Holding

A finding under Section 10 in conjunction with Section 16(3) of the U.P. Sugar Undertaking Acquisition Act, 1971 is necessary to determine if the employee was employed on the appointed day, and the appellant must approach the prescribed authority for that determination.

Summary

Ram Nayak, a workman of Ratna Sugar Mills, claimed that he was employed by the undertaking on the "appointed day" (24 April 1989) when the mill was vested in U.P. State Sugar Corporation under the U.P. Sugar Undertaking Acquisition Act, 1971. He was terminated by an oral order on 1 June 1990. The Labour Court held the termination invalid and ordered his reinstatement with continuity of service and back wages. The Corporation appealed, and the Allahabad High Court set aside the award solely on the ground of Section 16(3) of the Acquisition Act, without examining whether Nayak was actually employed on the appointed day. The Supreme Court held that a determination under Section 10 read with Section 16(3) of the Act is required to decide the employee's status on the appointed day, and directed the appellant to approach the prescribed authority for such a finding. Depending on that authority's finding, the High Court's writ petition will either be restored for merits or the appeal will be dismissed.

Issues considered

Whether the Labour Court award can be set aside solely on the basis of Section 16(3) of the U.P. Sugar Undertaking Acquisition Act, 1971 without a finding on the employee's employment status on the appointed day.
Whether the appropriate forum for determining the employee's status on the appointed day is the prescribed authority under Section 10 read with Section 16(3) of the Act.

Subjects

acquisition of undertakingappointed dayemployee terminationlabour disputereinstatementback wagesprescribed authorityspecial legislation

Judgment

f

RAM NAYAK A
v.
U.P. STATE SUGAR CORPORATION

AUGUST 31, 2007

(TARUN CHATIER.JEE AND D.K. JAIN,JJ.J B

U.P. Sugar Undertaking Acquisition Act, 1971-ss. JO r/w 16 (3)-
Acquisition of a sugar Undertaking under the Act-Employee claiming to be
working in erstwhile Undertaking on the 'appointed day'-Termination of C
the employee by oral order-labour Court holding the oral termination as
bad and directing reinstatement-High Court setting aside the award in
view of s. 16 (3)-0n appeal, held: A finding whether the employee was
working under the earstwhile employer on the 'appointed day~ was necessary--
Hence employee directed to approach the prescribed Authority uls 10 r/w s.
16 (3) for such finding-labour Laws. D
The undertaking in which the appellant-employee was working vested
with the respondent-Company under U.P. Sugar Undertaking Acquisition Act,
1971. The services of the appellant was terminated by an oral order. Appellant
raised industrial dispute claiming that he was working under the erstwhile
undertaking on the "appointed day" under the Act. Labbur Court held the E
termination bad and directed his reinstatement with continuity of service and
back wages. The award was challenged in Writ Petition. High Court allowed
the petition solely on the ground that award was bad in view ofs. 16 (3) of the
1 Act. Hence the present appeal.

Disposing of the appeal, the Court F

HELD: l. In view of Section 10 read with Section 16(3) ofU.P. Sugar
Undertaking Acquisition Act, 1971, a finding whether the appellant was
working under the respondent on the "appointed day" under the Acquisition
Act was necessary. For that purpose, it would be appropriate to direct the G
appellant to approach the prescribed authority under Section 10 read with
Section 16(3) of the Act for a finding whether he was exclusively employed in
connection with the scheduled undertaking before the appointed day as the
Acquisition Act, being a special act, is conferred with the power to make such
a finding. (Para 4) (667-D, E)
665 H
666 SUPREME COURT REPORTS [2007) 9 S.C.R.

A 2. In the event, the prescribed authority comes to a finding that the
appellant was working with the scheduled undertaking on the appointed day,
the Writ Petition filed by the Corporation before the High Court shall
automatically stand restored and the High Court shall, thereafter, decide the
Writ Petition on merits after taking into consideration the findings arrived
B at by the prescribed authority in compliance with directions of this Court made
in this regard. If, however, the prescribed authority C(>:Mes to a finding that
t~ appellant was not working with the erstwhile employer on the appointed
day, this appeal shall stand dismissed and the award shall also stand set.aside.
(Para 5) (667-G; 668-A)

C CIVIL APPELLATE JU~SDICTION : Civil Appeal No. 4008 of2007.

From the final Order'dated 10.7.2006 of the High Court of Judicature at
Allahabad in C.M.W.P. No. 5385/1998.

Bharat Sangal and Abhinav Ramkrishna for the Appellant.
D Rakesh Uttamchandra Upadhyay and Ajay Rai for the Respondent. ).
' .
The Judgment of the Court was delivered by ..
• I )

T ARUN CHATTERJEE, J. 1. Leave grantee!:

E 2. This appeal, by grant of special le~ve, is directed against the final
judgment and order dated 10th July, 2006 passed by the Allahabad High Court
in Civil Miscellaneous Writ Petition No.5385 of 1998 whereby the High Court
had allowed the writ petition filed by the respondent and set aside the 11;ward
dated 5th June, 1997 passed by the Presiding Officer, Labour Court, Varanasi, f
F U .P. in Adjudication Dispute No.89 of 1994 directing re-instatement of the
appellant with continuity of service and payment of full back wages by the
respondent - U.P. State Sugar Corporation (for short '.the Corporation').

3. The following reference wa5 .made for adjudication before the Labour
Court:
G ''Whether the termination ofservice by the employer of their workman
Ram Nayakfrom /st June 1990 was bad or invalid." ·.!

The said reference came to be registered as Adjudication Dispute.No.89 of
1994 before the Presiding Officer, Labour Court, yaranasi, U.P:,The appellant
H claimed that he wa~ working under the erstwhile Ratna Sugar Mills on the
RAMNAYAKv.U.P.STATESUGARCORPN.[TARUNCHAITERIEE,J.] 667

>- "appointed day" under the U.P. Sugar Undertaking Acquisition Act, 1971 A
(hereinafter referred to as "the Acquisition Act"). On and from 24/4/1989,
Ratna Sugar Mills had vested with the Corporation as the said date was the
"appointed day" under Section 2(A) of the Acquisition Act. However, the
service of the appellant was terminated by an oral order for which the reference
was made. The Labour Court, after considering, both the oral and the
documentary evidence on record, held that the oral termination order was bad B
and, therefore, directed re-instatement of the appellant in the Corporation with
continuity of service and back-wages. This award was challenged by the
Corporation before the High Court by way of a writ petition. As noted herein
above, the High Court allowed the writ petition and set aside the award
passed by the Labour Court solely on the ground that the award could not c
be allowed to stand in view of Section 16(3) ofthe Acquisition Act. We may
keep it on record that the High Court, while setting aside the award, had not
gone into the merits whether the appellant had failed to prove that his oral
termination order was bad or invalid in law.

4. Feeling aggrieved by the judgment of the High Court, this appeal has D
been preferred by the appellant. After hearing the arguments advanced by the
learned counsel for the parties and considering the provisions of Section l 0
read with Section 16(3) of the Act, we are of the firm opinion that a finding
whether the appellant was working under the respondent on the "appointed
day" under the Acquisition Act was necessary. For that purpose, it would be
appropriate to direct the appellant to approach the prescribed authority under
E
Section IO read with Section 16(3) of the Act for a finding whether he was
exclusively employed in connection with the scheduled undertaking before
the appointed day as we are of the view that the Acquisition Act, being a
special act, is conferred with the power to make such a finding.
F
5. In this view of the matter, we feel it proper and appropriate to direct
the appellant to approach the "prescribed authority" under Section IO read
with Section 16(3) of the Act for a finding on the aforesaid question. The
appellant shall approach the prescribed authority by making an application
within eight weeks from this date. The prescribed authority shall thereafter
determine the question within two months from the date of filing of the G
application before it by the appellant after giving due hearing to the parties
and permitting them to lead evidence. In the event, the prescribed authority
-J..
comes to a finding that the appellant was working with the scheduled
undertaking on the appointed day, the writ petition filed by the Corporation
before the High Court shall automatically stand restored and the High Court
H
668 SUPREME COURT REPORTS [2007] 9 S.C.R.

A shall, thereafter, decide the writ petition on merits after taking into consideration
the findings arrived at by the prescribed authority in compliance with our
directions made in this regard. If, however, the prescribed authority ~omes to
a finding that the appellant was not working with the erstwhile employer ori
the appointed day, this appeal shall stand dismissed and the award shall also
B stand set aside. The appeal is disposed of in the manner indicated above.
There will be no order as to costs. ·

KKT. Appeal disposed of.

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