1. Heard Mr.H.S. Munshaw, learned counsel appearing with Mr.Chauhan for the petitioner and Mr.R.J. Patel, learned counsel appearing for Mr.B.R. Pandya for the respondent.
2. By way of this petition under Article 227 of the Constitution of India, the petitioner- District Panchayat has challenged the legality and validity of judgment and award dated 31.05.1994 passed by the Presiding Officer, Labour Court, Godhra in Reference (LCG) No.450 of 1992.
3. The facts which can be culled out from the record of the petition are as under.
3.1. That the petitioner-Panchayat, in order to carry out scarcity work, appointed the respondent-workman vide order dated 05.10.1987. The said appointment order dated 05.10.1987 (Annexure-A) recites that the respondent-workman is appointed for the scarcity work of the current year 1987-1988 as work-charge clerk. It is further provided in the order that such appointment is ad-hoc and on certain conditions which have been provided in the said appointment order itself. It transpires from the record that the respondent-workman reported to his duties as work-charged clerk forthwith. Further, vide order dated 02.03.1988, the petitioner-Panchayat appointed the respondent-workman for the scarcity work on the same post under the scheme 'N.R.E.P.' and the respondent was allotted to the office of the Deputy Executive Engineer, Small Irrigation Scheme, Halol under the said Scheme. It transpires that on such an appointment having been made, the respondent reported to his duties at the office of the Deputy Executive Engineer, Small Irrigation Department, Halol on the very next date i.e. on 03.03.1988. By communication dated 21.10.1988, the Deputy Executive Engineer, Small Irrigation, Sub-Division, Halol District Panchayat passed an order whereby, the services of the respondent were discontinued because of the fact that 'N.R.E.P.' Scheme works were discontinued. It appears from the record that after lapse of about 4 years, the respondent raised dispute before the competent authority and as the same could not be resolved, the said dispute was referred to the Presiding Officer, Labour Court, Godhra which came to be registered as Reference (LCG) No.450 of 1992.
3.2. The Labour Court vide impugned judgment and award dated 31.05.1994, was pleased to allow the reference and direct the petitioner to reinstate the respondent on the original post with continuity of service and with full back wages. Being aggrieved by the said impugned judgment and award, the petitioner has preferred the present petition.
4. This Court (Coram: H.L. Gokhale, J., as he then was) was pleased to pass the following order on 07.09.1994:-
“Rule. Interim relief in terms of prayer clause 8(c). Hearing expedited. Liberty to the respondent to apply.”
5. Mr.Munshaw, learned counsel appearing with Mr.Chauhan for the petitioner has taken this Court through the factual matrix of the petition. Mr.Munshaw, learned counsel submitted that the respondent was appointed in a specific scheme for specific purpose and, therefore, the respondent was required to be discontinued when the particular scheme work was over. Mr.Munshaw, learned counsel submitted that such a discontinuance does not amount to retrenchment as contemplated under Section 25-F of the Industrial Disputes Act, 1947 (hereinafter referred to as the 'Act' for the sake of brevity). Mr.Munshaw, learned counsel submitted that the respondent was appointed for scarcity work which is a special work and the same cannot be termed as trade and/or business and, therefore, scarcity work is not an industry. Relying upon the ratio laid down by the Full Bench of this Court in case of H.K. Makwana V/s. State of Gujarat & Ors. reported in 1994(2) GLR 1002 (FB), Mr.Munshaw, learned counsel further submitted that as per the ratio laid down by this Court in the aforesaid case, the work of scarcity is not an industry and, therefore, the respondent cannot be considered to be a workman as defined under the Act. Mr.Munshaw, learned counsel further submitted that the contention raised by the respondent before the Labour Court that one Shri P.K. Solanki was continued by the petitioner is also far from truth as averred in the petition as well as even before the Labour Court. It was brought on record that the services of said Shri P.K. Solanki also came to be discontinued because the scheme in which the petitioner as well as said Shri Solanki were recruited for scarcity work on work charged basis, was over. Mr.Munshaw, learned counsel, therefore, submitted that the finding arrived at by the Labour Court is bad and illegal and on wrong appreciation of the evidence on record. Mr.Munshaw, learned counsel submitted that in fact, the respondent had approached the Court of Civil Judge, Senior Division, Godhra by way of filing Regular Civil Suit No.778 of 1988. However, the same came to be withdrawn and thereafter, the present dispute was raised. Mr.Munshaw, learned counsel further submitted that the conclusion arrived at by the Labour Court to the effect that as the respondent had completed one year's service i.e. more than 240 days, he was entitled to the benefit of Section 25-F of the Act, is an error apparent on the face of the record. Mr.Munshaw, learned counsel, therefore, submitted that the petition deserves to be allowed and impugned judgment and award deserves to be quashed and set aside.
6. Per contra, Mr.R.J. Patel, learned counsel appearing for Mr.B.R. Pandya for the respondent submitted that the respondent worked continuously from 05.10.1987 till 21.10.1988, the date on which he came to be terminated. Mr.Patel, learned counsel submitted that the respondent is a handicapped person and even though he was appointed for a particular scheme, as he had completed more than 240 days and as no notice or pay in lieu of notice has been paid to the respondent, there is a clear breach of Section 25-F of the Act. Mr.Patel, learned counsel, therefore, submitted that the impugned judgment and award is legal and proper. Mr.Patel, learned counsel submitted that the judgment rendered by the Full Bench of this Court would not apply to the present case as the same has been rendered by the Full Bench of this Court before the date of the award and hence, such a pronouncement of this Court would apply retrospectively. Mr.Patel, learned counsel submitted that in fact, during the pendency of this petition, the respondent has not been paid anything and he is still not gainfully employed and, therefore, on the ground of sympathy also, as averred in the affidavit-in- reply filed by respondent dated 09.04.2011, this Court be pleased to exercise discretion and award some compensation. No further contentions are raised by the learned counsel for the parties.
7. Before adverting to the submissions made by both the sides, it is noteworthy that this Court (Coram:H.L. Gokhle, J., as he then was) was pleased to admit the matter by order dated 07.09.1994, as aforesaid. It has been clearly noted in the said order itself that it was open for the respondent to apply. However, as per the record, no application has been filed by the respondent even for the benefit of Section 17-B of the Act. On the contrary, the record shows that the matter come up for final hearing once in the year 2002 and thereafter, it has come for final hearing in the year 2011 and finally, the petition is heard today as vide order dated 16.10.2002, in fact, the petition was dismissed for default, which came to be revived thereafter, as indicated from order dated 21.02.2011 passed by this Court (Coram: H.K. Rathod, J., as he then was).
8. Considering the first appointment letter dated 05.10.1987 (Annexure-A), it clearly transpires that the respondent was appointed for scarcity work by Taluka Development Officer, Halol, District Panchmahal. However, the Taluka Development Officer is not made a party either before the Labour Court or before this Court. On further appreciating the contents of the said appointment letter, it clearly transpires that it was a temporary appointment for the specific work of scarcity for the current year 1987-1988. Apart from the fact that such condition is embodied in the appointment letter being Condition No.3, it further transpires on reading of appointment letter dated 02.03.1988 that the respondent came to be appointed in a particular scheme known as 'N.R.E.P.' Scheme which was undertaken as scarcity work by the petitioner-Panchayat. In fact, that order was passed by the Taluka Development Officer, Halol and thereafter, the respondent was allocated to the office of the Deputy Executive Engineer, Small Irrigation, Sub- Division, Halol. It transpires from communication dated 21.10.1988 that as the works undertaken by 'N.R.E.P.' Scheme were over, the services of the respondent came to be discontinued. It is an admitted position that the said communication dated 21.08.1988 was challenged by the respondent by way of filing Regular Civil Suit No.778 of 1988 before the Court of Civil Judge, Senior Division, Godhra. However, the said suit came to be withdrawn and the present reference is filed after almost a period of 4 years. On the basis of the above factual background, it transpires that the respondent was appointed for scarcity work on temporary basis and was not appointed on the regular basis. The Full Bench of this Court in the case of H.K. Makwana (Supra) after considering the Programmes of Relief Undertakings as per the guidelines provided in the Gujarat Relief Manual has, in paras 11 and 12, observed thus:-
“11. Whether such relief undertakings would be covered by the word 'industry' as defined by Sec. 2(j) of the Industrial Disputes Act, 1947 and as interpreted by the Supreme Court in the case of Bangalore Water Supply:
In the referring judgment, the Division Bench found prima facie considerable force in the contention of the learned Advocate for the petitioners that the purpose of the project was absolutely irrelevant and the parity of work is to be found in the modus operandi in the working and it was organisation of the venture, including the relations between the two limbs that was material; that analysis must be activity oriented and not motive based; motive is irrelevant as held by the Supreme Court in paragraph 61 in the case of Bangalore Water Supply. The Court further observed that in the case of Sanjit Roy [AIR 1983 SC 328], while dealing with the famine relief work, it was accepted by the Supreme Court that the said activity undertaken by the State was an industrial activity and the workmen employed therein were entitled to minimum wages because the work undertaken is useful to the society and is creation of assets or goods and material service beneficial to the society.
The aforesaid question is required to be considered firstly by considering the scope and object of the Industrial Disputes Act. The scope and object of the Industrial Disputes Act is, as held by V. R. Krishna Iyer, J. in the case of L.I.C. of India v. D.J. Bahadur, AIR 1980 SC 2181, as under:-
“The soul of the statute is not contract of employment, uniformity of service conditions or recruitment rules, but conscionable negotiations, conciliations and adjudications of disputes and differences animated by Industrial justice, to avoid a collision which may spell chaos and imperil national effort at increasing the tempo of production.”
The question of industrial peace or question of avoiding a collision which may spell chaos and imperil national effort at increasing the tempo of production, would not arise in such type of relief undertakings where there is no question of increasing production. The question in such schemes is only how to provide sustenance to the affected persons. Further there is no question of avoiding collision because the employment is offered to all, who are seriously affected by the natural calamities. In such a situation, no question of relation or industrial dispute would arise.
Now we would refer to relevant paragraphs 37 and 38 of the judgment in the case of Bangalore Water Supply (supra). They read as under:
37. A look at the definition, dictionary in hand decisions in head and Constitution, at heart, leads to some sure characteristics of an Industry, narrowing down the twilit zone of turbid controversy. An Industry is a continuity, is an organized activity, is a purposeful pursuit - not any insolated advanture, desultory excursion or casual, fleeting engagement motivelessly undertaken. Such is the common feature of a trade, business, calling, manufacture - mechanical or handicraft - based service, employment. Industrial occupation or avocation. For those who know English and are not given to the luxury of splitting semantic hairs, this conclusion argues itself. The expression undertaking cannot be torn off the words whose company it keeps. If birds of a feather flock together and noscitur a sociis is a commonsense guide to construction, undertaking must be read down to conform to the restrictive characteristic shared by the society of words before and after. Nobody will torture undertaking in Sec. 2(j) to mean meditation or musheira which are spiritual and aesthetic undertakings. Wide meanings must fall in line and discordance must be excluded from a sound system. From Banerjee (AIR 1953 SC 58) to Safdar Jung (AIR 1970 SC 1467) and beyond, this limited criterion has passed muster and we see no reason, after all the marathon of argument to shift from this position.
38. Likewise, an 'Industry' cannot exist without co-operative endeavour between employer and employee. No employer, no industry; no employee, no industry -not as a dogmatic proposition in economics but as an articulate major premise of the definition and the scheme of the Act, and as a necessary postulate of Industrial disputes and statutory resolution thereof.”
After discussing various judgments, the Court further observed in paragraph 59 as under:
“59. All the indicia of Industry are packed into the judgment which condenses the conclusion tersely to hold that Industries will cover branches of work that can be said to be analogous to the carrying out of a trade or business. The case, read as a whole contributes to Industrial jurisprudence, with special reference to the Act, a few positive facets and knocks down a few negative fixations. Governments and Municipal and statutory bodies may run enterprises which do not for that reason ceases to be Industries.
xxx xxx xxx xxx Any operation carried on in a manner analogous to trade or business may legitimately be statutory Industry. The popular limitations on the concept of industry do not amputate the ambit of legislative generosity in Sec. 2(j). Industrial peace and the smooth supply to the community are among the aims and objects the legislature had in view, as also the nature, variety, range and areas of disputes between employers and employees. These factors must inform the construction of the provision.” (Emphasis supplied) Applying the aforesaid ratio and considering relief undertakings, it is apparent that -
(a) it cannot be said to be continuing activity as it is casual activity arising because of some unforeseeable calamities. Therefore, it cannot be said to be a systematic activity carried out for production or distribution of goods.
(b) it cannot also be considered as an industry because the said phrase is to be understood as analogous to the carrying out of a trade or business. As held by the Supreme Court, the undertaking must be read down to conform to the restrictive characteristic shared by the society of words before and after. Applying the said principles, it cannot be said to be having any characteristic of trade or business; and
(c) even the employer-employee relations would not bear any resemblance to what is found in trade or business. In the relief undertakings, there is no question of appointing employees by following any procedure of recruitment rules. They are not appointed as such. They are called on the site to work so that they could be provided livelihood. Further, even if a person is physically handicapped and is not in a position to do the work, yet he would get the wages prescribed for the relief work while in a trade or business, reverse would be the position. Unless the person is fit and competent, be would not be employed. Further, in relief undertaking, the employees would come for work at their own sweet will. Therefore, it would be difficult to hold that the relief undertakings bear any resemblance to what is found in trade or business with regard to employer-employee relations.
Lastly, while laying down triple elements for holding a particular activity as an industry, the Court has emphasised in paragraph 161, item I(c), that the true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employees relations. Applying the aforesaid test also, in our view, the relief undertakings carried on by the State would not be covered by the word industry. The relief work is undertaken not to construct a road or a bridge but is undertaken to see that within a span of 5 kms. of the affected area, the labourers would get something in cash or kind for their survival. Instead of giving them doles, they are provided work and wages. The reason is, as stated by the Division Bench in the case of J. J. Shrimali (supra), not to hurt the dignity, self-respect and sentiments of those receiving the same. This would be clear from the following observations :
“When a State Government during famine and drought undertakes relief works intended to provide the much needed relief to scarcity affected people living in affected areas, it is not embarking upon any Industrial or commercial enterprise but is merely trying to fulfil its obligation towards its people who are hit by natures wrath.
If, instead of distributing doles which may hurt the dignity, self respect and sentiments of those receiving the same, the State Government introduces schemes which would provide temporary work to the affected people and pays for the same.”
Further, in paragraph 161, item II, the Court has clarified that, although Sec. 2(j) uses words of widest amplitude, their meaning cannot be magnified to overreach itself and that undertaking must suffer a contextual shrinkage. Therefore, all organized activity possessing the triple elements in Item I [(i) systematic activity, (ii) organized by co-operation between employer and employee, and (iii) for the production and/or distribution of goods and services], although not trade or business, may still be industry, provided the nature of the activity, namely, the employer-employee basis, bears resemblance to what we find in trade or business. As discussed above, in relief undertaking employer-employee relations would not bear resemblance to what we find in trade or business. In any set of circumstances, the Court in the very judgment, as emphasised above, made it clear that the discussion in the aforesaid judgment was not exhaustive but to the extent covered by the debate at the Bar and that in a world of relativity where law and life interlace, a search for absolutes is a self-condemned exercise. Hence also the relief undertaking as discussed above would not be covered by the word industry as interpreted by the Supreme Court in the case of Bangalore Water Supply (supra).
12. Whether judgment in the case of J.J. Shrimali requires reconsideration because of the decisions in the case of Sanjit Roy (AIR 1983 SC 328) and in the case of Des Raj (AIR 1988 SC 1182):
Before considering this contention it would be appropriate to quote observations from the decision of the Supreme Court in the case of C.I.T. v. Sun Engineering Works (P) Ltd., 1992 (4) SCC 363, wherein the Court has held that the judgment of the Supreme Court must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court and that it is not proper to regard a word, a clause or a sentence occurring in a judgment as containing a full exposition of the law on a question when question did not even fall to be answered in that judgment. The relevant observations are as under :
“It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete law declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the Courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings. In Madhav Rao Scindia v. Union of India, [1971 (1) SCC 85], this Court cautioned:
It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment.”
Keeping this aforesaid principle in mind, we would consider the decision rendered by the Supreme Court in the case of Sanjit Roy (AIR 1983 SC 328). In that case, the Court considered whether the Minimum Wages Act, 1948 is applicable to the workmen employed in the famine relief works. For deciding the said question, the Court mainly relied upon Art. 23 of the Constitution of India and held that where a person provides labour or service to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the meaning of the words forced labour and attracts the condemnation of Art. 23. Every person who provides labour or service to another is entitled at least to the minimum wages and if anything less than the minimum wage is paid to him he can complain of violation of his fundamental right under Art. 23. No doubt, in that case, the Court has observed that the relief work undertaken by the State by way of famine relief is useful to the society and productive in terms of creation of some asset or wealth and when the State exacts labour or service from the affected persons for carrying out such work, for example, a bridge or a road which has utility for the society and which is going to augment the wealth of the State, there can be no justification for the State not to pay the minimum wage to the affected persons. As stated earlier, in the aforesaid case, the Court has not at all considered the provisions of Sec. 2(j) of the Industrial Disputes Act or the definition of the word industry. Therefore, in our view, the aforesaid decision would not have any bearing in deciding the question as to whether the relief work undertaken by the State Government would be 'industry' or not.
At this stage, we should not lose sight of the subsequent judgment rendered by the Supreme Court in the case of Delhi Development Horticulture Employees Union (1992 (4) SCC 99). In that case, the Court has specifically observed that in the context of such schemes, it is wrong to approach the problems of those employed under such schemes with a view to providing them with full employment and guaranteeing equal pay for equal work, and if such interpretation is given, it would benefit a few at the cost of the many starving poor for whom the schemes are meant. It may force the State to wind up the existing schemes and forbid them from introducing the new ones, for want of sources. In our view, these observations would aptly apply to such type of relief undertakings during such calamities. Even if the State intends to give full-fledged benefits to a few at the cost of the many starving poor the probable result may be devastating and/or riotous.
Similarly, in the case of Des Raj (supra), in one appeal the appellant before the Supreme Court was working as a foreman in the Mechanical Construction Division under the Irrigation Department and in another appeal, the appellant was working as T. Mate in the P.W.D. Drainage Division. Before the Court, the question was whether the Irrigation Department of the Government is industry or not. The Court observed that, as the amended statutory definition is not yet in force, the parent definition and judicial pronouncements have to be referred to for finding the law. The Court thereafter referred to various decisions including the decision in the case of Bangalore Water Supply (supra) and observed that the main functions of the Irrigation Department when subjected to the Dominant Nature test clearly come within the ambit of industry. In our view, in this judgment, the Court was not required to consider the question which is posed in this matter. The question was altogether different and was based upon the projects carried out by the Irrigation Department of the concerned State and the said judgment would have no bearing on the question which is required to be dealt with in this matter.
Similarly, in our view, the decision of the Patna High Court in the case of Bihar Relief Committee (54 FJR 385), would not require much consideration because in that case the petitioner, Bihar Relief Committee. was established as a society under the Societies Registration Act with the sole object rendering relief to the suffering caused by natural calamities like flood, drought, epidemic etc. to humanity. After considering various facts, the Court observed:
“The petitioner has undertaken minor irrigation schemes in the State for which it opened various centres for constructing open bore wells, tanks and tube wells after obtaining the advice of technical experts. It stores articles for such works and maintains plants and machineries for which depreciation, wear and tear and running charges are charged. In supplying pipes to the farmers it charges them the costs incurred in transportation and storage. All these establish that the activities of the petitioner are systematic.”
The Court has finally held that the Bihar Relief Committee is an industry within the meaning of Industrial Disputes Act, In the present case, in our view, the work is not organised by a society but it is organised by the State in discharge of its inalienable duty. Further, the relief undertakings, as stated above, are casual and not continuing one.
Lastly, in the case of Umayammal v. State of Kerala, 1983 (1) LLJ 267, the Kerala High Court considered the question whether the provisional or temporary employees working in Government Departments, Government Companies, Statutory Corporations and Local Bodies were governed by the provisions of the Industrial Disputes Act. There also, the Court relied upon the decision of the Supreme Court in the case of Bangalore Water Supply (supra) and it is made clear that the sovereign functions of the State cannot be included in industry, but if there are industrial units severable from the essential functions and possess an entity of their own, it may be plausible to hold that the employees of those units are workmen and those undertakings are industries. In our view, the aforesaid decision of the Kerala High Court would not advance the contentions raised by the learned Advocates for the petitioners.
Conclusions :
In the result, we entirely agree with the decision rendered by this Court in the case of J.
J. Shrimali [1989 (2) GLH 12 : (1989 (1) GLR 396)] and it does not call for any reconsideration.
For the reasons recorded above, we answer the questions referred to us, as under:
Re: Question No.1 The employment offered to the persons on the scarcity relief works as undertaken by the State cannot be said to be employment in industry as defined by Sec. 2(j) of the Industrial Disputes Act, 1947 mainly because,
(a) it is the primary and inalienable function of the State to provide livelihood to the persons who are affected by the natural calamities such as famine, earthquake, epidemic, flood, scarcity, etc., and
(b) admittedly, the relief work is not a business or trade and with regard to the undertaking, the activity is not analogous to trade or business or that it is not a systematic activity but is carried out casually at different places depending on the calamities in a particular area.
Re: Question No.2 The decision of the Division Bench of this Court in the case of J. J. Shrimali [1989 (2) GLH 12 : (1989 (1) GLR 396)] that scarcity relief work undertaken by the State is not industry as defined by Sec. 2(j) of the Industrial Disputes Act, 1947, is well sustained.
(ATP) Questions answered.
9. The argument put forward by the respondent that the said pronouncement of the Full Bench of this Court dated 08.04.1994 would not apply in the present case as the impugned judgment and award is passed by the Presiding Officer of the Labour Court, Godhra on 31.05.1994, is thoroughly misconceived and untenable.
10. On perusal of the impugned award, the Labour Court has committed error apparent on the face of the record inasmuch as that it is an admitted position that the respondent was appointed as work-charge clerk on temporary basis but as no notice or pay in lieu of notice has been paid, has straightaway come to the conclusion that as the respondent has worked from 05.10.1987 to 21.10.1988, there is a breach of Section 25-B of the Act as the respondent has worked for more than 240 days or more than one year. However, even in the reply before the Labour Court, it is pointed out by the petitioner that the respondent was appointed only for scarcity work which cannot be termed as regular recruitment and even it was clearly pointed out in the reply that on the scheme being over, about 1000 similarly situated persons working in the scarcity work under the said scheme have been discontinued.
11. Thus, this Court finds that the Labour Court has committed error apparent on the face of the record in coming to the conclusion that the respondent is entitled to benefits of Section 25- F Act. As per the ratio laid down by the Full Bench of this Court and as the respondent was appointed for scarcity work which is also admitted by the respondent, which cannot be termed as industry, the respondent cannot be termed as workman. This Court also finds that even though it was brought on record that Shri P.K. Solanki has been discontinued, still however, the said fact has also been ignored by the Labour Court.
12. In view of the fact that admittedly, the respondent was appointed for scarcity work, as per the ratio laid down by the Full Bench of this Court in case of H.K. Makwana (Supra), discontinuance of service of the respondent cannot be termed as retrenchment.
13. The argument put forward by the learned counsel for the respondent that the respondent being handicapped person and, therefore, discretion should be exercised by this Court by awarding appropriate compensation, in the facts and circumstances of this case, does not warrant any consideration inasmuch as that the employment of the respondent was for scarcity work, which is not an industry as held by the Full Bench of this Court. In the facts and circumstances of the present case, such a sympathy cannot be shown to the respondent.
14. In view of the above, the petition succeeds. Impugned judgment and award dated 31.05.1994 passed by the Presiding Officer, Labour Court, Godhra in Reference (LCG) No.450 of 1992 is hereby quashed and set aside. Rule is made absolute accordingly. No order as to costs.
(R.M.CHHAYA, J.) Hitesh