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CASE NO.: Special Leave Petition (civil)  16456-16460 of 2005

PETITIONER: M/S. SRIRAM INDUSTRIAL ENTERPRISES LTD

RESPONDENT: MAHAK SINGH & ORS

DATE OF JUDGMENT: 08/03/2007

BENCH: Dr.AR. Lakshmanan & Altamas Kabir

JUDGMENT: J U D G M E N T

ALTAMAS KABIR, J.

       Five different writ petitions were filed by the different  respondents in these special leave  petitions before the High  Court of Judicature at Allahabad against the awards made by   the Industrial Tribunal on 20th June, 1998.  The said writ  petitions having  been allowed by a common judgment dated  15th April, 2005, the petitioner  herein, which was the common  respondent in all the writ petitions,  has filed these special  leave petitions  questioning the judgment and order of the  Allahabad High Court.           The writ petitioners/respondents herein claimed to have  been appointed by the petitioner between the years 1987-1991  and  it is their case that they worked  continuously  from   the  date of their  appointment till they were retrenched in the  years 1994 and 1995 respectively.   The specific case made out  by the respondents  is that although they have worked  continuously from the date of  their  appointment for more  than 240 days in a calendar year, they have been illegally  retrenched from service in violation of the provisions of Section  6 N of the  U.P. Industrial Disputes Act, 1947 ( for short ’the  U.P. Act’).         The respondents raised a dispute relating to their  retrenchment which was ultimately referred by the State  Government to the Tribunal under Section 4 K of the aforesaid  Act to determine as to whether the termination of the services  of the workmen by the employer was just and/or illegal.   Pursuant to the said References, five separate Adjudication  Cases, being Nos. 134,139,132, 129 and  127 of 1995 were    registered  by the  Presiding Officer, Industrial Tribunal (V),  U.P.         In support of their contention that they had been illegally  retrenched, the respondents submitted that not only  had they  worked continuously from the date of their appointment till  their  services were terminated, but that  they had  been  allowed  grade number and provident fund number  and other  service benefits.  It is also the case of the respondents that as  they had demanded other benefits to which they were entitled,  their services were terminated without any notice and   compensation being given to them.   They accordingly claimed  reinstatement in service with all back wages.         The case of the petitioner herein is that since  the sugar  industry is a seasonal industry, most of the work force are  engaged as casual  and temporary  hands during the  operational season and that this state of affairs  is common to

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the entire sugar industry.  It was also the case of the petitioner  that the real dispute was not  with regard to the termination of  the services of the workmen, but with  regard to their claim for  regularisation of their services.  It was also the case of the  petitioner that the services of the workmen had never been  terminated since none of them had worked for 240 days in the  last 12   calendar months immediately preceding their alleged  date of termination.         As recorded by the Tribunal, the respondents had  produced   bonus slips, wage slips, deduction of provident   fund slips and attendance cards for various months and other  documents available to them.  They had also requested the  petitioner herein to produce certain documents which were in  its custody and included the Attendance Register, payment of  bonus record and various other documents relating to the  engagement of the respondents as workmen  under it.   Admittedly, on behalf of the petitioner herein, only the extract  of the  attendance record of the last 12 calendar months of the  workmen immediately preceding the date of their  retrenchment had been produced from which it was evident  that none of the workmen  had worked for more than 240 days  during the said period.  The Tribunal also noted  that the  petitioner had failed to assign any cogent    reason for not  producing the Attendance Registers of the  previous years    and allowed the workmen to lead secondary evidence in  support of their case.         The Tribunal did not lay any importance to the non- production of the documents  asked for on the ground that   the petitioner did not keep such record relating to the  temporary hands and relied on the documents that had been  produced to  come to a finding  that the workmen had not put  in 240 days of service in a calendar year preceding the  termination of their services.         Being aggrieved by the awards passed by the Tribunal,  the workmen filed  separate writ petitions praying for quashing  of the  impugned awards and declaring their retrenchment to  be illegal, together with a prayer to reinstate them in service  with full back wages  and continuity of service.         Drawing an adverse inference against the petitioner  herein for non-production of the documents in its possession  and holding that the petitioner had  failed to discharge the  onus and disprove the workmens’ claim, the High Court held  that under the  circumstances the Tribunal should have  drawn an adverse presumption under Section 114  Illustration  (g) of the Indian Evidence Act, 1872 against the petitioner.   Taking further note of the expression "continuous service"  under Section 2 (g)  of the U.P. Act, the High Court found that  the termination of service of the workmen was in violation of  Section 6 N of the aforesaid Act.  Basing its decision on its  aforesaid findings, the High Court quashed the awards passed  in the adjudication cases referred to above  and directed the  petitioner  herein to reinstate the workmen/respondents  herein with continuity of service and half back wages with  effect from  1995,  being the date of their  illegal retrenchment.    These special leave petitions have been filed against the  common judgment of the High Court by which the five writ  petitions were disposed of with the above-mentioned  directions.         The case made out by the petitioner herein before the  Tribunal and the High Court was reiterated by Mr. Ashok  Desai, learned senior advocate, appearing for the petitioner.   The main thrust of his submission was that since the  respondents had not completed 240 days  of service in the  year preceding the date of alleged termination, the   High  Court had erroneously reversed the findings of the Tribunal  

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on such score.  Mr. Desai reiterated the contention of the   petitioner that work in the sugar industry was of a seasonal  nature  and most of the work force was engaged as casual  labour on a temporary basis,  which was generally confined to   six to seven months in a year.  Mr. Desai submitted that the  Tribunal  had correctly  assessed the situation and the High  Court by drawing an adverse presumption for non-production  of the Attendance Register of prior years, had erroneously  arrived at the conclusion  that the respondents-workmen  had,  in fact, worked for more than 240 days in a calendar year prior  to  termination of  their services.         Mr.Desai submitted that it is settled law that the onus  of   proof  of having worked for 240 days within  a calendar  year  is on the employee.  According to Mr. Desai, the employee was  required to discharge the burden of proving that he had  actually worked for 240 days in a calendar year, but the High  Court had wrongly shifted the onus on the employer in  contravention of the law as laid down by this Court  in Range  Forest Officer vs.  S.T. Hadimani, reported in  (2002) 3 SCC  25.  In the  said case, this Court while considering a similar  issue observed as follows:-

"In our opinion, the Tribunal was not right  in placing the onus on the Management  without first determining on the basis of  cogent evidence that the respondent had  worked for more than 240 days in the year  preceding his termination.  It was the case  of the claimant that he had  so worked but   this claim was denied by the appellant.  It  was then for the claimant to lead evidence  to show that he had, in fact,  worked for 240  days in the year  preceding his termination."

Mr. Desai also referred to the decision of this Court in the   case  of Municipal Corporation, Faridabad vs.  Siri Niwas,  reported in (2004) 8 SCC 195.   In the said case, the  respondent’s case relating to his termination from service had  been referred to the Labour Court.   His case before the  Tribunal  was that he had completed working for 240 days in a  year and the order of retrenchment was, therefore, illegal  as  conditions precedent for  passing such an order as contained  in Section 25F of the Industrial Disputes Act, 1947, (for short  ’the Central Act’) had not been complied with.  Section 25F of  the Central Act is reproduced hereinbelow:-

Conditions precedent to retrenchment  of workmen.  "25F. No workman employed in any  industry who has been in continuous  service for  not less than one year under  an employer shall be retrenched by that  employer  until \026

(a)     the workman has been given one  month’s notice in writing indicating  the reasons for retrenchment and  the period of notice has expired, or  the workman has been paid in lieu of  such notice, wages for the period of  the notice;

(b)     the workman has been paid, at the  time of retrenchment, compensation

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which shall be equivalent to fifteen  days’ average pay for every  completed year of continuous service  or any part thereof in excess of six  months; and

(c)     notice in the prescribed manner is  served on the appropriate  Government or such authority as  may be specified by the appropriate  Government by notification in the  Official Gazette."  

The contention of the appellant in the said case however  was that the respondent had  worked only for 136 days during   the preceding 12 months  on daily wages  and had no lien   over the said job.  In  that background, this Court  held that  the burden of  proof was on the  respondent-workman to show  that he had worked for 240 days in the preceding 12 months  prior to his retrenchment. The same view was expressed  by this Court in   Surendranagar District Panchayat vs. Dahyabhai  Amarsinh, reported in (2005) 8 SCC 750, wherein this Court  while referring to the decisions of this Court in the  case of  Range Forest Officer (supra) and Municipal Corporation,  Faridabad (supra) and two other decisions in the case of  Rajasthan State  Ganganagar  S. Mills  Ltd.  vs. State of  Rajasthan and Anr., reported in (2004) 8 SCC 161 and  M.P.  Electricity Board  vs. Hariram, reported in (2004) 8 SCC  246, reiterated that the burden of proof lies on the workman to  show that he had  worked continuously  for 240 days in the  preceding  one year prior to his retrenchment and it is for the  workman to adduce evidence apart  from  examining   himself  to prove the  fact that he had been employed for the said  period by the employer. Various other decisions were also referred to  by Mr.  Desai on the aforesaid point which  are in consonance  with  the decision of this Court in Range Forest Officer (supra). Mr. Desai also contended that drawing an adverse  presumption for non-production of evidence is not  applicable  in all cases where other circumstances may exist  on the basis  whereof such  intentional non-production  may even be  found  to be justifiable on reasonable grounds.  In the  instant case,  Mr. Desai submitted that since in paragraph 11 of the  respondent’s written statement before the Industrial Tribunal  the pleading was restricted to the fact  that he had worked for  more than 240 days in the year preceding  the date of  termination, the appellant had thought  it fit to produce the  Attendance Register for the said period only, namely, for the   period comprising the year preceding the date of termination  of the services of the respondents.  In fact, it was the case of  the appellant before the  Tribunal, as also the High Court,   that the  Appellant-company did not maintain the records in  respect of temporary posts.  He urged that since the workmen  had produced various documents in support of their  claim  that they had worked continuously for more than 240 days  they  should also  have proof  of their  having  worked  for 240  days in any preceding year which could have been  produced  before the Tribunal in order to prove that they had actually  worked for 240 days  continuously during  12 calendar  months in any  year prior to termination of their services.  Mr.  Desai  submitted that  the respondents had failed to discharge  their onus of proving the aforesaid  fact and the Tribunal had  rightly rejected their contention. Mr. Desai reiterated the fact that in one case, the

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respondent had worked for only 162.5 days in the 12 months  preceding  the date of termination of his services.  Mr. Desai   also stated that the respondent had not worked  at all  in the  months of April, May, July, September and December, 1994  which fact  had not been  denied on behalf of the respondents. Mr. Desai contended that most of the documents  asked  to be produced on behalf   of the respondents  were irrelevant   to the fact  at issue  since even the Tribunal had framed an  issue   as to whether the concerned workman had worked for  more than  240 days during the last one year of service.  It is  on such   basis  that the Attendance Register for the preceding  year  had been produced on the basis whereof the Tribunal   came to the finding that the respondent had not put in more  than 240 days of service on 1st February, 1995.   Mr. Desai urged further that the mere statement on   affidavit of a workman that he had worked for 240 days  continuously does not constitute  sufficient proof in the  absence of other evidence.  The said principle was referred to  in the Range Forest Officer (supra) case wherein it was held   that filing of an affidavit  is only  the statement made by the  workman in his own favour which could not be regarded as  sufficient evidence for any Court or Tribunal to arrive at a  conclusion that the workman had, in fact, worked for 240  days in a year.  It was submitted that the same principle was  reiterated by this Court in the case of RBI vs. S. Mani,  reported in (2005) 5 SCC 100. Mr. Desai submitted that while the Tribunal had  correctly assessed the legal position, the High Court had  wrongly shifted the burden of proving  that the workman had  worked for 240 days or more in a calendar year on the  employer.  It was submitted that having proceeded on such  erroneous basis, the High Court had arrived at a wrong  conclusion, in the absence of any other material evidence, that  the respondents had, in fact, worked for  more than 240 days  in a calendar year preceding the date of termination of their  services and such finding was, therefore,  liable to be set  aside. Mr. Viswanathan, learned advocate, who appeared  for  the workmen submitted that while the High Court had not  disturbed the findings of fact, it had only corrected the  jurisdictional error of the Labour Court  which failed to  consider the difference in the  definition  of "continuous  service" mentioned in  Section  25B 2(a)   of the Central Act  and in Section 2 (g) of the U.P. Act.   He pointed out that in the  definition given in the U.P. Act, the word "preceding" has not  been used.  Consequently, it was urged that Section 2 (g) of  the U.P. Act does not require a workman to prove that he had  worked for 240 days continuously only during the preceding  period of 12 months prior to termination of his services.  The  workman was, therefore, entitled to show that he had worked  for 240 days continuously in a calendar year for any year prior  to termination of his services.  Mr. Viswanathan submitted  that  the   said period  was not confined under the U.P. Act  only to the year preceding  the date  of termination. In support of his submissions Mr. Viswanathan relied on  the decision of this Court in U.P. Drugs and  Pharmaceuticals  Company Ltd. vs. Ramanuj Yadav and  Ors. reported in (2003) 8 SCC 334, where the said position  has been examined and explained. Regarding Mr. Desai’s submissions that this Court had  consistently laid down that it is  for the workmen to prove that  they had worked for 240 days in a calendar year,  Mr.  Viswanathan submitted that this Court had in the case of  R.M. Yellatty vs. Assistant Executive Engineer, reported in  (2006) 1 SCC 106, observed as under:-

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"Analysing the above decisions of this  Court, it is clear that the provisions of the  Evidence Act in terms do not apply to the  proceedings under Section 10 of the  Industrial Disputes Act.  However,  applying general principles and on  reading the aforesaid judgments, we find  that this Court, has repeatedly taken the  view that the burden of proof is on the  claimant  to show that he had worked for  240 days in a given year.  This burden is  discharged only upon the workman   stepping up in the witness box.  This  burden is discharged upon the workman  adducing cogent evidence,  both oral and  documentary.  In cases of termination of  services of daily-waged earners, there will  be no letter of appointment  of  termination.   There will also be no  receipt of  proof of payment.  Thus in  most cases, the workman (the claimant)  can only call upon  the employer to  produce  before the court the nominal  muster roll for the given period, the letter  of appointment of termination, if any, the  wage register, the attendance register,  etc.  Drawing of  adverse  inference  ultimately would depend thereafter on the  facts of each case.  The above decisions  however  make it clear that mere  affidavits  or self-serving statements  made by the  claimant workman will not  suffice  in the matter of discharge of the  burden placed by law on the workman to  prove that he had  worked for 240 days in  a given year.  The above judgments  further laid down that mere non- production of muster rolls per se    without any plea of  suppression by the  claimant workman will not be the ground  for the Tribunal to draw an adverse  inference against the  management.   Lastly, the above judgments  lay down  the basic principle, namely, that the High  Court under Article 226 of the   Constitution  will not interfere with  concurrent findings of fact recorded by  the Labour Court unless they are  perverse.  This exercise will depend upon  the  facts of each case."

Mr. Viswanathan submitted that in these cases, the  workmen had discharged their initial onus by producing  whatever documents were in their custody.  The onus had  thereafter shifted to the petitioner when the workmen asked  for production of Attendance Registers and the Muster Rolls   from 1991 onwards.  On the failure of the petitioner to  produce the said documents, the High Court had rightly  drawn an adverse presumption.

Mr. Viswanathan then urged that in appropriate cases,  the High Court  in Writ Jurisdiction could  interfere  with the  findings of fact of the courts below  as had been  held by this  Court in the case of Trambak Rubber Industries Ltd. vs.

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Nashik Workers Union And Ors., reported in (2003) 6 SCC  416.  In any event,  the powers of  judicial  review  of  the High  Court under Article 227 are very wide and it empowered the  High Court to  ensure  that the courts and tribunals, inferior  to the High Court,  discharged their duties and obligations. Mr. Viswanathan urged that  the workmen had produced   whatever documents were in their possession,  such as,  attendance  cards, wage slips, bonus slips, provident fund   deduction slips from 1991 onwards and since other relevant  documents such as attendance registers and muster rolls were  with the  petitioners, the workmen  filed an application for  summoning the said documents which were, not however,  produced by the petitioner on account whereof the High Court   was compelled to  draw  an adverse presumption in terms of  Section 114, Illustration (g) of the Evidence Act.   

Mr. Viswanathan submitted that while the Tribunal had  failed to notice the difference in the definition of the   expression  "continuous service" in Section 6 N of the U.P. Act  as  against its definition in Section 25 B in the Central Act, the  High Court  had correctly interpreted the same in the  judgment impugned in these  proceedings.   

Mr. Viswanathan submitted that no case had been made  out on behalf of the petitioner to interfere with the findings of  the High Court and the directions ultimately given therein to  reinstate the respondents-workmen and to pay them   half  their back wages with effect from 1995   when their services  were illegally terminated.

Having carefully considered the submissions made on  behalf of the respective parties and the statutory provisions,  we are of the view that a decision in this matter  will depend   on the understanding of the  expression "continuous service"  as used in Section 6 N read with Section 2 (g) of the U.P. Act  as against its usage  in Section 25 B (2) (a) (ii)  of the Central  Act.   In order to appreciate the difference between the two  provisions, Sections 6N  and 2(g) of the U.P. Act and Section  25 B 2 (a) (ii )  of the Central Act are reproduced hereinbelow:-

"6-N.  Conditions precedent to  retrenchment of workmen.--  No workman   employed in any industry who has been in  continuous service for not less than  one  year under an employer shall be retrenched  by that employer until\027

(a)   the workman has been given one  month’s notice in writing  indicating the reasons for  retrenchment and the period of  notice has expired or the workman  has been paid in lieu of such  notice wages for the period of  notice:

Provided that no such notice shall be  necessary if the retrenchment is under an  agreement which specifies a date for the  termination of service;

(b)    the workman has been paid, at the  time of retrenchment,  compensation which shall be  equivalent to fifteen days’ average

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pay for every completed year of  service or any part thereof in  excess of six months, and  

(c)       notice in the prescribed manner is                                       served on the State Government.

2g.     ’Continuous service’ means  uninterrupted services, and  includes service which  may be  interrupted merely on account of  sickness or authorized leave or an  accident or a strike which is not  illegal, or a lock-out or a cessation  of work which is not due to any  fault on the part of the workman,  and a workman, who  during a   period of twelve calendar months  has actually worked in an   industry for not less than two  hundred and forty days shall be  deemed to have  completed one  year of continuous service in the  industry.

Explanation.\027In computing the number  of days on which a workman has  actually worked in an industry, the  days on which \026

(i)     he has been laid off under the  agreement or  as permitted by  standing order made under the  Industrial Employment (Standing  Orders) Act, 1946, or under this  Act or under any other law   applicable to the industrial  establishment, the largest  number of days during which he  has been so laid off being taken  into account for the purposes of  this clause,   

(ii)    he has been on leave with full  wages, earned  in the previous  year, and

(iii)   in the case of a female, she has  been on maternity leave;  so  however that the total period of  such maternity leave shall not  exceed twelve weeks, shall be  included;   

Definition of continuous service.  25B. For the purposes of this  Chapter,-

(2)     Where a workman is not in  continuous service within the  meaning of clause (1) for a period  of one year or six months, he  shall be deemed to be in  continuous service under an

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employer\027

(a)     for  a period of one year, if  the workman, during a  period of twelve calendar  months preceding the date   with reference to which  calculation is to be made,  has actually worked under  the employer for not less  than\027

(ii)   two hundred and forty days,  in any other case;"     

As pointed out by Mr. Viswanthan, the exclusion of the  word "preceding" from Section 2 (g) of the U.P. Act indicates   that a workman in order to be in  continuous service may have  worked continuously for a  period of  240 days in any calendar  year during his period of service.  In fact, such an  interpretation has already been given by this Court  in the  case  of U.P. Drugs and Pharmaceuticals Company Ltd.  (supra).  The case made out by the respondents before the  Tribunal was also on the same lines in the Adjudication cases  filed before  the  labour court, where the respondents had  made out a case that they had never worked  as temporary  hands but had worked continuously  from 26th February, 1991  to 31st January, 1995 without break.

In the light of the aforesaid case made out by the  respondents, the Tribunal was persuaded on behalf of the   petitioner herein to decide the case of the workmen on the  basis of the materials produced by the petitioner for the year  preceding the date of  termination  of their services from which  it was shown that the workmen  had not completed  240 days  of continuous service in the said year.

The said  approach,  in our view,  was erroneous  in view  of the decision of this Court in the case of U.P. Drugs and  Pharmaceuticals Company Ltd. (supra).    The petitioner  had wrongly  described  the documents relating to attendance  for the years 1991 onwards as far as the respondents are  concerned,  as being irrelevant and the Tribunal has also  accepted the said reasoning.  Consequently, instead of  drawing an adverse presumption for non-production of the   said records, the Tribunal accepted  the contention of the  petitioner that the workmen had not worked for more than  240 days in the year preceding the date of their termination   nor had the workmen filed any proof to show otherwise.

In our view, the High Court adopted the correct approach  while deciding the controversy between the parties upon a  correct understanding of the law as contained in Section 6 N   read with  Section 2 (g)  of the  U.P. Act which is applicable  to  these petitions.

Having correctly interpreted the provisions of Section 6 N  of the U.P. Act, the High Court rightly drew an adverse  presumption for non-production of the Attendance Registers  and the  Muster Rolls  for the years 1991 onwards.  The best  evidence having been withheld, the High Court  was entitled to  draw such adverse inference.  The views expressed by this  Court on the question of burden of proof in Range Forest  Officer’s case (supra) were watered down by the subsequent

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decision in R.M. Yellatty’s case (supra) and in our view the  workmen had discharged their initial onus by production of  the documents in their possession. On the question of judicial review, the submissions made  by Mr. Viswanathan has force and we are inclined to accept  the same.    In view of what has been indicated hereinabove,  we are  satisfied that no interference is called for with the judgment  and directions given by the High Court which had  been   impugned in these petitions and the  special leave petitions  are accordingly dismissed.  Interim order dated 16th August,  2005, stands vacated. There will be no order as to costs.