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2013 DIGILAW 938 (ALL)

State of U. P. v. Labour Court II, U. P. , Kanpur and Another

2013-03-21

TARUN AGARWALA

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Tarun Agarwala, J.— The petitioner has challenged the validity and legality of the award passed by the Labour Court directing reinstatement of the workman with 50% back wages. The facts leading to the filing of the writ petition is, that in 1986 the workman was appointed as a Sinchpal and that his services was terminated on 31.12.1987. In 1992, the dispute was referred under Section 4-K of the U.P. Industrial Disputes Act (hereinafter referred to as the 'Act') with regard to the validity and legality of the order of termination. It transpires that an exparte award dated 20.3.1993 was given in favour of the workman, but, subsequently on an application for recall filed on behalf of the employers, the exparte award was set aside by an order dated 18.3.1994. Pursuant thereto, the employers were allowed to file the written statement. The employers, as per their written statement, contended that the workman was employed on exigencies of service on a daily rate basis @ Rs.14/- per day and that he worked intermittently from 1.1.1987 to 31.1.1987, from 1.6.1987 to 4.7.1987 and from 1.8.1987 to 31.12.1987. The employers contended that the workman had never worked for more than 240 days in a calendar year and therefore, the provisions of Section 6-N was not applicable. The employers further submitted that the Irrigation Department is not an "Industry" as defined under Section 2(k) of the Act and, therefore, no industrial dispute could be referred to the Labour Court. The workman on the other hand contended that he was appointed on 15.8.1986 and that he worked continuously without any break in service till 31.12.1987 and therefore, had completed 240 days in a calendar year. The workman contended that he was not given any compensation as per Section 6-N of the Act nor any notice was given and consequently, the order of termination was illegal and that an order of termination was liable to be set aside. On behalf of the workman, an application was filed for summoning the documents, which were in exclusive possession of the employers, namely, the muster roll register, the attendance and payment register from the date of appointment of the petitioner till the date of his termination. This application was filed in order to strengthen the ground of the workman, namely, that he had worked continuously from 15.8.1986 onwards. This application was filed in order to strengthen the ground of the workman, namely, that he had worked continuously from 15.8.1986 onwards. Inspite of repeated time being granted and several opportunities being given, the employers did not file any document. A witnesses of the employer, P.W.-1, in his deposition admitted that between August,1986 to December, 1986 the workman had worked for some period of time. The Labour Court, after considering the material evidence on record held, that the employer, namely, the Irrigation Department of the State of U.P. is an industry as defined under Section 2(k) of the Act. The Labour Court, on the basis of the evidence, came to the conclusion that the workman had worked continuously for more than 240 days in a calendar year and that the termination of the services of the workman without complying with the provisions of Section 6-N of the U.P. Industrial Disputes Act was wholly illegal. The Labour Court also came to the conclusion that juniors to the petitioner had been retained and the principle of ''last come first to go' was not followed and that there was a violation of the provision of Section 6-P of the U.P. Industrial Disputes Act. The Labour Court also drew adverse inference against the employer for not filing the documents. The employer, being aggrieved by the said award, has filed the present writ petition. This petition was heard and dismissed by a judgment dated 23.5.2002. The Court agreed with the finding recorded by the Labour Court to the effect that the workman had worked for more than 240 days and accordingly, affirmed the award. It transpires that against the judgment of the High Court, the petitioners filed a Special Leave Petition before the Supreme Court of India, which was allowed by a judgement dated 31.10.2003, on the short ground that the petitioner had raised a plea with regard to the fact as to whether the department of Irrigation, namely, the petitioner was not an Industry as defined under the Act and, on that short ground, the S.L.P. has allowed and the matter was remitted again to the High Court. Heard Sri Anoop Kumar Srivastava, the learned Chief Standing Counsel for the employer-petitioner and Sri Krishnaji Khare for the workman-respondent. Heard Sri Anoop Kumar Srivastava, the learned Chief Standing Counsel for the employer-petitioner and Sri Krishnaji Khare for the workman-respondent. The learned standing counsel for the petitioner laid stress upon Annexure 1 to the writ petition contending that, as per the written statement, a document had been filed as Annexure to the written statement, which indicated the period of service of the workman which fact had not been considered by the labour court. The learned counsel stressed that the finding of the Labour Court that the workman had worked for 240 days in a calendar year is against the material evidence on record and that adverse interfere drawn against the petitioner was wholly illegal and illusory. The submission of the learned counsel for the petitioner is patently erroneous and cannot be taken into consideration. Annexure-1 to the writ petition is not the written statement of the employer/petitioner. It is only a narrative and it is not known as to whether this narrative was ever filed before the Labour Court or not. No such proof has been filed before this Court. The written statement has not been filed and therefore, the stand of the petitioner can only be culled out as recorded in the award, which only indicates that the petitioner had worked for certain period from January, 1987 to December, 1987 and contended that the workman had not worked for 240 days in a calendar year. No proof was given by the petitioner in their written statement with regard to the fact that he did not work from August, 1986 to December 1986. However, this Court finds, that one of the witness of the employers admitted that the workman had worked for some period of time from August, 1986 to December,1986. Since the documents, which were in possession of the employers were not filed, an adverse inference was rightly drawn by the Labour Court, to the effect, that the workman had worked for more than 240 days in a calender year. This Court has perused the award and finds that the Labour Court had rightly drawn an adverse interference and had rightly concluded that the workman had worked for more than 240 days in a calendar year, and that, the provisions of Section 6-N had not been complied with by the employer. This Court has perused the award and finds that the Labour Court had rightly drawn an adverse interference and had rightly concluded that the workman had worked for more than 240 days in a calendar year, and that, the provisions of Section 6-N had not been complied with by the employer. The petitioner had the best evidence in its possession, namely, the Muster Roll Register, the Attendance and Payment Register. These registers would have proved the number of days the workman had worked. The best evidence was not produced inspite of repeated time being granted. Consequently, the Labour Court was justified in drawing an adverse inference against the petitioner. The Labour Court was also justified in giving a finding of violation of the provisions of Section 6-P of the Industrial Disputes Act. On the question as to whether the Irrigation Department of the State of Uttar Pradesh is an "industry" or not as defined under Section 2(k) of the U.P. Industrial Disputes Act, the Court at the outset makes it clear that the petitioner in their written statement, as culled out from the award, has only made a bald statement, namely, that the petitioner is not an Industry as defined under the Act. No detail of its activity as to whether they are performing any regal or sovereign functions or whether they are performing any commercial activities, has been specified. Even before this Court, nothing has been indicated in the writ petition, namely, as to whether the petitioner are performing any regal or sovereign function or whether they are performing commercial activities. There is nothing to indicate whether the petitioner's have framed any service rules, which are applicable upon the workman nor have they indicated that there are no service rules for daily rated employees. Consequently, merely alleging that the petitioner is not an Industry does not mean that they will not be covered under the U.P. Industrial Disputes Acts. Section 2(k) of the Act defines "Industry". For facility the said provision is extracted herein: "(k) 'Industry' means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workman; Under Section 2 (c) of the Amending Act No.46 of 1992, the definition of Industry was amended in the Industrial Dispute Act, 1947 which till date has not yet been enforced. But no such amendment has been made in the U.P. Act and therefore, the definition of "Industry" as specified in 2(k) still holds the field. The law on Industry was reviewed by a Seven Bench of the Supreme Court in Bangalore Water Supply vs. A. Rajappa, 1978(36) F.L.R. 266, in which the Supreme Court laid down the dominant nature test to establish whether the employer comes within the ambit of Industry or not. For facility, paragraph 143 of the said decision is extracted hereunder: "143. The dominant nature test: (a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not `workmen' as in the University of Delhi case (supra) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur (supra), will be the true test. The whole undertaking will be `industry' although those who are not `workmen' by definition may not benefit by the status. (b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by government or statutory bodies. (c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within Section 2(j). (d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby." Subsequently, the Supreme Court considered the Irrigation Department of the Punjab and Haryana Government in Desh Raj and others vs. State of Punjab and others, 1988 (57) FLR 176 and, after reviewing all the decisions, held that the Irrigation Department was an Industry and over ruled the Full Bench Decision of the Punjab and Haryana High Court. The Supreme Court in Executive Engineer (State of Karnataka) vs. K. Somasetty and others, 1997(5) SCC 434 held, that the Telecommunication Department and the Irrigation Department are not an "industry" under the Industrial Disputes Act and while coming to the conclusion relied upon the decision of the Supreme Court in Union of India vs. Jai Narain Singh, 1995 Supp.(4)SCC 672 and State of U.P. Vs. Suresh Kumar Verma and another, 1996(7)SCC 562 For facility, paragraph 3 of the said judgment is extracted hereunder: "It is not well-settled legal position that the Irrigation Department and Telecommunication Department are not an "industry" within the meaning of definition under the Industrial Disputes Act as held in Union of India vs. Jai Narain Singh and in State of H.P. vs. Suresh Kumar Verma. The function of public welfare of the State is a sovereign function. It is the constitutional mandate under the Directive Principles, that the Government should bring about welfare State is not an "industry" under the Industrial Disputes Act. Even optherwise, since the Project has been closed, the respondent has no right to the post since he had been appointed on daily wages. It is brought to our notice that the respondent has been reinstated. The order of the reinstatement has been placed before us which indicates that at the threat of contempt of court, the order has been enforced. It is stated therein that it is subject to the final order of this Court in this appeal." The question whether the Telecommunication Department was an Industry or not was again considered and referred to a three Bench decision of the Supreme Court in the case of G.M. Telecom vs. S. Srinivasan Rao and others, 1998(78) FLR 143. The Supreme Court held that this question has to be answered in accordance with the decision of the Court in Bangalore Water Supply (supra) which is a binding precedent and that the dominant nature test specified therein was required to be considered. The Supreme Court, after applying the test laid down in Bangalore Water Supply held, that the Telecommunication Department of the Union of India is an "industry" within the definition since it is engaged in a commercial activity and that the department was not engaged in discharging any of the sovereign functions of the State. It was argued that Somasetty decision stands impliedly over ruled in so far as it relates to the Telecommunication Department, but, the decision continues to remain in existence in so far as it relates to the Irrigation Department. It was argued that Somasetty decision stands impliedly over ruled in so far as it relates to the Telecommunication Department, but, the decision continues to remain in existence in so far as it relates to the Irrigation Department. Such submission cannot be accepted for the reason that the reasoning given by the Supreme Court in Somasetty's case holding that Telecommunication Department and Irrigation Department has not been accepted by the Supreme Court in G.M. Telecom case (supra) as it did not consider the dominant nature test specified in Bangalore Water Supply's case (supra). The Supreme Court in G.M. Telecom case has itself held that it is not permissible for any Bench of lesser strength of the Supreme Court to take a view contrary to that in Bangalore Water Supply or to bye-pass that decision so long as it holds the field. The Supreme Court further held that judicial discipline requires the Court to follow the decision in Bangalore Water Supply case (supra). In the light of the aforesaid, this Court has no hesitation in holding that the reasoning adopted by the Supreme Court in Somasetty's case holding the Telecommunication and Irrigation Department is not an Industry has been specifically over ruled by the Supreme Court itself in G.M. Telecom case. In the light of the aforesaid, the dominant nature test as indicated in Bangalore Water Supply, is required to be taken into consideration in order to find out as to whether it is an "industry" or not. In the instant case, there is nothing to indicate either in the writ petition or before the Labour Court to indicate that the Irrigation Department is carrying on sovereign function and therefore, they are not an Industry. There is nothing to indicate that the Irrigation Department is carrying on welfare activities nor anything has come on record to indicate that separate Service Rules has been made applicable to the employees of the Irrigation Department. In the absence of any activity of the Irrigation Department being brought on record, it is not possible to hold that the Irrigation Department is not an Industry. This Court further finds that the petitioner had come out with the case that they are not an Industry. The Court is of the view that the initial burden was upon to the employers to prove that they are not an "industry". This Court further finds that the petitioner had come out with the case that they are not an Industry. The Court is of the view that the initial burden was upon to the employers to prove that they are not an "industry". No such evidence has been filed either before the Labour Court or before the Writ Court to show that their activities were regal and sovereign functions. Merely by alleging that the Irrigation Department is not an Industry by itself was not sufficient to shift the burden upon the employee. The Court is of the opinion, that the burden remained with the employer and since it was not discharged the onus could not shift upon the workman. In the light of the aforesaid, the contention of the petitioner that the Irrigation Department is not an Industry, is not fortified by any material evidence brought on record and cannot be accepted. A submission was also made, that the question as to whether the Irrigation Department of the State of U.P. is an Industry or not, has been referred to a larger Bench and therefore the Court should await the decision of the larger Bench. The Court finds, that this question was referred by a learned Single Judge on 20.12.2002 in Writ Petition No.52256 of 2002. The Court has made an inquiry and has found that the matter is still pending before a Division Bench of this Court. The contention of the petitioner, that the matter should be kept in abeyance till the decision of the Division Bench is arrived at, is not accepted. Quite apart from the fact that the matter is pending before the Division Bench for the past 10 years, the Court finds, that the workman concerned is suffering unnecessarily for the past decade and a half. This matter was remitted by the Supreme Court in the year 2003 on the question as to whether the petitioner was an "industry" or not. The Court is constrained to observe that no evidence of any sort was filed either before the Labour Court or before this High Court in a writ jurisdiction to establish that they are performing regal or sovereign functions. The Court is constrained to observe that no evidence of any sort was filed either before the Labour Court or before this High Court in a writ jurisdiction to establish that they are performing regal or sovereign functions. The Supreme Court in R.M.Yellatti vs. Assistant Executive Engineer vs. Assistant Executive Engineer, 2006(1) SCC 106 was faced with the same dilemma wherein it was contended before the Supreme Court that the matter should be adjourned since the judgment of the Supreme Court in Bangalore Water Supply was referred to a Larger Bench by a referral order, dated 5.5.2005 in State of U.P. vs. Jaibir Singh, 2005 (5)SCC 1 . The Supreme Court declined to adjourn the matter sine die, in view of the fact that there was nothing on record to indicate that the Management had argued the point in question. Taking clue from the Supreme Court itself, the Court finds, that there is nothing on record indicating that the petitioner is not an "industry". Merely by alleging that the petitioner is not an "industry" does not take them outside the realm of the U.P. Industrial Disputes Act. The dominant nature test as illustrated in Bangalore Water Supply case (supra) has not been followed. Consequently, the Court is of the opinion, that the matter cannot be adjourned sine die. The writ petition consequently fails and is dismissed. ______________