[20101 10 S.C.R. 773 INCHARGE OFFICER AND ANR. A V. SHANKAR SHETTY (Civil Appeal No. 7213 of 2010) AUGUST 31, 2010 B [AFTAB ALAM AND R.M. LODHA, JJ.] Industrial Disputes Act, 1947: s.25F - Daily wager appointed in 1978 - Worked intermittently for 7 years -Terminated from service in 1985 i.e. about 25 years back - C Claim fpr re-instatement and back wages on account of violation of s. 25 - Held: Order of re-instatement would not automatically follow - Instead monetary compensation would subserve the ends of justice - Compensation of Rs. 1, 00, 0001 - in lieu of re-instatement just and equitable - Equity - D Compensation. The respondent was engaged as daily wager by the appellants in 1978. He worked for about 7 years. In 1985, he was terminated from service. He raised industrial E dispute challenging his termination on the ground that the procedure under Section 25F of the Industrial Disputes Act was not followed. The Labour Court held that Section 25F of the Act was not attracted since the workman failed to prove that he had worked Fcontinuously for 240 days in the year preceding his termination. Respondent filed writ petition before the High Court. The High Court directed reinstatement of the respondent into service but without back wages and continuity of service. The employer filed the instant appeal. G Partly allowing the appeal, the Court HELD: The High Court erred in granting relief of 773 H 774 SUPREME COURT REPORTS [2010] 10 S.C.R.

A reinstatement to the respondent. The respondent was engaged as daily wager in 1978 and his engagement continued for about 7 years intermittently upto September 6, 1985 i.e. about 25 years back. In such a case, the relief of reinstatement cannot be justified and B instead monetary compensation would meet the ends of justice. The compensation of Rs. 1,00,000/- in lieu of reinstatement shall be appropriate, just and equitable. [Para 5] [778-C-E] Jagbir Singh v. Haryana State Agriculture Marketing C Board and Anr. (2009) 15 SCC 327; Senior Superintendent Telegraph (Traffic) Bhopal v. Santosh Kumar Seal & Ors 2010(6) sec 773 - relied on. U. P. State Brassware Corporation Ltd. & Anr. v. Uday D Narain Pandey (2006)1 SCC 479; Uttaranchal Forest Development Corporation vs. M. C. Joshi (2007) 9 SCC 353; State of M.P. & Ors. v. La/it Kumar Verma (2007)1 SCC 575; Madhya Pradesh Admn. v. Tribhuban (2007)9 SCC 748; Sita Ram & Ors. v. Moti Lal Nehru Farmers Training Institute E (2008) 5 SCC 75; Jaipur Development Authority v. Ramasahai & Anr. (2006)11 SCC 684; Ghaziabad Development Authority & Anr. v. Ashok Kumar & Anr. (2008) 4 SCC 261; Mahboob Deepak v. Nagar Panchayat, Gajraula & Anr. (2008)1 SCC 575 - referred to. F Case Law Reference:

(2009)15 sec 327 relied on Para 2, 5 (2006)1 sec 479 referred to Para 2 G (2001) 9 sec 353 referred to Para 2 (2001)1 sec 575 referred to Para 2 (2001) 9 sec 148 referred to Para 2 (2008) 5 sec 75 referred to Para 2H INCHARGE OFFICER AND ANR. v. SHANKAR 775 SH ETTY (2006)11 SCC 684 referred to Para 2 A (2008) 4 SCC 261 referred to Para 2 (2008) 1 sec 575 referred to Para 2 2010(6) sec 773 relied on Para 3 B CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7213 of 2010. From the Judgment & Order dated 09.12.2004 of the High Court of Bangalore in W.A. No. 7330 of 2001. c Sanjay R. Hegde, Ramesh Kr. Mishra, Krutin Joshi, Vikrant Yadav for the Appellants. The Judgment of the Court was delivered by D R.M. LODHA, J. 1. Leave granted.

2. The only question to be considered in this appeal by special leave is with regard to the relief of reinstatement granted to the respondent by the Single Judge of the High Court bf Karnataka in his judgment and order dated August 13, 2001 E and affirmed by the Division Bench vide its judgment and order dated December 9, 2004 in-the writ appeal. Should an order of reinstatement automatically follow in a case where the engagement of a daily wager has been brought to end in violation of Section 25 F of the Industrial Disputes Act, 1947 F (for short 'ID Act')? The course of decisions of this Court in recent years has been uniform on the above question. In the case of Jagbir Singh v. Haryana State Agriculture Marketing Board and Anr. 1, delivering the judgment of this Court, one of us (R.M. Lodha, J.) noticed some of the recent decisions of this G Court - namely, U.P. State Brassware Corporation Ltd. & Anr. v. Uday Narain Pandey2; Uttranchal Forest Development 1. (2009) 15 sec 327. 2. (2006) 1 sec 479. H 776 SUPREME COURT REPORTS [2010] 10 S.C.R. A Corporation vs. M. C. Joshi3; State of M.P. & Ors. v. La/it Kumar Verma4; Madhya Pradesh Admn v. Tribhuban5; Sita Ram & Ors. v. Motil Lal Nehru Farmers Training lnstitute6; Jaipur Development Authority v. Ramasahai & Anr. 7; Ghaziabad Development Authority & Anr. v. Ashok Kumar & B Anr. 8 and Mahboob Deepak v. Nagar Panchayat, Gajrau/a & Anr. 9 and stated as follows:

"It is true that the earlier view of this Court articulated in many decisions reflected the legal position that if the c terminationrelief of reinstatementof an employeewith full wasbackfoundwagestowouldbe illegal,ordinarilythe follow. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may D be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice. * * * * * * * * * * *E It would be, thus, seen that by a catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in violation of Section 25-F although may be set aside but an award of reinstatement F should not, however, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year 3. (2007) g sec 353. G 4. (2007) 1 sec 575. 5. (2007) g sec 748. 6. (2008) 5 sec 75. 7. (2006) 11 sec 684. 8. (2008) 4 sec 261. H 9. (2008) 1 sec 575. INCHARGE OFFICER AND ANR. v. SHANKAR 777 SHETTY [R.M. LODHA, J.]

preceding the date of termination, particularly, daily wagers A has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee". B 3. Jagbir Singh1 has been applied very recently in the case of Senior Superintendent Telegraph (Traffic) Bhopal v. Santosh Kumar Seal & Ors. (Civil Appeal No. 3815 of 2010) decided on April 26, 2010 wherein this Court stated: "In view of the aforesaid legal position and the fact that the c workmen were engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of reinstatement and back wages to them cannot be said to be justified and instead monetary compensation would subserve the ends of justice". D

4. Shankar Shetty - the respondent was initially engaged as daily wager by the appellants in 1978. He worked for 57 days in that year. The respondent had also worked for 316'h days in 1979, 335'h days in 1980, 242'h days in 1981, 33'h Edays in 1982, 1 O'h days in 1983, 103 days in 1984 and 50 days in 1985. According to him he was terminated from service on September 6, 1985 without following the procedure prescribed in Section 25 F of the ID Act . He raised industrial dispute relating to his retrenchment which was referred for adjudication to the Labour Court, Mysore but later on the F dispute was transferred to the Labour Court, Chickmagalur. The Labour Court, Chickmagalur by its award on December 21, 1994 rejected the respondent's claim. The Labour Court held that Section 25 F of the ID Act was not attracted since the workman failed to prove that he had worked continuously for G 240 days in the calendar year preceding his termination on September 6, 1985. The respondent challenged the award passed by the Labour Court by filing a writ petition before the Karnataka High Court. The Single Judge of the High Court overturned the finding of the Labour Court about non- H 778 SUPREME COURT REPORTS [2010] 10 S.C.R.

A applicability of Section 25 F and held that Section 25 F of the ID Act was attracted and the procedure provided therein having not been followed, the termination of respondent (petitioner therein) was illegal. The Single Judge, accordingly, vide his judgment and order dated August 13, 2001 directed B reinstatement of the respondent into service but without back wages and continuity of service. The present appellants challenged the judgment and order of the Single Judge in writ appeal before Division Bench but without any success. On December 9, 2004, the writ appeal preferred by the present c appellants was dismissed by the Division Bench.

5. We think that if the principles stated in Jagbir Singh 1 and the decisions of this Court referred to therein are kept in mind, it will be found that the High Court erred in granting relief of reinstatement to the respondent. The respondent was D engaged as daily wager in 1978 and his engagement continued for about 7 years intermittently upto September 6, 1985 i.e. about'25 years back. In a case such as the present one, it appears to us that relief of reinstatement cannot be justified and instead monetary compensation would meet the E ends of justice. In our considered opinion, the compensation of Rs. 1,00,000/- (Rupees One lac) in lieu of reinstatement shall be appropriate, just and equitable. We order accordingly. Such payment shall be made within 6 weeks from today failing which the same shall carry interest at the rate of 9 per cent per annum. F 6. The appeal is allowed to the above extent. Since the respondent has not chosen to appear despite service of notice, there will be no order a~ to costs. D.G. Appeal partly allowed.

[20101 10 S.C.R. 773 INCHARGE OFFICER AND ANR. A V. SHANKAR SHETTY (Civil Appeal No. 7213 of 2010) AUGUST 31, 2010 B [AFTAB ALAM AND R.M. LODHA, JJ.] Industrial Disputes Act, 1947: s.25F - Daily wager appointed in 1978 - Worked intermittently for 7 years -Terminated from service in 1985 i.e. about 25 years back - C Claim fpr re-instatement and back wages on account of violation of s. 25 - Held: Order of re-instatement would not automatically follow - Instead monetary compensation would subserve the ends of justice - Compensation of Rs. 1, 00, 0001 - in lieu of re-instatement just and equitable - Equity - D Compensation. The respondent was engaged as daily wager by the appellants in 1978. He worked for about 7 years. In 1985, he was terminated from service. He raised industrial E dispute challenging his termination on the ground that the procedure under Section 25F of the Industrial Disputes Act was not followed. The Labour Court held that Section 25F of the Act was not attracted since the workman failed to prove that he had worked Fcontinuously for 240 days in the year preceding his termination. Respondent filed writ petition before the High Court. The High Court directed reinstatement of the respondent into service but without back wages and continuity of service. The employer filed the instant appeal. G Partly allowing the appeal, the Court HELD: The High Court erred in granting relief of 773 H 774 SUPREME COURT REPORTS [2010] 10 S.C.R.

A reinstatement to the respondent. The respondent was engaged as daily wager in 1978 and his engagement continued for about 7 years intermittently upto September 6, 1985 i.e. about 25 years back. In such a case, the relief of reinstatement cannot be justified and B instead monetary compensation would meet the ends of justice. The compensation of Rs. 1,00,000/- in lieu of reinstatement shall be appropriate, just and equitable. [Para 5] [778-C-E] Jagbir Singh v. Haryana State Agriculture Marketing C Board and Anr. (2009) 15 SCC 327; Senior Superintendent Telegraph (Traffic) Bhopal v. Santosh Kumar Seal & Ors 2010(6) sec 773 - relied on. U. P. State Brassware Corporation Ltd. & Anr. v. Uday D Narain Pandey (2006)1 SCC 479; Uttaranchal Forest Development Corporation vs. M. C. Joshi (2007) 9 SCC 353; State of M.P. & Ors. v. La/it Kumar Verma (2007)1 SCC 575; Madhya Pradesh Admn. v. Tribhuban (2007)9 SCC 748; Sita Ram & Ors. v. Moti Lal Nehru Farmers Training Institute E (2008) 5 SCC 75; Jaipur Development Authority v. Ramasahai & Anr. (2006)11 SCC 684; Ghaziabad Development Authority & Anr. v. Ashok Kumar & Anr. (2008) 4 SCC 261; Mahboob Deepak v. Nagar Panchayat, Gajraula & Anr. (2008)1 SCC 575 - referred to. F Case Law Reference:

(2009)15 sec 327 relied on Para 2, 5 (2006)1 sec 479 referred to Para 2 G (2001) 9 sec 353 referred to Para 2 (2001)1 sec 575 referred to Para 2 (2001) 9 sec 148 referred to Para 2 (2008) 5 sec 75 referred to Para 2H INCHARGE OFFICER AND ANR. v. SHANKAR 775 SH ETTY (2006)11 SCC 684 referred to Para 2 A (2008) 4 SCC 261 referred to Para 2 (2008) 1 sec 575 referred to Para 2 2010(6) sec 773 relied on Para 3 B CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7213 of 2010. From the Judgment & Order dated 09.12.2004 of the High Court of Bangalore in W.A. No. 7330 of 2001. c Sanjay R. Hegde, Ramesh Kr. Mishra, Krutin Joshi, Vikrant Yadav for the Appellants. The Judgment of the Court was delivered by D R.M. LODHA, J. 1. Leave granted.

2. The only question to be considered in this appeal by special leave is with regard to the relief of reinstatement granted to the respondent by the Single Judge of the High Court bf Karnataka in his judgment and order dated August 13, 2001 E and affirmed by the Division Bench vide its judgment and order dated December 9, 2004 in-the writ appeal. Should an order of reinstatement automatically follow in a case where the engagement of a daily wager has been brought to end in violation of Section 25 F of the Industrial Disputes Act, 1947 F (for short 'ID Act')? The course of decisions of this Court in recent years has been uniform on the above question. In the case of Jagbir Singh v. Haryana State Agriculture Marketing Board and Anr. 1, delivering the judgment of this Court, one of us (R.M. Lodha, J.) noticed some of the recent decisions of this G Court - namely, U.P. State Brassware Corporation Ltd. & Anr. v. Uday Narain Pandey2; Uttranchal Forest Development 1. (2009) 15 sec 327. 2. (2006) 1 sec 479. H 776 SUPREME COURT REPORTS [2010] 10 S.C.R. A Corporation vs. M. C. Joshi3; State of M.P. & Ors. v. La/it Kumar Verma4; Madhya Pradesh Admn v. Tribhuban5; Sita Ram & Ors. v. Motil Lal Nehru Farmers Training lnstitute6; Jaipur Development Authority v. Ramasahai & Anr. 7; Ghaziabad Development Authority & Anr. v. Ashok Kumar & B Anr. 8 and Mahboob Deepak v. Nagar Panchayat, Gajrau/a & Anr. 9 and stated as follows:

"It is true that the earlier view of this Court articulated in many decisions reflected the legal position that if the c terminationrelief of reinstatementof an employeewith full wasbackfoundwagestowouldbe illegal,ordinarilythe follow. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may D be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice. * * * * * * * * * * *E It would be, thus, seen that by a catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in violation of Section 25-F although may be set aside but an award of reinstatement F should not, however, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year 3. (2007) g sec 353. G 4. (2007) 1 sec 575. 5. (2007) g sec 748. 6. (2008) 5 sec 75. 7. (2006) 11 sec 684. 8. (2008) 4 sec 261. H 9. (2008) 1 sec 575. INCHARGE OFFICER AND ANR. v. SHANKAR 777 SHETTY [R.M. LODHA, J.]

preceding the date of termination, particularly, daily wagers A has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee". B 3. Jagbir Singh1 has been applied very recently in the case of Senior Superintendent Telegraph (Traffic) Bhopal v. Santosh Kumar Seal & Ors. (Civil Appeal No. 3815 of 2010) decided on April 26, 2010 wherein this Court stated: "In view of the aforesaid legal position and the fact that the c workmen were engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of reinstatement and back wages to them cannot be said to be justified and instead monetary compensation would subserve the ends of justice". D

4. Shankar Shetty - the respondent was initially engaged as daily wager by the appellants in 1978. He worked for 57 days in that year. The respondent had also worked for 316'h days in 1979, 335'h days in 1980, 242'h days in 1981, 33'h Edays in 1982, 1 O'h days in 1983, 103 days in 1984 and 50 days in 1985. According to him he was terminated from service on September 6, 1985 without following the procedure prescribed in Section 25 F of the ID Act . He raised industrial dispute relating to his retrenchment which was referred for adjudication to the Labour Court, Mysore but later on the F dispute was transferred to the Labour Court, Chickmagalur. The Labour Court, Chickmagalur by its award on December 21, 1994 rejected the respondent's claim. The Labour Court held that Section 25 F of the ID Act was not attracted since the workman failed to prove that he had worked continuously for G 240 days in the calendar year preceding his termination on September 6, 1985. The respondent challenged the award passed by the Labour Court by filing a writ petition before the Karnataka High Court. The Single Judge of the High Court overturned the finding of the Labour Court about non- H 778 SUPREME COURT REPORTS [2010] 10 S.C.R.

A applicability of Section 25 F and held that Section 25 F of the ID Act was attracted and the procedure provided therein having not been followed, the termination of respondent (petitioner therein) was illegal. The Single Judge, accordingly, vide his judgment and order dated August 13, 2001 directed B reinstatement of the respondent into service but without back wages and continuity of service. The present appellants challenged the judgment and order of the Single Judge in writ appeal before Division Bench but without any success. On December 9, 2004, the writ appeal preferred by the present c appellants was dismissed by the Division Bench.

5. We think that if the principles stated in Jagbir Singh 1 and the decisions of this Court referred to therein are kept in mind, it will be found that the High Court erred in granting relief of reinstatement to the respondent. The respondent was D engaged as daily wager in 1978 and his engagement continued for about 7 years intermittently upto September 6, 1985 i.e. about'25 years back. In a case such as the present one, it appears to us that relief of reinstatement cannot be justified and instead monetary compensation would meet the E ends of justice. In our considered opinion, the compensation of Rs. 1,00,000/- (Rupees One lac) in lieu of reinstatement shall be appropriate, just and equitable. We order accordingly. Such payment shall be made within 6 weeks from today failing which the same shall carry interest at the rate of 9 per cent per annum. F 6. The appeal is allowed to the above extent. Since the respondent has not chosen to appear despite service of notice, there will be no order a~ to costs. D.G. Appeal partly allowed.