Holding

The Supreme Court held that the principle of res judicata applies to industrial adjudication, barring the Labour Court proceedings, and that 240 days of service alone does not warrant regularisation, with sympathy being an insufficient ground for relief.

Summary

The respondents, employed as daily‑wage engineers under a government scheme, were terminated in 1996 and filed writ petitions seeking regularisation, a direction not to discontinue their services and arrears of salary. The Karnataka High Court dismissed the writ petitions, finding that their services had been terminated. The respondents then approached the Labour Court, which set aside the termination orders and ordered reinstatement with back wages, relying on Section 25F of the Industrial Disputes Act, 1947. The employer appealed, contending that the principle of res judicata barred the Labour Court proceedings because the issue of termination had already been raised and decided in the writ petitions. The Supreme Court held that res judicata applies to industrial adjudication and that the Labour Court could not re‑examine the termination, which the respondents failed to raise in the writ proceedings. It further ruled that merely completing 240 days of service does not, by itself, entitle workmen to regularisation and that sympathy cannot be a basis for granting relief. Consequently, the appeals were allowed and the Labour Court awards were set aside.

Issues considered

Whether the principle of res judicata applies to industrial adjudication and bars the Labour Court proceedings after the writ petitions.
Whether completion of 240 days of continuous service under Section 25F of the Industrial Disputes Act, 1947, entitles the workmen to regularisation of service.
Whether sympathy or sentiment can be a ground for granting relief in industrial disputes.
Who bears the burden of proof to establish employment under Section 2(oo)(bb) of the Industrial Disputes Act.

Legislation cited

Code of Civil Procedure, 1908s. Order 2 Rule 2
Industrial Disputes Act, 1947s. 25F, s. 2(oo)(bb)

Subjects

res judicataindustrial disputeregularisationSection 25Flabour courtsympathyburden of prooftermination of servicewrit petition

Judgment

A EXECUTIVE ENGINEER ZP ENGG. DIVN. AND ANR.
v.
DIGAMBARA RAO

SEPTEMBER 27, 2004

B [N. SANTOSH HEGDE AND S.B. SINHA, JJ.]

Labour Laws :

Industrial Disputes Act, 1947:
c Res judicata-Principles-Applicability of-To an industrial
adjudication-Workmen filed a writ petition before the High Court claiming
for regularization oftheir services and also for a direction not to discontinue
their services, which was dismissed- Subsequently, the workmen filed an
application before the Labour Court challenging their termination-
D Maintainability of-Held: It is well settled that the general principle of res
judicata ·applies to an industrial adjudication-The prayer in the writ
application had a direct nexus with the orders of termination of services of
the said workmen-The workmen while filing the writ a.np/ication were bound
to lay their whole claim having regard to 0. 2 R. 2 CPC or principles
analogous thereto-The workmen were, therefore, obliged to question their
E orders of termination in the writ petition-They did not do so-Hence,
proceedings initiated before the Labour Court challenging their termination
orders were barred under the principle of res judicata-Code of Civil
Procedure, I 908, 0. 2 R. 2.

F Section 2(oo)(bb)-Employment of workmen-Burden of proof-Held:
Lay on the employer.

Section 25-F-Retrenchment-Regularization of services-Services of
workmen terminated on completion of Scheme-However, Labour Court
directed reinstatement ofthe said workmen having workedfor more than 240
G days, the provisions of S. 25-F were required to be complied with-
Correctness of-Held: Mere completion of 240 days of continuous service
in a year may not by itselfbe a groundfor directing an order ofregularization-
It was also not the case of the workmen that they were appointed in
accordance with the extant rules-Therefore, no direction/or regularization
H of their services could be issued
716
EXECUTIVE ENGINEER ZP ENGG. DIVN. v. D. RAO 717

Sympathy or sentiment-Whether a ground for passing an order in A
favour of a petitioner-Held: Cannot be a ground especially when the
petitioner had miserably failed to establish his legal right-While being
sympathetic to persons who come before a court, the courts cannot at the
same time be unsympathetic to the large number of eligible persons waiting
for a long time in a long queue seeking employment. B
The respondents-workmen were employed on daily wages in relation
to a Scheme. Their services were terminated on completion of the Scheme.
The respondents filed a writ petition before the High Court claiming
regularization of their services and for a direction not to discontinue
their services and also for payment of arrears of salary from the date C
of completion of 240 days of continuous service. A Single Judge of the
High Court found that the services of the respondents had, in fact, been
discontinued and, therefore, dismissed the writ petition. The Division
Bench dismissed the writ appeal.

Subsequently, the respondents filed applications before the Labour D
Court challenging the orders of their termination. The Labour Court set
aside the termination orders, on the ground that the respondents having
worked for more than 240 days, the provisions of Section 25-F of the
Industrial Disputes Act, 1947 were required to be complied with. The
High Court dismis~ed the writ petition tiled by the appellant-employer. E
Hence the appeal.
r
On behalf of the respondents,' it was contended that the principle
of res judicata had no application in the instant case inasmuch as in the
writ petitions the prayer made by the respondents was for regularization
of their services, whereas before the Labour Court the legality or F
otherwise of the orders of termination came to be questioned and that
as the respondents have already crossed the age of forty, this Court
should take a sympathetic view and might not interfere with the impugned
judgments.

Allowing the appeal, the Court
G

HELD : 1.1. Although the principal plea of the respondents in the
writ petition was for regularization of their services but they had a\so
prayed for issuance of a writ of mandamus or for a direction not to
H
718 SUPREME COURT REPORTS [2004] SUPP. 4 S.C.R.

A discontinue their services as also payment of arrears of salary, difference
or arrears of salary from the date of completion of 240 days and to
grant all service benefits as applicable to regular employees like seniority,
promotion, increments, allowance etc. [723-F-G] .....

1.2. The aforesaid prayer in the said writ application had a direct
B nexus with the orders of termination of their services. A finding of fact
having been arrived at that their services had been terminated
and they were not entitled to continue in service, the legality or otherwise
of the said purported orders of termination could not have been the
subject matter of proceedings under the Industrial Disputes Act, 1947 for
C the reason that if the respondents were not entitled to continue in their
services by reason of the judgment of the High Court, the question of
their reinstatement with back wages would not arise. [723-G-H; 724-A)

2.1. The respondents approached the High Court with full knowledge
that their services had been terminated. Their attempt to show that they
D were still in service had been disbelieved and it was found as of fact that
their services had already been terminated. The respondents, therefore,
while filing the writ application were bound to lay their whole claim
having regard to the provisions contained in Order 2 Rule 2 of the Code
of Civil Procedure, 1908 or the principles analogous thereto. The very
E basis upon which the writ petitions were based was found to be incorrect.
It was, thus, obligatory on the part of the respondents to question their
orders of termination upon placing correct facts before the High Court.
They did not choose to do so. They did not pray for and obtain any leave
of the court to raise the contention about the legality or otherwise of the
orders of termination before an appropriate forum. [724-B-D)
F
2.2. Furthermore, the respondents' plea to the effect that they were
entitled to continue in service was specifically rejected. In view of the
matter, the proceedings initiated before the Labour Court questioning
the orders of termination passed against them by the appellant was
G wholly misconceived. Such a plea was barred under the principle of res
judicata. It is well settled that the general principle of res judicata applies
to an industrial adjudication. [724-D-E)

Pondicherry Khadi & Village Industries Board v. P. Kulothangan,
(2004] 1 sec 68, relied on.
H
EXECUTIVE ENGJNEERZP ENGG. DIVN. v. D. RAO 719

Workmen v. Board of Trustees of the Cochin Port Trust, A
(1978] 3 SCC 119 and Pujari Bai v. Madan Gopal, (1989) 3 SCC 433,
cited.

3. The burden of proof that the respondents were employed against
a particular Scheme was on the appellants but ·such a burden stood B
discharged. [725-D]

4. Completion of 240 days of continuous service in a year may not
by itself be a ground for directing an order of regularization. It is also
not the case of the respondents that they were appointed in accordance
with the extant rules. No direction for regularization of their services, C
therefore, could be issued. [725-G-H; 726-A)

A. Umarani v. Registrar, Cooperative Societies, 12004] 6 SCALE 350
and Pankaj Gupta v. State of J & K, (2004) 7 SCALE 682, relied on.

5. Sympathy or sentiment by itself cannot be a ground for passing D
an order in relation whereto the respondents miserably failed to establish
a legal right. (726-D-E)

Teri Oat Estates (P) Ltd v. U. T Chandigarh, [2004) 2 SCC 30 and
A. Umarani v. Registrar, Cooperative Societies, (2004) 6 SCALE 350, relied E
on.

Latham v. Richard Johnson & Nephew Ltd, (1911-13) All ER I 17,
referred to.

6. While being sympathetic to the persons who come before the F
Court, the Courts cannot at the same time be unsympathetic to the large
number of eligible persons waiting for a long time in a long queue
seeking employment. (727-CJ

Ramakrishna Kamat v. State of Karnataka, JT (2003) 2 SC 88, relied
on. G

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. I 164-66 of
2002.

From the Judgment and Order dated 9.11.2000 and 20.11.2000 of the H
720 SUPREME COURT REPORTS (2004] SUPP. 4 S.C.R.

A Kamataka High Court in W.A. Nos. 2756-57/2000 (L-TER) and W.A. No.
2759 of 2000 (L-TER).

Mallikarajun Reddy, Sanjay R. Hegde, Anil K. Misra for the Appellants.

K. Maruthi Rao and G. Narasimhulu for· the Respondents.
B
The Judgment of the Court was delivered by

S.B. SINHA, J : These appeals arise out of the judgments and orders
dated 9.11.2000 and 20.11.2000 passed by the High Court of Kamataka at
C Bangalore in Writ Appeal Nos.2756-57 of2000 and 2759 of2000 respectively
whereby and whereunder the appeals preferred by the Appellants herein
against the· orders dated 14.2.2000 and 15.2.2000 passed by the learned
Single Judge of .the said court in several writ petitions were dismissed.

FACTS :
D
The Respondents wert< originally employed on daily wages in relation
to a Scheme known as 'Kriya Scheme' aimed at providing drinking water
and construction of roads for the benefit of the rural poor in the District of
Gulbarga in the State of Kamataka. The employment allegedly commenced
in the year 1993. The services of the Respondents were terminated in 1996.
E
They filed writ petitions before the Kamataka High Court contending , inter
alia, that as they having worked for a number of years, became entitled for
regularization. It was furthermore contended that they had still been in
service. The prayers made in the said writ petitions which are relevant for
our purpose are as under :
F
"a) Issue a writ of mandamus order or direction directing
Respondents No.2 & 3 to regularization (sic for regularize) the
service of the petitioner no. l to the post of Assistant Engineer
in the pay scale of Rs.2050- with allowance, the petitioners no.
2 and 3 as Junior Engineers in the pay scale of Rs.1520/- and
G allowance.

b) Issue a writ in the nature of mandamus order or direction not
to discontinue the service of the petitioners and to direct
payment of arrears of salary from September 1996 onwards
H
EXECUTIVE ENGINEER ZP ENGG. DIVN. v. D. RAO (SINHA, J.] 721

and also to pay difference or arrears of salary to the petitioners A
from the date of completion of 240 days to grant all service
benefits as are applicable to regular employees like seniority,
promotion, increments, allowance etc."

The said writ petitions came up for consideration before a learned B
Single Judge of the Karnataka High Court.

We may further notice that along with the said writ petitions, the
Respondents herein annexed two documents wherefrom it appeared that they
had allegedly continued to work beyond 19. I 0 .1996, the date of termination
of their services. Upon an inquiry made in this behalf at the behest of the c
High Court, it was contended by the Appellants by filing an additional
affidavit that no payment for daily wages had been made to the Respondents
after the order of their discharge and such certificates had been procured from
a Junior Engineer against whom a departmental inquiry had been initiated.
It was further pointed out that author of one of the documents had himself
disowned the said letter in terms of a communication annexed to the said
D
additional affidavit.

In the said writ petitions, two questions fell for consideration :

"I) Whether the petitioners continued in employment of the E
Respondents beyond the 19th of October, 1996; and 2) Whether
they are on the basis of the service rendered as daily wager
entitled to an order of regularization?"

By reason of a judgment and order dated 1.12.1997, the learned Single
Judge held that having regard to the fact that their services had been F
discontinued, the question of a direction being issued for continuance of their
services does not arise having regard to the fact that the life of the Scheme
had come to an end. As regard the claim for regularization even on the basis
of the services rendered by the Respondents upto October 1996, it was held
that they were not entitled thereto in law. G
The writ petitions were, thus, dismissed. An appeal preferred thereagainst
was also dismissed by the Division Bench of the said High Court by an order
dated 19.3.1998. Despite the same, the Respondents herein filed applications
before the Labour Court at Gulbarga which were marked as Reference. Nos.
H
722 SUPREME COURT REPORTS [2004) SUPP. 4 S.C.R.

A 495 of . 1998, 484 of 1998 and 498 of 1998. In the said Reference
Applications, the Respondents did not disclose that the High Court had
dismissed their earlier writ petitions and furthermore the appeal preferred
thereagainst had also been dismissed. Written statements in the said proceedings
were filed by the Appellants, wherein, inter alia, it was contended that the
B employment of the Respondents was for daily wages and for a specific
scheme. A further contention ~,as raised therein that having regard to the
decision of the High Court in the earlier writ petitions, Respondents were not
entitled to any relief.

By an order dated 1.10.1999, the Labour Court, however, passed two
c awards setting aside the orders of termination, inter alia, on the ground that
the Respondents having worked for more than 240 days, the provisions of
Section 25F of the Industrial Disputes Act were required to be complied with.
They were in terms of the said awards directed to be reinstated with 50%
of the back-wages. The legality and/or validity of the said awards came to
D be questioned by the Appellants herein by filing two writ petitions before the
Karnataka High Court which were marked as Writ Petition Nos.3808 of2000
and 3697-98of2000 which were dismissed by an order dated 14.2.2000 and
15 .2.2000. The appeals thereagainst filed by the Appellants herein were also
dismissed by orders dated 9.11.2000 and 20.11.2000. Hence these appeals.

E SUBMISSIONS :

Mr. Mallikarajun Reddy, learned counsel appearing on behalf of the
Appellants, would, inter alia, submit that the Reference Applications were
barred under the principle of res judicata. The learned counsel would contend
F that the principle of res judicata would apply to a proceeding under the
Industrial Disputes Act arid in that view of the matter, the High Court
committed a manifest error in not interfering with the awards passed by the
Labour Court. Reliance in this behalf has been placed on Pondicherry Khadi
& Village Industries Board v. P. Kulothangan and Another, [2C04] 1 SCC
G 68.

Mr. K. Maruthi Rao, learned counsel appearing on behalf of the
Respondents, on the other hand, would submit that the principle of res
judicata has no application in the instant case inasmuch as in the writ petitions
the prayer made by the Respondents herein was for regularization of their
H
EXECUTIVE ENGINEER ZP ENGG. DIVN. v. D. RAO [SINHA, J.] 723

services, whereas before the Labour Court the legality or otherwise of the A
orders oftennination came to be questioned. In any event, Mr. Maruthi Rao
would contend that having regard to the fact that the Respondents herein are
qualified Junior Engineers and have already crossed the age of forty, this
Court 01.ay~ot, in its discretion, interfere with the impugned judgments.

ANALYSIS:
B

The said writ petitions were filed by the Respondents on the following
premise: (1) The Respondents had been appointed in the year 1993; (2) When
the writ petitions were filed they were still in service; (3) They were
appointed as Daily Wages Graduate Engineers; (4) They were not being paid c
the regular scale of pay, although they had been doing the same work as was
being done by the regular employees; (5) .Having regard to the fact that they
had rendered about four years of continuous service and being under threat
of tennination of service, they were entitled to be regularized in their service
as also other benefits attached thereto, having completed 240 days of
D
continuous service in a year.

We have noticed hereinbefore that the factual premise that the
Respondents had still been in service at the time of filing of the writ petitions
had been found to be incorrect, as in fact their services had been tenninated
on or about 19.10.1996. It was further held that as they were appointed E
against a Scheme, the question of their continuance in service beyond the life
thereof does not arise. The High Court was furthermore of the opinion that
their services cannot be directed to be regularized.

We have noticed hereinbefore that although the principal plea of the
Respondents in the said writ petition was for regularization of their services F
but they had also prayed for issuance of a writ of mandamus or for a direction
not to discontinue their services as also payment of arrears of salary from
September 1996 onwards, difference or arrears of salary from the date of
completion of 240 days and to grant all service benefits as applicabll! to
regular employees like seniority, promotion, increments, allowance etc. G
The said prayer in the said writ applications had a direct nexus with the
orders of tennination of their services. A finding of fact having been arrived
at that their services had been tenninated and they were not entitled to
continue in service, in our opinion, the legality or otherwise of the sai<}
H
'

724 SUPREME COURT REPORTS [2004] SUPP. 4 S.C.R.

A purported orders of termination could not have been the subject-matter of
proceedings under the Industrial Disputes Act; for the reason that if the
Respondents herein were not entitled to continue in their services by reason
of the judgment of the High Court, the question of their reinstatement with
back-wages would not arise.
B
The Respondents herein approached the High Court with foil knowledge
that their services had been terminated. _Their attempt to show that they were
still in service had been disbelieved and it was found as of fact that their
services had been terminated on 19.10.1996. The Respondents, therefore,
while filing the writ application were bound to lay their whole claim having
c regard to the provisions contained in Order II Rule 2 of the Code of Civil
Procedure or the principles analogous thereto. The very basis upon which the
writ petitions were based was found to be incorrect. It was, thus, obligatory
on the part of the Respondents herein to question their orders of termination
upon placing correct facts before the High Court. They did not choose to do
so. They did not pray for and obtain any leave of the court to raise the
D
contention about the legality or otherwise of thr orders of termination before
an appropriate forum. Furthermore, their plea to the effect that they were
entitled to continue in service was specifically rejected. In that view of the
matter, the proceedings initiated before the Labour Court questioning the
orders of termination passed against them by the Appellants praying for their
E reinstatement with full back-wages, in our opinion, was wholly misconceived.
Such a plea was barred under the principle of Res Judicata. It is now well-
settled that the general principle of Res Judicata applies to an industrial
adjudication.

In P. Kulothangan (supra), this Court held :
F
"The principle of res judicata operates on the court. It is the
courts which are prohibited from trying the issue which was directly
and substantially in issue in the earlier proceedings between the
same parties, provided the court trying the subsequent proceeding
G is satisfied that the earlier court was competent to dispose of the
earlier proceedings and that the matter had been heard and finaily
decided by such court. Here the parties to the writ petition filed by
the respondent in the Madras High Court and the industrial dispute
were the same. The cause of action in both was the refusal of the
appellant to allow the respondent to rejoin service. The Madras High
H
EXECUTIVE ENGINEER ZP ENGG. DIVN. v. D. RAO [SINHA, J.] 725

Court was competent to decide the issue which it did with a reasoned A
order on merits and after a contested hearing. This was not a case
where the earlier proceedings had been disposed of on any technical
ground as was the case in Workmen v. Board of Trustees of the
Cochin Port Trust, [ 1978] 3 SCC 119 and Pujari Bai v. Madam
Gopal, [1989] 3 sec 433. The "lesser relief' of reinstatement which B
was the subject-matter of the industrial dispute had already
been claimed by the respondent in the writ petition. This was
refused by the High Court. The correctness of the decision in the
writ proceedings has not been challenged by the respondent. The
decision was, therefore, final. Having got an adverse order in the
writ petition, it was not open to the respondent to reagitate the issue C
before the Labour Court and the Labour Court was incompetent to
entertain the dispute raised by the respondent and redecide the
matter in the face of the earlier decision of the High Court in the
writ proceedings."

It is no doubt true, as has been contended by Mr. Maruthi Rao, that the
D
burden of proof that the Respondents were employed against a particular
Scheme was on the Appellants but such a burden stood discharged and in
any event the said question w1s no longer alive having regard to the decision
of the Kamataka High Court in the earlier writ petitions.
E
The plea raised before us by the Respondents to the effect that their
termination of employment fell within sub-clause (bb) of clause (oo) of the
Industrial Disputes Act, apart from having not been raised before the Labour
Court and the High Court, in our opinion, is not available to them having
regard to the decision of the High Court in the writ petitions filed by the
Respondents.
F

The decision of a Division Bench of this Court in S.M Nilajkar and
Others v. Telecom District Manager, Karnataka, [2003] 4 SCC 27, upon
which reliance was placed by Mr. Maruthi Rao, therefore, cannot be said to
have any application whatsoever in the instant case. G
It may not be out of place to mention that completion of 240 days of
continuous service in a year may not by itself be a ground for directing an
order of regularization. It is also not the case of the Respondents that they
were appointed in accordance with the extant rules. No direction for
H
726 SUPREME COURT REPORTS [2004] SUPP. 4 S.C.R.

A regularization of their services was, therefore, could be issued. [See A.
Umarani v. Registrar, Cooperative Societies and Ors., (2004) 6 SCALE 350
= [2004] 7 SCC 112 and Pankaj Gupta & Ors. Etc. v. State of Jammu &
Kashmir & Ors., (2004) 7 SCALE 682] Submission of Mr. Maruthi Rao to
the effect that keeping in view the fact that the Respondents are diploma-
B holders and they have crossed the date of 40 by now, this Court should not
interfere with the impugned judgment is stated to be rejected.

In A. Umarani (supra), this Court rejected the similar contention upon
noticing the following judgments :

c "fn a case of this nature this court should not even exercise its
jurisdiction under Article 142 of the Constitution of India on
misplaced sympathy.

In Teri Oat Estates (P) Ltd v. U. T., Chandigarh and Others, [2004] 2
sec 130, it is stated:
D
" ... We have no doubt in our mind that sympathy or sentiment by
itself cannot be a ground for passing, an order in relation whereto
the appellants miserably fail to establish a legal right. It is further
trite that despite an extra-ordinary constitutional jurisdiction contained
E in Article 142 of the Constitution of India, this Court ordinarily
would not pass an order, which would be in contravention of a
statutor1 provision.

As early as in 1911, Farewell L.J. in Latham v. Richard Johnson &
Nephew Ltd, [1911-13 AER reprint p. 117] observed:
F
"We must be careful not to allow our sympathy with the infant
plaintiff to affect our judgment. Sentiment is a dangerous Will
O' the Wisp to take as a guide in the search for legal
principles."

G Yet again recently in Ramakrishna Kamat & Ors. v. State ofKarnataka
& Ors., JT (2003) 2 SC 88, this Court rejected a similar plea for regularization
of services stating :

" ... We repeatedly asked the learned counsel for the appellants on
H
EXECUTIVE ENGINEER ZP ENGG. DIVN. v. D. RAO [SINHA, J.] 727

what basis or foundation in law the appellants made their claim for A
regularization and under what rules their recruitment was made so
as to govern their service conditions. They were not in a position
to answer except saying that the appellants have been working for
quite som~me in various schools started pursuant to resolutions
passed by zilla parishads in view of the government orders and that B
their cases need to be considered sympathetically. It is clear from
the order of the learned single judge and looking to the very
directions given a very sympathetic view was taken. We do not find
it either just or proper to show any further sympathy in the given
facts and circumstances of the case. While being sympathetic to the
persons who come before the court the courts cannot at the same C
time be unsympathetic to the large number of eligible persons
waiting for a long time in a long queue seeking employment. ... "

For the foregoing reasons, we are of the opinion that the Labour Court
and the High Court committed a manifest error in passing the impugned D
judgments and awards and as such they are liable to be set aside.

These appeals are allowed and the impugned judgments and.award are
set aside. No costs.

v.s.s. Appeals allowed. E