Holding

Considering the Industrial Court's discretionary jurisdiction under Section 11A and the specific facts, the employee is entitled only to compensation of Rs. 75,000, not reinstatement with full back wages.

Summary

The Madhya Pradesh Administration terminated the services of Tribhuban, who had been employed on a temporary basis with intermittent breaks, prompting an industrial dispute that was adjudicated by an Industrial Tribunal. The Tribunal awarded retrenchment compensation, notice pay and interest, finding the employer had not complied with Section 25F of the Industrial Disputes Act, 1947. The employer did not challenge the award, but the employee obtained a writ from the Delhi High Court ordering his reinstatement with full back wages, an order affirmed by a Division Bench. On appeal, the Supreme Court examined whether the High Court's reinstatement order was appropriate, considering the Tribunal's discretionary jurisdiction under Section 11A and the nature of the temporary appointment. The Court held that, given the peculiar facts, the appropriate relief was payment of compensation of Rs. 75,000 rather than reinstatement with back wages. Consequently, the appeal was partly allowed, directing compensation and dispensing with costs.

Issues considered

Whether the Delhi High Court could order reinstatement with full back wages despite the Industrial Tribunal's award of retrenchment compensation.
Whether the establishment qualifies as an 'industry' under Section 2(j) of the Industrial Disputes Act, 1947.
Whether the discretionary jurisdiction of the Industrial Court under Section 11A should govern the relief in this case.
Appropriate relief for a temporary appointee terminated without compliance with Section 25F.

Legislation cited

Industrial Disputes Act, 1947s. 11A, s. 25F, s. 2(j), s. 2(s)

Subjects

Industrial disputeTemporary appointmentRetrenchment compensationReinstatementBack wagesSection 11ASection 25FDiscretionary jurisdictionCompensation

Judgment

A MADHYA PRADESH ADMINISTRATION
v.
TRIBHUBAN

APRIL 05, 2007

B [S.B. SINHA AND MARKANDEY KA TJU, JJ.]

Industrial Disputes Act, 1947-Section I IA-Termination of temporary
appointee with break in service-Retrenchment compensation by Industrial
court-Reinstatement with full back wages by High Court- Correctness of-
C Held: In the peculiar facts and circumstances of the case, High Court should
have taken into consideration the jurisdiction exercised by indus_trial court-
Thus, in the interest of justice, employee directed to be paid compensation.

Respondent was appointed on temporary basis from time to time with
D break in service with the appellant. His services were terminated. Thereafter,
an industrial dispute was raised and was referred to the Industrial Tribunal.
Tribunal awarded retrenchment compensation since the appellant did not
comply with the requirement of section 25F of the Industrial Disputes Act,
1947. Appellant did not challenge the award. However, respondent filed the
writ petition. Single Judge of High Court directed re-instatement of respondent
E with full back wages. Division Bench upheld the order. Hence the present
appeal

Partly Allowing the appeal, the Court

HELD: 1.1. The Industrial Court exercised its discretionary jurisdiction
F under section llA of the Industrial Disputes Act, 1947. It merely directed
the amount of compensation to which the respondent was entitled to, had the
provisions of section 25F been complied with should be sufficient to meet the
ends of justice. It is not suggested that the High Court could not interfere
with the said order, but the discretionary jurisdiction exercised by the
G Industrial Court, should have been taken into consideration for determination
of the question as to what relief should be granted in the peculiar facts and
circumstances of this case. Each case is required to be dealt with in the fact
situation obtaining therein. (Para 13) (924-F-G)

1.2. In view of the peculiar facts and circumstances of the case and
H 918
MADHYA PRADESH ADMINISTRATION 1•. TRIBHUBAN (S.B. SINHA, J.) 919
....
~
particularly the fact that the High Court had directed re-instatement with full A
back wages, interest of justice would be subserved by directing the appellant
to pay a sum of Rs. 75,000/- by way of compensation to the respondent

- (Para 14) (924-H; 925-A]

Secretary, State of Karnataka and Ors. v. Umadevi (3) and Ors., [2006)
4 SCC 1; M P. Housing Board and Anr. v. Manoj Shrivastava, (2006) 2 SCC B
702; State ofMP. and Ors. v. Arjunlal Rajak, [2006) 2 SCC 711 and MP. State
~
Agro Industries Development Corpn. Ltd and Anr. v. S.C. Pandey, [2006) 2
sec 716, relied on.
Jasbir Singh v. Punjab & Sind Bank and Ors., [2007) 1 SCC 566,
distinguished. c
Muir Mills Unit of NTC (U.P.) Ltd. v. Swayam Prakash Srivastava and
Anr., [2007) 1 SCC 491 and Uttranchal Forest Development Corporation v.
---- M C. Joshi, (2007) 3 SCALE 545, referred to.

CIVIL APPEALLATE JURISDICTION: Civil Appeal No. 1817 of2007. D

- /
From the Final Judgment and Order dated 19.04.2005 of the High Court
of Delhi at New Delhi in L.P.A. No. 622 of 2005.

Vikas Singh, ASG. and Sibo Sankar Mishra for the Appellant
E
Sanjoy Ghosh, Anitha Shenoy and Nitin for the Respondent.

The Judgment of the Court was delivered by

S.B. SINHA, J. 1. Leave granted.
F
2. State of Madhya Pradesh runs an establis.hment in Delhi known as
~
-(
Madhya Pradesh Bhawan. Respondent was appointed on temporary basis
from time to time with breaks in services. He worked for the period 13.12.1991
·to 1.3.1994. After his services were terminated, an industrial dispute was
raised. The said dispute was referred for its determination before the Industrial
Tribunal. The Industrial Tribunal by an Award dated 26.7.2002, while holding G
~· that in terminating the services of the respondents the appellant has failed
to comply with the statutory requirements contained in Section 25F of the
Industrial Disputes Act, awarded only retrenchment compensation alongwith
-- notice pay together with interest@9% per annum. Validity of the said Award
was not questioned by the appellant. Respondent, however, filed a Writ H
y
920 SUl'Rt~ME COURT REPORTS [2007] 4 S.C.R.
""':'
A Petition thereagainst. By a Judgment and Order dated 24.2.2005 and 15.4.2005,
a learned Single Judge of the Delhi High Court allowed the said Writ Petition
directing re-instatement of the respondent with full back wages. An intra-
court appeal preferred thereagainst has been dismissed by a Division Bench
of the said Court by reason of the impugned judgment.

B 3. Mr. Vikas Singh, learned Additional Solicitor General appearing on
behalf of the appellant would submit that Madhya Pradesh Bhawan being
merely a Circuit House of the Government of Madhya Pradesh, is not an ~

"Industry" within the meaning of Section 2(j) of the Industrial Disputes Act.
Learned counsel urged that in that view of the matter, it was not a fit case

c where a direction of re-instatement with full back wages should have been
issued.

4. Mr. Sujoy Ghosh, learned counsel appearing on behalf of the
respondent, on the other hand, would submit that although the question as
...
-~

to whether sovereign functions of the State would come within the purview
D of the definition of "Industry" is pending for consideration before the Seven
Judges' Bench having been referred to by a Constitution Bench in State of
UP. v .Jai Bir Singh, [2005] 5 SCC l, but so long the existing law is not set
aside, Madhya Pradesh Bhawan wherein even the private guests are also
'-.
-
entertained would bring the establishment within the purview of "Industry".
In any event, the industrial court having arrived at a finding to that effect in
E its Award dated 26.7.2002 which having not been questioned, the appellant
cannot be permitted to raise the same before this Court. It was contended that
artificial breaks after 89 days of service being not bonafide, the termination
of the services of a workman would not come within the exceptions envisaged
under Section 2(oo) (bb) of the Act. It was urged that Industrial Disputes Act
F does not make any distinction between a daily wager and the permanent
employee, in view of the definition of"workman" as contained in Section 2(s)
,. """"'
thereof. The High Court, therefore, cannot be said to have committed any
illegality in directing the re-instatement of the respondent with full back
wages as admittedly the provisions of Section 25 F of the Industrial Disputes
Act had not been complied with.
G
5. The question as to whether the activities of the Appellant satisfy the ...,;,..
tests laid down in the statutory definition of "Industry" as contained in
Section 2(j) of the Industrial Disputes Act or not, in our opinion need not be
gone into in .this case. Industrial Court opined that it was an Industry. The --
legality of the Award of the Industrial Court was not questioned. So far as
H
MAD HY A PRADESH ADMINISTRATION 1•. TRIBHUBAN [S.B. SINHA, J.] 921

_, the appellant is concerned, it, thus, attained finality. It, therefore, in our ' A
opinion cannot now be permitted to tum round and contend that its Delhi
e:;tablishment does not come within the purview of the definition of"Industry".

6. The question, however, which arises for consideration is as to whether
in a situation of this nature, the learned Single Judge and consequently the
Division Bench of the Delhi High Court should have directed re-instatement B
of the respondent with full back wages. Whereas at one point of time, such
.....
a relief used to be automatically granted, but keeping in view several other
factors and in particular the doctrine of public employment and involvement
of the public money, a change in the said trend is now found in the recent
decisions of this Court. This Court in a large number of decisions in the matter
of grant of relief of the kind distinguished between .a daily wager who does
c
'

not hold a post and a permanent empk1yee. It may be that the definition of
"workman" as contained in Section 2(s) of the Act is wide and takes with in
its embrage all categories of workmen specified therein, but the same would
not mean that even for the purpose of grant of relief in an industrial dispute
referred for adjudication, application for constitutional scheme of equality b
adumbrated under Articles 14 and 16 of the Constitution oflndia, in the light
)
of a decision of a Constitution Bench of this Court in Secretary, State of
Karnataka and Ors. v. Umadevi (3) and Ors., [2006] 4 SCC 1, and other
relevant factors pointed out by the Court in a catena of decisions shall not
be taken into consideration.
E
7. The nature of appointment, whether there existed any sanctioned
post or whether the officer concerned had any authority to make appointment
are relevant factors.

8. See MP. Housing Board and Anr. v. Mano} Shrivastava, [2006] 2 SCC
702, State ofMP. and Ors. v Arjunlal Rajak, [2006] 2 SCC 711 and M.P. State
F
-"( Agro Industries Development Corpn. Ltd and Anr. v. S.C. Pandey, [2006] 2
sec 716.

9. Our attention has been drawn to a recent decision of this Court in
Jasbir Singh v. Punjab & Sind Bank and Ors., reported in [2007] 1 SCC 566
G'
by the learned counsel appearing on behalf of the respondent. We do not see
as to how the said decision is applicable to the fact of the present case.

..r
10. In Jasbir Singh (supra}, the Order of termination was passed on the
ground of misconduct. The said question was also the subject matter of a
suit, wherein the Civil Court had held that the appellant therein was not guilty H
,,..
~ r

922 SUPREME COURT REPORTS (2007] 4 S.C.R.

A of the misconduct. ln that cont~xt only, the question in regard to the relief
granted by the Court was considered in the light of the relief which may be
granted by the Industrial Court under Section 11 A of the Industrial Disputes
-
Act stating;

"It was, however, urged that no back wages should be directed
B to be paid. Reliance in this behalf has been placed on U.P. State
Brassware Corpn. Ltd. v. Uday Narain Pandey. In that case, this
Court was dealing with a power of the Industrial Courts under Section
11-A of the Industrial Disputes Act. Therein, as the establishment was ....
closed, the question of reinstatement of the workman did not arise.
• J'
Still ~hen, 25% back wages were directed to be paid as also the
c compensation payable in terms of Section 6-N of the U .P. Industrial
Disputes Act.

The judgments of both the civil court and the criminal court .A.

established that the appellant was treated very unfairly and
unreasonably. For all intent and purport, a criminal case was foisted
D
upon him. A confession, according to learned Chief Judicial Magistrate,
was extracted from him ~y the bank officers in a very cruel manner.
It is, therefore, not a case where back wages should be denied. The·
I_,
.... )

respondent Bank has tried to proceed against the appellant in both
.in civil proceedings as well as in criminal proceedings and. at both the
E independent forums, it failed."

11. We may notice that recently in Muir Mills Unit of NTC (U.P.) Ltd.
v. Swayam Prakash Srivastava and Anr., [2007] I SCC 491, a Bench of this
Court opined :

F "With regard to the contention of the respondents that in the
present fact scenario retrenchment is bad under law as conditions
F
under Section 6-N, which talks about a reasonable notice to be served )"-- 'II/Ir

on an employee before his~er retrenchment, is not complied with; we
are of the view that even under Section 6-N the proviso states that
"no such notice shall be necessary if the retrenchment is under an
G agreement which specifies a date for the termination of service". In
the present case on the perusal of the appointment letter it is clear
that no such notice needs to be issued to Respondent No. 1.

The respondents had referred to many cases with regard to back --...,
wages to be paid to the retrenched workman. The learned counsel ·
H
MADHYA PRADESH ADMINISTRATION 1•. TRIBHUBAN [S.B. SINHA,J.] 923
cited a string of decisions of this Court in support of this contention. A
We are however not addressing this plea of the respondents as we
have already observed that Respondent 1 is not a workman under the
Industrial Disputes Act, 1947 and the U.P. ID Act, 1947 and also that
the retrenchment was not illegal and therefore the question of back
wages does not arise."
B
12. We may also notice that in Uttranchal Forest Development
Corporation v. MC. Joshi, [2007] 3 SCALE 545, this Court held;

"Although according to the learned counsel appearing on behalf
of the appellant the Labour Court and the High Court committed an
error in arriving at a finding that in terminating the services of the C
respondent, the provisions of Section 6N of the UP Industrial Disputes
Act were contravened, we will proceed on the basis that the said
finding is correct. The question, however, would be as to whether in
a situation of this nature, relief of reinstatement in services should
have been granted. It is now well-settled by reason of a catena of D
decisions of this Court that, the relief of reinstatement with full back
wages would not be granted automatically only because it would be
... lawful to do so. For the said purpose, several factors are required to
be taken into consideration, one of them being as to whether such an
appointment had been made in terms of the statutory rules. Delay in
raising an industrial dispute is also a relevant fact". E
In Haryana State Electronics Development Corporation v. Mamni,
-I
AIR (2006) SC 2427, this Court directed payment of compensation.
Similar orders were passed in North-Eastern Karnataka Rt.
Corporation v. Ashappa, (2006] 5 SCC 137 and UP. State Road
Transport Corporation v. Man Singh, [2006] 7 sec 752] F
In Man Singh (supra) it was held :-

"7. The respondent admittedly raised a dispute in 1986, i.e. after
a peri9d of about 12 years, it may be true that in an appropriate
case, as has been done by the Labour Court, delay in raising the G
dispute would have resulted in rejection of his clai'm for back
wages for the period during which the workman remains absent
as has been held by this Court in Gurmail Singh v. Principal,
Govt. Co,flege of Education. But the discrP-tionary relief, in our
opinion, must be granted upon taking into consideration all
H
924 SUPREME COURT REPORTS [2007] 4 S.C.R.

A attending circumstances. The appellant is a statutory corporation
Keeping' iri view the fact. that the respondent .was appointed .on
a temporary basis, it was unlikely that he remained unemployed
for such a long time. In any event, it would be wholly unjust at
this distance of time. i.e. after a period of more than 30 years, to
direct reinstatement of the respondent in service. Unfortunately,
B. the Labol:!r Court or the High Court did. not consider these
aspects of the matter.

8. Keeping in view the particular facts and circumstances of this
'·.,'..· ...c.~~e, .'Y~ ,are of the. opinion that instead and in place of the
'''<lifedion' fo~ reinst~tefuent ofthetesporiderittogether with back
wages from 1986, interest of justice would be subserved if the
. . appellant is directed to pay a sum of Rs. 50,000 to him. Similar
orders; we may place on record, have been passed by this Court
: ~· -:.... ' ,... ,.... ;in Sta(e.of[Jajas.thrr~v.. (ihyan Chand, State of MP v. Arjun/al
.· ·. ·•· ; kcdiik; N~ga; Mah'apdl{Jca (n~w 'M~nicfpiit Corpdrati6n) v. State
D of U.P., and Haryana State Electronics Development Corporation
ltd v. Mamni."

.It was further held :

"The legal position has since undergone a change in the light of a
.. B. · :Constittiiion: Senct:i decision qf this Court in Secretary: State. of"
Karnataka & Ors. v. Uma Devi (3) & Ors., [2006] 4 SCC 1 wherein
this Court held that 'State' within th~ ~eaning of A£ticle 1.2 of the
Constitution of India is under a constitutional obligation to comply
with the provisions contained in Articles 14 and 16 of the Constitution
of India."
F
13. In this case, the Industrial Court exercised its discretionary jurisdiction
under Section 11 A of the Industrial Disputes Act. It merely directed the
amount of compensation to which the respondent was entitled to, had the
provisions of Section 25F been complied with should be sufficient to meet the
ends of justice. We are not suggesting that the High Court could not interfere
··Ci with' the said order, but th~ discretionary jurisdiction exercised by the Industrial
Coµ rt, in our .opinion, should have been taken into consideration for
detennination of the question as to what relief should be granted in the
peculiar facts and circumstances of this case. Each case is required to be dealt
with in the fact situation .obtaining· therein~

H 14. We, therefore, are of the opinion that keeping in view the peculiar
MAD HY A PRADESH ADMINISTRATION'" TRIBHUBAN [S.B. SINHA, J.] 925
facts and circumstances of this case and particularly in view of the fact that A
the High Court had directed re-instatement with full back wages, we are of
the opinion that interest of justice would be subserved if appellant herein be
directed to pay a sum of Rs. 75,000/- by way of compensation to the respondent.
This appeal is allowed to the aforementioned extent.

15. However, in the facts and circumstances of this case, there shall be B'
no order as to costs.

N.J. Appeal partly allowed.

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