Holding

No employer‑employee relationship existed between the appellant and the respondent; therefore, the order of reinstatement was erroneous.

Summary

The State of Uttar Pradesh acquired land for G.M. Tanda Thermal Power Project and the Special Land Acquisition Officer (SLAO) engaged daily‑wage workers, including Jai Prakash Srivastava, to handle the acquisition cases. Although the appellant (the power project company) funded the wages, the appointment and supervision were made by the SLAO. After the temporary assignment ended, the respondent’s services were terminated and he raised an industrial dispute. The Labour Court held that an employer‑employee relationship existed between the appellant and the respondent and ordered reinstatement with back wages. The High Court dismissed the writ petition, saying it could not determine the disputed fact, and the intra‑court appeal was also dismissed. The Supreme Court allowed the appeal, ruling that no employer‑employee relationship existed between the appellant and the respondent because the appointment was made by the SLAO, no post was created, and reinstatement could not be ordered. Consequently, the Labour Court’s award was set aside.

Issues considered

Whether an employer‑employee relationship existed between the appellant and the respondent for the purposes of the Uttar Pradesh Industrial Disputes Act.
Whether the High Court could refuse to interfere under Article 226 of the Constitution when the existence of such a relationship is disputed.
Whether a direction of reinstatement can be issued when the post was non‑existent and the appointment was purely contractual.
Whether the Special Land Acquisition Officer should be treated as a party to the reference.

Legislation cited

Constitution of Indias. Article 226
Land Acquisition Act

Subjects

labour lawemployer-employee relationshipindustrial disputereinstatementcontractual appointmentArticle 226land acquisitionUttar Pradesh Industrial Disputes ActSupreme Court

Judgment

A G.M. TANDA THERMAL POWER PROJECT
v.I
JAi PRAKASH SRIVASTAVA AND ANR.

OCTOBER 11, 2007
B
(S.B. SINHA AND HARJIT SINGH BEDI, JJ.]

Labour Laws-Appointment-On contractual basis-Against
non-existing post By Land Acquisition Officer-For looking after land -r-
c acquisition proceedings pertaining to land acquiredfor a Company-
Salary to the employee paid by the Company-Termination of the
employee-Industrial dispute alleging violation ofprovision of UP.
Industrial Disputes Act-Labour Court directing reinstatement on the
ground that there existed relationship of employer and employee
D between the Company and the employee-High Court not interfereing
with the matter-On appeal, held: Services of the employee were
required by the Land Acquisition Officer and not the Company--Hence
there did not exist relationship ofemployer and employee between the
employee and the Company--Order of reinstatement was wrong in >--...

E view of appointment against a non-existing post and in view of the
fact that appointment was on contractual basis-High Court should
have determined the disputed question ofrelationship ofemployer and
employee, in presence of all the interested parties ie. also Land
Acquisition Officer-Uttar Pradesh Industrial Disputes Act.
F Constitution of India, 1950-Article 226-Judicial review-
Labour matter-Interference with disputed question of fact-
Permissibilit)l-:Held: When existence ofthe relationship ofemployer y
and employee is disputed, inte1ference is permissible.

G State acquired land for the appellant-Company. Acquiring
Authority engaged first respondent as a daily wager for a temporary
period to look after the pending acquisition cases. The expenses
threreof were brone by the appellant. After expiry of the period, his +-
services were terminated. Respondent raised industrial dispute
H 46
~
!
I

G.M. TANDATHERMALPOWERPROJECTv. JAi 47
PRAKASHSRIVASTAVA
~
challenging his termination. Labour Court held that there existed a A
relationship of employer and employee between the appellant and
first respondent; that the respondent was entitled to notice pay and
retrenchment compensation having worked for more than 240 days.
He was directed to be reinstated with back wages. The Writ Petition
thereagainst was dismissed by High Court on the ground that it could B
not determine disputed question of fact in exercise of its jurisdiction
under Article 226 of the Constitution oflndia, 1950. Intra-Court
appeal was also dismissed by Division Bench of High Court. Hence
the present appeal.
Allowing the appeal, the Court
c
HELD: 1. Lands are acquired in terms of the provisions of the
Land Acquisition Act. It is for the authorities concerned to conduct
the cases relating to acquisition ofland in the courts oflaw. Although
the appellant was providing for the funds for meeting the expenditure D
in relation to payment of wages etc. to the first respondent herein,
evidently, the relationship between an employer and employee did
not come into being between the appellant and the first respondent.

-. -"'
The offer of appointment was issued by the Special Land Acquisition
Officer. First respondent was working under his supervision and E
control. His services were being taken by the Special Land
Acquisition Officer for a particular purpose, namely, looking after
the land acquisition cases. When the purpose for which the first
respondent was appointed ceased to exist, his services were
terminated. If there did not exist any relationship of employer and
F
employee, the question of the appellant's fulfilling the obligations
~
required in terms of the UP Industrial Disputes Act, namely, payment
ofretrenchment compensation or one month's pay in lieu of notice
did not and could not arise. If the first respondent was a workman
working under the Special Land Acquisition Officer, the question of
- G
compliance of the said provisions by the said authority would also
not arise. [Para 12] (51-D-G)
~
2. The High Court, committed a serious error in refusing to
interfere in the matter. When existence of the relationship of
employer and employee is disputed, the same was required to be H
48 SUPREME COURT REPORTS [2007] 11 S.C.R.

A determined in presence of all the parties who are interested in the
subject matter of reference. The Special Land Acquisition Officer
was ilota'party·to the reference. Labour Court, neither went into
the question as-regards the nature of duties required to be performed
by the 'first respondent and also other relevant factors; namely, who
B had 'issued 'the offer of appointment; ·who used to supervise and
control the work of the respondent; or who was the authority to grant
leave and take disciplinary action etc. The said questions were
relevant:[Para 12]'[51-H; 52-A-B)
C Workmerz o/Nilgiri Coop. Mkt. Society Ltd v. State o/Tamil Nadu
and Ors., [2004) 3SCC 514, referred to.
3. The 'High Court, furthermore, committed a serious error
insofar as it failed to take into consideration that a direction for
reinstatement cannot be issued when there does not exist any post.
D Requirement of the Special Land Acquisition Officer.to have the
services ofsome employees was for a short period. No such'post
was created by the· competent authority. The services of the first
respondent were necessary·for looking after.the land acquisition )..
cases of the petitioner. Even in a case where the·workman is ;-_
E appointed on contractual basis, the industrial court would ordinarily
not direct for reinstatement. Subject to statutory interdict, the
agreement between the parties in this behalf must be given -due
weight. [Para 13) [52-C~F]
CIVIL APPELLATE JURISDICTION: Civil AppealNos. 4809-
F 10 of2007.
From the Judgment and final Order dated 13.02.2004 of the High 1
Court of Judicature at Allahabad, Lucknow Bench, Lucknow in Special
Appeal No. 76 of 1998.
G ·Ranjit Saxena, Anita Pandey and Vishnu Shanna for the Appellant.
S. Wasim A. Kadri, Shalini Kumar, G.V. Rao, Kamlendra Mishra }
and Varinder Kumar Sharma for the Respondents.
The Judgment of the Court was delivered by
H
G.M. TANDA THERMALPOWERPROJECTv. JAI 49
'i PRAKASHSRIVASTAVA[SINHA,J.]
S.B. SINHA, J. 1. Leave granted. A

2. The State of Uttar Pradesh acquired land for the appellant
company. Various land acquisition proceedings therefor were initiated. The
Special Land Acquisition Officer, the acquiring authority, expressed its
intention to engage some daily wagers to look after the pending acquisition B
cases and asked the appellant to meet the said expenses or depute one
of its staff for the said purpose. Appellant agreed to the proposal of the
,.,.. Special Land Acquisition Officer that a person on daily wages may be
appointed on an ad hoc basis. The Special Land Acquisition Officer, inter
alia, engaged three persons on daily wages. Their wages were paid from
the fund provided for by the appellant. Appointments of the said employees
c
were for a temporary period and so long as their services were necessary
for the purpose of looking after the land acquisition cases, services of the
said employees were necessary for the period 1.5.1981 to 6.3.1982.
3. The services of the respondent having been tenninated with effect D
from 6.3.1982, an industrial dispute was raised. The State of Uttar
Pradesh referred the following dispute for adjudication to the Presiding
-""' Officer, Labour Court, Lucknow:
"Whether the termination/removal of Shri Jai Prakash Srivastava,
Case-Clerk, son of Shri Gomti Prasad Srivastava, from services E
by the Management w.e.f 6.3.1982, is just and legal? If not, then
to what benefit/relief the workman is entitled entitled?"
4. Whereas the contention of the first respondent was that there
existed a relationship of employer and employee by and between the F
appellant and himself; the contention raised on the part of the petitioner
was that there did not exist any such relationship. The validity of the
reference made by the State was also questioned.
5. In its award dated 30.9.1996, the Presiding Officer, Labour
Court, UP, Lucknow, in Award Dispute No. 28 of 1985 recorded that G
.J the first respondent was appointed by the Special Land Acquisition Officer
for conducting pairvi on behalf of the project in the cases of land
acquisition. The learned Labour Court, however, was of the opinion that
as the salary of the first respondent was made available to the Land
H
50 SUPREME COURT REPORTS [2007] 11 S.C.R.

A Acquisition Officer from the funds provided for by the appellant, a
relationship of employer and employee came into being, holding :
"From the documents available on record, it is very well proved
that although the appointment of the appliCant-workman Shri Jai
Prakash was not made on the basis of any appointment letter issued
B
independently by the Chief Project Manager of Tanda Thermal
Power Project, but was made by the Special Land Acquisition
Officer on daily wages on the basis of the approval given by the
Chief Project Manager on the request/proposal made by the
Special Land Acquisition Officer. The Management had also
c approved extension of the above appointment from time to time
and also came to a decision for not continuing the services of the
applicant-workman and the Chief Project Manager had duly
informed the Special Land Acquisition Officer for discontinuing the
services of the applicant-workman. Finally the services of the
D applicant-workman were terminated. It is also proved from the
evidence that the applicant-workman was doing the work of pairvi
in the cases relating to the Tanda Thermal Power Project and,the
payment of his salaries was also made from the funds made
available by Management. In the circumstances, it is proved that
E the appointment of the applicant-workman was made on the basis
of approval given by Management."
6. Opining that the first respondent worked for more than 240 days
during the aforementioned period and as no notice pay as also
p retrenchment compensation had been paid to the workman, he was
directed to be reinstated with back wages.
7. The writ petition filed by the appellant thereagainst before the
Lucknow Bench of Allahabad High Court which was marked as Writ
Petition No. 222 ofl 998, was dismissed on the premise that the disputed
G question of fact could not be determined by the High Court in exercise
of its jurisdiction under Article 226 of the Constitution oflndia.
8. The Division Bench of the High Court on an intra court appeal
preferred by the appellant refused to interfere therewith stating that the
H Special Appeal was not maintainable.
G.M. TANDA THERMALPOWERPROJECTv. JAi 51
'{ PRAKASH SRIVASTAVA [SINHA, J.]
9. Appellant is, thus, before us. A
10. Mr. Ranjit Saxena, learned counsel appearing on behalf of
the petitioner, would submit that the High Court committed an error in
passing the impugned judgment insofar as it failed to take into
consideration that there did not exist any relationship of employer and
B
employee by and between the petitioner and the first respondent;
appointment of the first respondent having been made by the Special
Land Acquisition Officer.
11. Our attention has not been drawn to any statute or statutory
rules in terms whereof such an appointment could be made by a revenue c
authority. It was, therefore, only an ad hoc employment.
12. Lands are acquired in terms of the provisions of the Land
Acquisition Act. It is for the authorities concerned to conduct the cases
relating to acquisition ofland in the courts oflaw. Although the appellant
was providing for the funds for meeting the expenditure in relation to D
payment of wages etc. to the first respondent herein, evidently, the
relationship between an employer a.11d employee did not come into being
between the appellant and the first respondent. It did not require the
services of the appellant. The Special Land Acquisition Officer did. The
offer of appointment was issued by the Special Land Acquisition Officer. E
First respondent was working under his supervision and control. His
services were being taken by the Special Land Acquisition Officer for
a particular purpose, namely, looking after the land acquisition cases.
When the purpose for which the first respondent was appointed ceased
to exist, his services were terminated. If there did not exist any F
relationship of employer and employee, the question of the appellant's
fulfilling the obligations required in terms of the UP Industrial Disputes
Act, namely, payment of retrenchment compensation or one month's
pay in lieu of notice did not and could not arise. If the first respondent
was a workman working under the Special Land Acquisition Officer, G
the question of compliance of the said provisions by the said authority
~ would also not arise. The High Court, therefore, in our opinion,
committed a serious error in refusing to interfere in the matter. When
existence of the relationship of employer and employee is disputed, the
san1e was required to be determined in presence of all the parties who H
\

r\
52 SUPREME COURT REPORTS [2007] 11 S.C.R.

A are interested in the subject matter of reference. The Special Land
Acquisition Officer was not a party to the reference. The learned Presiding
Officer, Labour Court, UP, Lucknow neither went into the question as
regards the nature of duties required to be performed by the first
respondent and also other relevant factors, namely, who had issued the
B offer of appointment; who used to supervise and control the work of the
respondent; or who was the authority to grant leave and take disciplinary
action etc. The said questions were relevant. {See Workmen ofNilgiri
Coop. Mkt. Society Ltd. v. State of Tamil Nadu and Ors., [2004] 3
sec 514]}.
c 13. The High Court, furthermore, committed a serious error insofar
as it failed to take into consideration that a direction for reinstatement
cannot be issued when there does not exist any post. Requirement of the
Special Land Acquisition Officer to have the services of some employees
was for a short period. No such post was created by the competent
D authority. The services of the first respondent were necessary for looking
after the land acquisition cases of the petitioner. Even in a case where
the workman is appointed on contractual basis, the industrial court would
ordinarily not direct for reinstatement. Subject to statutory interdict, the
agreement between the pdlties in this behalf must be given due weight
E
14. For the reasons aforementioned, the impugned judgment cannot
be sustained. The same is set aside accordingly. Appeal is allowed. As
nobody has appeared on behalf of the first respondent, there shall be no
order as to costs.
F K.K.T. Appeal allowed.