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CASE NO.: Appeal (civil) 892  of  2001

PETITIONER: INDIAN PETROCHEMICALS CORPN. LTD. & ANR.

       Vs.

RESPONDENT: SHRAMIK SENA & ANR.

DATE OF JUDGMENT:       29/01/2001

BENCH: Syed Shah Mohammed Quadri & S.N. Pukhan.

JUDGMENT:

L...I...T.......T.......T.......T.......T.......T.......T..JJ U D G M E N T

Syed Shah Mohammed Quadri,  J.

Leave is granted.

   The  Judgment and order of a Division Bench of the  High Court  of  Judicature at Bombay in Writ Petition  No.979  of 2000 passed on April 26, 2000, is brought under challenge in this  appeal by special leave.  Appellant No.1 is Government of  India  Undertaking  and appellant No.2  is  its  General Manager  (hereinafter  they  will  be referred  to  as  the management).   The first respondent is the union of workmen of  appellant  No.1 and the second respondent is its  member and  a workman (hereinafter they will be referred to as the workmen).

   To  comprehend the controversy in this appeal, narration of the following facts will be useful.

   The  management is running a canteen in compliance  with the  requirements of Section 46 of the Factories Act,  1948, in  which  the  workmen were employed purporting to  be  the employees  under  a contractor.  The litigation between  the parties  commenced with the filing of Writ Petition  No.2206 of  1997  by the workmen in the High Court of Judicature  at Bombay  seeking  a  direction that they  (specified  in  the Annexure  A  thereto) be absorbed as regular employees  of the  management with parity of pay-scales and other  service conditions  applicable to regular employees with effect from their actual date of entry into service with the contractor. On  August  29,  1997, the High Court disposed of  the  writ petition taking the view that as the workmen were engaged in a  statutory canteen they ipso facto became the employees of the  principal employer, namely, the management and  ordered their absorption subject to conditions (a) to (e) which will be referred to presently.  That judgment was assailed by the management  in this Court, by special leave, in Civil Appeal No.1854  of  1998.  And inasmuch as the High  Court  imposed certain  conditions  for their absorption, the workmen  also filed Civil Appeal No.1855 of 1998, by special leave of this Court.   Those appeals were dismissed by a three Judge Bench

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of  this  Court  on  August  4,  1999,  reported  in  Indian Petrochemicals Corporation Ltd.  & Anr.  Vs.  Shramik Sena & Ors.   [1999 (6) SCC 439].  Thereafter, for similar  reliefs the  workmen filed Writ Petition No.5817 of 1999 in the High Court,  but the same was dismissed as withdrawn on  November 17, 1999.  The present writ petition which has given rise to this appeal, is the third in the series.  The High Court, by the  judgment  impugned in this appeal, held, in  regard  to condition  (a),  that for purposes of regularisation of  the workmen  the maximum age limit should be taken as the age of superannuation  and,  in regard to condition (e),  that  the workmen  who  did not fulfil conditions  for  regularisation should  be retrenched in terms of the provisions of  Chapter V-B  of  the Industrial Disputes Act, 1947 (for short,  the I.D.   Act) and directed that the process of regularisation of  the  workmen  in accordance with the said  judgments  be completed  within  two months from the date of the  impugned judgment.   The  validity of the pronouncement of  the  High Court  on those two aspects is assailed by the management in this appeal before us.

   Mr.T.R.Andhyarujina,   the   learned    senior   counsel appearing for the management, submitted that it was the case of  the  management that the maximum age limit of  25  years would  be  applicable  as on the date of  their  entry  into service  and  not as on the date of hearing of  the  present writ  petition  but  the  High  Court  had  not  appreciated properly  the  contention  of   the  management  and  having erroneously interpreted condition (a), directed that the age of  superannuation should be taken as the maximum age  limit which  in  effect  had altered condition  (a).   The  second contention  of  the learned counsel relates to  retrenchment compensation.   He  argued that condition (e) provided  that the  workmen who could not be absorbed, should be considered for  future absorption in accordance with the provisions  of Section  25H  and  be   paid  retrenchment  compensation  in accordance  with  law  but the High Court introduced  a  new condition,  viz., retrenchment of workmen under Section  25N of  the I.D.Act, which had nullified condition (e), as  such the  impugned  judgment  was illegal and liable  to  be  set aside.   Mr.K.K.   Singhvi,  the   learned  senior   counsel appearing  for  the  workmen, contended that they  had  been working  for number of years and as no rules were applicable to  them  for purposes of their absorption, the maximum  age limit  that  could be taken into consideration was only  the age  of  superannuation as was done by the Supreme Court  in Railway  Parcel  & Goods Handling Mazdoor Union & Ors.   Vs. Union  of India & Ors.  [2000 (1) LLJ 1050].  In any  event, submitted  Mr.Singhvi,  there existed in the management  the power  to  relax  the age limit, therefore,  the  management should  relax  the  age limit and absorb the  workmen.   The conditions  laid down for regularisation of the workmen,  it was  submitted, were virtually lifted from the decisions  in R.K.   Panda  & Ors.  Vs.  Steel Authority of India  &  Ors. [1994  (5)  SCC  304] and Parimal Chandra Raha &  Ors.   Vs. Life Insurance Corporation of India & Ors.  [1995 (2) Suppl. SCC  611], so the conditions be interpreted in the light  of the  judgments in those cases.  As the workmen were found to be   the   employees  of   the  management,  an   industrial establishment, and not of the contractor, argued Mr.Singhvi, payment  of retrenchment compensation could only be in terms of  Section  25N and not under Section 25F of the I.D.   Act and  that in approving condition (e) the Supreme Court could not  have  deprived the workmen of the benefits  which  they would otherwise be entitled to under Chapter V-B of the I.D.

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Act.   On the contentions raised by the learned counsel, the question  that  merits our consideration is :  what  is  the true interpretation of conditions (a) and (e) imposed by the High Court and confirmed by this Court.

   It will be apt to refer to the relevant findings of this Court  and  the  conditions confirmed by this Court  in  the aforementioned  appeals.  While negativing the contention of the  management  that  in view of the contract  between  the management  and  the  contractor the workmen  could  not  be treated  as the employees of the management, this Court held that  on  the facts of the case the contractor  was  engaged only  for  the  purpose of record and for all  purposes  the workmen  in  that  case  were in fact  the  workmen  of  the management.   Further,  the contention of the  workmen  that after holding them the employees of the management there was no  reason to impose those conditions, was also rejected  by this Court observing as follows :

   It   should  be  borne  in   mind  that   the   initial appointments of these workmen are not in accordance with the rules  governing the appointments or the established  policy of  recruitment  of the management.  The  said  recruitments could  also  be  in contravention of the  various  statutory orders  including  the  reservation  policy.   Further,  the respondent  is  an instrumentality of the State and  has  an obligation to conform to the requirements of Articles 14 and 16  of the Constitution.  In spite of the same the  services of  the workmen are being regularised by the Court not as  a matter of right of the workmen arising under any statute but with  a  view  to eradicate unfair labour practices  and  in equity  to undo social injustice and as a measure of  labour welfare.   Therefore,  it is necessary that in this  process suitable  guidelines or conditions be laid down at the  time of  courts issuing directions to regularise the services  of the  workmen  so concerned depending upon the facts of  each case.  This Court has consistently followed this practice in the  earlier  cases of regularisation and we do no find  any reason to differ from the same.

   The  directions/conditions, referred to above, read thus :   Respondent  1  should absorb the employees  listed  in Exhibit  A  to the petition, in its employment subject  to their fulfilling the following conditions:

   (a)  at  the  time of initial  appointment  the  workmen should  be  complying  with  the  minimum  and  the  maximum age-limits prescribed under the policy of the Corporation;

   (b)  they  must  be  medically   fit  according  to  the standards prescribed by the Corporation;

   (c)  those who were appointed prior to the filing of the writ  petition  must  have three years minimum  service  to their credit on the date of the present judgment;

   (d)  those who were appointed during the pendency of the writ  petition  must have four years of minimum  service  to their credit on the date of the present judgment;

   (e) all those who are not absorbed in the service of the Corporation  for  any of the reasons indicated above,  their cases  shall be considered in accordance with the provisions of  the Industrial Disputes Act, 1947 when fresh recruitment to the canteen staff is made by the Corporation;

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   All  the  workmen  who are not absorbed for any  of  the conditions  enumerated  above, shall be  given  retrenchment compensation in accordance with law.

   Adverting     to    the       first    contention     of Mr.T.R.Andhyarujina,  from a plain reading of condition (a), extracted  above,  we  find  that the  age  eligibility  for regularising  the  services of the workmen, the minimum  and the  maximum  age limits prescribed under the policy of  the Corporation  (18 years and 25 years respectively) has to  be considered  as  at  the time of their  initial  appointment. This  condition  is too clear to admit of  any  controversy. Mr.Andhyarujina  submitted that it was not the contention of the  management that the maximum age should be determined as on  the  date of passing of the order by the High Court  and that on the wrong assumption that the management was denying the  benefit  of regularisation to some of the workmen,  the High  Court  found fault with it and observed that it  would not  be permissible for the Corporation (management) to deny the  benefit of regularisation to some of the workers on the ground  that they were not at the present time below the age of 25 years and that it was merely a device reflective of an unfortunate  attempt on its part to evade its obligation  to comply  with  the  direction issued by the  High  Court  and confirmed by this Court.  A perusal of the impugned judgment shows  that the contention of the management before the High Court  was  that the workmen who had crossed the age  of  25 years  at  the time of regularisation, were not entitled  to that  benefit.  We cannot accept that the contentions  urged by the parties are not correctly recorded by the High Court. We  cannot go into the question as to what was really argued before  the High Court as we cannot allow the records of the High Court to be contradicted.  [See :  State of Maharashtra Vs.   Ramdas  Shrinivas Nayak & Anr.  [1983 (1) SCR 8].   Be that  as it may, we have already pointed out that  condition (a), referred to above, does not warrant any polemic.

   It  is  correct  that  in the  aforesaid  appeals  while confirming  conditions  (a)  to (e) laid down  by  the  High Court,  this Court referred to the decisions in Pandas case (supra)  and  Rahas  case (supra) but that fact  would  not permit   a  different  interpretation   of   condition   (a) whereunder the minimum and the maximum age as on the date of initial  appointment have to be looked into for purposes  of regularisation of services of the workmen in this case.  The High  Court  is, therefore, not justified in coming  to  the conclusion that the maximum age referred to in condition (a) meant  the  age of superannuation.  No support can be  drawn for  the said conclusion from the judgment of this Court  in Pandas  case (supra) or in Railway Parcel & Goods  Handling Mazdoor  Unions  case (supra) as in those cases this  Court prescribed  the age of superannuation as the maximum age for absorption/regularisation  whereas in the instant case  this Court  confirmed,  without any modification,  condition  (a) imposed  by  the High Court, which needs to  be  interpreted correctly and not altered with reference to other decisions. We, therefore, cannot sustain the order of the High Court on this aspect.

   We  are  of the view that any further direction by  this Court  in  regard to relaxation of maximum age  limit  would amount  to recasting condition (a) which we are not inclined to do.  We may, however, observe that it will be open to the management  to relax maximum age limit in appropriate cases.

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The  other  point  that remains to be  considered  is  about payment  of retrenchment compensation;  whether it should be paid  under  the  provisions of Section 25F or in  terms  of Section  25N  of the I.D.Act.  It may be noticed  here  that conditions   (a)  to  (d),  noted   above,  deal  with   the requirements  which have to be fulfilled by the workmen  for their  regularisation.   Such  of  the workmen  who  do  not satisfy  them and are not eligible for regularisation,  have to  be  dealt  with under condition (e)  which  incorporates benefits for unabsorbed workmen who would be rendered out of service.  A close reading of condition (e) discloses that it is  in  two  parts.   The  first  part  provides  for  their re-employment in accordance with the provisions of I.D.  Act as   and  when  the  management   proposes  to  make   fresh recruitment  to the canteen staff.  The second part  directs payment of retrenchment compensation in accordance with law. To  understand  the  import of these two parts, it  will  be necessary  to  bear in mind that the High Court imposed  the aforementioned  conditions for purposes of absorption of the workmen in the service of the management because though they were  treated  as the employees of the management under  the Factories   Act,  they  were   purportedly  working  as  the employees  of  the contractor.  Now, in the context  of  the aforementioned  findings recorded (that they are in fact the workmen  of the management) and the direction issued by this Court   for  their  regularisation  in  the   service   of management  that both the parts of condition (e) have to  be interpreted.    It  is  difficult  to  assume   that   while conferring  the  benefit of regularisation on  the  workmen, subject  of  course  to  the  said  conditions,  this  Court impliedly  took away the rights available to the  unabsorbed workmen  under  the  I.D.   Act.  There is  nothing  in  the judgment  of this Court, in the above-mentioned appeals,  to suggest  that  the  status  of   the  workmen  who  remained unabsorbed  for  non-fulfillment  of conditions (a)  to  (d) would  be changed to that of retrenched employees.   Equally there  is  nothing  therein to infer that it  directs  their retrenchment  in  accordance  with law.  It is  needless  to point  out that once it is held that they are the  employees of the management, they can be retrenched only in accordance with the provisions of the I.D.  Act.

   Mr.T.R.Andhyarujina,  however,  contended   that  having regard  to  the provisions of Section 25N of the  I.D.   Act retrenchment   of  unabsorbed  workmen   would  be  next  to impossible.   We  are  unable  to accede  to  such  a  broad proposition.   Whether  retrenchment  of   an  employee   is justified  or  not has to be determined by  the  appropriate Government  on  the  facts of each case.  In our  view,  the apprehension  expressed  by the learned counsel may  not  be justified  in  a  case  where the workmen are  found  to  be lacking in the requisite eligibility criteria for absorption laid  down by the High Court and confirmed by this Court and therefore  cannot  be  continued  in  the  present   status. However,  this is not germane to the issue with which we are concerned and should not detain us any longer.

   From   the  above  discussion,  it  follows   that   the obligation  to comply with condition (e) is contingent  upon the  retrenchment of the workmen in accordance with law.  It is  not  disputed  that  the  management  is  an  industrial establishment to which Chapter V-B complies;  if that be so, Sections  25N  and  25H  read   with  Section  25S  will  be attracted.  Therefore, we are of the view that the following direction  in  the  impugned order of the High  Court,  We

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direct that those workers who do not fulfill directions (a), (b),  (c)  &  (d) of the conditions for  regularisation,  be retrenched  in  accordance  with  law  after  following  the provisions  of  Chapter V-B of the Industrial Disputes  Act, 1947.  does not correctly interpret condition (e).  In our view,  condition  (e)  postulates that in the event  of  the management  choosing  to  retrench the workmen  who  do  not fulfil  directions  (a)  to  (d)   of  the  conditions   for regularisation, they shall be paid retrenchment compensation under  Section 25N and their cases for re-employment  should be considered under Section 25H of the I.D.  Act.

   For  all  these reasons, the impugned order of the  High Court  is  set  aside to the extent  indicated  above.   The appeal  is allowed accordingly.  There shall be no order  as to costs.