Patna High Court
General Manager,versusThe State of Bihar,
- Decided
- Disposal
- ALLOWED
Holding
The award is illegal and set aside because reinstatement and back wages cannot be granted for a closed establishment and the Labour Court exceeded its jurisdiction.
Summary
The General Manager of Barauni Thermal Power Station filed a writ petition challenging an award dated 27 June 2018 passed by the Begusarai Labour Court that reinstated two workmen, Bibhu Shankar Sharma and Mahendra Mallick, with back wages, despite the college where they were employed having been closed. The High Court examined whether the award qualified as a valid award under Section 2(b) of the Industrial Disputes Act and held that the Labour Court had failed to make a final determination on the relief issue, rendering the award invalid. It further ruled that reinstatement and payment of back wages are legally impossible when the establishment has ceased to exist, and that directing appointment in another unit exceeded the Labour Court’s jurisdiction. Consequently, the award was quashed. The writ petition was allowed, and the matter was disposed of.
Issues considered
- Whether the award passed by the Labour Court constitutes a valid award under the Industrial Disputes Act.
- Whether reinstatement can be ordered when the establishment has been closed.
- Whether back wages can be awarded for a closed establishment.
- Whether the Labour Court exceeded its jurisdiction by directing appointment in another establishment.
- Whether termination on closure amounts to retrenchment under Section 2(oo) and the applicability of Section 25-F.
Legislation cited
- Industrial Disputes Act, 1947 — s. 10, 25-F, 2(b), 2(oo)
Subjects
- industrial dispute
- award
- reinstatement
- closed establishment
- back wages
- Labour Court jurisdiction
- Section 25-F
- retrenchment
- Article 226
- writ petition
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.20943 of 2019
======================================================
General Manager, Barauni Thermal Power Station, at and P.O.-Barauni,
District-Begusarai.
... ... Petitioner/s
Versus
1. The State of Bihar, through the Secretary, Department of Labour and
Employment, New Secretariat, Patna-1.
2. The Presiding Officer, Labour Court, Begusarai.
3. The General Secretary, Bihar Vidyut Kamgar Sangh, Patel Nagar, Patna-3.
4. Bhibhu Shankar Sharma, Son of Late S.N. Sharma, Resident of Village and
Post-Chintamani Chak, Mokama, District-Patna-803302.
5. Mahendra Mallick, Son of Late Bipat Mallick, Resident of Village-Dih, P.S.-
Birpur, District-Begusarai.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. Vijoy Nandan Sahay, Advocate
For the State : Mr. Parijat Saurav, AC to Ex AAG 10
For the Respondent : Dr. Kumar Binode Bariar, Advocate
======================================================
CORAM: HONOURABLE JUSTICE SMT. G. ANUPAMA CHAKRAVARTHY
ORAL JUDGMENT
Date : 12-02-2026
1. The petitioners have filed the Writ
petition for the following relief:
“ For quashing the Award
dated 27.06.2018 passed in Reference
Case No.23 of 1994 by the Presiding
Officer, Labour Court, Begusarai,
Respondent no.2 by which the Court
reinstated two workmen out of six in
service with back wages committing an
error that the College run by the
petitioner in the Barauni Thermal
premises which was closed for last so
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many years and there was no post on
which the workman was reinstated in
service and directed to be re-appointed
in closed establishment the dispute was
raised in a closed establishment which
can not be an Industrial Dispute under
the Act.”
2. It is the second round of litigation. At the
outset, the petitioner has filed CWJC No. 8790 of
2008 assailing the award dated 18.12.2007 passed
by the Presiding Officer, Labour Court Begusarai in
Reference Case No. 23 of 1994 by which
termination of service of respondent nos. 4 and 5,
namely Bibhu Shankar Sharma and Mahendra
Mallick has been held to be improper and
unjustified and it has been held that both the
workmen are fit to be adjusted with all
consequential benefits in any other branch of the
Management. This Court on considering the
contentions and merits of both the parties has
passed a detailed order dated 29.03.2018 in CWJC
No. 8790 of 2008. The relevant part of the
judgment is quoted herein below for better
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appreciation:
“9. Without going into merits of
the submissions made on behalf of the
parties, I would straightway come to the
operative part of the impugned award
dated 18.12.2007 passed by the learned
Presiding Officer of the Labour Court,
Begusarai. The first part of the award
states that the termination of the
workmen, namely, Bibhu Shankar Sharma
and Mahendra Mallick by the Management
was unjustified and illegal. The second
part of the award is that both the
workmen are fit to be taken back into
services but because the college run by
the Management in which they were
employed has been closed, they were fit
to be employed with all consequential
benefits in any other branch of the
Management.
10. The question is as to whether
the award passed by the Labour Court can
be termed to be a valid award. In order to
find out the answer, it would be essential
to see what an award is? The award in a
quasi judicial proceeding is the end
product of the adjudication process.
11. Section 2(b) of the I.D. Act
stipulates “award” means an interim or a
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final determination of any industrial
dispute or of any question relating thereto
by any Labour Court, Industrial Tribunal or
National Industrial Tribunal and includes
an arbitration award made under Section
10-A.
12. Thus, an order shall be
deemed to be an award in terms of
Section 2(b) of the I.D. Act under the
following circumstances:-(a) it is an
interim or final determination of an
industrial dispute or (b) it is an interim or
final determination of any question
relating to such dispute and (c) such
interim or final determination is made by
a Labour Court, an Industrial Tribunal or a
National Tribunal, or (d) it is an arbitration
award under Section 10-A.
13. The first part of the definition
of the award specifies the determination
final or interim. The second part pertains
to determination of any question relating
to dispute.
14. Leaving some issues to be
settled by the parties themselves without
determination by the Labour Court cannot
be termed to be a valid award. The
expression „determination of any dispute‟
means an adjudication of the dispute on
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relevant materials.
15. The Supreme Court in Cox and
Kings Ltd. vs. Workmen [1977(1) LLJ 471
SC] laid down twofold tests for a decision
of the tribunal to fall within the definition
of award. First, it must be adjudication of
a question or point relating to industrial
dispute, which has been specified in the
order of reference or is incidental thereto;
and secondly, such adjudication must be
on merits.
16. The determination also implies
that the adjudicator has to adjudicate
upon the whole dispute as referred to him.
An adjudicator cannot determine only the
part of the dispute by leaving rest to be
determined by the parties. The award
must be certain, in the sense that the
parties must know what they are required
to do in terms of the award. In an award,
there should finally be directions
necessary for proper implementation of
the award.
17. In the present case, as seen
above, two issues were referred before
the Labour Court. The first was as to
whether the termination of services of the
respondent nos. 4 and 5 was proper and
justified and the second was if termination
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of services of the respondent nos. 4 and 5
was not proper and justified, then what
relief they were entitled to. So far as the
first issue is concerned, the Labour Court
had definitely held that the termination of
respondent nos. 4 and 5 was improper
and unjustified, but so far as the second
issue regarding the relief to which they
were entitled to is concerned, the Labour
Court had left the matter open to the
discretion of the parties after holding that
they are fit to be engaged in any other
running branch of the Management.
18. In the opinion of this Court,
such an award cannot be termed to be a
valid award. There is no final
determination of the second issue referred
to the Labour Court. The Labour Court
could not have determined only part of
the dispute by leaving the rest to be
determined by the parties themselves.
The error committed by the Labour Court
is certainly an apparent error of law.
19. In that view of the matter, the
award dated 18.12.2007 passed by the
learned Presiding Officer, Labour Court,
Begusarai in Reference Case No. 23 of
1994 is set aside. The matter is remanded
back to the Labour Court, Begusarai to
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decide the case afresh on the basis of the
evidences already led before it after
hearing the oral and written submissions
which may be made on behalf of the
parties.
20. Registry is directed to send
back the record to the Labour Court
forthwith through special messenger
along with a copy of this judgment. Since
the parties are being represented through
their respective counsel, no notice shall
be required to be issued by the Labour
Court. The Labour Court shall fix a date of
hearing on 16th April 2018 and shall
decide the reference made to it within two
months from the date of first hearing.
21. With the aforesaid
observations and directions, the writ
petition stands disposed of.”
3. Upon the judgment dated 29.03.2018
passed in CWJC No. 8790 of 2008, the Presiding
Officer, Labour Court, Begusarai, vide order dated
27.06.2018 has passed the Award in Reference
Case No. 23/1994, which is presently challenged
before this Court. By order dated 27.06.2018, the
Presiding Officer has observed that while passing
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the award in the case, it is determined that the
termination of service of the workers Upendra
Mahto, Gena Prasad Yadav, Md. Akhlaq, Mahesh
Mahto and Mantu Pal by the management is fair
and legal and they are not entitled to get any relief
but the termination of service of workers Vibhu
Shankar and Mahendra Mallick by the
management is unfair and illegal. Both these
workers are entitled to be re-appointed to their
posts along with arrears. Since the College of
Management had already been closed, in such a
situation, the Management should appoint them in
its establishment with all the benefits due to them
at that time.
4. The case of the workmen respondent
nos. 4 and 5 before the Labour Court was that
respondent no. 4 Bibhu Shankar was engaged in
December, 1983 by the Management of BTPS and
was terminated in June, 1991 whereas respondent
no. 5 Mahendra Mallick was engaged in 1982 and
was terminated in July, 1992. Their contention was
that they were working as contingent workers and
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were directly controlled by the BTPS and paid
directly at the departmental cash counter. The
matter of their regularization was taken up with
the Chairman of the BTPS, but their claim was
never resolved. Thereafter, their claim for
regularization was taken up with the General
Manager of the BTPS. A representation in this
regard was also given to the Deputy Labour
Commissioner, Begusarai. During discussion, the
local Management assured to regularize their
services in conciliation proceeding held on
17.10.1989 before the Deputy Labour
Commissioner, Begusarai and it was agreed by the
Management that the issue of regularization would
be finalized within a month, but when the matter
still remained pending, conciliation proceeding was
held by the Labour Superintendent, Begusarai on
13.05.1991. However, instead of regularizing the
services of respondent nos. 4 and 5, the
Management terminated their services during
pendency of the conciliation proceeding. They
contended that the termination was wholly illegal,
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unjustified and unsustainable as no notice in terms
of Section 25-F of the Industrial Dispute Act was
given to them prior to order of termination.
5. The Learned counsel for the petitioner
contended that the impugned Award is illegal,
perverse, and unsustainable in law, as the
respondent Nos. 4 and 5 were never employees of
Bihar State Electricity Board or Barauni Thermal
Power Station (BTPS). There existed no employer–
employee relationship. It is further submitted that
the workmen were engaged purely on
contractual/daily wage basis through contractors
for ancillary works such as cleaning and sweeping
in the Intermediate College run at BTPS premises.
It is further contended that the Intermediate
College was closed with effect from 24.09.1991
pursuant to Board’s Office Order No. IXA-Sch.
2002/90 (P.F.) EB-6133, and consequently all
contractual arrangements came to an end, by
efflux of time. Since the termination occurred due
to closure of establishment, it does not amount to
retrenchment under Section 2(oo) of the Industrial
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Disputes Act, 1947, and therefore Section 25-F is
not applicable. No individual appointment orders
were issued in the names of the workmen; funds
were sanctioned for contractual work and not
against specific posts.
6. The Learned counsel for the petitioner
submitted that the services of the workmen were
never regularized, and appointments in other units
of BTPS were made only through proper selection
processes. The industrial dispute was raised after
closure of the establishment, rendering the
reference itself invalid in law. The dispute was
raised by an unrecognized and unregistered union,
namely Bihar Vidyut Kamgar Sangh.
7. The Learned counsel for the petitioner
submitted that the Respondent no. 4 had earlier
filed a writ petition seeking regularization and had
admitted therein that his engagement was
contractual and had come to an end. It is further
submitted that Reinstatement in a closed
establishment is impermissible in law, and at best
the workmen could only be entitled to closure
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compensation.
8. It is contended that the Labour Court
committed a serious error in holding that teaching
staff fall within the definition of “workman” under
the Act.
9. The Learned counsel for the petitioner
lastly submitted that the impugned Award amounts
to granting relief contrary to statutory provisions,
particularly Sections 2(oo) and 25-F of the
Industrial Disputes Act. The Labour Court ignored
the settled law that contractual termination on
closure does not constitute retrenchment. The
direction for reinstatement in an establishment
which had ceased to exist is ex facie illegal. The
Award is liable to be quashed as the Labour Court
exceeded its jurisdiction and ignored material
evidence.
10. The Learned counsel for the petitioner
submits that respondent nos. 4 and 5 were never
regular employees of the petitioner-Management
and were engaged on a contractual/daily wage
basis. It is contended that the Intermediate
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College, where they were engaged, stood closed
with effect from 24.09.1991, and therefore the
question of reinstatement does not arise. It is
further argued that the termination was on account
of closure and would not amount to retrenchment
under Section 2(oo) of the Industrial Disputes Act,
1947, and hence Section 25-F would have no
application.
11. The Intermediate College stood closed
with effect from 24.09.1991 pursuant to Office
Order No. IXA-Sch. 2002/90 (P.F.) EB-6133, and
consequently all contractual arrangements came
to an end by efflux of time. The termination was on
account of closure of the establishment and,
therefore, does not amount to retrenchment within
the meaning of Section 2(oo) of the Act.
Consequently, Section 25-F has no application.
12. It is further argued that reinstatement
in a closed establishment is impermissible in law.
At best, the workmen could claim closure
compensation. The industrial dispute was raised
after closure of the establishment and through an
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unrecognized union.
13. It is submitted that the Labour Court
exceeded its jurisdiction in directing appointment
in another establishment of the Management. The
direction for reinstatement with back wages in a
non-existent establishment is ex facie illegal and
unsustainable.
14. A counter affidavit was filed on behalf
of the respondent State. The Learned counsel
appearing for the State submits that upon failure of
conciliation, the competent authority of the Labour
Resources Department rightly referred the dispute
for adjudication under Section 10 of the Industrial
Disputes Act. It is further submitted that the
Labour Court adjudicated the dispute after issuing
notices to the parties and appreciating oral and
documentary evidence. The State has no role in
examining the legality of the Award, and is only a
formal party to the proceedings. It is further stated
that no specific allegations have been made
against the State in the writ petition as such the
State is only a formal party-respondent in the
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present case.
15. The respondent Nos. 4 and 5 have also
filed counter affidavit. The Learned counsel for
respondent nos. 4 and 5 submitted that
Respondent nos. 4 and 5 are “workmen” within the
meaning of Section 2(s) of the Industrial Disputes
Act, and the petitioner is an “industry” under
Section 2(j). The dispute regarding termination
squarely falls within the definition of “industrial
dispute” under Section 2(k).
16. It is further submitted that the Labour
Court has, upon remand by this Court, finally
adjudicated both issues—legality of termination
and relief—strictly in accordance with the
directions issued on 29.03.2018. The termination
was effected during pendency of conciliation
proceedings, without compliance of mandatory
provisions of Section 25-F, rendering the same void
ab initio. The plea of contractual termination under
Section 2(oo)(bb) was never pleaded or proved by
the Management before the Labour Court.
17. It is further submitted that the Labour
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Court is the final court of facts, and its findings
cannot be interfered with in writ jurisdiction unless
it is shown to be perverse or illegal. It is contended
that the writ petition has been filed after more
than one year of the Award, without reinstating the
workmen or paying back wages. The petitioner has
consistently violated Section 17-B of the Industrial
Disputes Act, during pendency of litigation,
compelling the workmen to initiate contempt
proceedings.
18. The Learned counsel further submitted
that under the Bihar Power Generation Undertaking
Transfer Scheme, 2018, liability for execution of
awards passed prior to 15.12.2018 remains with
BTPS, and not NTPC.
19. The Learned counsel appearing for
respondent nos. 4 and 5 submits that the Labour
Court, upon appreciation of oral and documentary
evidence, recorded a categorical finding that the
workmen were working under the direct
supervision and control of the Management and
had completed continuous service. It is contended
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that their termination was effected without
compliance of Section 25-F of the Act and during
the pendency of conciliation proceedings,
rendering the same void ab initio. It is further
submitted that the scope of interference under
Article 226 of the Constitution of India with an
Award of the Labour Court is limited.
20. The Learned counsel has also placed
Reliance on judgments of the Hon’ble Supreme
Court reported in AIR 1964 SC 477 : Syed
Yakoob v. K.S. Radhakrishnan and (2014) 11
SCC 85 : Bhuvnesh Kumar Dwivedi v.
Hindalco Industries Ltd.
21. Having heard learned counsel for the
parties and perused the materials on record, the
following issues arise for consideration:
(i) Whether reinstatement can be directed
when the establishment itself has ceased to exist?
(ii) Whether back wages can be awarded in
respect of a closed establishment?
(iii) Whether the Labour Court exceeded its
jurisdiction in directing appointment in another
Patna High Court CWJC No.20943 of 2019 dt.12-02-2026
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establishment?
22. It is undisputed that the Intermediate
College, where respondent nos. 4 and 5 were
engaged, was closed with effect from 24.09.1991.
The closure of the College has not been set aside
by any competent authority. Once the
establishment itself has ceased to exist, the
question of reinstatement therein does not arise.
23. Reinstatement presupposes the
existence of a post and a running establishment. In
absence thereof, such a direction becomes
incapable of compliance and legally unsustainable.
The Labour Court, while directing reinstatement,
simultaneously acknowledged that the College was
closed and then proceeded to direct appointment
in another establishment of the Management. Such
direction travels beyond the terms of reference
and amounts to creating a new contract of
employment.
24. This Court is of the considered opinion
that once the College was closed, reinstatement
was legally impossible. Consequently, the direction
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to pay back wages also cannot survive, as there
was no subsisting establishment in which the
workmen could have worked.
25. The Award, therefore, suffers from
patent illegality insofar as it grants reinstatement
and back wages in respect of a closed
establishment and further directs adjustment in
other units of the Management.
26. While it is true that the scope of
interference under Article 226 is limited, this Court
can interfere where the Award is contrary to law or
incapable of implementation. The present Award
falls within that category.
27. In view of the discussions made
hereinabove, this Court holds that since the
Intermediate College was closed with effect from
24.09.1991, reinstatement of respondent nos. 4
and 5 is legally impermissible. The direction for
appointment in another establishment of the
Management is beyond jurisdiction and the
consequential direction for payment of back wages
is unsustainable.
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28. Accordingly, the Award dated
27.06.2018 passed by the Presiding Officer, Labour
Court, Begusarai in Reference Case No. 23 of 1994,
insofar as it relates to respondent nos. 4 and 5, is
hereby quashed and set aside.
29. The writ petition stands allowed.
30. Interlocutory Application(s), if any,
shall stand disposed of.
(G. Anupama Chakravarthy, J)
Spd/-
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CAV DATE NA
Uploading Date 13.02.2026
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