REP ORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  6585     0F 2008 (Arising out of S.L.P.(C) No. 7197 of 2006)

KANPUR ELECTRICITY SUPPLY CO. LTD.

— APPELLANT (S)

VERSUS

SHAMIM MIRZA — RESPONDENT (S)

WITH

CIVIL APPEAL NO.6586    0F 2008 (Arising out of S.L.P.(C) No. 9586 of 2006)

J U D G M E N T

D.K. JAIN, J.:

Leave granted.

2. Since a common issue is involved in both the appeals, these

are being disposed of by this judgment.

3. The  appeals  are  directed  against  two separate  judgments

rendered  by  the  High  Court  of  Judicature  at  Allahabad,

upholding the Awards of: Labour Court (4) Kanpur in I.D.

No.70 of 1997 and Industrial  Tribunal (3)  Kanpur in I.D.

No.46 of 1997, collectively referred to as “the adjudicatory

authority”,  whereby  the  appellant  had  been  directed  to

reinstate  the  respective  respondents  –  namely,  Shamim

Mirza  and Manoj  Srivastava,  the  two  workmen,  with  full

back wages and continuity in service.

4. The appellant-company was constituted by the U.P. State

Government under Section 5 of the Electricity (Supply) Act,

1948 and was charged with several duties, as enumerated

under Section 18 of the said Act, in relation to generation,

transmission and distribution of electricity within the State.

The  appellant  opened  various  cash  centres  in  different

divisions and sub-divisions for collection of electricity bills

and for the said purpose, invited tenders for installation of

Bradma Machines  on contract  basis.   One such contract

was awarded to M/s Vivek and Associates in the year 1995.

Under the agreed terms and conditions, the machines were

to be operated by the said concern, through its employees,

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for which it was to be paid Rs.175/- per day, per machine.

The contract is stated to have continued till the year 1997.

5. Both the respondent-workmen raised an industrial dispute,

alleging that their services had been illegally terminated by

the appellant. Accordingly, the State Government referred,

under Section 4K of the U.P. Industrial Disputes Act, 1947

(for short ‘the Act’), the following dispute i.e. I.D. No.70 of

1997 for adjudication:

“Details of Industrial Dispute

Whether  removal/termination  of  services  of the workman Shri Shamim Mirza, son of Shri Atiq  Mirza,  Cashier,  w.e.f.  2.9.1996  by  the Management is legal and justified?  If not, to which relief/consequential  benefits  and from which  date,  the  workman  concerned  is entitled to?”

(Except  for  change  of  name  of  the  workman  and  date  of

termination of his services, the dispute referred in I.D. No.46

of 1997 was on similar lines.)

6. The case  of  the workmen in nutshell  was that:  they had

been appointed as cashiers at two sub-stations when the

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appellant had adopted the policy of centralisation of all the

16-17  sub-stations  for  the  purposes  of  collection  of

electricity  bills;  several  new appointments  were  made  for

operating these new machines; before their appointment as

cashiers,  they  were  all  given six  months training for this

work;  apart  from collecting the  electricity bills,  they were

also  depositing  the  cash  so  collected  in  the  Treasury  in

Chief  Office  as  per  the  instructions  of  the  Assistant

Engineer  (D);  suddenly  their  services  were  terminated

without assigning any reason and without giving any notice

to them whereas persons junior to them were still working

on the  posts  of  cashiers.   Their  plea  was  that  since  the

termination  of  their  services  was  in  violation  of  the

provisions contained in Sections 6N, 6P & 6Q of the Act,

they were entitled to be reinstated with continuity in service

and with full back wages.

7. In  the  written  statement  filed  before  the  adjudicatory

authority,  the  stand of  the  appellant  –  management  was

that there was no relationship of  employer  and employee

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between  them and the  applicants  and hence  the  dispute

was not an industrial dispute; the post of the cashier was a

promotion post which could be filled up by promotion from

the cadre of assistant cashier; the cash centres were opened

in various divisions and sub-divisions for the convenience

of  the  consumers  for  depositing  their  electricity  bills;

tenders  were  invited  for  installing  Bradma  Machines  in

these centres on contract basis; the tender was awarded in

favour of Vivek and Associates for the period from 1st July,

1995 to 30th June, 1996 which period was later extended

upto  31st July,  1997  and  that  the  contractor  was

responsible for the operation and upkeep of the machines,

though the cash was to be handled by appellant’s cashier or

its  duly  authorised  representative  and,  therefore,  the

question of applicants' employment with the appellant did

not arise at all.  In other words, the stand of the appellant

was that the references in both the cases were factually and

legally incompetent as the applicants were not “workmen”

within the meaning of the Act.

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8. Upon consideration of the evidence produced by both the

parties,  the  adjudicatory  authority  formed  the  view  that

though  no  appointment  letters  had  been  filed  by  the

workmen but it had come in evidence that before taking the

work, letters were issued to them by an Assistant Manager

of the appellant;   though signatures of the applicants did

not appear in any of the columns of Electricity Cash and

Revenue  (ECR)  rolls but their  designation as cashier  had

been  mentioned  on  all  these  sheets  and  in  some  of  the

letters there were signatures of the Assistant Engineer; in

the  contract  given  to  M/s  Vivek  and  Associates  for

operating Bradma machines it had been mentioned that it

would  be  the  responsibility  of  the  contractor  to  operate

these machines at all the 16 sub-stations but the cash was

to be handled by the cashier of the appellant only but the

appellant had failed to prove that any of its other cashiers’

had handled the job of cash collection.  It finally concluded

that  on  the  basis  of  the  documents  submitted  by  the

workmen  and  for  lack  of  proper  rebuttal  to  these

documents,  there  was  no  ground  to  presume  that  the

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workmen were the employees of the contractor and it stood

proved that, in fact, they were in the regular employment of

the  appellant  as  cashiers.   Thus,  it  was  held  that  the

workmen  having  worked  for  more  than  240  days,  their

termination without notice and payment of compensation as

contemplated under Section 6N of the Act, was illegal.

9. Being  aggrieved,  the  appellant  filed  writ  petitions  under

Article 226 of the Constitution, which have been dismissed

by the impugned orders.  The High Court has held that the

Labour Court/Industrial Tribunal having considered all the

aspects of the matter in the light of the evidence on record,

no interference in exercise of power under Article 226 of the

Constitution was called for.  However, while dismissing the

writ  petition  arising  out  of  I.D.  No.46  of  1997,  the  High

Court modified the Award to the extent that the workman in

that  case  would  be  entitled  to  50%  of  the  back  wages

pursuant to the Award.

10.We have heard learned counsel for the parties.

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11.Learned counsel  appearing for  the appellant strenuously

urged that both the adjudicatory authorities as well as the

High Court committed grave error by acting on factually and

legally erroneous premise.  It was submitted that it was a

clear and definite stand of the appellant before the courts

below  that  the  workmen  were  never  employed  by  the

appellant  and they  were  the  employees  of  the  contractor

working  on  the  Bradma  Machines  installed  by  him  for

collection of the electricity bills from the consumers; there

was no privity  of  contract between the appellant and the

workmen and, therefore, the provisions of the Act were not

attracted  at  all.   Learned  counsel  contended  that  for

determining  the  employer-employee  relationship  both  the

courts have failed to apply the test laid down by this Court

in  Ram Singh & Ors.  Vs.  Union Territory, Chandigarh

& Ors.1  It was also submitted that having observed that

the  workmen  had  neither  produced  the  letters  of

appointment  nor  the  salary  slips,  the  courts  below

committed a patent illegality in relying on the documents

1 (2004) 1 SCC 126

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signed by the staff of the appellant for internal use to return

a finding that the workmen were the regular employees of

the appellant, which had the effect of putting the onus on

the  employer  to  prove  that  the  workmen  were  not  his

employees.  Reliance was placed on Range Forest Officer

Vs.  S.T. Hadimani2 to support the plea that it is for the

claimant  to  prove  that  he  had  worked  for  a  particular

management.   Lastly,  relying  on  Nagar  Panchayat

Kharkhauda  Vs.  Yogendra  Singh3,  learned  counsel

submitted  that  the  courts  below again erred  in awarding

back wages to the workmen in routine.

12.Per contra, Mr. R. Venkataramani, learned senior counsel

appearing  for  Shamim  Mirza,  one  of  the  workmen,

supporting the decision of the High Court, submitted that

apart  from  the  fact  that  the  evidence  produced  by  the

workman was sufficient  to prove that he was discharging

his  duties  as  cashier  and  not  as  a  Bradma  Machine

Operator,  even  the  official  records  show  that  he  was

working as an employee of the appellant.  Referring to the 2 (2002) 3 SCC 25 3 (2005) 13 SCC 428

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application  of  the  workman  –  Shamim  Mirza,  before  the

Labour  Court,  inter  alia,  praying  for  summoning  of  some

documents  from  the  appellant,  including  ECR  register,

vouchers showing payment of salaries by the appellant to

him,  learned  senior  counsel  vehemently  argued  that  on

appellant’s  failure  to  produce  these  documents,  the

adjudicatory  authority  was  justified  in  drawing  adverse

inference against them.  It was also urged that the service of

the workman having been terminated much after the expiry

of the period of contract of Vivek and Associates, it stands

established that the workman was under the control of the

appellant  and  not  the  contractor.   Relying  on  Bank  of

Baroda  Vs.  Ghemarbhai  Harjibhai  Rabari4,  learned

counsel  urged  that  the  workman  having  produced  more

than prima facie evidence, no fault could be found with the

findings of fact recorded by both the courts below in favour

of the workman, this Court should be loathe to interfere.

13.Mr. Praveen Chaturvedi, learned counsel appearing for the

other workman – Manoj Srivastava, in order to buttress his

4 (2005) 10 SCC 792

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argument that the respondent was under the administrative

control of  the appellant,  invited our attention to an office

note dated 26th July, 1994 (Ex.34) issued by the Managing

Director  of  the  appellant  to  some  of  its  cashiers,  which

included  the  name  of  the  respondent,  threatening  action

against them for not depositing the cash amounts collected

by them.  He, thus, contended that the document proves,

beyond doubt, the employer-employee relationship between

the appellant and respondent.

14.Having considered the matter in the light of the material

referred to and relied upon by the adjudicatory authority, in

our judgment, the High Court was justified in declining to

interfere in both the matters.

15.It is trite that the burden to prove that a claimant was in

the employment of a particular management, primarily lies

on the person who claims to be so but the degree of proof,

so required, varies from case to case.  It is neither feasible

nor advisable to lay down an abstract rule to determine the

employer-employee relationship.  It is essentially a question

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of fact to be determined by having regard to the cumulative

effect of the entire material placed before the adjudicatory

forum by the claimant and the management.

16.It  is  true that in the instant case,  the workmen did not

produce the letters of appointment as also their salary slips

but  they  have  been  successful  in  adducing  some

contemporaneous  documentary  evidence,  including  ECR

sheets bearing the signatures of the workmen and that of

another senior officer of the appellant company (Ex.W-7, W-

10 to W-15), which shows that they were collecting cash on

behalf of the appellant; depositing it in the van or central

office of the appellant and were answerable to the officials of

the appellant.   In this regard, Clause 5 of the terms and

conditions of the contract awarded to Vivek and Associates

is also relevant, which provides as under:

“You will be responsible for the operation of machines only.  The cash handling is to  be  done  by  K.E.S.A.,  Cashier  or  a representative of K.E.S.A. duly authorised by Dy. C.A.O./Head Cashier.”

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17.It  has  come  in  evidence  of  the  witnesses  examined  on

behalf of the workmen that it was only the respondents who

were  collecting  the  cash  and  no  other  employee  of  the

appellant.  No evidence was led by the appellant in rebuttal.

Furthermore, the appellant was called upon to produce the

official records but they failed to do so, with the result the

adjudicatory authority drew adverse inference  against the

appellant.  In the light of the factual scenario as emerging

from the  evidence  on  record,  we  are  convinced  that  the

workmen had discharged the burden which lay on them to

prove  the  employer-employee  relationship  with  the

appellant.  It is also pertinent to note that in both the cases,

evidence on record shows the engagement of the workmen

was  prior  to  the  award  of  contract  to  M/s  Vivek  and

Associates for the period starting 1st July, 1995.  Workman

Shamim Mirza claims to have joined the appellant on 13th

June, 1995 while workman Manoj Srivastava claims to have

joined on 17th June, 1994, which fact was not controverted

by the appellant.  On the contrary, this fact stands proved

from Ex.34, an office note dated 26th July, 1994, containing

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the  name  of  Manoj  Srivastava  as  one  of  the  defaulting

cashiers.   Workman  Shamim  Mirza  has  also  placed  on

record  a  certificate  dated  9th September,  1996  issued  by

Assistant Engineer,  sub-station Kalyanpur,  certifying that

he had worked at the cash collection office in the capacity of

a cashier with effect from 13th June, 1995 to 31st August,

1996 with honesty and hard labour.  Other than this, he

had also done good job on his directions at other places.

The stand of the appellant on the said certificate was that

this Assistant Engineer was not competent to issue such a

certificate.  Be that as it may, the said document does show

that the workman did work with the appellant even prior to

the award of the contract to Vivek and Associates.

18.Moreover, Shamim Mirza has also placed on record a copy

of an office memorandum dated 5th May, 2007, issued by

the  appellant  indicating  that  another  cashier,  namely,

Kailash Verma, stated to be similarly situated and who had

also  obtained  an award  in  his  favour,  the  appellant  had

arrived into an agreement with him.  The said person has

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been reinstated in service by the appellant on the post of a

cashier in the pay scale of Rs.4200-100-6400 subject to his

complying  with  certain  terms and conditions  imposed  on

him, which does  prima facie  show that the appellant  has

been adopting some sort of pick and choose policy.

19.As regards the rulings of this Court relied upon by learned

counsel  for  the  appellant,  in  our  view,  these  are  of  little

assistance to the appellant.  All these cases deal with the

question  of  regularisation  of  the  services  of  workmen,  in

particular  those  who were  engaged  as  daily  wager  or  on

contract or for specific period/fixed term, which is not the

case here.  It is manifest that the only dispute referred to

the adjudicatory authority was in regard to the termination

of  the  services  of  the  workmen  without  following  the

procedure laid down in the Act.   

20.In  the  light  of  the  aforenoted  factual  matrix  and  the

evidence on record, we are of the opinion that the courts

below were justified in holding that both the workmen have

established their claim of having worked with the appellant

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for  more than 240 days as their  employees.   We find no

reason  whatsoever  to  interfere  with  the  impugned

judgments to that extent.

21.The  next  question  for  determination  is  whether  the

respondents are entitled to the back-wages for the period

they were out of service?

22.It is true that once the order of termination of service of an

employee is set aside, ordinarily the relief of reinstatement

is  available  to  him.   However,  the  entitlement  of  an

employee  to  get  reinstated  does  not  necessarily  result  in

payment of full or partial back-wages, which is independent

of reinstatement.   While dealing with the prayer of back-

wages, factual scenario, equity and good conscience and a

number  of  other  factors,  like  the  manner  of  selection;

nature of appointment; the period for which the employee

has worked with the employer etc.; have to be kept in view.

All these factors are illustrative and no precise formula can

be laid down as to under what circumstances full or partial

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back-wages should be awarded.  It depends upon the facts

and circumstances of each case.   

23.In  General Manager, Haryana Roadways  Vs. Rudhan

Singh5 a  three-Judge  Bench  of  this  Court  has  observed

that there cannot be a strait  jacket formula for awarding

relief of back-wages and an order of back-wages should not

be passed in a mechanical manner.  It has been held that a

host  of  factors,  like  the  manner  and method of  selection

and  appointment;  the  nature  of  appointment,  namely,

whether  ad  hoc,  short  term,  daily  wage,  temporary  or

permanent in character;  and the length of  service,  which

the workman had rendered with the employer are required

to be taken into consideration before passing any order for

award  of  back-wages.  [See: also  Haryana  State

Electronics Development Corpn. Ltd.  Vs.  Mamni6;  U.P.

State Brassware Corpn. Ltd. & Anr.  Vs. Uday Narain

Pandey7  and U.P. SRTC Vs. Mitthu Singh 8]

5 (2005) 5 SCC 591 6 (2006) 9 SCC 434 7 (2006) 1 SCC 479 8 (2006) 7 SCC 180

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24.Bearing in mind the afore-noted broad parameters, we are

of  the  opinion  that  the  facts  at  hand  do  not  warrant

payment  of  back-wages to the  respondents.   In  both  the

cases,  though  the  respondents  have  succeeded  in

establishing  that  they  were  in  the  employment  of  the

appellant when their services were terminated but nothing

has been brought on record to show that they were selected

through a regular recruitment process.  It has also not been

shown whether they were actually qualified for the post of a

cashier.  Besides, on their own showing they had worked

with the appellant for about two years when their services

were  terminated.   These  circumstances,  in  our  view,

disentitle  them  from  their  claim  for  back  wages.

Accordingly, the orders of the High Court to the extent they

affirm  the  directions  of  the  adjudicatory  authority  with

regard to the payment of back wages are set aside.

25.Consequently, for the aforesaid reasons, both the appeals

are allowed to the extent indicated above.  However, in the

circumstances, there will be no order as to costs.  

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…………………………………J.      (C.K. THAKKER)  

…………………………………J.      (D.K. JAIN)

NEW DELHI; NOVEMBER 7, 2008.  

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