Holding

The appointment was illegal, the burden of proving the 240‑day requirement rests on the workman, and the discretionary relief under Section 11A does not mandate reinstatement; therefore the Labour Court's award is set aside and the employer must pay Rs. 50,000 compensation.

Summary

The Municipal Council, Sujanpur terminated Surinder Kumar, a daily‑waged worker appointed in violation of its recruitment rules and allegedly as a supervisor. The Labour Court held that Kumar was a workman who had completed the requisite 240 days of work and ordered his reinstatement with full back wages. The High Court dismissed the Council's writ petition, limiting its jurisdiction. On appeal, the Supreme Court held that the appointment was illegal because it was not a sanctioned post and violated recruitment rules and constitutional guarantees, that the burden of proving the 240‑day requirement lies on the workman, and that relief under Section 11A of the Industrial Disputes Act is discretionary. Consequently, the Court set aside the Labour Court's award and directed the Council to pay monetary compensation of Rs. 50,000 to the workman, rather than reinstatement.

Issues considered

Whether the termination of Surinder Kumar was justified under the Industrial Disputes Act, 1947.
Whether Kumar qualifies as a "workman" within the meaning of Section 2(s) of the Act.
Whether the employer complied with the statutory requirements of Sections 25F and 11A of the Act.
Who bears the burden of proof for establishing completion of 240 days of work in the preceding twelve months.
Whether a writ of certiorari can be issued when an error of law is apparent on the face of the record.
Whether an appointment made in violation of recruitment rules and in a non‑sanctioned post is void under Articles 12, 14 and 16 of the Constitution.

Legislation cited

Constitution of Indias. Article 12, s. Article 14, s. Article 16
Industrial Disputes Act, 1947s. 10(l)(c), s. 11A, s. 25F, s. 2(s)

Subjects

industrial disputetermination of employmentworkman definitionburden of proofreinstatementmonetary compensationrecruitment ruleswrit of certioraridiscretionary reliefconstitutional law

Judgment

A MUNICIPAL COUNCIL, SUJANPUR
v.
SURINDER KUMAR

MAY 5, 2006

B (S.B. SINHA AND P.K. BALASUBRAMANYAN, JJ.)

Industrial Disputes Act, 1947-Sections 2(s), 10(/)(c), I IA and 25F:

Daily waged workman-Appointed in violation of the Recruitment Rules
C at the instance of an MLA-Subsequently terminated--Entit/ement to relief of
re-instatement with full back wages-Held: Not entitled--However having
regard to the factual circumstances, employer asked to award monetary
compensation of Rs. 50,000 to the workman-Constitution of India, 1950-
Articles 12, 14 and 16.
D Termination-Burden of proof-To establish completion of 240 days of
work within preceding 12 months -Lies on the workman.

Constitution of India, 1950-Article 226-Writ of certiorari-Issuance
of-Held: Can be issued if there is an error of law apparent on the face of
E the record

Appellant-employer is a statutory body and being a local authority,
governed by the Punjab Municipal Act. It terminated the services of
Respondent, a daily wager. Questioning the validity and legality thereof,
an industrial dispute was raised, The Labour Court held that although
F the respondent was appointed with the designation of Supervisor, he was
merely discharging the duties of a workman; that the respondent having
completed 240 days of work within a period of twelve months preceding
his termination, it was the bounden duty of the Appellant to produce the
entire relevant records but the same had not been done; that in terminating
the services of the respondent, the appellant had not complied with the
G statutory requirements contained in Section 2SF of the Industrial Disputes
Act as no compensation had been paid to him in terms thereof, and
accordingly directed the respondent to be reinstated in service with full
back wages and allied benefits from the date of termination till actual
reinstatement. Writ petition filed by the Appellant against the said award
11 914
MUNICIPAL COUNCIL, SUJANPUR v. SURINDER KUMAR 915
was dismissed by High Court which, being of the view that its jurisdiction A
in the matter of issuing a writ of certiorari is limited, declined to go into
the question as regards the payment of entire back wages. Hence the
present appeal.

Allowing the appeal, the Court
B
HELD: 1.1. The High Court's jurisdiction to issue a writ of certiorari
though is limited, a writ of certiorari can be issued if there is an error of
law apparent on the face of the record. The Labour Court and the High
Court also proceeded wrongly on the premise that the burden of proof to
establish non-completion of 240 days of work within a period of twelve C
months preceding the termination, was on the management. The burden
was on the workman. (918-F; 919-B]

1.2. The Labour Court and consequently the High Court also
completely misdirected themselves insofar as they failed to take into
consideration that relief to be granted in terms of Section I IA of the said D
Act being discretionary in nature, a Labour Court was required to
consider the facts of each case therefor. Only because relief by way of
reinstatement with full back wages would be lawful, it would not mean
that the same would be granted automatically. For the said purpose, the
nature of the appointment, the purpose for which such appointment had
been made, the duration/tenure of work, the question whether the post E
was a sanctioned one, being relevant facts, must be taken into
consideration. (919-E, Ff

S.N Chandrashekar and Anr. v. State of Karnataka and Ors., (2006) 2
SCALE 248; Bombay Dyeing & Mfg. Co, Ltd. v. Bombay Environmental
Action Group & Ors., (2006) 3 SCALE I; U.P. State Brassware Corporation F
& Ors. v. Udit Narain Pandey, JT (2005) 10 SC 344, State of M.P. v. Arjan
Lal Rajak, (2006] 2 SCC 610 and Manager, Reserve Bank of India, Bangalore
v. S. Mani & Ors., (2005( 5 SCC 100, relied on.

Judicial Review of Administrative Action, by S.A. De Smith, IVth G
Edition, p. 136, referred to.

2.1. The appointment of the Respondent was not in a sanctioned post.
Being a 'State' within the meaning of Article 12 of the Constitution of
India, the Appellant tor the purpose of recruiting its employees was bound
to follow the recruitment rules. Any recruitment made in violation of such H
916 SUPREME COURT REPORTS [2006) SUPP. I S.C.R.

A rules as also in violation of the constitutional scheme enshrined under
Articles 14 and 16 of the Constitution of India would be void in law. If a
post is not a sanctioned one, again, appointment therein would be illegal.
1919-G, H; 920-AI

2.2. In the instant case, the respondent was appointed in violation
B of the rules. He was appointed at the instance of a Member of the
Legislative Assembly who was a Minister at the relevant time. No
appointment could have been made at his instance. No authority howsoever
high may be can direct recruitment of persons of his choice. 1922-B, Cl

C M. V. Bijlani v. Union of India & Ors., (2006) 4 SCALE 147; State of
Punjab v. Jagdip Singh & Ors, 119641 4 SCR 964; Secretary, State of
Karnataka v. Uma Devi, (2006) 4 SCALE 197; M.P. Housing Board and Anr,
v. Mano} Shrivastava, 120061 2 SCC 702; Haryana State Agricultural
Marketing Board v. Subhash Chand and Anr., (20061 2 SCC 794 and BHEL
v. B.K. V(/ay and Ors., 120061 2 SCC 654, relied on.
D
3. Having regard to the factual circumstances of this case, grant of
monetary compensation would sub-serve the interests of justice. Therefore,
the direction of the Labour Court is set aside and it is directed that in
place of the respondent being reinstated with back wages, the Appellant
E would pay monetary compensation to him, quantified at Rs. 50,000/-.
(922-C-DI

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2474 of2006.

From the Judgment and Order dated 29.4.2004 of the High Court of
F Punjab and Haryana at Chandigarh in C.W.P. No. 4988 of 2002.

Tatini Basu and Sudhir Nandrajog for the Appellant.

M.K. Verma, R.K. Kappor and Anis Ahmed Khan for the Respondent.

The Judgment of the Court was delivered by
G
S.B. SINHA, J. Leave granted.

The appellant herein being aggrieved by and dissatisfied with the
judgment and order dated 29.4.2004 passed by a Division Bench of the
Punjab and Haryana High Court at Chandigarh in Civil Writ Petition No.
H 4988 of 2002 affirming the award dated 22.11.200 I of the Labour Court,
MUNICIPAL COUNCIL, SUJANPUR v. SURINDER KUMAR [SINHA, J.] 917

Gurdaspur is before us. It is not in dispute that the Appellant herein is a A
statutory body and being a local authority, governed by the Punjab Municipal
Act. The terms and conditions of service, including recruitment of its
employees, are governed by statutory rules.

The respondent herein was appointed on 1.4.1994. He continued to
work up to 31.7.1996. His services were terminated on 16.7.1997 by issuing B
a notice of termination. Questioning the validity and legality thereof, an
industrial dispute was raised which culminated in a reference made by the
appropriate government under Industrial Disputes Act ('the Act') in exercise
of its power under Section IO(l)(c) thereof the following dispute to the
Labour Court, Gurdaspur: C
"Whether termination of services of Shri Surinder Kumar, workman
is justified and in order? If not, to what/exact amount of compensation
is he entitled?"

A plea was raised in the said proceedings on behalf of the appellant D
herein that the respondent was appointed on a supervisory post and, thus, was
not a 'workman' within the meaning of Section 2(S) of the Act.

It is not in dispute that the respondent was appointed on daily wages.
Before the Labour Court, the appellant raised a plea that the respondent was
appointed on the post of Supervisor, on the recommendation of one Shri R.S. E
Puri, M.L.A., Sujanpur and then a Minister in the Government of Punjab.
The Labour Court by reason of the impugned award, inter alia, held that
although the second respondent was appointed with the designation of a
Supervisor and was expected to look after the development work being carried
out by the appellant and other construction works under the Nehru Rojgar
Yojana, he was merely discharging the duties of a workman. F

It was held by the Labour. Court that the respondent completed 240
days of work within a period of twelve months preceding his termination.
The Labour Court proceeded on the basis that the workman having completed
240 days of work in a calendar year, it was the bounden duty of the Appellant G
to produce the entire relevant records but the same had not been done. It is
not in dispute that the attendance records of March 1994 and from April
1994 to February 1996 were produced but the attendance registers from
((Jo March 1996 onwards were not produced. It, however, does not appear from
the impugned award that the respondent had called for the records from the
office of the appellant. H
918 SUPREME COURT REPORTS [2006) SUPP. I S.C.R.

A The Labour Court upon arriving at a finding that in terminating the
services of the respondent, the appellant had not complied with the statutory
requirements contained in Section 25F of the Industrial Disputes Act as no
compensation had been paid to him in terms thereof, the respondent shall be
directed to be reinstated in service with full back wages and allied benefits
from the date of termination i.e. July 1997 till actual reinstatement.
B
A writ petition filed before the High Court by the appellant herein
against the said award was dismissed.
•
Before the High Court, a specific plea was raised by the Appellant that
the initial appointment of the respondent was contrary to the recruitment
C rules. The High Court's attention was further drawn to the fact that the
respondent was appointed in a Supervisory capacity to look after the
construction work of the MC building and other construction works under the
Nehru Rojgar Yojana.

D The High Court, however, rejected the said contentions of the Appellant
relying on or on the basis of the findings of the Labour Court that the work
for which the respondent was appointed had been existing. It opined that its
jurisdiction in the matter of issuing a writ of certiorari is limited. It further
refused to go into the question as regards the payment of entire back wages
stating that the appellant herein had neither pleaded nor produced any evidence
E to show that the respondent was gainfully employed after termination of his
service.

The High Court's jurisdiction to issue a writ of certiorari though is
limited, a writ of certiorari can be issued if there is an error of law apparent
on the face of the record. What would constitute an error of law is well
F known. In the Judicial Review of Administrative Action, IVth edition p.136,
S.A De Smith has summed up the position:-

"The concept of error of law includes the giving of reasons that are
bad in law or (if there is a duty to give reasons) inconsistent, intelligible
or, it would seem, substantially inadequate. It includes also the
G application of a wrong legal test to the facts found, taking irrelevant
considerations into account and failing to take relevant considerations
into account, exercising a discretion on the basis of any other incorrect
legal principles, misdirection as to the burden of proof, and wrongful
admission or exclusion of evidence, as well as arriving at a conclusion
H without any supporting evidence."
MUNICIPAL COUNCIL, SUJANPUR v. SURINDER KUMAR [SINHA, J.)919

(See also S.N. Chandrashekar and Anr. v. State of Karnataka and Ors., A
(2006) 2 SCALE 248 and Bombay Dyeing & Mfg. Co. Ltd. v. Bombay
Environmental Action Group & Ors., (2006) 3 SCALE I].

The Labour Court and the High Court also proceeded wrongly on the
premise that the burden of proof to establish non-completion of 240 days of
work within a period of twelve months preceding the termination, was on the B
management. The burden was on the workman. [See UP. State Brassware
Corporation & Ors. v. Udit Narain Pandey, JT (2005) IO SC 344 and State
of M.P. v. Arjan Lal Rajak, (2006] 2 SCC 610].

Equally well settled is the principle that the burden of proof, having
regard to the principles analogus to Section I06 of the Evidence Act that he C
was not gainfully employed, was on the workman. [See Manager, Reserve
Bank of India, Bangalore v. S. Mani & Ors., (2005] 5 SCC 100].

It is also a trite law that only because some documents have not been
produced by the management, an adverse inference would not be drawn D
against the management. [See S. Mani (supra)]

Apart from the aforementioned error of law, in our considered opinion,
the Labour Court and consequently the High Court completely misdirected
themselves insofar as they failed to take into consideration that relief to be
granted in terms of Section 11 A of the said Act being discretionary in nature, E
a Labour Court was required to consider the facts of each case therefor. Only
because relief by way of reinstatement with full back wages would be lawful,
it would not mean that the same would be granted automatically.

For the said purpose, the nature of the appointment, the purpose for
which such appointment had been made, the duration/tenure of work, the F
question whether the post was a sanctioned one, being relevant facts, must be
taken into consideration.

It is not disputed that the appointment of the respondent was not in a
sanctioned post. Being a 'State' within the meaning of Article 12 of the
Constitution of India, the Appellant for the purpose of recruiting its employees G
was bound to follow the recruitment rules. Any recruitment made in violation
of such rules as also in violation of the constitutional scheme enshrined under
Articles 14 and 16 of the Constitution of India would be void in law. (See
j M. V. Bijlani v. Union of India & Ors., (2006) 4 SCALE 147, State of Punjab
v. Jagdip Singh & Ors., [I 964] 4 SCR 964 and Secretary, State of Karna/aka H
920 SUPREME COURT REPORTS (2006] SUPP. I S.C.R.

A v. Uma Devi, (2006) 4 SCALE 197).
If a post is not a sanctioned one, again, appointment therein would be
illegal. In M.P. Housing Board & Anr. v. Mano) Shrivastava, (2006] 2 SCC
702, this Court stated the law in the following words:-

B "A person with a view to obtain the status of a "permanent employee"
must be appointed in terms of the statutory rules. It is not the case of
the respondent that he was appointed against a vacant post which was
duly sanctioned by the statutory authority or his appointment was
made upon following the statutory law operating in the field.
•

c The Labour Court unfortunately did not advert to the said question
and proceeded to pass its award on the premise that as the respondent
had worked for more than six months satisfactorily in terms of clause
2(vi) of the Standard Standing Orders, he acquired the right of
becoming permanent. For arriving at the said conclusion, the Labour
Court relief only upon the oral statement made by the respondent.
D
It is one thing to say that a person was appointed on an ad hoc basis
or as a daily-wager but it is anoth~r thing to say that he is appointed
in a sanctioned post which was lying vacant upon following the due
procedure prescribed therefor.

E It has not been found by the Labour Court that the respondent was
appointed by the appellant herein, which is "State" within the meaning
of Article 12 of the Constitution, upon compliance with the
constitutional requirements as also the provisions of the 1972 Act or
the Rules and Regulations framed thereunder."

F Yet again, in Haryana State Agricultural Marketing Board v. Subhash
Chand & Ar.r.. [2006] 2 SCC 794, this Court held:-

"In P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd Edn., Vol. 4
at p. 44 70, the expression "status" has been defined as under:

G "Status" is a much discussed term which, according to the best
modern expositions, includes the sum total of a man's personal
rights and duties (Salmond, Jurisprudence 253, 257), or, to be
verbally accurate, of his capacity for rights and duties. (Holland,
Jurisprudence 88)

H The status of a person means his personal legal condition only
MUNICIPAL COUNCIL, SUJANPUR v. SURINDER KUMAR [SINHA, J.]921

so far as his personal rights and burdens are concerned. A
Duggamma v. Ganeshayya, AIR at p.101 [Evidence Act (1 cf
1872), Section 41]
In the language of jurisprudence 'status' is a condition of
membership of a group of which powers and duties are exclusively
determined by law and not by agreement between the parties B
concerned. (Roshan Lal Tandon v. Union of India).

The word "privilege" has been defined, at p. 3733, as under:

'Privilege is an exemption from some duty, burden, or attendance to
which certain persons are entitled; from a supposition of law, that the C
stations they fill, or the offices they are engaged in, are such as
require all their care; that therefore, without this indulgence, it would
be impracticable to execute such offices, to that advantage which the
public good requires.

A right or immunity granted as a peculiar benefit; advantage or favour; D
a peculiar or personal advantage or right, especially when enjoyed in
derogation of a common right.
Immunity from civil action may be described also as a privilege,
because the word 'privilege' is sufficiently wide to include an
immunity. E
The word 'privilege' has been defined as a particular and peculiar
benefit or advantage enjoyed by a person ...... 'Privileges' are liberties
and franchises granted to an offence, place, town or manor, by the
King's great charter, letters patent, or Act of Parliament.

In view of the aforementioned definitions of the expressions "status" and
F
"privilege" it must be held that such "status" and "privilege" must emanate
from a statute. If legal right has been derived by the respondent herein to
continue in service in terms of the provisions of the Act under which he is
governed, then only, would the question of depriving him of any status or
privilege arise. Furthermore, it is not a case where the respondent had worked G
for years. He has only worked, on his own showing, for 356 days wherws
according to the appellant he has worked only for 208 days. Therefore, the
Fifth Schedule of the Industrial Disputes Act, 1947 has no application in the
instant case. In view of the above, the dispensing with of the engagement of
the respondent cannot be said to be unwarranted in law."
H
922 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A [See also BHEL v. B.K. Vijay & Ors., [2006] 2 SCC 654].

In the instant case, the respondent was appointed in violation of the
rules. He was appointed at the instance of a Member of the Legislative
Assembly who was a minister at the relevant time. No appointment could
have been made at his instance. No authority howsoever high may be cannot
B direct recruitment of persons of his choice.

Having regard to the factual circumstances of this case, we are of the
opinion that grant of monetary compensation would sub-serve the interests of
justice.

C We, therefore, allow the appeal and set aside the directions of the
Labour Court and direct that in place of the respondent being reinstated with
back wages, the Appellant would pay monetary compensation to him,
quantified at Rs.50,000/-. We make no order as to costs.

B.B.B. Appeal allowed.
D