REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 7 OF 2019 [Arising out of SLP (C) No. 17975 of 2014]

Management of the Barara Cooperative Marketing­cum­ Processing Society Ltd.  ... Appellant

Versus

Workman Pratap Singh … Respondent

J U D G M E N T

Abhay Manohar Sapre, J.

1. Leave granted.

2. This appeal is directed against the final

judgment and order dated 21.02.2014  passed by the

High Court of  Punjab & Haryana at Chandigarh in

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L.P.A. No. 317 of 2010 whereby the Division Bench of

the  High  Court dismissed the appeal filed by the

appellant herein and affirmed the judgment dated

26.11.2009 passed by the Single Judge of the High

Court in CWP No.15066 of 2006 by which the

respondent herein was ordered to be reinstated into

service with back wages.

3. Few relevant facts need mention hereinbelow to

appreciate the short controversy involved in this

appeal.

4. The appellant is the Co­operative Marketing

Society. The respondent was working with the

appellant as a Peon from 01.07.1973.  The appellant

terminated the services of the respondent on

01.07.1985.  The respondent, therefore, got the

reference made through the State to the Labour

Court to  decide the legality  and correctness  of  his

termination order.  

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5. By award dated 03.02.1988, the Labour Court

held the respondent's termination as bad in law and

accordingly awarded lump sum compensation of

Rs.12,500/­ to the respondent in lieu of

reinstatement in service.   

6. The appellant and respondent both were

aggrieved by the award and filed writ petitions before

the High Court to challenge the legality and

correctness of the award passed by the Labour Court.

The  High  Court,  however,  dismissed  both the  writ

petitions. The respondent then accepted the

compensation, which  was awarded by the Labour

Court.

7. In the year 1993, the respondent filed a

representation to the appellant praying therein that

since the appellant has recently regularized the

services of two peons on 01.01.1992 vide their

resolution dated 02.08.1993, therefore, he has

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become entitled to claim re­employment in the

appellant's services in terms of Section 25 (H) of the

Industrial Disputes Act, 1947 (hereinafter referred to

as “the ID Act”). The appellant, however, did not

accept the prayer made by the respondent.

8. This led to making of an industrial reference to

the Labour Court by the State at the instance of the

respondent for deciding the question as to whether

the respondent is entitled to claim re­employment in

the appellant's services in terms of Section 25 (H) of

the ID Act.  

9. The Labour Court answered the reference

against the respondent and in appellant's favour. In

other words, the Labour Court held that the

respondent was not entitled to claim any benefit of

Section 25 (H) of the ID Act to claim re­employment

in the appellant's services on the facts stated by the

respondent in his statement of claim.

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10. The respondent felt aggrieved and filed writ

petition in the High Court. The Single Judge by order

dated 26.11.2009 allowed the writ  petition and set

aside the award of the Labour Court.  The High Court

directed re­employment of the respondent on the post

of  Peon in the  appellant's services.  The  appellant­

employer felt  aggrieved and  filed  appeal  before the

Division Bench.  

11. By impugned order, the Division Bench

dismissed the  appeal  and  upheld the  order of the

Single  Judge,  which has  given rise to filing  of the

present appeal by way of special leave in this Court

by the employer­the appellant.

12. Heard Mr. Ajay Kumar, learned counsel for the

appellant and Mr.  Shish Pal Laler, learned counsel

for the respondent.

13. Having heard the learned counsel for the parties

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

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inclined to allow the appeal and while setting aside

the orders of the High Court (Single Judge and the

Division Bench) restore the award of the Labour

Court.

14. In our  considered opinion, there  was no case

made out by the respondent (workman) seeking re­

employment in the appellant's services on the basis

of Section 25 (H) of the ID Act.

15. In the first place, the respondent having

accepted the compensation awarded to him in lieu of

his right of reinstatement in service, the said issue

had finally come to an end; and Second, Section 25

(H) of the ID Act had no application to the case at

hand.

16. Section 25(H) of the ID Act applies to the cases

where employer has proposed to take into their

employment any persons to fill up the vacancies.   It

is at that time, the employer is required to give an

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opportunity to the  “retrenched workman”  and offer

him re­employment and if such retrenched workman

offers himself for re­employment, he shall have

preference over other persons, who have applied for

employment against the vacancy advertised.   

17. The object behind enacting Section 25(H) of the

ID Act is to give preference to retrenched employee

over other persons by offering them re­employment in

the services when the employer takes a decision to fill

up the new vacancies.

18. Section 25(H) of the ID Act is required to  be

implemented as per the procedure prescribed in Rule

78 of the Industrial Disputes  (Central)  Rules, 1957

(hereinafter referred to as “the ID Rules”) which, in

clear terms, provides that Section 25(H) of the ID Act

is applicable only when the employer decides to fill

up the vacancies in their set up by recruiting

persons.   It provides for issuance of notice to

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retrenched employee prescribed therein in that

behalf.

19. So, in order to attract the provisions of Section

25(H) of the ID Act,   it must be proved by the

workman that firstly, he was the “retrenched

employee” and secondly, his ex­employer has decided

to fill up the vacancies in their set up and, therefore,

he is entitled to claim preference over those persons,

who have applied against  such vacancies  for  a  job

while seeking re­employment in the services.

20. The case at hand is a case where the

respondent's termination was held illegal and, in

consequence thereof, he was awarded lump sum

compensation of Rs.12,500/­ in full and final

satisfaction.  It is not in dispute that the respondent

also accepted the compensation.  This was, therefore,

not a case of a retrenchment of the respondent from

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service as contemplated under Section 25(H) of the ID

Act.

21. That apart and more importantly, the

respondent was not entitled to invoke the provisions

of Section 25 (H) of the ID Act and seek re­

employment by citing the case of another employee

(Peon)  who was  already  in  employment  and whose

services were only regularized by the appellant on the

basis of his service record in terms of the Rules.

22. In our view, the regularization of an employee

already in service does not give any right to

retrenched employee so as to enable him to  invoke

Section 25 (H) of the ID Act for claiming re­

employment in the  services.  The reason  is that  by

such act the employer do not offer any fresh

employment to any person to fill any vacancy in their

set up but they simply regularize the services of an

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employee already in service.   Such act does not

amount to filling any vacancy.

23. In our view, there lies a distinction between the

expression ‘employment’ and ‘regularization of the

service”.   The expression ‘employment’ signifies a

fresh employment  to  fill the vacancies whereas the

expression ‘regularization of the service’ signifies that

the employee, who is already in service, his services

are regularized as per service regulations.   

24. In our view, the Labour Court  was, therefore,

justified in answering the reference in appellant's

favour and against the respondent by rightly holding

that Section 25(H) of the ID Act had no application to

the facts of this case whereas the High Court (Single

Judge and Division Bench) was not right in allowing

the respondent's prayer by directing the appellant to

give him re­employment on the post of Peon.  

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25. In view of the foregoing discussion, the appeal

succeeds and is accordingly allowed. Impugned order

is  set  aside and the award of the Labour Court is

restored.              

    ………………………………..J.      (ABHAY MANOHAR SAPRE)

          ..………………………………J.     (INDU MALHOTRA)

New Delhi, January 02,2019

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