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       REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 10690-10691   OF 2014 (Arising out of S.L.P. (C) Nos. 36800-36801 of 2012)

Bhavnagar Municipal Corporation etc. …Appellants

Vs.

Jadeja Govubha Chhanubha & Anr. …Respondents

J U D G M E N T

T.S. THAKUR, J.

1. Leave granted.

2. These  appeals  arise  out  of  a  judgement  and  order  

dated 20th July, 2012 passed by the High Court of Gujarat at  

Ahmedabad whereby Letters Patent Appeal No.878 of 2012  

filed by the appellant-Corporation has been dismissed and  

the order passed by the learned Single Judge of that Court  

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partly modifying the award made in favour of the respondent  

affirmed.  

3. The  respondent,  it  appears,  was  employed  as  a  

Conductor  in  the  Transport  Department  of  the  appellant-

Corporation on daily-wage basis in October, 1987. He claims  

to have served in that capacity till 31st March, 1989 when his  

services were terminated.  Aggrieved by the termination, the  

respondent raised an industrial dispute before the Assistant  

Labour Commissioner,  Bhavnagar who tried to resolve the  

same  by  way  of  conciliation  but  since  the  conciliation  

proceedings also failed, Reference No.459 of 1990 was made  

to the Labour Commissioner at Bhavnagar for adjudication of  

the dispute between the parties. The Labour Court allowed  

the parties to adduce evidence in support of their respective  

versions  and  eventually  came  to  the  conclusion  that  the  

respondent  had  indeed  worked  as  a  Conductor  with  the  

appellant-Corporation  between  3rd October,  1987  and  31st  

March, 1989.  The Labour Court in the process rejected the  

appellant's case that the respondent had worked only for 58  

days as Badli Conductor and was not, therefore, entitled to  

protection  of  Section  25F  of  the  Industrial  Disputes  Act,  

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1947. The Labour Court placed reliance upon a Xerox copy of  

a certificate allegedly issued by an officer of the appellant-

Corporation certifying that the respondent had worked as a  

Conductor for the period mentioned above. The Labour Court  

drew an adverse inference against the appellant-Corporation  

for its omission to produce relevant record to prove that the  

respondent-workman had worked only for 58 days hence not  

entitled to the benefit  of  any retrenchment compensation.  

The Labour Court on that basis       held the termination of  

the  respondent  from  service  to  be  illegal  and  directed  

reinstatement with 65% back wages.  

4. Aggrieved by the award made by the Labour Court the  

appellant-Corporation  filed  Special  Civil  Application  

No.11508 of 2002 which was heard and partly allowed by a  

learned  Single  Judge  of  the  High  Court  of  Gujarat  at  

Ahmedabad by his  order  dated 24th April,  2012.  The High  

Court referred to the evidence adduced by the parties before  

the  Labour  Court  and  came  to  the  conclusion  that  the  

appellant-Corporation  had  not  been  able  to  prove  its  

assertion that the respondent had worked for 58 days only.  

The High Court held that the findings recorded by the Labour  

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Court to the effect that the respondent had worked between  

3rd October, 1987 and 31st March, 1989 were supported by  

sufficient evidence and material on record.  Having said so,  

the High Court opined that the award of back wages of 65%  

was  not  justified  as  the  Labour  Court  had  not  given  any  

cogent reasons while directing such back wages nor had the  

Labour  Court  examined  whether  the  respondent  was  

gainfully employed during the intervening period. The award  

to the extent it directed payment of 65% back wages was,  

therefore, held to be perverse by the learned Single Judge of  

the High Court which part was accordingly set aside and the  

writ petition partly allowed.  

5. Dissatisfied with the order passed by the Single Judge  

the appellant-Corporation filed Letters Patent Appeal No.878  

of  2012  which,  as  noticed  earlier,  was  dismissed  by  a  

Division Bench of the High Court by its order dated 20th July,  

2012. The Division Bench was of the view that the findings  

recorded  by  the  Labour  Court  did  not  suffer  from  any  

infirmity to call for any interference specially when the other  

employees of the appellant-Corporation appear to have been  

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absorbed by the Corporation upon closure of its Transport  

Department.  

6. On behalf  of  the appellant-Corporation it  was argued  

that the findings recorded by the Labour Court to the effect  

that the respondent had worked as a Conductor between 3rd  

October, 1987 and 31st March, 1989 was not supported by  

any evidence and was, therefore, perverse. It was contended  

that the solitary piece of evidence which the respondent had  

produced in support of his version was a Xerox copy of a  

certificate  allegedly  issued by  an  officer  of  the  appellant-

Corporation who was never summoned as a witness. Apart  

from  the  said  document  and  the  self-statement  of  the  

respondent  there  was  no  other  material  to  support  the  

findings that the respondent had indeed worked for 240 days  

as alleged by him before his termination. On the contrary, it  

was  proved  by  the  documents  placed  on  record  by  the  

appellant  that  the  respondent  was  a  Conductor  who  had  

worked for just about 58 days hence was not entitled to any  

protection under Section 25F of the Industrial Disputes Act,  

1947.  It was urged that the Labour Court had wrongly drawn  

an  adverse  inference  against  the  appellant-Corporation,  

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overlooking  the  settled  legal  position  that  the  burden  of  

proof  lay  on  the  workman  to  establish  that  he  was  in  

continuous  employment  for  a  period  of  240  days  to  be  

entitled  to  question  the  termination  of  his  employment  

without retrenchment compensation. The Single Judge of the  

High  Court  and  so  also  the  Division  Bench  failed  to  

appreciate the essence of the controversy and fell in error in  

upholding the award made by the Labour Court.   

7. On behalf of the respondent, it was contended that the  

findings recorded by the Labour Court do not suffer from any  

perversity  to  call  for  our  interference.  The  Single  Judge,  

according  to  the  learned  counsel,  has  examined  the  

evidence on record and clearly held that there was sufficient  

material  to  support  the  findings  that  the  respondent  had  

worked for more than 240 days and was, therefore, entitled  

to  the  protection  of  Section  25-F  and  that  since  no  

retrenchment compensation had been paid at  the time of  

the termination of his employment, the order of termination  

was illegal which entitled the respondent to reinstatement. It  

was also contended that although sufficient number of years  

had rolled back since the respondent last served with the  

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appellant-Corporation, yet the respondent was entitled to be  

reinstated  no  matter  the  Transport  Department  of  the  

appellant-Corporation  where  the  respondent  was  working  

had  been  wound  up.  The  fact  that  the  similarly  situated  

workmen in the department had been adjusted, according to  

the  learned  counsel,  was  a  sufficient  reason  for  the  

respondent  to  seek  reinstatement  with  or  without  back  

wages.  

8. It is fairly well-settled that for an order of termination of  

the services of a workman to be held illegal on account of  

non-payment of retrenchment compensation, it is essential  

for  the  workman  to  establish  that  he  was  in  continuous  

service of the employer within the meaning of Section 25B of  

the  Industrial  Disputes  Act,  1947.  For  the  respondent  to  

succeed in that attempt he was required to show that he was  

in service for 240 days in terms of Section 25B(2)(a)(ii). The  

burden to prove that he was in actual and continuous service  

of  the  employer  for  the  said  period  lay  squarely  on  the  

workman.  The  decisions  of  this  Court  in  Range  Forest  

Officer v. S.T. Hadimani (2002) 3 SCC 25,  Municipal  

Corporation,  Faridabad  v.  Siri  Niwas  (2004)  8  SCC  

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195,  M.P. Electricity Board v. Hariram (2004) 8 SCC  

246, Rajasthan State Ganganagar S. Mills Ltd. v. State   

of Rajasthan & Anr. (2004) 8 SCC 161, Surendra Nagar  

District Panchayat and Anr. v. Jethabhai Pitamberbhai   

(2005) 8 SCC 450, R.M. Yellatti v. Assistant Executive  

Engineer (2006) 1 SCC 106 unequivocally recognise the  

principle  that  the  burden to  prove that  the workman had  

worked  for  240  days  is  entirely  upon  him.  So  also  the  

question  whether  an  adverse  inference  could  be  drawn  

against the employer in case he did not produce the best  

evidence available with it,  has been the subject-matter  of  

pronouncements of this Court in  Municipal Corporation,  

Faridabad  v.  Siri  Niwas (supra)  and  M.P.  Electricity  

Board  v.  Hariram (supra),  reiterated  in  Manager,  

Reserve Bank of India, Bangalore v. S. Mani (2005) 5   

SCC  100.  This  Court  has  held  that  only  because  some  

documents have not been produced by the management, an  

adverse inference cannot be drawn against it.  

9. The  Labour  Court  has,  in  the  case  at  hand,  placed  

reliance upon a Xerox copy of a certificate allegedly issued  

by an officer  of  the appellant-Corporation stating that  the  

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respondent  was  in  the  employment  of  the  appellant-

Corporation as a Conductor between 3rd October, 1987 and  

31st March, 1989. While it is true that the Xerox copy may  

not be evidence by itself specially when the respondent had  

stated that the original was with him, but had chosen not to  

produce the same yet the fact remains that the document  

was allowed to be marked at the trial and signature of the  

officer  issuing  the  certificate  by  another  officer  who  was  

examined  by  the  appellant.  Strict  rules  of  evidence,  it  is  

fairly  well-settled,  are  not  applicable  to  the  proceedings  

before the Labour Court.  That being so the admission of the  

Xerox copy of the certificate, without any objection from the  

appellant-Corporation,  cannot  be  faulted  at  this  belated  

stage.  When  seen  in  the  light  of  the  assertion  of  the  

respondent, the certificate in question clearly supported the  

respondent's  case  that  he  was  in  the  employment  of  the  

appellant-Corporation for  the period mentioned above and  

had completed 240 days of continuous service. That being  

so,  non-payment  of  retrenchment  compensation  was  

sufficient to render the termination illegal. Inasmuch as the  

Labour Court declared that to be so it committed no mistake  

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nor was there any room for the High Court to interfere with  

the said finding especially when the findings could not be  

described as  perverse  or  without  any  evidence.  The High  

Court  was  also  justified  in  directing  deletion  of  the  back  

wages from the award made by the Labour Court against  

which deletion, the respondent did not agitate either before  

the Division Bench by filing an appeal or before us.  

10. The only question that remains to be examined in the  

above backdrop is whether reinstatement of the respondent  

as a Conductor is imperative at this late stage. We say so  

because the appellant claims to have worked for a period of  

just about 18 months that too nearly three decades ago. The  

respondent  today  may  be  past  fifty  if  not  more.  The  

Transport  Department  where  he  was  working  appears  to  

have been wound up and transport work out sourced. That  

apart, this Court has in a series of decisions held that the  

illegality  in  an  order  of  termination  on  account  of  non-

payment  of  retrenchment  compensation  does  not  

necessarily  result  in  the reinstatement  of  the workman in  

service.  This Court has, in cases where such termination is  

found  to  be  illegal,  directed  compensation  in  lieu  of  

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reinstatement. We may at this stage refer to some of those  

decisions:

11. In  Mahboob Deepak v. Nagar Panchayat Gajraula  

and Anr. (2008) 1 SCC 575, this Court held that since the  

appellant  had  worked  only  for  a  short  period,  interest  of  

justice would be sub-served if the direction for reinstatement  

was modified and compensatory payment of Rs.50,000/- in  

lieu  thereof  directed  to  be  substituted.   Similarly  in  Sita  

Ram  and  Ors.  v.  Moti  Lal  Nehru  Farmers  Training  

Institute (2008)  5  SCC  75,  this  Court  took  into  

consideration  the  period  during  which  the  services  were  

rendered  by  the  workman  and  instead  of  reinstatement  

directed  a  lump  sum  payment  of  Rs.1,00,000/-  in  lieu  

thereof.  

12. In  Ghaziabad Development Authority and Anr. v.   

Ashok Kumar  and Anr. (2008)  4  SCC 261, this  Court  

made  a  similar  order  as  is  evident  from  the  following  

passage:

“10.  We  are,  therefore,  of  the  opinion  that  the   appellant should be directed to pay compensation to  the first respondent instead and in place of the relief   of reinstatement in service. Keeping in view the fact   that the respondent worked for about six years as   

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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   respondent.”

                                           [emphasis supplied]

13. To the same effect is decision of this Court in  Jagbir  

Singh v. Haryana State Agriculture Marketing Board  

and Anr. (2009) 15 SCC 327 where this Court held that  

while awarding compensation in lieu of reinstatement host of  

factors should be kept in mind.  The Court said:

16.  While  awarding  compensation,  the  host  of   factors,  inter-alia,  manner  and  method  of   appointment,  nature  of  employment  and length  of   service  are  relevant.  Of  course,  each  case  will   depend upon its own facts and circumstances. In a   case such as this where the total length of service  rendered by the appellant was short and intermittent   from September 1, 1995 to July 18, 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 No. 1 shall meet the ends of justice.”

                                          [emphasis supplied]

14. Reference  may also  be  made to  the  decision  of  this  

Court  in  Senior  Superintendent  Telegraph  (Traffic)   

Bhopal v. Santosh Kumar Seal and Ors. (2010) 6 SCC  

773, where this Court referred to the previous decisions on  12

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the subject to declare that even when a retrenchment order  

passed  in  violation  of  Section  25(F)  may  be  set  aside,  

reinstatement  need  not  necessarily  follow  as  a  matter  of  

Court.  The following passage from the decision is apposite:

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 25F 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 permanent employee.”

     [emphasis supplied]

15. To  the  same  effect  is  the  decision  of  this  Court  in  

Incharge Officer and Anr. V. Shankar Shetty (2010) 9   

SCC 126, where this Court said:  

“5.  We think that  if  the  principles  stated in  Jagbir   Singh  and  the  decisions  of  this  Court  referred  to   therein are kept  in  mind,  it  will  be found that  the   High Court erred in granting relief of reinstatement   to the respondent. The respondent was engaged as   daily wager in 1978 and his engagement continued  for about 7 years intermittently upto September 6,   1985 i.e. about 25years back. In a case such as the  present  one,  it  appears  to  us  that  relief  of   reinstatement  cannot  be  justified  and  instead  monetary  compensation  would  meet  the  ends  of   justice. In our considered opinion, the compensation   

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of  Rs.  1,00,000/-  (Rupees  One  lac)  in  lieu  of   reinstatement  shall  be  appropriate,  just  and  equitable.”

[emphasis supplied]

16. The  case  at  hand,  in  our  opinion,  is  one  such  case  

where  reinstatement  must  give  way  to  award  of  

compensation.  We say so because looking to the totality of  

the circumstances, the reinstatement of the respondent in  

service  does  not  appear  to  be  an  acceptable  option.  

Monetary  compensation,  keeping  in  view  the  length  of  

service rendered by the respondent, the wages that he was  

receiving during that period which according to the evidence  

was around Rs.24.75 per day should sufficiently meet  the  

ends  of  justice.  Keeping  in  view  all  the  facts  and  

circumstances, we are of the view that award of a sum of  

Rs.2,50,000/- (Rupees Two Lacs Fifty Thousand only) should  

meet the ends of justice.

17. In the result, we allow these appeals but only in part  

and to the extent that the award made by the Labour Court  

and the orders of the High Court shall stand modified to the  

extent  that  the  respondent  shall  be  paid  monetary  

compensation  of  Rs.2,50,000/-  (Rupees  Two  Lacs  Fifty  

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Thousand only) in full and final settlement of his claim. The  

amount shall be paid by the appellant-Corporation within a  

period  of  two  months  from  today  failing  which  the  said  

amount shall start earning interest @ 12% p.a. from the date  

of this order till actual payment of the amount is made to the  

respondent.                          

……………………………..…….…..…J.  (T.S. THAKUR)

……………………………..…….…..…J. New Delhi;                       (R. BANUMATHI) December 3, 2014

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