Holding

The termination did not amount to retrenchment as it fell within the exception of Section 2(oo)(bb) for non‑renewal of a fixed‑term contract.

Summary

The Haryana State F.C.C.W. Store Ltd. engaged two individuals as watchmen/chowkidars on a daily-wage contract for a specific purpose—watching grain stock stored in an open area—and for a defined period of three months or until the stock was cleared. After the stock was disposed of, the respondents were terminated on 26 April 1994 without complying with the procedural requirements of Section 25(f) of the Industrial Disputes Act, 1947, and claimed that the termination amounted to retrenchment. The Labour Court held that the engagement was for a specific purpose and period, so the termination fell under the exception of non‑renewal of a fixed‑term contract and did not constitute retrenchment, granting no relief. The Punjab and Haryana High Court set aside that award, ordering reinstatement of the respondents. The Supreme Court reversed the High Court, holding that the termination was covered by the exception in Section 2(oo)(bb) of the Act and therefore was not retrenchment, restoring the Labour Court award.

Issues considered

Whether the termination of the respondents' service amounts to 'retrenchment' under Section 2(oo) of the Industrial Disputes Act, 1947.
Whether the exception under Section 2(oo)(bb) for non‑renewal/expiry of a contract applies to the facts.
Whether Section 25(f) of the Act is applicable to the termination in question.

Legislation cited

Industrial Disputes Act, 1947s. 25(f), s. 25(j), s. 2(oo), s. 2(oo)(a), s. 2(oo)(b), s. 2(oo)(bb), s. 2(oo)(c)

Subjects

retrenchmentIndustrial Disputes Acttermination of servicecontract of serviceSection 2(oo)Section 25(f)labour court awardhigh court interference

Judgment

• MIS. HARYANA STATE F.C.C.W. STORE LTD. AND ANR. A
v.
RAM NIWAS AND ANR.

JULY 8, 2002

[D.P. MOHAPATRA AND K.G. BALAKRlSHNAN, JJ.] B

labour la1-tis:

Industrial Disputes Act, 1947-Section 2(00) and 25(j)-Appointment of
Chowkidar!Watchman-For specified period/specified purpose-Termination- C
Whether a1nounts to retrenchn1ent-Held, since contracts of service specified
ter111s of and conditions and the disengagen1entlter1nination was in accordance
therewith, it did not a111ount to retrench1nent-Thus provisions a/Section 25(j)
not attracted.

Appellant-Society had appointed respondents as Watchman/
D
Chowkidar on contract basis on payment of daily wages for watching and
keeping care of the stock of grains lying in the open area till the stocks
would be disposed of or for a period of three months. After clearance of
the stock of food grains, engagement of both the respondents was
terminated without complying with the provisions of Section 25(f) of the E
Industrial Disputes Act. Respondents raised an industrial dispute which
was referred to the Labour Court by the State Government. Labour Court
came to the conclusion that workmen were not entitled to any relief since
they were appointed for specific purpose and specific period only.
Aggrieved, workmen challenged the award by filing Writ Petitions. High
Court allowed the Writ Petitions and set aside the award. Hence these F
appeals.

The question for determination in these appeals is whether on the
facts and circumstances of the case the termination of service of the
respondents amounts to 'retrenchment'.
G
Allowing the appeals, the Court

HELD: I. On a plain reading of the statutory provision, it is clear
that any termination of service of a workman by the employer for any
ll 5 I H
)

1152 SUPREME COURT REPORTS [2002) 3 S.C.R.

A reason whatsoever comes within the meaning of the expression
'retrenchment' as defined in Section 2(oo) of the Industrial Disputes Act. ""
The Section further provides certain exceptions vide Ss. 2(oo) (a) to
2(oo)(c), to the wide and comprehensive definition of the term
'retrenchment'. It follows, therefore, that ifthe case of termination of the

B
workman comes within any of the exceptions enumerated in the Section
then the said termination will not be a case of 'retrenchment' within the
...
meaning of Section 2(00). 11155-C, GI
-I
Uptron India ltd. v. Shammi Bhan and Anr., 119981 6 SCC 538 and
Harmohinder Singh v. Kharga Canteen, Ambala Cantt. 12001 I 5 SCC 540, .......'

c referred to.

2. In the present case, the Labour Court, relying on the oral and
documentary evidence, held that the engagement/appointment of the
workmen concerned was for a specific purpose and for a particular period
and since the purpose f~r their engagement/appointment was over and the
D period of appointment had expired, their disengagement was in terms of
contract of service, and therefore, not a 'retrenchment' within the meaning
'
~

of Section 2(oo) of the Act.11156-F, G, HI
I-
3. In the facts and circumstances of the case the Labour Court rightly
came to the conclusion that the workmen were entitled to no relief in the
E case. The High Court was clearly in error in interfering with the Award
passed by the Labour Court. 11157-BI
; •
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3645-46 of
2002.

F From the Judgment and Order dated 22.9.2000 of the Punjab and
Haryana High Court in CWP Nos. 9471 and 9472 of 1999.

Anil Mittal and Dharam Bir Raj Vohra, for the Appellants. ' -
S.R. Sharma and S. Srinivasan for the Respondents.
G
The Judgment of the Court was delivered by

D.P. MOHAPATRA, J. Leave is granted.
...
The question that arises for determination in these appeals is whether
H on the facts and circumstances of the case the termination of service of the
HARYANA STATE r_c.c.w. STORE LTD. I'. RAM NIWAS lD r. MOHAPATRA, J.J 1153

respondents is 'retrenchment' in terms of section 2(oo) of the Industrial A
• Disputes Act, 1947 (for short 'the ID Act') ?The further question that arises
for consideration in this connection is whether section 2(oo)(bb) of the ID
Act has any application in the case ?

The factual matrix of the case relevant for considering the questions
raised may be stated thus : B

In the year 1993 the appellants have been entrusted with the
responsibility of procuring wheat and supply the same to Haryana Warehousing

- Corporation. On account of non-aVailability of godowns heavy stock of grain
had to be stored in the open area at Hasanpur Mandi. For watching and
keeping care of the stock lying in the open area necessity of watchman/ C
chowkidar was felt and sanction was sought by the District Manager of the
appellant Society. The Managing Director having sanctioned the engagement
of watchman/chowkidar the respondents were appointed on contract basis on
payment of daily wages till the stocks are disposed of or for a period of three
months. It was made clear in the order of the Managing Director that the D
number of chowkidars/Labourers kept by the District Manager should come
down with the clearance of stock lying in the open. The respondents continued.
The respondent Ram Niwas was engaged on 25.5.1993 whereas respondent
Shiv Kumar was engaged on 2.6.93. The engagement of both the respondents
was terminated with effect from 26.4.1994, after the stock lying in the open
was cleared. Undisputedly, the provisions of section 25(f) of the ID Act were E
not complied with before disengagement /termination of the respondents.

The Industrial Dispute raised by the respondents was referred by the
State Government under section I 0( I) of the Act to the Labour Court,
Faridabad for adjudication. The term of reference was "Whether the termination
F
of service of Shri Shiv Kumar is legal and justified? If not to what relief he
·is entitled to"? Similar order of reference was passed in the case of the other
respondent. Before the Labour Court the workmen concerned took the stand
that the disengagement/termination of their service was per se invalid as the
order of disengagement was passed without complying with the mandatory
condition prescribed under section 25 (f) of the ID Act. Therefore they claimed G
reinstatement in service with all the consequential benefits.

Reviewing the claim the appellant society pleaded the case that the
workmen concerned were appointed on ad hoc basis for a specific purpose
and for a specified period; as such their disengagement/termination of service
after the stock of wheat lying in open area in the mandi was cleared and the H
,
1154 SUPREME COURT REPORTS [2002] 3 S.C.R.

A period specified in the appointment order had expired, di~ not amount to ~
termination within the meaning of section 2(oo) of the ID Act, and therefore
section 25(f) of the Act was not applicable in the case.

Both the parties led oral and documentary evidence in support of their
case.
B
The Labour Court on consideration of the evidence on record held that
it is evident from Exh.MW l/ 2 - the order issued by the Managing Director,
that the workmen were engaged by the management for specific purpose and
for specified period. Referring to certain decisions of this Court the Labour
Court came to the conclusion that the workmen were entitled to no relief in
C the case. The Labour Court decided the Award accordingly.

The workmen filed writ petitions before the High Court assailing the
Award of the Labour Court. The High Court as evident from the discussions
by its judgment dated 22nd September, 2000 allowed the writ petitions, set
D aside the Award passed by the Labour Court and ordered reinstatement of the
writ petitioners in the service with all the consequential benefits and with full
wages from the date of demand notice. From the discussions in the judgment )

it is clear that the High Court while taking the decision has placed reliance
mainly on the fact that no contract of service between the management and
the workmen was produced by the Management and there was no material to
E show that at the time of appointment the workmen had been told that their
appointment was for a specified period and for a specific work. The said
judgment is under challenge in these appeals.

Since the case turns on the interpretation of section 2(oo)(bb) of the ID
Act it will be convenient to quote the said section before proceeding to
F consider merits of the case:

"2. In this Act, unless there is anything repugnant in the subject or
context

(oo)retrenchment" means the termination by the employer of the
G service of a workman for any reason whatsoever, otherwise
than as a punishment inflicted by way of disciplinary action,
but does not include

(a) voluntary retirement of the workman; or ....

(b) retirement of the workman on reaching the age of
H
HARYANA STATE F.CC W. STORE LTD."· RAM NIWAS [D.P. MOHAPATRA, J] 1155

superannuation if the contract of employment between A
the employer and the workman concerned contains a
stipulation in that behalf; or

(bb) termination of the service of the workman as a resu It of the
non-renewal of the contract of employment between the
e1nployer and the workman concerned on its expiry or of B
such contract being terminated under a stipulation in that
behalf contained therein; or

On a plain reading of the statutory prov1s1on it is clear that any
c
termination of service of a workman by the employer for any reason
whatsoever comes within the meaning of the expression 'retrenchment' as
defined in section 2(oo) of the Act. Further the section further provides
certain exceptions to the wide and comprehensive definition of the term
'retrenchment'. The exceptions are : D
"(l) Tennination of appointment inflicted by way of disciplinary action

(2) Voluntary retirement of the workman

-
(3) retirement of the workman on reaching the age of superannuation
if the contract of employment between the employer and the E
workman concerned contains a stipulation in that behalf; or

(4) termination of the service of the workman as a result of the non-
renewal of the contract of employment between the employer and
the workman concerned on its expiry or of such contract being
terminated under a stipulation in that behalf contained therein; or F
(5) termination of the service of a workman on the ground of continued
ill-health."

It follows therefore that if the case termination of the workman
comes within any of the exceptions enumerated in the section then the said G
tennination will not be a case of 'retrenchment' within the meaning of the
section 2( oo ).

• In the case of Uptron India Ltd v. Shammi Ban and Anr., [1998] 6
sec 538 this Court considering the definition. of 'retrenchment' in section 2
(oo) observed: H
)

1156 SUPREME COURT REPORTS [2002] 3 S.C.R.

A "The definition of "retrenchment" was introduced in the Act by act
43of1953 with effect from 24.10.1953. Clause (bb) was inserted in
the definition by Act 49 of 1984 with effect from 18.8.1984.

The definition is conclusive in the sense that "retrenchment" has been
defined to mean the termination of the service of a workman by the
B employer for any reason whatsoever. If the termination was by way
of punishment as a consequence of disciplinary action, it would not
amount to "retrenchment". Originally, there were two other exceptions,
namely,

(i) voluntary retirement of the workman and
c (ii) retirement of the workman on reaching the age· of superannuation
if the contract of employment contained a stipulation to that effect.

By the Amending Act 49 of 1984, two further exceptions were
introduced in the definition by inserting clause (bb) with effect from
18.8.1984; one was the termination of service on the ground of
D continued ill-health of the workman and the other was termination of
service on account of non-renewal of the contract of employment on
the expiry of the term of that contract. If such contract of employment
contained a stipulation for termination of service and the services of
the workman are terminated in accordance with that stipulation, such
E termination, according to clause (bb) would also not amount to ....
"retrenchment".

The position was reiterated in Harmohinder Singh v. Kharga Canteen,
Ambala Cant!, [200 l] 5 SCC 540.

F In such a case the question of complying with the conditions precedent
to retrenchment of workman provided in section 25(t) of the Act will not
arise. In the present case the Labour Court relying on the oral and documentary
evidence cited on behalf of the management, particularly the order of the
Managing Director sanctioning the engagement· of the workmen concerned
held that the engagement/appointment of the workmen concerned was for a
G specific purpose and for a particular period and since the purpose for their
engagement/appointment was over and the period of appointment had expired
their disengagement was in terms of the contract of service, and therefore,
not a 'retrenchment' within the meaning of section 2(oo) of the Act. The
High Court has not recorded a finding that there was no contract of service
H between the management and the workmen concerned. In view of the evidence
HARYANA STATE F.C.CW. STORE LTD "·RAM NIWAS [D.P. MOHAPATRA, J.] 1157

on record the High Court could not and indeed has not recorded any finding A
that there was no contract of service between the 1nanage1nent and the
workmen concerned. Since there exists a contract of service with the tern1s
and conditions as noted earlier the position is inescapable that the case of
Jisengagement/termination of the workman concerned did not amount to
retrenchment. In particular facts and circumstances of the case the Labour
Court rightly came to the conclusion that the \Vork111en \Vere entitled to no B
relief in the case. The High Court was clearly in error in interfering with the
Award passed by the Labour Court. Accordingly, the appeals are allowed.
• The Judgments of the High Court in CWP No. 9471199 and CWP No. 94721
... 99 dated 22.9.2000 allowing the writ petitions filed by the respondent workmen
are set aside and the Award of the Tribunal is restored. There will, however, C
be no order for costs.

S.K.S. Appeals allowed.

,