REPORTABLE  

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7213   OF 2010 (Arising out of SLP (C) No. 6668 of 2006)

Incharge Officer and Anr. …. Appellants

      Versus  

Shankar Shetty         …. Respondent  

JUDGMENT

R.M. Lodha, J.  

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 of Karnataka  

in his judgment and order dated August 13, 2001 and affirmed by  

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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 (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 Court – namely,  U.P. State Brassware Corporation  

Ltd.  &  Anr.   v.  Uday  Narain  Pandey2;   Uttranchal  Forest  

Development Corporation vs. M.C. Joshi3 ;  State of M.P. & Ors. v.   

Lalit  Kumar  Verma4;   Madhya Pradesh Admn v.  Tribhuban5;  Sita  

Ram & Ors. v. Motil Lal Nehru Farmers Training Institute6;  Jaipur  

Development  Authority  v.  Ramasahai  &  Anr.7;  Ghaziabad  

Development  Authority  &  Anr.  v.  Ashok  Kumar  &  Anr.8  and  

1 (2009) 15 SCC 327 2 (2006) 1 SCC 479 3 (2007) 9 SCC 353 4 (2007) 1 SCC 575 5 (2007) 9 SCC 748 6 (2008) 5 SCC 75 7 (2006) 11 SCC 684 8 (2008) 4 SCC 261

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Mahboob Deepak v. Nagar Panchayat, Gajraula & 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 termination of  an  employee  was  found  to  be  illegal,  the  relief  of  reinstatement  with  full  back  wages  would  ordinarily  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 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.

     *       *       *       *       *       *       *       *       *       *       *        

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 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 preceding  the date of termination, particularly, daily wagers 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”.

3. Jagbir Singh1 has been applied very recently in the case  

of  Senior  Superintendent  Telegraph  (Traffic)  Bhopal v.  Santosh  

9 (2008) 1 SCC 575

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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 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”.

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 316½  days in 1979, 335½

days  in 1980, 242½  days in 1981,  33½  days in 1982, 10½  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 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  

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had worked continuously for 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-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  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  appellants  was  

dismissed by the Division Bench.  

5.  We think that if the principles stated in Jagbir Singh1  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 engaged as daily wager in  

1978 and his engagement continued for about 7 years intermittently  

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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 ends  

of  justice.   In  our  considered  opinion,  the  compensation  of  Rs.  

1,00,000/-  (Rupees  Onc  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.  

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 as to costs.   

  …………………….J.            (Aftab Alam)

    ………………….. J.        (R.M. Lodha)  

NEW DELHI, AUGUST  31, 2010

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