REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.  19857-19858  OF 2017    (ARISING OUT OF SLP (C) Nos.11956-11957 of 2015)

District Development Officer  & Anr.       ...Appellant(s)

VERSUS

Satish Kantilal Amrelia       ….Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1) Leave granted.

2) These  appeals  are  filed  against  the  final

judgment  and  order  dated  01.12.2014  passed  by

the  High Court  of  Gujarat  at  Ahmedabad in Civil

Application  No.10519  of  2014  in  Letters  Patent

Appeal  No.1878 of  2006,  wherein  the  High Court

dismissed the   Letters  Patent  Appeal  filed  by  the

appellant herein in default and further declined to

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restore  the  appeal  when prayed by  the  appellant.

The  Letters  Patent  Appeal  arose  out  of  judgment

and  final  order  of  the  Single  Judge  dated

21.04.2006  in  Special  Civil  Application  No.8390

whereby  the  learned  Single  Judge  dismissed  the

writ petition filed by the appellant and affirmed the

Award dated 01.02.2006 passed by Labour Court,

Bhavnagar in Reference Case No.166 of 1992.  

3) The  controversy  involved  in  the  appeals  is

confined  to  short  facts,  which,  however,  need

mention hereinbelow to appreciate the same.  

4) The appellant is the Panchayat Department of

State of Gujarat having its office at Bhavnagar.  The

respondent - Satish Kantilal Amrelia worked in the

appellant's Revenue Department at Bhavnagar as a

Peon-cum-Driver on daily wages from 18.12.1989 to

31.05.1990 (5  months  15  days)  and then started

giving  his  services  again  as  daily  wager  in

appellant's  another  branch  (Small  Saving)  from

01.06.1990  to  12.02.1992  (1  year  9  months)  on

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daily  payment  of  Rs.27.55  (Rs.Twenty  Seven  and

Fifty Five Paisa).  The respondent's tenure was then

discontinued with effect from 12.02.1992 vide order

dated 23.03.1992 (Annexure P-4).

5) The  respondent  felt  aggrieved  of  his

termination  and  initiated  two  actions  against  the

appellant.   In  the  first  instance,  challenging  his

termination  order  dated  23.03.1992  from  the

services, the respondent filed  Civil Suit No.141 of

1992 in the Civil Court at Bhavnagar.  During the

pendency of the civil suit, he also approached to the

State (Labour Commissioner) and prayed for making

Industrial Reference to the concerned Labour Court

under Section 10 of Industrial Disputes Act, 1947

(hereinafter referred to as “the Act”) for deciding the

legality and propriety of his termination order.  

6) The Labour Commissioner made an Industrial

Reference No.166 of 1992 to the Labour Court No. 2

at  Bhavnagar  for  deciding  the  legality  and

correctness  of  the  termination  order  and  for

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regularization of respondent's services.

7) The 2nd Joint Civil Judge (SD), Bhavnagar, vide

judgment/decree  dated  03.05.1994  decreed  the

respondent’s  suit,  set  aside  the  termination order

and directed the appellant (State) to re-instate the

respondent  in  service  with  all  consequential

benefits.  

8) Against  the  judgment/decree  of  the  Trial

Court,  the  appellant  filed  first  appeal  being  Civil

Appeal  No.45/1994  before  the  Assistant  Judge,

Bhavnagar.   The  Appellate  Court,  by  order  dated

30.09.2003,  allowed  the  appellant's  appeal,  set

aside the judgment/decree of  the Trial  Court  and

dismissed the respondent's civil suit.  In substance,

the  Appellate  Court  upheld  the  respondent's

termination order.

9) The Labour  Court,  however,  by Award dated

01.02.2006 (Annexure P-9) answered the Reference

in respondent's favour.  Applying the provisions of

the  Act,  the  Labour  Court  held  that  since  the

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respondent was able to prove that he has worked for

240  days  continuously  in  one  previous  calendar

year, he was entitled to get the protection of the Act.

It was held that it was a case of illegal retrenchment

because  the  respondent  was  not  paid  any  prior

retrenchment  compensation  before  termination  of

his services.  The Labour Court also held that there

was violation of Section 25-G of the Act in passing

the  termination  order.   The  Labour  Court

accordingly  directed  the  appellant(State)  to

re-instate  the  respondent  in  service  along  with

payment of 40% back wages.

10) The appellant  (State)  felt  aggrieved,  filed writ

petition  (Special  Civil  Application  No.8390/2006)

before  the  High Court  of  Gujarat.  By  order  dated

21.04.2006,  the  Single  Judge  dismissed  the

appellant's writ petition and affirmed the Award of

the Labour Court.  The appellant then filed Letters

Patent Appeal before the Division Bench of the High

Court  but  it  was  dismissed  in  default.   The

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appellant  applied  for  restoration  of  the  Letters

Patent Appeal but it was dismissed and hence this

appeal by special leave was filed by the State before

this Court against the order of the Division Bench

as also against the order of  the Single Judge.

11) Heard Ms. Jesal Wahi, learned counsel for the

appellants  and  Mr.  Purvish  Jitendra  Malkan,

learned counsel for the respondent.  

12) Having  heard  the  learned  counsel  for  the

parties and on perusal of the record of the case, we

are inclined to allow the appeals in part and while

setting aside the impugned orders (Single Judge and

Division  Bench),  modify  the  Award  of  the  Labour

Court as indicated below.

13) Having gone through the entire record of the

case  and  further  keeping  in  view  the  nature  of

factual  controversy,  findings  of  the  Labour Court,

the  manner  in  which  the  respondent  fought  this

litigation on two fronts simultaneously, namely, one

in  Civil  Court  and  the  other  in  Labour  Court  in

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challenging  his  termination  order  and  seeking

regularization in service, which resulted in passing

the  two  conflicting  orders  -  one  in  respondent's

favour  (Labour  Court)  and  the  other  against  him

(Civil  Court)  and lastly,  it  being  an admitted  fact

that the respondent was a daily wager during his

short tenure, which lasted hardly two and half years

approximately  and  coupled  with  the  fact  that  25

years has since been passed from the date of  his

alleged termination, we  are  of  the  considered

opinion that the law laid down by this Court in the

case  of  Bharat  Sanchar  Nigam  Limited vs.

Bhurumal [(2014) 7 SCC 177] would aptly apply to

the  facts  of  this  case  and we  prefer  to  apply  the

same for disposal of these appeals.

14) It is apposite to reproduce what this Court has

held in the case of Bharat Sanchar Nigam Limited

(supra):

“33.  It  is  clear  from  the  reading  of  the aforesaid  judgments  that  the  ordinary principle of grant of reinstatement with full

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back wages, when the termination is found to be illegal  is  not applied mechanically in all cases.  While  that  may  be  a  position  where services of a regular/permanent workman are terminated illegally and/or mala fide and/or by  way  of  victimisation,  unfair  labour practice, etc. However, when it comes to the case  of  termination  of  a  daily-wage  worker and  where  the  termination  is  found  illegal because  of  a  procedural  defect,  namely,  in violation  of  Section  25-F  of  the  Industrial Disputes  Act,  this  Court  is  consistent  in taking  the  view  that  in  such  cases reinstatement  with  back  wages  is  not automatic  and instead the workman should be given monetary compensation which will meet  the  ends  of  justice.  Rationale  for shifting in this direction is obvious.

34.  The  reasons  for  denying  the  relief  of reinstatement in such cases are obvious. It is trite law that when the termination is found to  be  illegal  because  of  non-payment  of retrenchment  compensation  and notice  pay as mandatorily required under Section 25-F of  the  Industrial  Disputes  Act,  even  after reinstatement,  it  is  always  open  to  the management  to  terminate  the  services  of that  employee  by  paying  him  the retrenchment  compensation.  Since  such  a workman  was  working  on  daily-wage  basis and  even  after  he  is  reinstated,  he  has  no right  to  seek  regularisation  [see  State  of Karnataka v.  Umadevi (3)17].  Thus when he cannot  claim  regularisation  and  he  has  no right  to  continue  even  as  a  daily-wage worker,  no  useful  purpose  is  going  to  be served in reinstating such a workman and he can be given monetary compensation by the Court itself inasmuch as if he is terminated again after  reinstatement,  he would receive monetary compensation only in the form of retrenchment compensation and notice pay. In  such  a  situation,  giving  the  relief  of reinstatement,  that  too  after  a  long  gap, would not serve any purpose.

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“35. We would, however, like to add a caveat here. There may be cases where termination of a daily-wage worker is found to be illegal on  the  ground  that  it  was  resorted  to  as unfair labour practice or in violation of the principle  of  last  come  first  go  viz.  while retrenching such a worker daily wage juniors to him were  retained.  There  may also be  a situation  that  persons  junior  to  him  were regularised  under  some  policy  but  the workman  concerned  terminated.  In  such circumstances, the terminated worker should not be denied reinstatement unless there are some other weighty reasons for adopting the course  of  grant  of  compensation  instead of reinstatement. In such cases, reinstatement should  be  the  rule  and only  in  exceptional cases for the reasons stated to be in writing, such a relief can be denied.”

15) We have taken note of one fact here that the

Labour Court has also found that the termination is

bad due to violation of Section 25-G of the Act.  In

our opinion, taking note of overall factual scenario

emerging  from the  record of  the  case  and having

regard to the nature of  the findings rendered and

further  the  averments  made in the  SLP justifying

the need to pass the termination order,  this  case

does  not  fall  in  exceptional  cases  as  observed  by

this  Court  in  Para  35  of  Bharat  Sanchar  Nigam

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Limited case (supra) due to finding of Section 25-G

of the Act recorded against the appellant.  In other

words, there are reasons to take out the case from

exceptional cases contained in Para 35 because we

find that the appellant did not resort to any kind of

unfair practice while terminating the services of the

respondent.     

16) In view of  forgoing discussion,  we are of  the

considered view that it  would be just,  proper and

reasonable  to  award  lump  sum  monetary

compensation  to  the  respondent  in  full  and  final

satisfaction of his claim of re-instatement and other

consequential  benefits  by  taking  recourse  to  the

powers under Section 11-A of the Act and the law

laid down by this Court in Bharat Sanchar Nigam

Limited case (supra).

17) Having regard to the totality of the facts taken

note of supra, we consider it just and reasonable to

award a total sum of Rs.2,50,000/- (Rs.Two Lakhs

Fifty Thousand) to the respondent in lieu of his right

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to claim re-instatement and back wages in full and

final satisfaction of this dispute.  

18) Let the payment of Rs.2,50,000/- be made by

the appellant(State) to the respondent within three

months from the date  of  receipt  of  this  judgment

failing which the amount will carry interest at the

rate of 9% per annum payable from the date of this

judgment till payment to respondent.  

19) In  view  of  foregoing  discussion,  the  appeals

succeed  and  are  allowed  in  part.   The  impugned

order of the Division Bench and that of the Single

Judge are set aside.  The Award of the Labour Court

dated  01.02.2006  is  accordingly  modified  to  the

extent indicated above.

                                                            ………...................................J.

[R.K. AGRAWAL]           

                         …...……..................................J. [ABHAY MANOHAR SAPRE]

New Delhi; November 28, 2017

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