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REPORTABLE

IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION

CIVIL  APPEAL NO.        6795         OF 2013   (Arising out of SLP(C) No.11305 of 2006)

Assistant Engineer, Rajasthan State  Agriculture Marketing Board, Sub-Division, Kota … Appellant

   Versus  

Mohan Lal            …Respondent

JUDGMENT

R.M. LODHA, J.  

Leave granted.

2. The  consequent  relief  to  be  granted  to  the  workman  

whose termination is held to be illegal being in violation of Section  

25-F of the Industrial Disputes Act, 1947 (for short, “ID Act”) is the  

sole question for our decision in this appeal.   Were it  not for the  

argument strongly pressed by the learned counsel for the respondent  

that the delay in raising industrial dispute in the absence of any such  

objection  having  been raised  by  the  employer  before  the  Labour  

Court is no ground to mould the relief of reinstatement, we would not  

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have gone into the question which is already answered in a long line  

of cases of this Court.

3. Mohan Lal,  the workman, was engaged as “Mistri”  on  

muster  roll  by  the  appellant,  employer,  from  01.11.1984  to  

17.02.1986.  On 18.02.1986,   the services of the workman were  

terminated.  While  doing  so,  the  workman was  neither  given  one  

month’s  notice  nor  was  he paid  one month salary  in  lieu  of  that  

notice. He was also not paid retrenchment compensation.   

4. In  1992,  the  workman raised  industrial  dispute  which  

was referred by the appropriate  government to  the Labour Court,  

Kota (Rajasthan) for adjudication. The dispute referred to the Labour  

Court reads as under:  

“Whether 18.02.86 termination of labour Shri Mohan  Lal S/o Shri Dhanna Lal (Post-Mistri), who has been  represented  by  Regional  Secretary,  Hind  Mazdoor  Sabha, Kota Cantt., from  service by the Employer –  Assistant  Engineer,  Rajasthan  State  Agriculture  Marketing  Board,  Sub-Division  –  Kota  is  legal  and  justifiable? If not, then applicant – labour is entitled to  get what relief and compensation?”       

5. The Labour Court in its  award dated 03.02.1999 held  

that the workman had completed more than 240 days in a calendar  

year and his services were terminated in violation of Section 25-F of  

the ID  Act.  Having  held  that,  the Labour  Court  declared  that  the  

workman was entitled to be reinstated with continuity in  service and  

30% back wages.  2

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6. The employer was successful in challenging the above  

award before the Single Judge of the High Court. The Single Judge  

in  his  judgment  dated 23.08.2001 though agreed with the Labour  

Court  that  the  employer  had  terminated  workman’s  services  in  

violation of Section 25-F but he was of the view that the Labour Court  

was  not  justified  in  directing  the  reinstatement  of  the  workman  

because the workman had raised the industrial dispute after 6 years  

of his termination.   Relying upon the decision of this Court in Balbir  

Singh1,  the Single Judge substituted the order of reinstatement by  

the compensation which was quantified at Rs.5,000/-.  

7. The workman challenged the order of the learned Single  

Judge in an intra-court appeal.  The Division Bench of the High Court  

allowed the workman’s appeal  on 19.11.2005 by relying upon the  

decision of this Court in Ajaib Singh2.  The Division Bench restored  

the award passed by the Labour Court.  

8.  In Nagar Mahapalika3, it was held by this Court that non  

compliance with the provisions of Section 6-N of the U.P. Industrial  

Disputes  Act,  1947  (this  provision  is  broadly  pari  materia with  

Section 25-F), although, leads to the grant of a relief of reinstatement  

with  full  back  wages  and  continuity  of  service  in  favour  of  the  

workman, the same would not mean that such relief is to be granted  1 Balbir Singh v. Punjab Roadways; (2001) 1 SCC 133  2 Ajaib Singh v. Sirhind Cooperative Marketing-cum-Processing Service Society Limited and    

  Anr.; (1999) 6 SCC 82  3 Nagar Mahapalika v. State of U.P. and Ors.; (2006) 5 SCC 127

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automatically or as a matter of course.  It was emphasised that the  

Labour  Court  must  take  into  consideration  the  relevant  facts  for  

exercise of its discretion in granting the relief.   

9. The  same  Bench that  decided  Nagar  Mahapalika3 in  

Municipal  Council,  Sujanpur4, reiterated  the  above  legal  position.  

That was a case where the Labour Court had granted reinstatement  

in  service  with  full  back  wages  to  the  workman  as  statutory  

provisions were not followed. The award was not interfered with by  

the High Court.  However, this Court granted monetary compensation  

in lieu of reinstatement.   

10. In Mamni5 following Nagar Mahapalika3, this Court held  

that the reinstatement granted to the workman because there was  

violation of Section 25-F, was not justified and modified the order of  

reinstatement by directing that the workman shall  be compensated  

by  payment of  a sum of  Rs.25,000/-  instead of  the order of  the  

reinstatement.  

11. In  M.C.  Joshi6,  this  Court  was  concerned  with  the  

situation which was very similar to the present case. The workman in  

that case was employed as a daily wager by the Uttaranchal Forest  

Development  Corporation  on  01.08.1989.   His  services  were  

terminated  on  24.11.1991  in  contravention  of  the  provisions  of  

4 Municipal Council, Sujanpur v. Surinder Kumar; (2006) 5 SCC 173 5 Haryana State Electronics Development Corporation Ltd. v. Mamni; (2006) 9 SCC 434  6 Uttaranchal Forest Development Corporation v. M.C. Joshi; (2007) 9 SCC 353

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Section 6-N of the U.P. Industrial  Disputes Act. He had completed  

240 days of continuous work in a period of twelve months preceding  

the order of termination.  The workman approached the Conciliation  

Officer  on or  about  02.09.1996,  i.e.,  after  a  period  of  about  five  

years.  The Labour Court granted to the workman, M.C. Joshi, relief  

of reinstatement with 50% back wages.  In the writ petition filed by  

the Corporation, the direction of reinstatement was maintained but  

back wages were reduced from 50% to 25%.  This Court substituted  

the  award  of  reinstatement  by  compensation  for  a  sum  of  

Rs.75,000/-∗.    

12. In  Ashok  Kumar7,  this  Court  was  concerned with  the  

question as to whether the Labour Court was justified in awarding  

relief of reinstatement in favour of the workman who had worked as  

daily wager for two years. His termination was held to be violative of  

U.P. Industrial Disputes Act.  This Court held that the Labour Court  

should not have directed reinstatement of the workman in service  

and  substituted  the  order  of  reinstatement  by  awarding  

compensation of Rs.50,000/-*∗. ∗ Pg. 358; (2007) 9 SCC 353

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

7 Ghaziabad Development Authority and Anr. v. Ashok Kumar and Anr; (2008) 4 SCC 261 ∗∗Pg. 265; (2008) 4 SCC 261

“Keeping in  view the fact that  the respondent  worked for about six years as also the  amount of daily wages which he had been getting, we are of the opinion that the interest of  justice would be subserved if the appellant is directed to pay a sum of Rs.50,000/- to the first   

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13. In  Keshab Deb8,  the termination of  the workman who  

was a daily  wager,  was held illegal  on diverse grounds including  

violation of the provisions of Section 25-F.  This Court held that even  

in a case where order of termination was illegal, automatic direction  

for reinstatement with full  back wages was not contemplated.  The  

Court  substituted  the  order  of  reinstatement  by  an  award  of  

compensation of Rs.1,50,000/-***.   

14. In  Jagbir Singh9, the Court speaking through one of us  

(R.M.  Lodha,J)  in  a  case  where  the  workman  had  worked  from  

01.09.1995 to 18.07.1996 as a daily wager granted compensation of  

Rs.50,000/-  to  the  workman  in  lieu  of  reinstatement  with  back  

wages∗∗∗∗ .   respondent.   The said sum should be paid to the respondent  within  eight  weeks from date,   failing  which  the same shall  carry interest  at  the rate  of 12% per  annum.   The appeal  is   allowed to the aforesaid extent.  However, in the facts and circumstances of this case, there   shall be no order as to costs.”   

8 Telecom District Manager v. Keshab Deb ; (2008) 8 SCC 402 ∗∗∗ Pg. 412; (2008) 8 SCC 402

“27. Even if the provisions of Section 25-F of the Industrial Disputes Act had not been  complied  with,  the  respondent  was only entitled  to  be paid  a  just  compensation.  While,   however, determining the amount of compensation we must also take into consideration the  stand  taken  by the  appellants.  They  took  not  only  an  unreasonable  stand  but  raised  a   contention in regard to the absence of jurisdiction in the Tribunal. They admittedly did not  comply with the order  passed by the Tribunal  for a long time.  It  had raised a contention  which is not otherwise tenable.

28. We, therefore, are of the opinion that in the peculiar facts and circumstances of the   case  interest  of  justice  shall  be  subserved  if  the  respondent  is  directed  to  be  paid  a   compensation of Rs 1,50,000 (Rupees one lakh fifty thousand only). The said sum should be  paid to him within four weeks, failing which it will carry interest @ 9% per annum.”

9 Jagbir Singh v. Haryana State Agriculture Marketing Board; (2009) 15 SCC 327  ∗∗∗∗ Pg. 335; (2009) 15 SCC 327

“14. It would be, thus, seen that by a catena of decisions in recent time, this Court has   clearly laid down that an order of retrenchment passed in violation of Section 25-F although   may be set aside but an award of reinstatement should not, however, be automatically passed.  The  award  of  reinstatement  with  full  back  wages  in  a  case  where  the  workman  has   completed 240 days of work in a year preceding the date of termination, particularly, daily  wagers has not been found to be proper by this Court  and instead compensation has been  awarded. This Court has distinguished between a daily wager who does not hold a post and a   

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15. It is not necessary to refer to subsequent three decisions  

of this Court, namely, Laxmi Kant Gupta10, Man Singh11 and Santosh  

Kumar Seal12, where the view has been taken in line with the cases  

discussed above. As a matter of fact in  Santosh Kumar Seal12, this  

Court awarded compensation of  Rs.40,000/- to each of the workmen  

who were illegally retrenched as they were engaged as daily wagers  

about 25 years back and worked hardly for two or three years.  It was  

held that the relief of reinstatement cannot be said to be justified and  

instead granted monetary compensation.  

16. Recently  in  the  case  of  Gitam  Singh13,  this  Court  

speaking through one of us (R.M. Lodha,J) on consideration of the  

most  of  the  cases  cited  above  reiterated  the  principle  regarding  

exercise of judicial discretion by the Labour Court in a matter where  

the termination of the workman is held to be illegal being in violation  

of Section 25-F in these words : “The Labour Court has to keep in  

permanent employee. 15.  Therefore,  the  view of the  High  Court  that  the  Labour  Court  erred  in  granting   

reinstatement and back wages in the facts and circumstances of the present case cannot be  said  to  suffer  from any legal  flaw.  However,  in  our  view,  the  High  Court  erred  in  not   awarding compensation to the appellant while upsetting the award of reinstatement and back   wages.

18. In a case such as this where the total length of service rendered by the appellant was  short and intermittent from 1-9-1995 to 18-7-1996 and that he was engaged as a daily wager,  in our considered view, a compensation of Rs 50,000 to the appellant by Respondent 1 shall   meet the ends of justice. We order accordingly. Such payment should be made within  six   weeks from today failing which the same will carry interest @ 9% per annum.”

10 Uttar Pradesh State Electricity Board v. Laxmi Kant Gupta ; (2009) 16 SCC 562 11 Bharat Sanchar Nigam Limited v. Man Singh ; (2012) 1 SCC 558  12 Senior Superintendent Telegraph (Traffic), Bhopal v. Santosh Kumar Seal and Ors. ;   

   (2010) 6 SCC 773  13 Assistant Engineer, Rajasthan Development Corporation and Anr. v. Gitam Singh;  

   (2013) 5 SCC 136  7

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view  all   relevant  factors,  including  the  mode  and  manner  of  

appointment, nature of employment, length of service, the ground on  

which the termination has been set aside and the delay in raising the  

industrial dispute before grant of relief in an industrial dispute”.     

17. Mr.  Badri  Prasad  Singh,  learned  counsel  for  the  

workman,  however,  vehemently  contended,  which  was  also  the  

contention  of  the  workman  before  the  Division  Bench,  that  plea  

regarding  delay  was   not   raised  before  the  Labour  Court  and,  

therefore, the delay in raising the industrial dispute should not come  

in the way of  the workman in grant of  relief  of  reinstatement.  He  

relied upon Ajaib Singh2. In that case, the services of the workman,  

Ajaib Singh were terminated on 16.07.1974. Ajaib Singh issued the  

notice of demand on 18.12.1981.  No plea regarding delay was taken  

by the employer before the Labour Court. The Labour Court directed  

the  employer  to  reinstate  Ajaib  Singh with  full  back  wages.  The  

award was challenged before the High Court. The Single Judge held  

that Ajaib Singh was disentitled to relief of reinstatement as he slept  

over the matter  for  7 years and confronted the management at  a  

belated stage when it might have been difficult for the management  

to prove the guilt of the workman.  The judgment of the Single Judge  

was upheld  by  the Division  Bench.  The judgment  of  the Division  

Bench was challenged by the workman before this Court. The Court  

was persuaded  by the grievance of the workman that in the absence  8

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of any plea on behalf of the employer and any evidence regarding  

delay, the workman could not be deprived of the benefits under the  

I.D. Act merely on the technicalities of law.  However, the Court was  

of the opinion that on account of th admitted delay, the Labour Court  

ought to have appropriately moulded the relief by denying some part  

of the back wages.*****     

18. Ajaib Singh2, in our view, cannot be read as laying down an  

absolute proposition of law that where plea of delay is not raised by  

the  employer,  the  delay  in  raising  the  industrial  dispute  by  the  

workman  pales  into  insignificance  and  the  Labour  Court  will  be  

*****Pg. 91; (1999) 6 SCC 82 “11. In the instant case, the respondent management is not shown to have taken any plea   

regarding  delay as is evident from the issues framed by the Labour Court.   The only plea   raised in defence was that the Labour Court had no jurisdiction to adjudicate the reference  and the termination of the services of the workman was justified.  Had this plea been raised,   the workman would have been in a position to show the circumstances preventing him in   approaching the Court at an earlier stage or even to satisfy the Court that such a plea was not   sustainable after  the reference was made by the Government.   The learned  Judges of the  High Court,  therefore,  were not justified in  holding that  the workman  had not given any  explanation as to why the demand notice had been issued after a long period.  The findings   of facts  returned  by the  High  Court  in  writ  proceedings,  even  without  pleadings  were,   therefore, unjustified.  The High Court was also not justified in holding that the courts were  bound to render an even-handed justice by keeping balance between the two different parties.   Such  an  approach  totally ignores  the  aims and  object and  the  social  object sought  to be  achieved by the Act.  Even after noticing that “it is true that a fight between the workman   and the management is not a just fight between equals”, the Court was not justified to make  them  equals  while  returning  the  findings,  which  if  allowed  to  prevail,  would  result  in   frustration  of  the  purpose  of  the  enactment.   The  workman  appears  to  be  justified  in   complaining that in the absence of any plea on behalf of the management and any evidence,  regarding  delay,  he  cold  not  be  deprived  of  the  benefits  under  the  Act  merely  on  the  technicalities of law.  The High Court appears to have substituted its opinion for the opinion   of the Labour Court which was not permissible in proceedings under Articles 226/227 of the   Constitution.  

12.  We are, however, of the opinion that on account of the admitted delay, the Labour   Court  ought  to have appropriately moulded the relief by denying  the appellant  workman   some part  of the back wages.  In  the circumstances,  the appeal is allowed, the impugned  judgment is set aside by upholding the award of the Labour Court with the modification that   upon his  reinstatement  the appellant  would be entitled  to continuity of service,  but  back  wages to the extent of 60 per cent with effect from 8-12-1981 when he raised the demand for   justice  till  the  date  of award  of the  Labour  Court,  i.e.,  16-4-1986  and  full  back  wages  thereafter till his reinstatement would be payable to him.  The appellant is also held entitled  to the costs of litigation assessed at Rs.5,000 to be paid by the respondent management.”

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unjustified in taking this circumstance into consideration for moulding  

the relief.  On the contrary,  in  Ajaib Singh2,  the Court said that on  

account  of  admitted  delay,  the  Labour  Court  ought  to  have  

appropriately moulded the relief though this Court moulded the relief  

by denying the workman some part of the back wages.   

19. In  a  subsequent  decision  in  Balbir  Singh1,  this  Court  

observed  that  Ajaib  Singh2 was  confined  to  the  facts  and  

circumstances of that case. It is true that in Balbir Singh1, the plea of  

delay  was  raised  before  the  Industrial  Tribunal  but  we  would  

emphasize  the  passage  from  Balbir  Singh1  where  it  was  said:  

“Whether relief to the workman should be denied on the ground of  

delay or it should be appropriately moulded is at the discretion of the  

Tribunal depending on the facts and circumstances of the case.  No  

doubt the discretion is to be exercised judicially”.   

20. We are clearly  of the view that though Limitation Act,  

1963 is not applicable to the reference made under the I.D. Act but  

delay  in  raising  industrial  dispute  is  definitely  an  important  

circumstance which the Labour Court must keep in view at the time  

of exercise of discretion irrespective of whether or not such objection  

has been raised by the other side. The legal position laid down by  

this  Court  in  Gitam  Singh13 that  before  exercising  its  judicial  

discretion, the Labour Court has to keep in view all relevant factors  

including  the  mode  and  manner  of  appointment,  nature  of  10

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employment, length of service, the ground on which termination has  

been set aside and the delay in raising industrial dispute before grant  

of relief in an industrial dispute, must be invariably followed.

21. Now,  if  the  facts  of  the  present  case  are  seen,  the  

position  that  emerges  is  this:  the  workman  worked  as  a  work-

charged employee for a period from 01.11.1984 to 17.02.1986 (in all  

he worked for 286 days during his employment).  The services of the  

workman were terminated with effect from 18.02.1986. The workman  

raised the industrial dispute in 1992, i.e., after 6 years of termination.  

The Labour Court did not keep in view admitted delay of 6 years in  

raising the industrial dispute by the workman. The judicial discretion  

exercised by the Labour Court is,  thus, flawed and unsustainable.  

The Division Bench of the High Court was clearly in error in restoring  

the award of the Labour Court whereby reinstatement was granted to  

the  workman.  Though,  the  compensation  awarded  by  the  Single  

Judge  was  too  low  and needed  to  be  enhanced by  the  Division  

Bench but  surely  reinstatement  of  the  workman in  the  facts  and  

circumstances is not the appropriate relief.  

22. In our opinion, interest of justice will be subserved if in  

lieu of reinstatement, the compensation of Rs.1,00,000/- (one lac) is  

paid by the appellant (employer) to the respondent (workman). We  

order accordingly.  Such payment shall be made by the appellant to  

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the respondent within six weeks from today failing which the same  

will carry interest @ 9% per annum.   

23. The appeal is partly allowed to the above extent with no

order as to costs.  ………………………J. (R.M. Lodha)

………………………J. (Madan B. Lokur)

NEW DELHI AUGUST 16, 2013.

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