Holding

The age limits for regularisation are those prescribed at the time of the workers’ initial appointment, and retrenchment compensation must be paid under Section 25‑N with re‑employment governed by Section 25‑H of the Industrial Disputes Act.

Issues considered

Whether the maximum age limit for regularisation of the canteen workers is to be determined as at the time of their initial appointment or as the superannuation age.
Whether unabsorbed workers are to be retrenched under Section 25‑N of the Industrial Disputes Act and their re‑employment considered under Section 25‑H, as per condition (e) of the High Court’s order.

Legislation cited

Factories Act, 1948s. 46
Industrial Disputes Act, 1947s. 25-H, s. 25-N, s. 25-S

Subjects

regularisationindustrial disputes actretrenchmentage limitcanteen workerscontractoremployee statusSection 25-HSection 25-NSection 25-S

Judgment

INDIAN PETROCHEMICALS CORPN. LTD. A
v.
SHARMIK SENA AND ANR.

JANUARY 29, 2001

[S.S.M. QUADRI AND S.N. PHUKAN, JJ.] B

Labour Law:

lndustricl Disputes Act, 1947: Sections 25-H, 25-N and 25-S.
c
Workmen-Regularisation of-Workmen were employed in a canteen
run by the management through a contractor-High Court directed their
regularisation subject to the worker, inter-alia, being within the prescribed
minimum and maximum age limits-and providing that those not regularised
may be retrenched under S.25-H-Supreme Court approved these conditions-
Subsequent(v in proceeding initiated to give effect to the said directions- D
High Court directed that maximum age as limit be taken that ofsuperannuation
and retrenchment to be under S.25-N-Validity of-Held: Minimum and
maximum age limits should be as at the time of the initial appointment of the
workmen-Hence, High Court erred in directing that the maximum age limit
as that of superannuation-Retrenchment compensation to be paid under E
S. 25-N and re-employment to be considered under S.25-H-Facto(·ies Act,
1948, S.46.

Practice and Procedure:

Contentions urged before High Court-Whether can be gone into- F
Held: The question as to what is really argued before the High Court cannot
be gone into as records of the High Court cannot be allowed to be
contradicted-Hence, plea that contentions not correctly recorded by High
Court, rejected.

The Appellant-management was running a canteen in compliance with G
the requirements of Section 46 of the Factories Act, 1948, in which the
respondent-workmen were employed purporting to be the employees under a
contractor. The High Court directed the appellant-management to regularise
the services of these workmen subject to their being within the prescribed
minimum and maximum age limits and providing those not regularised that
659 I-I
...
660 SUPREME COURT REPORTS [2001] I S.C.R.

A may 'be retrenched under Section 25-H of the Industrial Disputes Act, 1947.
This Court approved these conditions.

Subsequently in proceedings initiated to give effect to the said conditions
the High Court directed that for the purposes of regularisation the maximum
age limit should be taken as the age of superannuation and that the workmen
B who did not fulfil the conditions for regularisation should be ri!trenched in
terms of Section 25-N of the Act. Hence this appeal.

Allowing the appeal, the Court

C HELD: I.I. For regularising the services of the workmen, the minimum
and the maximum age limits prescribed under the policy of the Corporation
(18 years and 25 years respectively) has to be considered as at the time of
their initial appointment. This condition is too clear to admit of any
controversy. The order of the High Court that the maximum age should be
the age of superannuation cannot be sustained. 1664-G-H; 665-Gf
D
Railway Parcel & Goods Handling Mazdoor Union v. Union of India,
120001 1 LLJ !050; R.K. Panda v. Steel Authority of India, 11994] 5 SCC
304; Parimal Chandra Raha v. life Insurance Corporation of India 119951 2
Supp. SCC 611 and Indian Petrochemicals Corporation ltd. v. Sharmik Sena,
119991 6 sec 439, referred to.
E
1.2. The plea that the contentions urged by the parties are not correctly
recorded by the High Court cannot be accepted. The question as to what was
really argued before the High Court cannot be gone into as the records of the
High Court cannot be allowed to be contradicted. 1665-C-Df

F State of Maharashtra v. Ramdas Shrinivas Nayak, J19831 1 SCR 8,
relied on.

2. It is not disputed that the management is an industrial establishment
to which Chapter V-B of the Industrial Disputes Act, 1947 applies; if that be
G so, Sections 25-N and 25-H read with Section 25-S will be attracted. Therefore,
in the event of the management choosing to retrench the workmen who do
not fulfil the conditions for regularisation, they shall be paid retrenchment
compensation under Section 25-N and their cases for re-employment should
be considered under Section 25-H of the Industrial Disputes Act. (667-C-D(

H CIVIL APPELLATE JURISDICTION: Civil Appeal No. 892 of2001.
\~

INDl/\N PETROCHEMICALS CORl'N. LTD. v. Slli\RMIK SENA [()Ui\DRI. J.J 661

From the Judgment and Order dated 26.4.2000 of the Bombay High A

--- Court in W.P. No. 979 of2000.

T.R. Andhyarujina, K.S. Parihar, S. Birla, M.M. Varma and ll.S. Parihar
for the Appellants.

K.K. Singhvi, R.R. Chandrachud, S. Pakale and Sanjay Parikh for the B
Respondents .
..,.,
The Judgment of the Court was delivered by

SYED SHAH MOHAMMED QUADRI, J. Leave is granted.
c
The Judgment and order of a Division Bench of the High Court of
Judicature at Bombay in Writ Petition No. 979 of 2000 passed on April 26,
..- 2000, is brought under challenge in this appeal by special leave. Appellant
.
~ No. I is Government of India Unde11aking and appellant No. 2 is its General
Manager (hereinafter they will be referred to as 'the management'). The first
respondent is the union of workmen of appellant No. I and the second D
i ' respondent is its member and a workman (hereinafter they will be referred to
as 'the workmen').

-41( To comprehend the controversy in this appeal, narration of the following
facts will be useful. E
' The management is running a canteen in compliance with the
requirements of Section 46 of the Factories Act, 1948, in which the workmen
were employed purporting to be the employees under a contractor. The
litigation between the parties commenced with the filing of Writ Petition
-+·. No. 2206 of l 997 by the workmen in the High Court of Judicature at Bombay F
seeking a direction that they (specified in the Annexure 'A' thereto) be
absorbed as regu Jar employees of the management with parity of pay-scales
and other service conditions applicable to regular employees with effect from
their actual date of entry into service with the contractor. On August 29, 1997,
the High Com1 disposed of the writ petition taking the view that as the
G
workmen were engaged in a statutory canteen they ipso facto became the

--- employees of the principal employer, namely. the manc.gement and ordered
their absorption subject to conditions (a) to (e) which will be referred to
p1esently. That judgment was assailed by the management in this Court, by
special leave, m Civil Appeal No. 1854 of 1998. And inasmuch as the High
Court imposed certain conditions for their absorption, the workmen also filed H
662 SUPREME COURT REPORTS 12001] I S.C.R.

A Civil Appeal No. l 855 of 1998, by spei:ial leave of this Court. Those appeals
were dismissed by a three Judge Bench of this Court on August 4, l 999, 'I-·
reported in Indian Pe1rochemicals Corporation Ltd. & Anr. v. Shramik Sena
& Ors., [ 1999] 6 SCC 439. Thereafter, for similar reliefs the workmen filed Writ
Petition No. 58 l 7 of l 999 in the High Court, but the same was dismissed as
withdrawn on November 17. 1999. The present writ petition which has given
B rise to this appeal. is the third in the series. The High Court, by the judgment
impugned in this appeal, held, in regard to condition (a). that for purposes
of regularisation of the workmen the maximum age limit should be taken as
the age of superannuation and, in regard to condition (e), that the workmen
who did not fulfil conditions for regularisation should be retrenched in terms
c of the provisions of Chapter V-B of the Industrial Disputes Act, 1947 (for

-
short, 'the l.D. Act') and directed that the process of regularisation of the
workmen in accordance with the said judgments be completed within two
months from the date of the impugned judgment. The validity of the
pronouncement of the High Court on those two aspects is assailed by the t·
management in this appeal before us.
D 1~
,Mr. T.R. Andhyarujina, the learned senior counsel appearing_ for the
management, submitted that it was the case of the management that the
maximum age limit of25 years would be applicable as on the date of their entry
into service and not as on the date of hearing of the present writ petition but )t
E the High Court had not appreciated properly the contention of the management
and having erroneously interpreted condition (a), directed that the age of
superannuation should be taken as the maximum age limit which in effect had
altered condition (a). The second contention of the learned counsel relates
to retrenchment compensation. He argued that condition (e) provided that the
workmen who could not be absorbed, should be considered for future
F absorption in accordance with the provisions of Section 25H and be paid +
retrenchment compensation in accordance with law hut the High Court
introduced a new condition. viz .. retrenchment of workmen under Section 25N
of the l.D.Act, which had nullified condition (e), as such the impugned
judgment was illegal and liable to be set aside.
G
Mr. K.K. Singh vi. the learned senior counsel appearing for the workmen,
-,.__
contended that they had been working for number of years and as no rules
were applicable to them for purposes of their absorption, the maximum age
limit that could be taken into consideration was only the age of superannuation
as was done by the Supreme Court in Railway Parcel & Goods Handling
H Mazdoor Union & Ors. v. Union of India & Ors., (2000) l LLJ I 050. In any
INDIAN PETROCllEMICJ\LS CORPN. LTD.,. Slli\RMIK SENA [QUJ\DRI, J.] 663

event, submitted Mr.· Singhvi, there e.xisted in the management the power to A
--+- relax the age limit, therefore, the management should relax the age limit and
absorb the workmen. The conditions laid down for regularisation of the
workmen, it was submitted, were virtually lifted from the decisions in R.K.
Panda & Ors. v. Steel Authority of India & Ors., [1994] 5 SCC 304 and
Parimal Chandra Raha & Ors. v. life Insurance Corporation of India & Ors. B
[ 1995) 2 Suppl. SCC 611, so the conditions be interpreted in the light of the
judgments in those cases. As the workmen were found to be the employees
of the management, an industrial establishment, and not of the contractor,
argued Mr. Singhvi, payment of retrenchment compensation could only be in
terms of Section 25N and not under Section 25F of the l.D. Act and that in
approving condition (e) the Supreme Court could not have deprived the C
workmen of the benefits which they would otherwise be entitled to under
Chapter V-B of the l.D. Act.

On the contentions raised by the learned counsel, the question that
merits our consideration is : what is the true interpretation of conditions (a)
and (e) imposed by the High Court and confirmed by this Court. D
It will be apt to refer to the relevant findings of this Court and the
conditions confirmed by this Court in the aforementioned appeals. While
negativing the contention of the management that in view of the contract
between the management and the contractor the workmen could not be
treated as the employees of the management, this Court held that on the facts E
of the case the contractor was engaged only for the purpose of record and
for all purposes the workmen in that case were in fact the workmen of the
management. Further, the contention of the workmen that after holding them

* the employees of the management there was no reason to impose those
conditions, was also rejected by this Court observing as follows : F
"It should be borne in mind that the initial appointments of these
workmen are not in accordance with the rules governing the
appointments or the established policy of recruitment of the
management. The said recruitments could also be in contravention
of the various statutory orders including the reservation policy. G
___y--
Further, the respondent is an instrumentality of the State and has an
obligation to conform to the requirements of Articles 14 and 16 of
the Constitution. In spite of the same the services of the workmen are
being regularised by the Court not as a mat/a of right of the
workmen arising under any statute but with a view to eradicate
unfair labour practices and in equity to undo social injustice and H
664 SUPREME COURT REPORTS [2001] I S.C.R.

A as a meusuie of labour welfare. Therefore, ii is necessary lhul in· !his
process suilable guidelines or conditions he laid down al !he lime
<fcourts issuing directions to regularise !he services of the workmen
so concerned depending upon the facls of each case. This Court has
consistently followed this practice in the earlier cases of
regularisa/ion and we do no find any reason to differ from the same. "
B
The directions/conditions, referred to above, read thus :

"Respondent 1 should absorb the employees listed in Exhibit 'A' to
the petition, in its employment subject to their fulfilling the following
conditions:
c
(a) at the time of initial appointment the workmen should be
complying with the minimum and the maximum age-limits
prescribed under the policy of the Corporation;
(b) they must be medically fit according to the standards prescribed
D by the Corporation;
(c) those who were appointed prior to the filing of the writ petition
must have three years' minimum service to their credit on the
date of the present judgment;
(d) those who were appointed during the pendency of the writ
E petition must have four years of minimum service to their credit
on the date of the present judgment;
(e) all those who are not absorbed in the service of the Corporation
for any of the reasons indicated above, their cases shall be
considered in accordance with the provisions of the Industrial
F Disputes Act, 1947 when fresh recruitment to the canteen staff
is made by the Corporation;
All the workmen who are not absorbed for any of the conditions
enumerated above, shall be given retrenchment compensation in accordance
with law."
G
Adverting to the first contention of Mr. T.R. Andhyarujina, from a plain
reading of condition (a), extracted above, we find that the age eligibility for
regularising the services of the workmen, the minimum and the maximum age
limits prescribed under the policy of the Corporation ( 18 years and 25 years
respectively) has to be considered as at !he time of their initial appointment.
H This condition is too clear to admit of any controversy.
INDIAN PETROCHEMICALS l'ORJ>N LTD. 1·. SHARMIK SENA [QUADRI. J.] 665

Mr. Andhyarujina submitted that it was not' the contention of the A
··-I- management that the maximum age should be determined as on the date of
passing of the order by the High Cou11 and that on the wrong assumption
that the management was denying the benefit of regularisation to some of the
workmen, the High Court found fault with it and observed that it would not
be permissible for the Corporation (management) to deny the benefit of B
regularisation to some of the workers on the ground that they were not at
the present time below the age of 25 years and that it was merely a device
reflective of an unfortunate attempt on its part to evade its obligation to
comply with the direction issued by the High Court and confirmed by this
Court. A perusal of the impugned judgment shows that the contention of the
management before the High Court was that the workmen who had crossed C
the age of 25 years at the time of regularisation, were not entitled to that
benefit. We cannot accept that the contentions urged by the parties are not
_,,.,.,. correctly recorded by the High Com1. We cannot go into the question as to
what was really argued before the High Court as we cannot allow the records
of the High Court to be contradicted. See : State of Maharashtra v. Ramdas
Shrinivas Nayak & Anr., [ 1983] I SCR 8. Be that as it may, we have already D
pointed out that condition (a), referred to above, does not warrant any
polemic.

It is correct that in the aforesaid appeals while confirming conditions
(a) to (e) laid down by the High Court, this Court referred to the decisions E
in Panda's case (supra) and Raha 's case (supra) but that fact would not permit
a different interpretation of condition (a) whereunder the minimum and the
maximum age as on the date of initial appointment have to be looked into
for purposes of regularisation of services of the workmen in this case. The
High Court is, therefore, not justified in coming to the conclusion that the
maximum age referred to in condition (a) meant the age of superannuation. No F
support can be drawn for the said conclusion from the judgment of this Court
ill' Panda's case (supra) or in Railway Parcel & Goods Handling Mazdoor
Union's case (supra) as in those cases this Court prescribed the age of
superannuation as the maximum age for absorption/regularisation whereas in
the instant case this Court confirmed, without any modification, condition (a) G
imposed by the High Court, which needs to be interpreted correctly and not
altered with reference to other decisions. We, therefore. cannot sustain the
order of the High Court on this aspect.

We are of the view that any further direction by this Court in regard to
relaxation of maximum age limit would amount to recasting condition (a) which H
666 SUPREME COURT REPORTS [2001] I S.C.R.

A ·we are not inclined to do. We may, however, observe that it will be open to
the management to relax maximum age limit in appropriate cases.

The other point that remains to be considered is about payment of
retrenchment compensation; whether it should be paid under the provisions
of Section 25F or in terms of Section 25N of the l.D. Act. It may be noticed
B here that conditions (a) to (d), noted above, deal with the requirements which
have to be fulfilled by the workmen for their regularisation. Such of the
workmen who do not satisfy them and are not eligible for regularisation, have
to be dealt with under condition (e) which incorporates benefits for unabsorbed
workmen who would be rendered out of service. A close reading of condition
C (e) discloses that it is in two parts. The first part provides for their re-
employment in accordance with the provisions of l.D. Act as and when the
management proposes to make fresh recruitment to the canteen staff. The
second part directs payment of retrenchment compensation in accordance
with law. To understand the import of these two parts, it will be necessary
to bear in mind that the High Cou1i imposed the aforementioned conditions
D for purposes of absorption of the workmen in the service of the management
because though they were treated as the employees of the management under
the Factories Act, they were purportedly working as the employees of the
contractor. Now, in the context of the aforementioned findings recorded (that
they are in fact the workmen of the management) and the direction issued by
E this Court for their 'regularisation' in the service of management that both the
parts of condition (e) have to be interpreted. It is difficult to assume that while
conferring the benefit of regularisation on the workmen, subject of course to
the said conditions, this Court impliedly took away the rights available to the
unabsorbed workmen under the l.D. Act. There is nothing in the judgment
of this Court, in the above-mentioned appeals, to suggest that the status of ~
F the workmen who remained unabsorbed for non-fulfillment of conditions (a)
to (d) would be changed to that of retrenched employees. Equally there is
nothing therein to infer that it directs their retrenchment in accordance with
law. It is needless to point out that once it is held that they are the employees
of the management, they can be retrenched only in accordance with the
G provisions of the l.D. Act.

Mr. T.R. Andhyarujina, however, contended that having regard to the
provisions of Section 25N of the l.D. Act retrenchment of unabsorbed workmen
would be next to impossible. We are unable to accede to such a broad
proposition. Whether retrenchment of an employee is justified or not has to
H be determined by the appropriate Government on the facts of each case. In
INDIAN PETROCHEMICALS CORPN. LTD. v. SI-IARMIK SENA [QUADRI, J.] 667

our view, the apprehension expressed by the learned counsel may not be A
-----+-- justified in a case where the workmen are found to be lacking in the requisite
eligibility criteria for absorption laid down by the High Court and confirmed
by this Court and therefore cannot be continued in the present status. However,
this is not germane to the issue with which we are concerned and should not
detain us any longer.
B
From the above discussion, it follows that the obligation to comply with
condition (e) is contingent upon the retrenchment of the workmen in
accordance with law. It is not disputed that the management is an industrial
establishment to which Chapter V-B complies; if that be so, Sections 25N and
25H read with Section 25S will be attracted. Therefore, we are of the view that C
the following direction in the impugned order of the High Court, "We direct
that those workers who do not fulfill directions (a), (b), (c) & (d) of the
.Ji1¥' conditions for regularisation, be retrenched in accordance with law after
following the provisions of Chapter V-B of the Industrial Disputes Act,
1947," does not correctly interpret condition (e). In our view, condition (e)
postulates that in the event of the management choosing to retrench the D
workmen who do not fulfil directions (a) to (d) of the conditions for
regularisation, they shall be paid retrenchment compensation under Section
25N and their cases for re-employment should be considered under Section
.._ 25H Jf the l.D. Act.

For all these reasons, the impugned order of the High Court is set aside E
to the extent indicated above. The appeal is allowed accordingly. There shall
be no order as to costs.

V.S.S. Appeal allowed.
~-