maintain status quo and without

any express contract stipulating the conditions of

service. It is not the case of any of the parties that

during the pendency of the aforesaid proceedings before

this Court and operation of the interim relief to

maintain status quo, any attempt was made either to

improve or change the conditions of service or to

terminate the services continued at the fixed salary of

Rs.3,000/- to Rs.3,500/- per month. Therefore it could

be inferred that the conditions of service and the status

of the workmen remained frozen for the period of last

six years of their service, which was otherwise

continued. The issue that necessarily arises for

deciding legality of the termination would be as to

whether the termination was ‘retrenchment’ and

whether the provisions of Section 25F of the Industrial

Disputes Act, 1947 (for short ‘the Act’) applied in the

above facts. The other major issue arising from the

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terms of reference itself was as to whether the

termination was legal during pendency of the

conciliation proceedings.

11. Although the Tribunal touched upon these issues

and alluded to the case law cited before it, it held in the

impugned award that it was not the case of termination

but of non-renewal of contract, and that the discharge

of the workmen pursuant to letter dated 28.01.2010

was anterior to the conciliation proceedings and hence

no illegality was committed. These conclusions have to

be examined on the touch-stone of relevant provisions

of the I.D. Act which may be quoted for easy reference

as under:

“Section 2. Definitions – In this Act, unless there is anything repugnant in the subject or context, - (g) “employer” means –

(i) in relation to any industry carried on

by or under the authority of any department of the Central Government or a State Government, the authority prescribed in this behalf, or where no authority is prescribed, the head of the department; (ii) in relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that authority;

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(j) “industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen; (ka) “Industrial establishment or undertaking” means an establishment or undertaking in which any industry is carried on:

Provided that where several activities are carried on in an establishment or undertaking and only one or some of such activities is or are an industry or industries, then, - (a) if any unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or units of such establishment or undertaking, such unit shall be

deemed to be a separate industrial establishment or undertaking;

(b) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the

purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be

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an industrial establishment or undertaking;

(oo) “retrenchment” means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include –

(a) voluntary retirement of the

workman; or

(b) retirement of the workman on

reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or

(bb) termination of the service of

the workman as a result of the non-renewal of the contract of

employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or

(c) termination of the service of a

workman on the ground of continued ill-health;

CHAPTER V A

LAY-OFF AND RETRENCHMENT 25A. Application of sections 25C to 25E.–

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(1) Sections 25C to 25E inclusive shall not apply to Industrial Establishments to which Chapter VB applies, or – a) to industrial establishments in which less than fifty workmen on an average per working day have been employed in the preceding calendar month; or

b) to industrial establishments which are of a seasonal character or in which work is performed only intermittently.

(2) ……. Explanation.- In this section and in sections 25C, 25D and 25E, “industrial establishment” means-

(i) a factory as defined in clause (m) of

section 2 of the Factories Act, 1948 (63 of 1948); or

(ii) a mine as defined in clause (j) of section 2 of the Mines Act, 1952 (35 of 1952); or

(iii) a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951).

25B. Definition of continuous service.–

For the purposes of this Chapter,-

(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or

an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;

(2) where a workman is not in continuous

service within the meaning of clause (1) for a

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period of one year or six months, he shall be deemed to be in continuous service under an employer-

(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-

(i) one hundred and ninety days in

the case of a workman employed below ground in a mine; and

(ii) two hundred and forty days, in any other case;

(b) for a period of six months, if the workman, during a period of six

calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-

(i) ninety-five days, in the case of a workman employed below ground in a mine; and

(ii) one hundred and twenty days, in any other case.

Explanation: For the purposes of clause (2), the number of days on which workman has

actually worked under an employer shall include the days on which-

(i) to (iv) ……………

25F. Conditions precedent to retrenchment of workmen

No workman employed in any industry who has been in continuous service for not less

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than one year under an employer shall be retrenched by that employer until-

(a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;

(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate government for such authority as may be specified by the appropriate government by notification in the Official Gazette.

25H. Re-employment of retrenched workmen.– Where any workman are retrenched, and the employer proposes to take into his employ any persons, he shall, in such

manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re-employment, and such retrenched workmen who offer themselves for re-employment shall have preference over other persons. 25J. Effect of Laws inconsistent with this Chapter.–

(1) The provisions of this Chapter shall have effect notwithstanding anything inconsistent

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therewith contained in any other law including standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946): Provided that where under the provisions of any other Act or rules, orders or notifications issued thereunder or under any standing orders or any award, contract of service or otherwise, a workman is entitled to benefits in respect of any matter which are more favourable to him than those to which he would be entitled under this Act,

the workman shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that he receives benefits in respect of other matters under this Act.

(2) For the removal of doubts, it is hereby declared that nothing contained in this Chapter shall be deemed to affect the provisions of any other law for the time being in force in any State in so far as that law provides for the settlement of industrial

disputes, but the rights and liabilities of employers and workmen in so far as they relate to lay-off and retrenchment shall be determined in accordance with the provisions of this Chapter.

CHAPTER V C

UNFAIR LABOUR PRACTICES

25T. Prohibition of unfair labor practice

No employer or workman or a trade union, whether registered under the Trade Unions Act, 1926 (16 of 1926), or not, shall commit any unfair labor practice.

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25U. Penalty for committing unfair labor practices

Any person who commits any unfair labor

practice shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees or with both.]

CHAPTER VI

PENALTIES

26 to 30A …..

31. Penalty for other offences.– (1) Any employer who contravenes the provisions of section 33 shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. (2) Whoever contravenes any of the provisions of this Act or any rule made

thereunder shall, if no other penalty is elsewhere provided by or under this Act for such contravention, be punishable with fine which may extend to one hundred rupees.

CHAPTER VII

MISCELLANEOUS

33. Conditions of service, etc., to remain unchanged under certain circumstances during pendency of proceedings

(1) During the pendency of any conciliation

proceeding before a conciliation officer or a Board or of any proceeding before an arbitrator or a Labor Court or Tribunal or National Tribunal in respect of an industrial dispute, no employer shall -

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(a) in regard to any matter connected

with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding; or

(b) for any misconduct connected with

the dispute, discharge or punish, whether by dismissal or otherwise, any workmen concerned in such dispute,

save with the express permission in writing of the authority before which the proceeding is pending;

(2) ……….

(3) ………..

(4) …………

(5) ………..

THE FIFTH SCHEDULE

UNFAIR LABOUR PRACTICES

I- On the part of employers and trade unions of employers

1 to 9. ……

10. To employ workmen as “badlis”, casuals

or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen.

11 to 16. …….

12. Before deciding upon applicability of the above

statutory provisions in the facts of the present case, it

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may be noted that the Tribunal has, in the impugned

Award relied upon a decision of this Court in Ms. S.

Pushpa and others Vs. Government of Karnataka and

others, 2004 (4) Kar. L.J. 594 for excluding the present

case from the definition of ‘retrenchment’ by virtue of

the provisions of Section 2 (oo) (bb). In the facts of that

case before the learned single Judge, it was found that

the workmen concerned were engaged to work for a

period of six months, on ad hoc and contract basis by

the same company i.e., BESCOM and the workmen had

worked on similar successive contracts from the year

1998 till the end of the year 2003. They had to be

discharged on computerization of the work which the

workmen were employed to do. The Tribunal found

that the workmen were not appointed against any

sanctioned or vacant posts and their appointments were

not regular for being de hors the Regulations, as

applicable. The Court further found that it was a case

of nothing but non-renewal of the contract of

employment. The material on record showed that there

existed no job and no vacancy on account of

computerization, and therefore, it was not possible for

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the Court to provide relief, as pleaded by the workmen.

The Court further found, on the basis of the material on

record, that the workmen were not working in a factory

and the place of their work could not be termed as ‘an

industrial establishment’, warranting compliance of

Section 25N of the Act. It was held that, if illegal

appointments were made or illegal entries were created,

such appointees could not be regularized by the Court,

and hence directions were issued only to draw a scheme

for giving to the workmen an opportunity of applying for

employment, as and when vacancy would arise in future.

It needs to be noted that in the judgment as

aforesaid, the argument that if the workmen were having

record of successive appointments on contract basis, it

amounted to unfair labour practice, was not addressed

or dealt with and the provisions of Section 25J, 25T and

25U were not noticed.

13. As seen earlier, in the facts of the present case the

workmen had put in continuous service under different

appointment orders or the contracts of service upto

31.03.2004 under the express stipulation that the

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workmen shall not have any claim or right for

continuation in the service and on that basis it was

contended, and accepted by the Tribunal, that it was a

case of non-extension or non-renewal of the contract of

service under a stipulation in that behalf. However for

the same period of service, it is argued for the workmen

that, such continuation in service under separate orders

and contracts of a fixed term amounted to an unfair

labour practice punishable under Section 25U, in view of

the intention, expressed in the stipulation itself, of

depriving the workmen of the status and privileges of

permanent workmen. Although in a given case such

argument may be accepted, but in the facts of the

present case, that issue was neither agitated nor

examined by the Tribunal, nor was there the opportunity

to agitate that issue before learned single Judge. It may

yet be observed that, in view of the scheme of the related

provisions of the Act viz., sections 2 (oo) (bb), 25F, 25J,

25T, 25U and the entry No.10 in the Fifth Schedule of

the Act, the stipulation in a contract of service to deprive

a person of his right to be permanent and successive

issuance of such orders or contracts may not be held to

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be legal on account of being an offence. However, in the

present case, it is a matter of fact on record that even

after 31.03.2004 the workmen had been continued in

service without issuing any fresh orders of appointment

or execution of any contract for the subsequent term.

Therefore, it is difficult to conclude that the stipulation

in respect of the term of contract continued to operate.

And even assuming for the sake of argument that the

employer continued to have the right to terminate the

contract of service at any time without notice, they never

even attempted to exercise that right by resolving to

terminate the service of the workmen or making an

application to the Court to modify the interim relief and

permit termination of service of the workmen. Therefore,

there is no reason to assume that the workmen

continued in service only on account of the order of

interim relief to maintain status quo, or that, even after

continuous service of six years subsequent to

01.04.2004, the last contract of service, which expired

on 31.03.2004 continued to operate and it was a case of

non-renewal of contract or expiry of such contract. The

conclusion of the Tribunal in that regard in its award is

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patently wrong and perverse. Accordingly, continuation

in service of the workmen during the six years preceding

the date of termination was continuous service as

envisaged in Section 25B of the Act and the provisions of

Section 25F of the Act were attracted at the time of

termination of service.

14. Chapter VA of the Act was amended by Act No.32

of 1976 with effect from 05.03.1976 with the effect that

the provisions of sections 25C to 25E shall not apply to

industrial establishments to which Chapter VB applies

and the phrase “industrial establishment” is defined for

that purpose. The result is that, in any case the

provisions of sections 25F to 25J continue to apply to all

the industrial establishments or undertakings as defined

in Section 2(ka). The provisions of Section 25F are titled

as ‘Conditions precedent to retrenchment of workmen’,

indicating that, without compliance with those

conditions, there can be no termination of service for any

reason whatsoever, in the eye of law. The exceptions

carved out from the definition of ‘retrenchment’ in

Section 2 (oo) have to be strictly interpreted for being

exceptions to the general rule and the wider definition of

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‘retrenchment’. As seen earlier, the termination of

service in the facts of the present case being not covered

by the exception clause prescribed in Section 2 (oo) (bb),

in absence of any continuing contract with the specific

stipulation, it amounted to retrenchment, which could

not take effect unless and until the conditions contained

in Section 25F were complied with. In absence of even

an attempt to comply with those conditions or even a

plea in that regard, the termination of service in question

was outright illegal and non est. Consequently, the

workmen continued in service in the eye of law. The

provisions of Section 25J giving an over-riding effect to

the provisions of Chapter VA of the Act must be given its

full effect and hence the pleas that there was no post or

work for the workmen or that the workmen continued

only on account of an interim order of the Court cannot

be countenanced to defeat the provisions of Section 25F

and Section 25J of the Act. Similarly, the pleas that the

workmen were employed on specific jobs in Soujanya

counters and that the services in those counters were

decided to be outsourced could also not defeat the said

statutory and mandatory provisions of the Act. As held

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in Pramod Jha and Others Vs. State of Bihar [ (2003) 4

SCC 619 para 10] even payment or tender of

compensation after the time when the retrenchment has

taken effect would vitiate the retrenchment and non-

compliance with the mandatory provision which has a

beneficial purpose and a public policy behind it would

result in nullifying the retrenchment.

15. The other aspect touching on the legality of

termination, as distinguished from justifiability of the

termination relates, by the terms of reference itself, to

the termination of service during pendency of

conciliation proceedings. In the facts of the present

case, the termination of service was effected on

01.03.2010 by order dated 28.01.2010, rejecting the

representation of the workmen. According to the

provisions of Section 20 read with Rules 9 and 10 of the

Industrial Disputes (Karnataka) Rules, 1957, where the

Conciliation Officer received any information about an

existing or apprehended industrial dispute, which does

not relate to public utility service, and he considers it

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necessary to intervene in the dispute, he shall give

formal intimation in writing to the parties concerned,

declaring his intention to commence conciliation

proceedings with effect from such date as may be

specified. In the facts of the present case, the industrial

dispute was raised before the Conciliation Officer on

04.02.2010 and the notice for holding the conciliation

proceeding was issued to the employer on 23.02.2010,

holding the first meeting for conciliation on 26.02.2010.

Thus admittedly and in view of the express terms of

reference, as on 01.03.2010 the conciliation proceedings

were pending in respect of the service conditions of the

workmen and the termination of service during pendency

of such proceeding was in violation of the provisions of

Section 33 of the Act, and in fact it was an offence

punishable under Section 31 of the Act. For the purpose

of application of Section 33, the date of alteration of the

conditions of service, during the pendency of conciliation

proceedings, is material, and the date on which decision

to effect such alteration is irrelevant. As held in M/s.

North Brook Jute Co. Ltd., and Another Vs. Their

Workmen (AIR 1960 SC 879), the conditions of service

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do not stand changed, either when the proposal is made

or the notice is given but only when the change is

actually effected. Therefore, the reasoning and finding

of the Tribunal based on the date of decision dated

28.01.2010 and not the date of alteration of condition of

service which was 01.03.2010, was obviously incorrect

and illegal.

As held by the Bombay High Court in Dalanvalan

Imarat Bandhkam & Patbandhare Kamgar Union Vs.

The State of Maharashtra & Ors. [1993 (3) LLJ 744],

after reference to judgment of the Apex Court in the

Bhavnagar Municipality Vs. Alibhai Karimbhai &

others (AIR 1977 SC 1229), once the conclusion is

reached that there was breach of Sec.33(1)(a), it is only a

short hop therefrom to the conclusion that there is an

unfair labour practice within the meaning of Item 9 of

Schedule IV of the Act in view of the judgment of the

Supreme Court in S.G. Chemicals and Dyes Trading

Employee’s Union Vs. S.G. Chemicals and Dyes

Trading Ltd. & Anr. (1986 I CLR 360). Therefore, the

workmen were held to be entitled to the consequential

reliefs of reinstatement and back wages for the period of

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their unemployment. In Bhavnagar Municipality (supra),

daily rated workmen had raised an industrial dispute

and the subject matter of the dispute was connected

with the conversion of temporary workmen into

permanent workmen. During the pendency of that

dispute, the municipality had removed the concerned

workmen from service, and the Supreme Court opined

that such tampering with status quo ante of those

workers was a clear alteration of the conditions of their

service and the alteration was in regard to a matter

connected with the pending industrial dispute and thus

there was contravention of Section 33(1)(a) of the

Industrial Disputes Act. As held by the Constitution

Bench of the Apex Court in Jaipur Zila Sahakari

Bhoomi Vikas Bank Ltd. Vs. Ram Gopal Sharma and

others [ (2002) 2 SCC 244], in the context of Section

33(2)(b) of the Act, an order discharging the workmen

remains inchoate till an approval of the authority under

the said provision is granted. In other words, the

relationship comes to an end de jure only when the

authority grants approval. If approval is not given,

nothing more is required to be done by the employee, as

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it will have to be deemed that the order of discharge or

dismissal had never been passed. Consequently the

employee would be deemed to have continued in service

entitling him to all the benefits available. That being the

legal position, there would be no need of a separate or

specific order for his reinstatement. These observations

made in the context of the provisions of Section 33 (2)

(b), wherein ex post facto approval is required, may apply

with greater force in the cases falling under the

provisions of Section 33 (1) (a) and (b) of the Act, where

prior and express permission in writing of the authority

before which the proceedings are pending is prescribed.

Thus, the termination of service of the workmen was

illegal and non est on the second count as well.

16. In view of the clear finding and conclusion that

termination of services of the workmen was not only

illegal on two counts, but it was void and non est and

even amounted to punishable offences, the issue as to

whether the termination was justifiable, pales into

insignificance. Then the third issue which has to be

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addressed is as to what relief the workmen were entitled

to.

17. It was argued for the employer, on the basis of the

observations of the Apex Court in Incharge Officer and

another Vs. Shankar Shetty [ (2010) 9 SCC 126], that

relief by way of reinstatement with back wages is not

automatic and may be wholly inappropriate in a given

fact-situation even though the termination of an

employee is in contravention of the prescribed

procedure, and compensation instead of reinstatement

would meet the ends of justice in the given facts of the

case. Peculiar facts obtaining in the present case ought

to be considered for obviating further complications,

disputes and litigations. Learned counsel for BESCOM

also submitted that, since 2004, BESCOM was planning

and preparing for outsourcing the services rendered at

Soujanya Counters and, as a matter of policy, not to

expand its permanent set-up of workmen where the

workmen concerned herein could be posted and their

services could be regularized for permanent absorption.

On the other hand, it was argued for the workmen that

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after more than eight years of continuous service on

fixed wages and apparently exploitative conditions of

service, the workmen were entitled in equity and in law

to be absorbed on permanent basis, so as to be

employed on reasonable conditions of service at par with

the other regular employees of BESCOM. It was also

contended that the workmen were originally inducted

into service on the basis of their qualification and after

following the process of selection. Therefore, they

cannot be treated as back-door entrants with the stigma

of having entered into service in violation of Articles 14

and 16 of the Constitution or in violation of any specific

recruitment Rules.

18. Relying upon Kendriya Vidyalaya Sangathan and

Another Vs. S.C. Sharma [(2005) 2 SCC 363], it was

submitted that as far as the question of determining

entitlement of a person to back wages is concerned, the

employee has to show that he was not gainfully

employed; the initial burden is on him and if he placed

materials in that regard, the employer can bring on

record, the materials to rebut the claim. According to

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the three Judge Bench decision of the Apex Court in

General Manager, Haryana Roadways Vs. Rudhan

Singh [ (2005) 5 SCC 591], a host of factors like the

manner and method of selection and appointment, the

nature of appointment namely whether ad hoc, short

term, daily wage, temporary or permanent in character,

any special qualification required for the job and the like

should be weighed and balanced in taking a decision

regarding award of back wages. One of the important

factors, which has to be taken into consideration, is the

length of service, which the workman had rendered with

the employer. If the workman has rendered a

considerable period of service and his services are

wrongfully terminated, he may be awarded full or partial

back wages, keeping in view the fact that at his age and

with the qualification possessed by him, he may not be

in a position to get another employment. Another

important factor, which requires to be taken into

consideration is the nature of employment.

It is recently held in Deepali Gundu Survase Vs.

Kranti Junior Adhyapak Mahavidyalaya (2013 AIR

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SCW 5330), that the cases in which the competent Court

or Tribunal finds that the employer had acted in gross

violation of the statutory provisions and/or the

principles of natural justice or is guilty of victimizing the

employee or workman, then the concerned Court or

Tribunal will be fully justified in directing payment of full

back wages. The Courts must always keep in view that

in the cases of wrongful/illegal termination of service,

the wrongdoer is the employer and sufferer is the

employee/workman and there is no justification to give

premium to the employer of his wrong doings by

relieving him of the burden to pay to the

employee/workman his dues in the form of full back

wages.

19. Unfortunately, in the facts of the present case,

during the course of proceedings before the Tribunal and

the High Court, the parties have mixed the issue related

to the legality or otherwise of termination of service with

the issue related to absorption and placement of the

workmen in regular employment of BESCOM. Whereas,

adjudication of an industrial dispute has to be confined

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to the dispute referred to the Tribunal and the terms of

reference, and in the instant case, as the only dispute

referred for adjudication was regarding legality of

termination of service of the workmen, it was wholly

improper and impermissible to bring into consideration

extraneous pleas, leading the Tribunal and the Court to

grant reliefs which were not within the scope of

adjudication. The provisions of sub-section (4) of

Section 10 of the Act clearly provide that the tribunal

shall confine its adjudication to the points referred and

matters incidental thereto. Therefore, it is necessary to

confine the consideration of grant of relief to the

industrial dispute which was referred and which was

required to be legally adjudicated.

20. In view of the findings and conclusion recorded

hereinabove about the legality of the action of

termination of services of the workmen and the legal

consequences thereof, the workmen have to be held to

have continued in the service of BESCOM, in the

absence of a valid and effective order of termination.

Hence, in the absence of any evidence led by the

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BESCOM to disbelieve assertion of the workmen that

they remained unemployed after the admitted and illegal

termination of their service on 01.03.2010, an order of

their reinstatement with full back wages has to follow.

It has to be noted here that the demand and dispute

related to the conditions of service, absorption or parity

in service with the comparable employees who are in

regular employment of BESCOM was not part of the

terms of reference and hence, those claims could not be

adjudicated and no relief could be granted on that basis.

Thereafter, the issue of passage of time, non availability

of post and work for the workmen and policy of the

employer of not running the Soujanya Counters by the

staff employed by it, need to be considered for a just and

proper award of reliefs to the aggrieved parties. It is an

undisputed fact that BESCOM does not have regular

posts or even recruitment Rules for selection and

appointment of employees to be employed in the offices

which were opened as a part of Soujanya scheme.

Therefore, an order to reinstate the workmen on their

original posts or in the regular establishment of

BESCOM would be practically unworkable and may

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result into fresh order of termination and successive

rounds of litigation. It is trite and well-settled that the

primary purpose of industrial adjudication is to ensure

industrial peace by settling the dispute on a just and fair

basis, having regard to the prevailing conditions in the

industry, the statutory provisions and the Constitutional

ideology explicit and implied in the preamble of the

Constitution and the Directive Principles of State Policy.

21. In view of the facts, circumstances and

submissions narrated hereinabove and in order to do

complete justice and to bring the litigation to a quietus,

it is found to be necessary and in the interest of justice

to direct appellant-BESCOM to pay to the workmen

concerned full back wages at the rate last drawn by

them and also to pay to them all the terminal benefits

due as on the date of payment as if their services were

then being terminated afresh, in compliance with the

provisions of Section 25-F of the Industrial Dispute Act,

after continuous service from the date of their entry into

service till the date of payment. The workmen shall also

be entitled to any other statutory benefits such as

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gratuity or any other terminal benefits to which they may

be entitled under the Rules and Regulations of BESCOM

as may be applicable to the workmen, as on the date of

their termination of service now on payment of all such

compensation and benefits. It is clarified that unless

and until the amounts of terminal benefits as aforesaid

are paid to the workmen, they shall be deemed to be in

continuous service of BESCOM and back wages and

terminal benefits shall be calculated and paid

accordingly. Each of workmen shall also be paid by

BESCOM the sum of Rs.3,000/-, by way of costs. They

shall also be entitled to the statutory benefit accruing to

them under Section 25H of the I.D.Act.

All the appeals stand disposed of with the order in

the aforesaid terms, even as no argument on other

issues and contentions in the appeals are agitated or

pressed.

Sd/- CHIEF JUSTICE

Sd/- JUDGE

SNB/VR

WA nos.5569-70.2013 & conn.ID Act FINAL...

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