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Jharkhand High Court · body

2019 DIGILAW 1416 (JHR)

Karvy Stock Broking Limited v. State of Jharkhand

2019-08-13

RAJESH KUMAR

body2019
JUDGMENT : 1. Heard counsel for the parties. 2. Writ jurisdiction of this Court has been invoked under article 226 of the Constitution of India for quashing the orders dated 12.12.2008, 17.02.2009 and 26.05.2008 passed by the respondent No.2 in JSE Case No.1 of 2008 whereby present writ petitioner has been directed to reinstate the respondent No.5 with full back wages. 3. The respondent No.5-namely, Nilendu Kumar Patra, has been appointed as Office Boy/Assistant in January, 2005 on the pay of Rs.2276/- per month and subsequently, orally terminated from the service w.e.f. 5th July, 2006. On such termination, the concerned workman has approached the Labour Superintendent, Bokaro for conciliation (date has not been disclosed) which has ultimately resulted in settlement dated 06.09.2007. In terms of settlement, M/s Sunil International (Labour Supply Contractor of the petitioner) has issued an appointment letter dated 03.10.2007 in favour of the respondent No.5 but he has not joined the post rather approached the authority under Section 26 of the Bihar Shops and Establishments Act, 1953 along with limitation petition. The said complaint has been registered as JSE Case No.1 of 2008. The factum of not joining the service in pursuance of the appointment letter dated 03.10.2007 has been communicated to the conciliator vide letter dated 12.12.2007. 4. Learned Deputy Labour Commissioner-respondent No.2, after considering the materials brought on record, vide order dated 12.12.2008, has directed the petitioner to reinstate the respondent No.5 in service with full back wages. The delay in filing petition under Section 26 (supra) has been condoned vide order dated 26.05.2008. A review petition filed by the petitioner, has also been dismissed vide order dated 17.02.2009. All these orders have been challenged in the present writ petition. 5. Petitioner has taken plea of limitation and further non-existence of relationship of employer and employee. Both plea has been taken unsuccessfully before Deputy Labour Commissioner. 6. Section 26 of the Bihar Shops and Establishments Act, 1953 is quoted hereinbelow: 26. All these orders have been challenged in the present writ petition. 5. Petitioner has taken plea of limitation and further non-existence of relationship of employer and employee. Both plea has been taken unsuccessfully before Deputy Labour Commissioner. 6. Section 26 of the Bihar Shops and Establishments Act, 1953 is quoted hereinbelow: 26. Notice of the dismissal or discharge.-1[(1) No employer shall dismiss or discharge or otherwise terminate the employment of any employee who has been in his employment continuously for a period of not less than six months, except for a reasonable cause and after giving such employee at least one month’s notice or one month’s wages in lieu of such notice : Provided that such notice shall not be necessary where the services of such employee are dispensed with on a charge of such misconduct as may be prescribed by the State Government, supported by satisfactory evidence recorded at an enquiry held for the purpose: Provided further that an employee who has been in continuous employment for a year or more and whose services are dispensed with otherwise than on a charge of misconduct shall also be paid compensation equivalent to fifteen days average wages for every completed year of service and any part thereof in excess of six months before his discharge in addition to the notice or pay in lieu of notice as prescribed above.] [(2) Every employee, dismissed or discharged or whose employment is otherwise terminated, may make a complaint in writing in the prescribed manner, to a prescribed authority within 90 days of the receipt of the order of dismissal or discharge or termination of employment on the one or more of the following grounds, namely : — (i) there was no reasonable cause for dispensing with his services; or (ii) no notice was served on him as required by sub-section (1); or (iii) he has not been guilty of any misconduct as held by the employer ; or (iv) no compensation as prescribed in sub-section (1) was paid to him before dispensing with his service.] (3) Notwithstanding anything contained in sub-section (2), where the order of dismissal or discharge was received by an employee at any time before the commencement of the Bihar Shops and Establishments (Amendment) Act, 1959, he may make a complaint in writing in the prescribed manner before a prescribed authority within sixty days of the commencement of the said Act: Provided that such complaints, if any, pending before an authority prescribed prior to the commencement of the said Act shall be deemed to have been duly filed before the authority prescribed after such commencement and the said authority shall dispose the same in accordance with the provisions of this Act. (4) The prescribed authority may condone delay in filing such a complaint if it is satisfied that there was sufficient cause for not making the application within the prescribed time. (5)(a) The prescribed authority shall cause a notice to be served on the employer relating to the said complaint, record briefly the evidence adduced by the parties, hear them and after making such enquiry as it may consider necessary pass orders giving reasons therefore. (b) In passing such order the prescribed authority shall have power to give relief to the employee by way of reinstatement or money compensation or both. (6) The decision of the prescribed authority shall be final and binding on both the employer and employee.” 7. From perusal of sub Section 2 of Section 26, it is evident that application has to be moved within 90 days from the date of termination. 8. In the present case, order of termination is dated 5th July, 2006. After termination, respondent No.5-employee has moved before the Labour Superintendent for conciliation (date has not been disclosed) and settlement has been arrived vide settlement dated 06.09.2007. In pursuance of the above settlement, appointment letter dated 03.10.2007 has been issued and subsequently, vide letter dated 12.12.2007 factum of non-acceptance of appointment letter by respondent No.5 has been communicated to the conciliator. 9. The period of limitation is 90 days and it has expired on 4th October, 2006. Delay, if any, has been explained till 12.12.2007. Reason for not approaching the authority from 13.12.2007 to 14.01.2008 has not been disclosed. In spite of non-explanation of this period, Deputy Labour Commissioner has condoned the delay vide order dated 26.05.2008 without assigning any reason. 10. It is trite that each and every days delay has to be explained. 11. In the present case, delay of more than one month has not been explained. In such factual position, order of condonation of delay is not sustainable, especially being unreasoned one. 12. So far as employer and employee relationship is concerned, employee has been defined under Section 2(4) of the Bihar Shops and Establishments Act, 1953, which is quoted hereinbelow: 2(4) “employee” means a person wholly or partially employed for hire, wages including salary, reward, or commission in and in connection with any establishment and includes ‘apprentice’ but does not include member of the employer’s family. It also includes person employed in a factory who are not worker within the meaning of the Factories Act, 1948 (63 of 1948), and for the purpose of proceeding under this Act, include an employee, who has been dismissed, discharged or retrenched for any reason whatsoever; 13. The test of employer and employee relationship has been explained in various judicial pronouncements. 14. Reference is being made to the judgment passed by Apex Court in the case of Bharat Heavy Electricals Limited Vs. Mahendra Prasad Jakhmola & ors. reported in 2019 SCC Online SC 382. Relevant paragraphs No.18 to 21 are quoted hereinbelow: 18. We, now come to some of the judgments cited by Shri Sudhir Chandra and Ms. Asha Jain. In ‘General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lala’ [ (2011) 1 SCC 635 ], it was held that the well recognised tests to find out whether contract labourers are direct employees are as follows: “10. It is now well settled that if the industrial adjudicator finds that the contract between the principal employer and the contractor to be a sham, nominal or merely a camouflage to deny employment benefits to the employee and that there was in fact a direct employment, it can grant relief to the employee by holding that the workman is the direct employee of the principal employer. Two of the well-recognized tests to find out whether the contract labourers are the direct employees of the principal employer are: (i) whether the principal employer pays the salary instead of the contractor; and (ii) whether the principal employer controls and supervises the work of the employee. In this case, the Industrial Court answered both questions in the affirmative and as a consequence held that the first respondent is a direct employee of the appellant” 19. The expression ‘control and supervision’ were further explained with reference to an earlier judgment of this Court as follows: “12. The expression “control and supervision” in the context of contract labour was explained by this Court in International Airport Authority of India v. International Air Cargo Workers' Union thus: (SCC p.388, paras 38-39) “38…. The expression ‘control and supervision’ were further explained with reference to an earlier judgment of this Court as follows: “12. The expression “control and supervision” in the context of contract labour was explained by this Court in International Airport Authority of India v. International Air Cargo Workers' Union thus: (SCC p.388, paras 38-39) “38…. if the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by a contractor, if the right to regulate the employment is with the contractor, and the ultimate supervision and control lies with the contractor. 39. The principal employer only controls and directs the work to be done by a contract labour, when such labour is assigned/allotted/sent to him. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or used otherwise. In short, worker being the employee of the contractor, the ultimate supervision and control lies with the contractor as he decides where the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns/sends the worker to work under the principal employer, the worker works under the supervision and control of the principal employer but that is secondary control. The primary control is with the contractor.” 20. From this judgment, it is clear that test No. 1 is not met on the facts of this case as the contractor pays the workmen their wages. Secondly, the principal employer cannot be said to control and supervise the work of the employee merely because he directs the workmen of the contractor ‘what to do’ after the contractor assigns/allots the employee to the principal employer. This is precisely what paragraph 12 explains as being supervision and control of the principal employer that is secondary in nature, as such control is exercised only after such workman has been assigned to the principal employer to do a particular work. 21. We may hasten to add that this view of the law has been reiterated in ‘Balwant Rai Saluja v. Air India Limited’ [ (2014) 9 SCC 407 ], as follows: “65. 21. We may hasten to add that this view of the law has been reiterated in ‘Balwant Rai Saluja v. Air India Limited’ [ (2014) 9 SCC 407 ], as follows: “65. Thus, it can be concluded that the relevant factors to be taken into consideration to establish an employer-employee relationship would include, inter alia: (i) who appoints the workers; (ii) who pays the salary/remuneration; (iii) who has the authority to dismiss; (iv) who can take disciplinary action; (v) whether there is continuity of service; and (vi) extent of control and supervision i.e. whether there exists complete control and supervision. As regards extent of control and supervision, we have already taken note of the observations in Bengal Nagpur Cotton Mills case [ (2011) 1 SCC 635 ], International Airport Authority of India case [ (2009) 13 SCC 374 ] and Nalco case [ (2014) 6 SCC 756 ].” 15. Thus, there are two primary tests: (i) whether the principal employer pays the salary instead of contractor; and (ii) whether the principal employer controls and supervises the work of the employee. 16. In the present case, it has been admitted by the employee himself that the payment was being made by the Contractor namely, Sunil International (respondent no.3). The plea has been taken by the petitioner that he has a contract for supply of labour with the respondent No.3 and in pursuance of the said contract for supply of labour, petitioner has been provided with labour and accordingly, employee (respondent no.-5) has worked for the alleged period. Respondent No.5 was the employee of the contractor and not of the petitioner. Since it has been admitted by the employer that salary was being paid by the contractor, his case fails on this parameter. 17. So far as the expression ‘control and supervision’ is concerned, it has been settled by the above judicial pronouncement. If the contract is for supply of labour, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by a contractor, if the right to regulate the employment is with the contractor, then ultimate supervision and control lies with the contractor. Thus, the contractor is the primary control and the principal employer is the secondary control. 18. Thus, the contractor is the primary control and the principal employer is the secondary control. 18. Admittedly, in the present case, no evidence has been brought on record to substantiate the claim of being employee of the petitioner by the employee (respondent No.5). Only evidence has been brought, is attendance register and oral evidence, that he has been employed by the petitioner. So far as attendance register is concerned, it only proves regarding his working under the petitioner and it does not proof any parameter required for proving relationship of employer and employee, even in oral evidence by the employee, it has been accepted that the salary has been paid by the contractor and not by the petitioner. 19. In view of the above discussion as well as judicial pronouncement, this Court finds that the impugned orders dated 12.12.2008, 17.02.2009 and 26.05.2008 passed by the respondent No.2, in JSE Case No.1 of 2008, are not sustainable and accordingly, the same are hereby, quashed. 20. Resultantly, this writ petition stands allowed. 21. Pending I.A., if any, stands disposed of.