Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4605  OF 2009 (Arising out of SLP(C) No. 1201/2008)

Haryana State Co-operative Supply Marketing Federation Limited.          …Appellant

Versus   

Sanjay     …Respondent

JUDGEMENT

R.M. Lodha, J.

Leave granted.

2. This  appeal  by  special  leave  is  directed  against  the  

judgment of  the High Court  of  Punjab and Haryana whereby  

Division Bench of that Court upheld the award passed by the  

Industrial  Tribunal-Cum-Labour  Court,  Hissar  ordering

reinstatement  of  the  respondent-workman  with  continuity  of  

service and payment of 50% back wages.

3. Sanjay,  respondent,  was  engaged  as  Chowkidar  on  

causal basis by the District Manager, HAFED, Jind on August,  

1998 for 29 days. On expiry of the said contract, fresh contracts  

were executed from time to time and he rendered service there  

until  December  31,  1998.  He  was  engaged  afresh  by  the  

District Manager, HAFED, Hissar on January 15, 1999 where  

he worked upto May 31, 1999. As the service of the respondent  

was not renewed after May 31, 1999, he issued demand notice  

under Section 2A of the Industrial Disputes Act, 1947 (for short  

“ID  Act”)  raising  dispute  to  the  effect  that  his  services  were  

illegally  terminated.  Conciliation  efforts  having  failed,  upon  

receipt  of  the  failure  report,  the  appropriate  Government  

referred the dispute for adjudication to the concerned Labour  

Court.

4. The  respondent  in  his  statement  of  claim  before  the  

Labour Court set up the case that he had completed more than  

240 days of continuous service in the year preceding the date  

of  termination with  the HAFED. He raised the grievance that  

without following the mandatory procedure provided in Section  

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25-F  of  the  ID  Act,  his  services  were  terminated  which  

amounted to illegal retrenchment. It is pertinent to notice here  

that the respondent clubbed the period of his engagement with  

District Manager, HAFED, Jind and District Manager, HAFED,  

Hissar while computing 240 days of continuous service.

5. The  Appellant-Management  traversed  the  workman’s  

claim and set up the plea that the workman was engaged on  

contractual basis by the District Manager, HAFED, Jind for the  

period from August 1, 1998 to December 31, 1998 and there he  

completed 145 days of service. The District Manager, HAFED,  

Hissar, which is a separate industrial establishment, engaged  

the workman afresh on January 15, 1999 upto May 31, 1999  

and  accordingly,  workman  worked  in  the  office  of  District  

Manager, HAFED, Hissar for 112 days. The Management, thus,  

set   up   a    specific  case  that  the  workman  worked  at  two  

different units of HAFED and the period of service rendered at  

these two places cannot be clubbed for the purposes of Section  

25-F of the ID Act. The case of the Management was that the  

workman having not completed 240 days of continuous service,  

there was no necessity of compliance of Section 25-F of the ID  

Act.

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6. Both  the  parties  led  evidence  in  support  of  their  

respective  case.  The  Industrial  Tribunal-Cum-Labour  Court,  

Hissar held that there was violation of Section 25-F of the ID  

Act and, therefore, termination of service of the workman was  

bad in law. It directed reinstatement of the workman with 50%  

back wages. The said award has been affirmed by the High  

Court.

7. The question that falls for our consideration is: whether  

the work rendered by the respondent  in the office of  District  

Manager.  HAFED,  Jind  and  the  District  Manager,  HAFED,  

Hissar can be clubbed together for the purposes of application  

of Section 25-F of the ID Act.

8. For  the  purposes  of  applicability  of  Section  25-F,  the  

workman has to show that he has been in continuous service  

for not less than one year under an employer. A workman is  

deemed to be in continuous service for a period of one year if  

during the period of 12 calendar months preceding the date of  

termination, he has actually worked under the employer  for not  

less than 240 days by virtue of Section 25B(2) of the ID Act.  

The words  “has been in  continuous service………. under  an  

employer” in Section 25-F are crucial. Can office of the District  

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Manager,  HAFED,  Jind  and  office  of  the  District  Manager,  

HAFED, Hissar, for the purposes of Section 25-F, be said to be  

one establishment and, thus, covered by an expression “under  

an employer”?   We do not think so. In our view, the office of  

the District Manager, HAFED, Jind and the office of the District  

Manager,  HAFED,  Hissar  are  two  distinct  and  separate  

establishments and cannot be treated as one establishment for  

the  purpose  of  reckoning  continuity  of  service  within  the  

meaning of Section 25-F read with Section 25-B of the ID Act. It  

is so because the workman was engaged on contract basis by  

two separate authorities under different contracts. The contract  

of employment with District Manager, HAFED, Jind commenced  

on  August  1,  1998  initially  for  29  days  and  continued  upto  

December  31,  1998.  The  contract  with  District  Manager,  

HAFED,  Hissar,  January  15,  1999  was  a  separate  contract.  

Both authorities are distinct. It is true that the office of District  

Manager, Jind and the office of District Manager, Hissar are the  

establishments or offices of the HAFED but the authority that  

engaged the workman as Chowkidar on casual basis at Jind is  

different from the authority that engaged him at Hissar. It is not  

unusual  for  an  Institution,  Corporation  or  Authority  to  have  

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different offices, branches and establishments. When a casual  

employee  is  employed  in  different  establishments  of  a  

Corporation, Institution or Authority, the concept of continuous  

service under one employer cannot be applied. In the case of  

Union of India v. Jummasha Diwan1, this Court observed, “there  

are  several  establishments  of  Railway  Administration.  If  a  

workman  voluntarily  gives  up  his  job  in  one  of  the  

establishments and joins another, the same would not amount  

to his being in continuous service. When a casual employee is  

employed in different establishments, may be under the same  

employer,  e.g.  Railway  Administration  of  India  as  a  whole,  

having different  administrative set  ups,  different  requirements  

and different projects, the concept of continuous service cannot  

be applied…………”

9. The  Constitution  Bench  of  this  Court  in  the  case  of  

Management of Indian Cable Co. Ltd, v. Workmen2 dealt with  

the expression “industrial establishment” albeit with reference to  

Section 25-G of the ID Act and held :

“Thus whether we have regard to the popular sense of the  words  “industrial  establishment”,  or  to  the  limitation  of  relief  under  Section  25-G  to  workmen  in  the  same  

1 (2006) 8 SCC 544 2 1962 Supp (3) SCR 589

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category,  the conclusion would appear to be inescapable   that  each  branch  of  a  company  should  normally  be  regarded as a distinct industrial establishment.”

10. In the case of DGM Oil & Natural Gas Corporation Ltd. &  

Anr. v. Ilias Abdul Rehman3, this Court was concerned with the  

question whether work put in by the workman in different units,  

namely, Baroda and Mehsana projects  of Oil and Natural Gas  

Corporation  could  be  counted  for  determining  whether  the  

workman worked for 240 days continuously  for the purpose of  

Section 25-F of the ID Act. The Court answered the question in  

the negative and held that the Baroda and Mehsana projects of  

the  Corporation  could  not  be considered  as  a  single  unit  or  

department under the Corporation and, therefore, the days put  

in by the workman in different units could not be counted for  

determining  whether  the  workman  worked  for  240  days  

continuously for the purpose of Section 25-F of the ID Act, This  

is what this Court said:

“We  are  aware  that  the  judgment  of  this  Court  in  Indian Cable Co. Ltd. was rendered in the context of  Section 25-G of the Act, still we are of the opinion that  the law for the purpose of counting the days of work in  different  departments  controlled  by  an  apex  corporation  will  be  governed  by  the  principles  laid  down in the judgment of  Indian Cable Co. Ltd. And  

3 (2005) 2 SCC 183

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the Industrial Tribunal was justified in dismissing the  reference.”

11. In  Haryana  Urban  Development  Authority  v.  Om  

Pal4, the question raised before this Court was whether the two  

Sub-Divisions of Haryana Urban Development Authority  could  

be treated to be one establishment for the purpose of reckoning  

continuity of service within the meaning of Section 25-B of the  

Act. This Court held :  

“5. The  Industrial  Tribunal-cum-Labour  Court  unfortunately did not go into the said question at all. If  both  the  establishments  are  treated  to  be  one  establishment for the purpose of reckoning continuity  of service within the meaning of Section 25-B of the  Act, as was held by the Tribunal, a person working at  different points of time in different establishments of  the  statutory  authority,  would  be  entitled  to  claim  reinstatement on the basis thereof. However, in that  event, one establishment even may not know that the  workman  had  worked  in  another  establishment.  In  absence  of  such  a  knowledge,  the  authority  retrenching  the  workman  concerned  would  not  be  able to comply with the statutory provisions contained  in  Section  25-F  of  the  Act.  Thus,  once  two  establishments are held to be separate and distinct  having different cadre strength of the workmen, if any,  we are of the opinion that the period during which the  workman was working in one establishment would not  enure to his benefit when he was recruited separately  in  another  establishment,  particularly  when  he  was  not transferred from one sub-division to the other. In  this case he was appointed merely on daily wages.”

4 (2007) 5 SCC 742

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12. Learned  counsel  for  the  respondent,  however,  

strenuously  urged  that  the  Managing  Director,  HAFAED has  

control  over  the  office  of  District  Manager,  Jind  as  well  as  

District Manager, Hissar and,  therefore, workman can be said  

to have worked under the same employer.  We are unable to  

accept the contention of the learned counsel. Merely because  

the District Manager, Jind and the District Manager, Hissar are  

the subordinate officers under the control of Managing Director,  

HAFED, the two offices at Jind and Hissar do not cease to be  

separate establishment for the purposes of Section 25-F of the  

ID Act.  As held by this Court in Jummasha Diwan, with which  

we  respectfully  agree,  that  when  a  casual  employee  is  

employed in different establishments, may be under the same  

employer, the concept of continuous service cannot be applied.  

There is also no merit in the submission of the learned counsel  

for the respondent that the workman was transferred from the  

office  of  the  District  Manager,  Jind  to  the  Office  of  District  

Manager, Hissar. No transfer order was placed by the workman  

before the Labour Court. As a matter of fact, by a separate and  

fresh  contract,  the  workman  was  engaged  by  the  District  

Manager,  Hissar from January 15,  1999. The employment  of  

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the workman at Hissar  was not an employment in continuity  

but  a fresh employment.

13. In what we have discussed above, the conclusion would  

appear to us to be inescapable that  the office of  the District  

Manager, Jind and the office of the District Manager, Hissar are  

separate  and  distinct  and  the  services  rendered  by  the  

workman at these two establishments cannot be clubbed for the  

purpose of reckoning continuity of service within the meaning of  

Section  25-F  read  with  Section  25-B  of  the  ID  Act.  The  

workman having not completed 240 days of continuous service  

under  the  employer  in  the  year  preceding  his  termination,  

Section 25-F is not at all  attracted. In the circumstances, the  

impugned Judgment  cannot  be sustained and has to  be set  

aside.

14. The appeal is, accordingly, allowed. The Judgment dated  

May 7, 2007 passed by the High Court and the Award dated  

February 8, 2006 passed by the Industrial Tribunal-Cum-Labour  

Court, Hissar are quashed and set aside. The parties will bear  

their own costs.

……………………J

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(Tarun Chatterjee)

…….……………..J         (R. M. Lodha)

New Delhi July 22, 2009.

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