1. Heard.
2 .In the first writ petition, the Petitioner, the Superintending Engineer of the Tamil Nadu Electricity Board, Kadamparai Electricity Generation Circle (hereinafter referred to as the "Electricity Board"), challenges a common award issued by the First Additional Labour Court, Coimbatore, on 05.04.2018. The award pertains to 11 industrial disputes raised by 11 respondents (hereinafter referred to as the "workmen"), each of whom had individually approached the labour court. By the impugned award, the labour court set aside the oral terminations of the 11 workmen and directed their reinstatement within one month from the date the award takes effect. However, the labour court declined to grant continuity of service, back wages, or attendant benefits.
3. Aggrieved by the common award, the Electricity Board filed a single writ petition. When the matter was taken up on 08.09.2020, notice was ordered in the writ petition, and private notice was also permitted. In the meantime, upon receiving notice of the writ petition filed by the Electricity Board, the 11 workmen, who were also aggrieved by the same common award dated 05.04.2018, filed a second writ petition challenging the portion of the award that denied them continuity of service, back wages, and other attendant benefits.
4. In the second writ petition, when the matter was taken up on 19.07.2021, it was admitted, and notice was ordered to the respondent Electricity Board. It was further directed that the said writ petition be heard along with the first writ petition filed by the Electricity Board. However, when the matter was subsequently listed on 05.11.2024, it was referred for adjudication before the Lok Adalat scheduled for 14.12.2024. As no settlement was reached in the Lok Adalat, and when the first writ petition filed by the Electricity Board was taken up for final disposal, the second writ petition filed by the workmen was also tagged along. Consequently, a common judgment has been pronounced in both matters.
5. The records reveal that the 11 workmen raised disputes before the Government Labour Officer, Coimbatore, challenging their oral termination on different dates as follows: I.D.No.234/2006 (T. Babu) – 20.07.1998 I.D.No.235/2006 (T. Ravichandran) – 30.10.1998, I.D.No.236/2006 (T. Rajaselvan) – 31.12.1997, I.D.No.237/2006 (P. Suresh) – 30.10.1998, I.D.No.240/2006 (S. Ramesh) – 30.04.1999, I.D.No.243/2006 (K. Parvathi) – 05.03.1998, I.D.No.248/2006 (K. Arumugam) – 31.07.1996, I.D.No.249/2006 (K. Selvaraj) – 31.03.1998, I.D.No.250/2006 (K. Mylsami) – 23.08.1998, I.D.No.254/2006 (K. Manikandan) – 31.12.1997, I.D.No.256/2006 (P. Lawrence D’Cruz) – 16.12.1999.
6. The Labour Officer, after issuing due notice to the Electricity Board, submitted failure reports on various dates, including 03.03.2006, 27.07.2006, 27.03.2006, 24.03.2006, and 09.11.2006. Based on these failure reports, the 11 workmen filed their respective claim statements dated 08.09.2006 before the Labour Court, Coimbatore. The Labour Court registered the disputes as I.D.Nos. 234 to 237 of 2006, 240 of 2006, 243 of 2006, 248 to 250 of 2006, and 254 of 2006, 256 of 2006. The Electricity Board entered an appearance and filed separate but identical counter statements dated 07.06.2017 in the first 10 cases, while in I.D.No.256/2006, the counter statement was filed on 10.07.2017.
7. Before the Labour Court, both parties filed a memo agreeing to a joint trial for all 11 disputes, with the evidence recorded in I.D.No.234/2006 being treated as evidence for all cases. On behalf of the workmen, P. Lawrence D’Cruz, the petitioner in I.D.No.254/2006, was examined as WW1, and 14 documents were submitted, marked as Ex.W1 to Ex.W14. On the side of the Electricity Board, K. Subramaniam, Assistant Administrative Officer, was examined as MW1, and the authorization letter issued to him by the Board, dated 31.01.2018, was marked as Ex.M1.
8. The Labour Court framed six issues for consideration. The first issue was whether the workmen had proved the existence of an employer-employee relationship with the Electricity Board. The second issue being whether the contract system adopted by the Electricity Board was genuine and whether the classification of the workmen as contract workers, as claimed by the Board, was acceptable. The third issue was whether the workmen had completed 240 days of work within a span of 12 calendar months in the Electricity Board. The fourth issue was whether the termination of the workmen was legal and the fifth issue was whether the workmen were entitled to reinstatement, continuity of service, and full back wages.
9. In the impugned common award, the Labour Court, with respect to the first two issues, held that the workmen had proved the existence of an employer-employee relationship and that the purported contract system was not genuine (para 12 of the Award). Regarding the actual service rendered by the workmen, the Labour Court found that each workman had proved completing 240 days of work within 12 months and 480 days within 24 months. On the issue of the alleged contract system, the Labour Court referred to the cross-examination of MW1, where it was revealed that the workmen had performed various tasks under the direct instructions and supervision of the Assistant Engineer. The following admission made by MW1 was highlighted:
"This content is in vernacular language. Kindly email us at info@legitquest.com for this content."
10. The Labour Court also relied on the evidence of MW1, wherein he admitted that all the workmen had been engaged from 1989 to 1997 and that there were approximately 186 similar workmen in the circle. The court further noted that the Electricity Board failed to produce any registration certificate for engaging contract labour, the license of the alleged contractor, or any relevant registers. The Labour Court also found that the name of the so-called contractor was not mentioned in the counter statement or in MW1’s proof affidavit. It referred to MW1’s admission, wherein he candidly stated that he had no knowledge of the contractor’s particulars. The court concluded that the workmen were labeled as contract labour solely to deny them statutory benefits and that the alleged contractor was merely a name lender, rendering the contract system sham and nominal. The Labour Court also took note of the fact that, while contractors changed over time, the workmen remained the same, further reinforcing the conclusion that the contract arrangement was not genuine.
11. The Labour Court also took note of the following testimony given by MW1 during his cross-examination:
"This content is in vernacular language. Kindly email us at info@legitquest.com for this content."
12. The Labour Court referred to the service certificates submitted by the workmen, which were marked as Ex.W1 to Ex.W11. Since these documents were admitted by the Respondent, it was not open for them to contend that the workmen had failed to prove their case. With respect to WW1, he had produced six certificates issued by the Respondent authorities, which were marked as Ex.W11 series. Certified copies of these certificates were also submitted before this Court, and it is necessary to extract them below:
Certificate No.1
This is to certify that Thiru/Thirumathi. Lawrence De Crews, S/o.Pascal De Crews is working in the Sanitary Maintenance contract work at Civil Section at Sholayar Power House I From 1989 to till Date. His/Her conduct and character are good.
Place: SPH I sd/-
Date: 15.10.89 Junior Engineer, Civil
TamilnaduElectricity Board, Sholayar
Power House No.1
Certificate No.2
This is to cerfified that Thiru.P.Lawrance D’Cruz S/o. Thiru.Pascal D’cruz is working in the maintenance contract work at Sholayar Power House I as contract labour period from 4/92 Till date. He known day to day routine Maintenance work, he is upkeeping in the official records. He is very sincere and hard worker. His conduct and character are very good.
Place: Sholayar Power House I sd/-
Date: Assistant Executive Engineer/Civil
Tamilnadu Electricity Board, Sholayar
Power House-I
Certificate 3
This is to certify that Thiru.P.Lawrence D Cruz S/o. Thiru.Pascal D’cruz is known to me from 1993 onwards. He is working as Contract labour in Sholayar Power House I. His conduct and Character are good. Sd/-
Asst. Executive Engineer/Mechanical
Sholayar Power House I Tamilnadu
Electricity Board, Manamboli P.O.642 115
Certificate 4
This is to certify that Thiru.P.Lawrence D Cruz, S/o. Thiru Pascal D Cruz working in the maintenance contract of Sholayar Power House I from 7.1.93 to till date. He knows day to day routine maintenance works in the section and upkeeping of section records etc. He is very sincere and hard working. His conduct and character are very good.
Sd/- Assistant Engineer,
Civil Maintenance,
TNEB Sholayar Power House I
Certificate 5
This is to certify that Thiru.P.Lawrance D’Cruz S/o. Pascal D’Cruz is working in the Contract Labour in Electrical Maintenance at Sholayar Power House-I for the period 19.1.96 to 16.8.97. His Conduct and Character are Good.
Sd/-
Place: Sholayar P.H.I Date:16.08.97
Assistant Engineer, Electrical
Sholayar Power House I
Manamboli 642 115
Certificate 6
This is to certify that Thiru P.Lawrence D’Cruz, S/o. Pascal D’Cruz residing at Sholayar Power House I camp is known to me for the past 3 ½ year. His conduct and character are Good.
Sd/-
Place: SPH I Date: 8.6.99
Assistant Engineer/Mechanical Sholayar Power
House I Tamilnadu Electricity Board
Manamboli 642 115
13. The Labour Court held that since these certificates were admitted by the Respondent, and no contrary evidence was produced, their authenticity remained undisputed. The court further observed that the deliberate withholding of material documents and registers by the Respondent warranted an adverse inference against them.The Labour Court referred to the following three judgments:
a. Secretary, Haryana State Electricity Board Vs. Suresh & Ors reported in 1999-I-LLJ- 1086 (SC)
b. Chet Ram Vs. Presiding Officer, Industrial Tribunal cum Labour Court-I, Faridabad & Anr. reported in 2011-I-LLJ 271 (P & H)
c. Hindustan Petroleum Corporation, Ltd. (represented by its Chairman cum Managing Director), Mumbai & Anr. Vs. Presiding Officer, Central Government Labour Court-cumIndustrial Tribunal, Chennai and another reported in 2008 (4) LLN 254.
14. The Labour Court held that the Respondent failed to produce any records establishing that they were registered as a principal employer or that the so-called contractors were licensed under the law. It concluded that the alleged contract system prevailing in the Electricity Board was merely sham and nominal, and as a result, the workmen should be deemed employees of the principal employer. With respect to the termination of the workmen, the Labour Court found that the certificates produced by them demonstrated their continuous service, and therefore, their termination amounted to retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. Since the mandatory requirements of Section 25F of the I.D. Act were not complied with, the terminations were deemed invalid and liable to be set aside.
15. The Labour Court also took into account its earlier awards, which had been upheld by the High Court, and recognized that these workmen were entitled to similar relief. However, due to their delayed approach to the Labour Officer, they were deemed ineligible for back wages, as granting the same would impose a significant financial burden on the board. Accordingly, in its common award, the Labour Court ordered the reinstatement of the workmen without continuity of service, back wages, or other attendant benefits, as previously noted.
16. The counsel for the electricity board, after presenting oral submissions, also submitted written arguments on 07.03.2025. The learned counsel contended that since the workmen had approached the Labour Officer after a delay of seven years, their claim should be dismissed on the grounds of delay and laches. In support of this argument, the learned counsel referred to the following judgments of the Supreme Court:
a. Prabhakar Vs. Joint Director Sericulture Department, 2015 (15) SCC 1
b.Nedungadi Bank Ltd Vs. K.P.Madhavan Kutty & Ors, 2000 (2) SCC 455
c. Chief Engineer,Ranjit Sagar Dam & Anr. Vs. Sham Lal, 2006 (9) SCC 124
d. Uttaranchal Forest Development Corporation Vs. M.C.Joshi, 2007(9) SCC 353
e. State of Karnataka & Anr. Vs. Ravi Kumar, 2009 (13) SCC 746
17. As the first judgment referenced above is the most recent, it is essential to examine it in light of the submissions made by the counsel for the Electricity Board. In Prabhakar v. Joint Director, Sericulture Department, reported in 2015 (15) SCC 1, the Supreme Court, in paragraph 40and 42.4, made the following observation
“Since there is no period of limitation, it gives right to the workman to raise the dispute even belatedly. However, if the dispute is raised after a long period, it has to be seen as to whether such a dispute still exists Thus, notwithstanding the fact that law of limitation does not apply, it is to be shown by the workman that there is a dispute in praesenti. For this purpose, he has to demonstrate that even if considerable period has lapsed and there are laches and delays, such delay has not resulted into making the industrial dispute seized to exist. Therefore, if the workman is able to give satisfactory explanation for these laches and delays and demonstrate that the circumstances discloses that issue is still alive, delay would not come in his way because of the reason that law of limitation has no application. On the other hand, if because of such delay dispute no longer remains alive and is to be treated as “dead”, then it would be nonexistent dispute which cannot be referred.
Take, for example, a case where the workman issues notice after his termination, questioning the termination and demanding reinstatement. He is able to show that there were discussions from time to time and the parties were trying to sort out the matter amicably. Or he is able to show that there were assurances by the Management to the effect that he would be taken back in service and because of these reasons, he did not immediately raise the dispute by approaching the labour authorities seeking reference or did not invoke the remedy under Section 2A of the Act. In such a scenario, it can be treated that the dispute was live and existing as the workman never abandoned his right. However, in this very example, even if the notice of demand was sent but it did not evoke any positive response or there was specific rejection by the Management of his demand contained in the notice and thereafter he sleeps over the matter for number of years, it can be treated that he accepted the factum of his termination and rejection thereof
18. Before the Labour Court, in the claim statement filed in I.D.No.256/2006, the workman, who was examined as WW1, made the following statements in paragraphs 8 and 9:
“8. …..The Petitioner’s efforts to get himself explained with the reasons for his termination proved fruitless. Whenever the petitioner approached the Respondent in person for reinstatement, the Respondent produced delay tactics by representing that they are awaiting for orders from their Superior Authorities and assured to reinstate them after getting the socalled orders.
9. Despite of the strenuous efforts by the petitioner his coworkers and union, the Respondent did not turn down to provide employment to the Petitioner by pleading untenable one or other reason. On the other hand the Respondent engaged new workers in the place of the petitioner.”
19. In response to these assertions, the Electricity Board, in its counter statement, provided the following reply in paragraphs 7 and 8:
“7. The respondent further submits that petitioner has to prove and establish the averments in Para 8 to 14 of the petition.
8. The respondent further submits that the petitioner has involved in a criminal case and the police has registered an FIR against the petitioner at that time and the petitioner had been absconding himself and there by he had not turned to duty. Further, the petitioner has not made any representation with the respondent herein before which act itself would speak volume about the malafide intention of the petitioner.”
20. Apart from a general denial of the averments, the Respondent did not raise any specific plea regarding the issue of delay. On the contrary, as previously noted, the workmen had approached the Labour Officer by filing a petition under Section 2A(2) of the Industrial Disputes Act. Following the failure of conciliation, they obtained a failure report on 09.11.2005. It was only based on this failure report and in accordance with Section 2A(2) that they filed their claim statement before the Labour Court. In the absence of any statutory bar, and given that the Labour Court is a statutory authority, it rightfully took up the dispute and issued notice to the Electricity Board.
21. It is important to note that Section 2A(3) was inserted into the Industrial Disputes Act through the Central Amendment Act 24 of 2010, specifically applicable to industries where the appropriate government is the Central Government. Under this newly introduced provision, a limitation period of three years has been prescribed. However, this provision does not apply to industries where the appropriate government is the State Government. In such cases, the State Amendment of 1988, which introduced Section 2A(2), remains applicable. Since this State Amendment received the assent of the President, it holds precedence and continues to be the governing law for disputes arising within the State jurisdiction.
22. The legal position on this issue has been clarified by this Court in its decision in R. Kariamal v. The Management of Raj TV Network Ltd., rendered in W.P.No.2955 of 2020, dated 28.02.2025. However, the Labour Court, being conscious of the delay, denied the workmen’s entire claim for back wages, continuity of service, and other attendant benefits in the impugned award. As a result, the workmen have effectively lost back wages for over 20 years and that can be considered as a sufficient punishment for the delay in initiating proceedings. In this regard, the Labour Court, in paragraph 31 of the impugned order, has observed as follows:
“31. ….The perusal of evidence on record show that these petitioners failed to approach the authorities immediately after the above absorption of contract labourers as permanent workers as per the list prepared as on 05.01.1998. The petitioners have approached the labour officer for conciliation, only in the year 2005, as seen from the Exs.W-12 to W-14 and the Conciliation Failure Report….Hence the petitioners have to bear the consequences of the delay caused by them. Admittedly several years have elapsed from the date of oral termination. If back wages with continuity of service is granted to these petitioners then the respondent would be put into huge financial loss, even in the absence of work carried out by these petitioners.”
23. It is also important to take note of the fact that these workmen were earning daily wages ranging from Rs. 40 to Rs. 70 while working at the Sholayar Power House, located 20 kilometers from Valparai in a remote hilly region. Given their circumstances, they had no access to trade unions or legal assistance and had to struggle individually to pursue their disputes. Even to become aware of their legal rights, they would have needed access to a nearby city and contact with individuals knowledgeable in law. Therefore, this Court is not inclined to reject their claims solely on the ground of delay, especially when the Labour Court has already imposed a significant consequence by denying them back wages for two decades as well as continuity of service.
24. In this context, reference must be made to the Supreme Court's judgment in Director, Fisheries Terminal Division v. Bhikubhai Meghajibhai Chavda, reported in 2010 (1) SCC 47, wherein in para 17 it was observed as follows:
“17) It is also the case of the appellants that there is unexplained delay in approaching the labour court in adjudicating the imaginary grievance by the respondentworkman. In our view, there is no merit in this contention.
The workman had approached the Conciliation Officer for resolving the dispute between the employer and the employee and it is only when the conciliation proceedings failed that the matter was referred to the labour court for final adjudication.”
Hence the objection raised by the electricity board is rejected.
25. The second contention raised by the counsel for the Board was that the workmen had not established that they had worked for 240 days within a period of 12 calendar months and that there were no specific findings regarding their oral termination. The Labour Court had in fact adequately addressed the issue of completion of 240 days, relying on the service certificates issued by the Board officials, which were marked as Ex.W1 to Ex.W11, serving as conclusive proof. Once the workmen successfully demonstrated their continuous employment, albeit on daily wages, the initial burden rested on them. However, after producing substantial material evidence, the burden of proof shifted to the Electricity Board to disprove their claims.
26. In this context, under identical circumstances involving the same Electricity Board and the same Generation Circle, a Division Bench of this Hon’ble Court, in its decision in The Superintending Engineer, Kadamparai Generation Circle, Tamil Nadu Electricity Board v. M. Murugan & Others, rendered in Writ Appeal No.1696 of 2021, dated 31.10.2023, in para 29 and 30 held as follows:
“29. After discussing the counter evidence adduced by the Management, the Labour Court has given a finding that Service Certificates were issued by the officers of the Board and those documents could not be brushed aside on the ground that those documents are false Certificates. Further, there is no evidence produced on behalf of the Management that those documents were false certificates. Since there was no quarrel that these certificates were issued by the Officials of the Board. Hence, the Labour Court has accepted the case of the workmen that they were engaged as contract workmen in various periods and the contention that they were not engaged by the Management is not sustainable. It is also further elicited from the evidence of the Management Witnesses that for absorbing the contract workers as per the scheme framed by Justice Khalid Commission, the similar certificates issued by the officers of the Board have been accepted and based on the those certificates, the contract labourers were also absorbed. Under the said circumstances, the Labour Court has held that those documents have to be accepted, and the Board is not entitled to claim those documents as false certificates.
30. After accepting the above documents, the Labour Court has held that as per Section 29 of the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as 'the Act 1970'), no registers were maintained by the Board and no other documents to prove the contract entered between the Board and the contractors were produced. Similarly, the alleged contractors were also not licensed contractors and the contract entered between them is not a valid contract.”
Hence the Objection Nos. 2 and 3 also stand rejected.
27. With respect to the contention that the workmen had failed to establish a violation of Section 25F of the Industrial Disputes Act, the learned counsel relied on the following decisions:
a. J.K.Synthetics Ltd Vs. K.P.Agrawal & Anr, 2007 (2) SCC 433
b. Uttaranchal Forest Development Corpn. Vs. M.C.Joshi, 2007 (9) SCC 353
c. Gaziabad Development Authority & Anr. Vs. Ashok Kumar & Anr, 2008 (4) SCC 261
d. Sita Ram Vs. Moti Lal Nehru Farmers Training Institute, 2008 (5) SCC 75
e. Uttar Pradesh State Electricity Board Vs. Laxmi Kant Gupta, 2009 (16) SCC 56
f. Assistant Engineer Rajastan Development Corporation & Anr. Vs. Gitam Singh, 2013 (5) SCC 136
g. BSNL Vs. Bhurumal, 2014 (7) SCC 177
h. K.V.Anil Mithra Vs. Sree Sankaracharya University of Sanskrit, 2021 SCC OnLine SC 982.
28. In fact, in the last decision cited by the learned counsel for the Petitioner, namely, K.V. Anil Mithra v. Sree Sankaracharya University of Sanskrit, reported in 2021 SCC OnLine SC 982, while the Supreme Court granted monetary compensation based on the specific facts and circumstances of that case, the following finding by the Supreme Court is particularly relevant to the present case:
“37. The submission made by learned counsel for the respondents that after the finding has been recorded by the Division Bench of the High Court in the earlier round of litigation holding the seal of approval on the appointments of the appellants to an act which is conceived in fraud and delivered in deceit, are not entitled to claim benefit under Section 25F of the Act 1947. In our considered view, the submission is without substance for the reason that appointments are made in the instant case on daily wage basis under the orders of the Vice Chancellor who is the competent/appointing authority and merely because their appointments are not in accordance with the procedure prescribed under the Ordinance would not disentitle them from claiming protection under provisions of the Act 1947”
29. Even otherwise, the well-established judgment of the Supreme Court in State Bank of India v. Sundara Money, reported in 1976 (1) SCC 822, laid down the legal principle on this issue for the first time. The Court held as follows:
“…To retrench is to cut down. You cannot retrench without trenching or cutting. But dictionaries are not dictators of statutory construction where the benignant mood of a law and, more emphatically, the definition clause furnish a different denotation. Section 2(oo) is the master of the situation and the Court cannot truncate its amplitude.
A break-down of s. 2(oo) unmistakably expands the semantics of retrenchment. 'Termination... for any reason whatsoever' are the key words. Whatever the reason, every termination spells retrenchment. So the sole question ishas the employee's service been terminated Verbal apparel apart, the substance is decisive. A termination takes place where a term expires either by the active step of the master of the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, but the fact of termination howsoever produced.
xxxx
What follows Had the State Bank known the law and acted on it, half-a-month's pay would have concluded the story. But that did not happen. And now, some years have passed and the Bank has to pay, for no service rendered. Even so, hard cases cannot make bad law. Re-instatement is the necessary relief that follows. At what point In the particular facts and circumstances of this case, the respondent shall be put back where he left off, but his new salary will be what he would draw where he to be appointed in the same post today de novo. As for benefits, if any, flowing from service he will be rank below all permanent employees in that cadre and will be deemed to be a temporary hand upto now. He will not be allowed to claim any advantages in the matter of seniority or other priority inter se among temporary employees on the ground that his retrenchment is being declared invalid by this Court.”
30. Following this judgment, the Supreme Court reiterated its principles in 12 subsequent cases. Eventually, the matter was referred to a larger bench of five judges for reconsideration. The Constitution Bench, in its decision in Punjab Land Development and Reclamation Corporation Ltd. & Others v. Presiding Officer, Labour Court & Others, reported in 1990 (3) SCC 682, upheld the ratio laid down in Sundara Money’s case. Subsequently, in Anoop Sharma v. Executive Engineer, Public Health Division No.1, reported in 2010 (5) SCC 497, the Court further reinforced this position, in para 17 and 18 holding as follows:
“17. If the workman is retrenched by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F of the Act.
18. The stage is now set for considering whether the respondent had offered compensation to the appellant before discontinuing his engagement/employment, which amounts to retrenchment within the meaning of Section 2(oo) of the Act. In his statement, the appellant categorically stated that before discontinuing his service, the respondent did not give him notice pay and retrenchment compensation. ……Therefore, we are convinced that the finding recorded by the Labour Court on the issue of non- compliance of Section 25- F of the Act was based on correct appreciation of the pleadings and evidence of the parties and the High Court committed serious error by setting aside the award of reinstatement.”
Therefore, the argument that there was no violation of Section 25F does not stand to reason and hence rejected.
31. The fifth contention raised by the learned counsel for the management appeared to be desperate. The counsel sought to argue that, since the workmen were engaged on daily wages, they could only be reinstated as daily wage workers. In support of this argument, reliance was placed on the following two judgments:
a. Deepali Gundu Surwase Vs. Kranti Junior Adhyapak Mahavidyala, 2013 (10) SCC 324
b. Manager, Reserve Bank of India, Bangalore Vs. S.Mani & Ors, 2005 (5) SCC 100
32. The learned counsel for the Electricity Board overlooked the fact that the Labour Court, in paragraph 16, made the following finding:
“From the above discussions it is clear that the petitioners have proved their continuous service under the respondent management and also their continuous service of 240 days in 12 calendar months and 480 days in 24 calendar months.”
This would mean that the workmen are not only entitled to relief for illegal retrenchment but are also eligible for conferment of permanent status under the Tamil Nadu Conferment of Permanent Status Act, 1981. Accordingly, this Court is not inclined to accept the contentions raised on this issue.
33. Without prejudice to the above, the learned counsel further contended that in a dispute filed under Section 2A of the Industrial Disputes Act, the issue of whether the contract was sham and nominal cannot be examined. In support of this argument, reliance was placed on the following four judgments:
a. Bharat Heavy Electricals Ltd Vs. Anil & Ors., 2007 (1) SCC 610
b. Rajasthan State Transport Corporation & anr. Vs. Krishna Kant & Ors., 1995 (5) SCC 75
c. Radhey Shyam & anr. Vs. State of Haryana & anr., 1998 (2) LLJ 1217
d. RBI Vs. S.Mani, 2005 (5) SCC 100
34. However, a similar contention raised by the Electricity Board (by the same Petitioner) before a Division Bench in The Superintending Engineer, Kadamparai Generation Circle, Tamil Nadu Electricity Board v. M. Murugan & Others, in Writ Appeal No.1696 of 2021, dated 31.10.2023, was rejected. The Division Bench held that Section 2A of the Industrial Disputes Act is comprehensive enough to examine the issue of whether the contract was sham and nominal. The Court observed in para 40 to 44 as follows:
“40. One of the contentions of the Board was that in an industrial dispute under Section 2-A of the I.D.Act, 1947, the issue pertains to whether the contract was sham and nominal and the benefits of regularization cannot be granted. We are not inclined to accept the said contention, as the Labour Court is empowered to grant any relief in a dispute under Section 2-A of the I.D.Act, 1947 and the power of the Labour Court is much wider that that of a Civil Court. Once the non employment is held to be bad, the Labour Court can grant full relief or mould the relief partially. The purpose of I.D.Act, 1947 is to bring about an early settlement to an industrial dispute. Learned counsel for the Board heavily relied upon the judgment of the Apex Court in the case of Bharat Heavy Electricals Ltd., vs. Anil and others, reported in 2007 (1) SCC 610 to strengthen his argument.
41. In a case of non employment, certainly all questions have to be gone into. The Apex Court in a decision reported in (2001) 7 SCC 1 [Steel Authority of India Ltd. vs. National Union Waterfront Workers] categorically held that if the contract is found to be not genuine, but a mere camouflage, the so-called contract labour will have to be treated as employees of the principal employer, who shall be directed to regularize the services of the contract labour in the establishment concerned. It was further held that if the contact is found to be genuine and prohibition notification under Section 10(1) of the CLRA Act in respect of the establishment concerned has been issued by the appropriate Government, prohibiting employment of socontract labour in any process, operation or other work of any establishment and where in such process, operation or other work of the establishment the principal employer intends to employ regular workmen, he shall give preference to the erstwhile contract labour, if otherwise found suitable and if necessary, by relaxing the conditions as to maximum age appropriately, taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications. The judgment referred to by the Board in Bharat Heavy Electricals Ltd., vs. Anil and others (supra), in our considered opinion, will not inure to the benefit of the Board for the simple reason that in this case, Workmen challenged the order of termination and the question of deciding their consequential benefits needs to be answered. As discussed supra, the Labour Court in a dispute under Section 2-A of the I.D.Act, 1947 can grant any relief and decide the issue, including the one of contract being sham and nominal, otherwise the purpose of I.D.Act, 1947 will be defeated.
42. When a Industrial Adjudicator comes to the conclusion that the contract is genuine, the Court may direct parties to recourse to the 1970 Act for abolition of Contract Labour. When the contract itself is sham and nominal, in the dispute relating to non employment under Section 2-A of the I.D.Act, 1947, the Labour Court is empowered to grant the relief as stated sup
43. Admittedly, in the present case on hand, there existed relationship of master and servant, whereby the Labour Court held on a finding of fact that contract system is a ruse. There was no document produced by the Board to show that there was a genuine contract system, more so, production of documents under the Act, 1970, if there exists contract labour system. The preamble to the I.D.Act, 1947 is very clear that it is an Act to make provisions for the investigation and the settlement of industrial disputes and for certain other purposes.
44. If the contention of the Board is accepted, there will be no finality to the litigation. The employees will have to knock at the doors of one Court after another till they exit from the world. That apart, the ground raised in respect of the Labour Court going into the question of sham and nominal was not raised either in the Writ Petition or in the grounds of appeal. Even assuming for the sake of argument that the same has been raised or permitted to be raised as a legal ground, such plea will have to be rejected, as the Labour Court will have to decide the issue based on the finding of fact, which has been done in this case and there are no materials available for this Court to defer from the finding of Labour Court.”
35. The learned counsel for the workmen, Mr. V. Ajoy Khose, in rebuttal to this argument, referred to the latest judgment of the Supreme Court in Jaggo v. Union of India, reported in 2024 SCC OnLine SC 3826. In paragraphs 27 and 28, the Supreme Court held as follows:
“27. In light of these considerations, in our opinion, it is imperative for government departments to lead by example in providing fair and stable employment. Engaging workers on a temporary basis for extended periods, especially when their roles are integral to the organization's functioning, not only contravenes international labour standards but also exposes the organization to legal challenges and undermines employee morale. By ensuring fair employment practices, government institutions can reduce the burden of unnecessary litigation, promote job security, and uphold the principles of justice and fairness that they are meant to embody. This approach aligns with international standards and sets a positive precedent for the private sector to follow, thereby contributing to the overall betterment of labour practices in the country.
28. In view of the above discussion and findings, the appeals are allowed. The impugned orders passed by the High Court and the Tribunal are set aside and the original application is allowed to the following extent:
i. The termination orders dated 27.10.2018 are quashed;
ii. The appellants shall be taken back on duty forthwith and their services regularised forthwith. However, the appellants shall not be entitled to any pecuniary benefits/back wages for the period they have not worked for but would be entitled to continuity of services for the said period and the same would be counted for their post-retiral benefits.”
36. In light of the above findings and the binding legal precedents, the seventh and eighth contentions raised by the counsel for the Board appear to be vexatious and do not warrant consideration. Consequently, their writ petition challenging the impugned award is liable to be dismissed. However, with respect to the second writ petition filed by the workmen, which challenges the denial of back wages and continuity of service, the learned counsel for the workmen, Mr. Ajoy Khose, cited several judicial decisions, which are referenced below:
a. Secretary, Haryana State Electricity Board Vs. Suresh, 1999 (1) LLJ 1086
b. Kanpur Electricity Board Company Ltd Vs. Shamim Mirza, 2009 (1) LLN 121
c. Harjinder Singh Vs. Punjab State Warehousing corporation, 2010 (5) SCC 192
d. Anoop Sharma Vs. Executive Engineer, Public Health Division No.1, Haryana, 2010 (5) SCC 497
e. Devinder Singh Vs. Municipal Council, Sanaur, 2011(6) SCC 584
f. R.Lakshmi Vs. TNEB & Ors., 2012 (3) LLN (DB) (Mad.)
g. Deepali Gundu Surwase Vs. Kranti Junior Adhyapak Mahavidyala & Ors., 2013 (10) SCC 324
h. Hari Nandan Prasad Vs. Employer I/R to Management of Food Corporation of India, 2014 (7) SCC 190
37. While the legal principles established in the cited judgments regarding reinstatement, continuity of service, and back wages in cases of violation of Section 25F of the Industrial Disputes Act are well-settled and undisputed, the present case involves an additional factor—the delayed approach of the workmen to the Labour Court. This aspect was duly considered by the Labour Court in the impugned award, and the denial of normal relief was intended as a measure to compensate the employer for the delay. Accordingly, this Court finds no reason to interfere with that portion of the award, wherein the workmen have been denied back wages, continuity of service, and other attendant benefits.
38. In view of the foregoing discussion, both Writ Petitions, namely W.P.No.12192 of 2020 and W.P.No.14822 of 2021, are liable to be dismissed and are accordingly dismissed. However, there shall be no order as to costs. Consequently, all Miscellaneous Petitions shall also stand dismissed.
