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CASE NO.: Appeal (civil)  6511 of 2005

PETITIONER: Surendranagar District  Panchayat                

RESPONDENT: Dahyabhai Amarsinh                               

DATE OF JUDGMENT: 25/10/2005

BENCH: S.N. Variava & P.P. Naolekar

JUDGMENT: JUDGMENT (Arising out of SLP) No.24805 of 2003) P.P. Naolekar, J.

       Leave granted.

       This appeal is directed against the Judgment of the  Division Bench of the High Court confirming the order of the  Single Judge and that of the Industrial Tribunal whereby the  appellant was directed to reinstate the respondent.  The  brief facts of the case are that the services of the  respondent was terminated by an order dated 15.8.1985.   On 1.6.1992, i.e., nearly after 7 years the respondent sent a  Demand Notice to the appellant and ultimately the dispute of  termination of service of Respondent was referred to the  Industrial Tribunal. The respondent filed a claim petition  alleging therein that he was in service of the appellant for  more than ten years at the wages of Rs.10/- per day till he  had been terminated by an order dated 5.7.1985.  It is  alleged that before the order of termination was issued,  provisions of the Industrial Disputes Act were not complied  with.  An application was moved before the Labour Court for  direction to the employer-appellant to produce muster roll,  salary register from the year 1976 to 1986.  The appellant  entered appearance and filed its counter alleging that the  respondent himself stopped coming to work; that there was  a gross delay of seven years in raising the dispute.  The  workman was never engaged permanently and he was  employed for miscellaneous work i.e. whenever there was  work, he was called for it.  It is alleged that the workman  had not completed 240 days of continuous service in the 12  months preceding the date of termination of his services. He  had worked for 114 days in the year 1982, 63 days in 1983,  124 days in 1984 and 64 days in 1985 and thus there was  no necessity for complying with legal requirement, before  terminating the service of the respondent, of following the  procedure laid down in Section 25F of the Industrial Disputes  Act.                 The respondent examined himself and deposed  that he was employed for 10 years at the salary of Rs.470  per months whereas Mr. Vinod Misra, an official from the  appellant side was examined to show that the workman  never worked for 240 days in a year.                 Before the Labour Court, oral evidence was given  by the respondent. The Labour Court relied on the oral  evidence of the respondent-workman and drew an adverse  inference for non-production of muster roll and the salary  register from the year 1976 to 1986 and held that the  respondent-workman had worked for more than 240 days

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and therefore his termination was illegal.  The Labour Court  directed the reinstatement of the workman with back wages  of 20% from the date of reference for non-compliance of  sections 25 F, 25 G and 25 H.                  The learned Single Judge dismissed the petition.   A letter patent appeal was filed and the Division Bench held  that the Labour Court was right in holding that the workman  by his oral statement had proved his case.  Not only that the  workman under Ex.4, called upon the appellant-Panchayat  to produce his salary Register and muster roll from 1976 to  1986 and also to produce the seniority list of the workmen,  which were not produced.  On the non-production by the  appellant, of the said documents the Labour Court had  rightly drawn an adverse inference against the appellant and  rightly held that the workman had worked for 240 days in a  year.  The Court also held that one junior was retained,  whereas service of respondent was terminated.   Consequently, the Letters Patent Appeal was dismissed.   That is how the appellant has come before this Court,  challenging the order of reinstatement.                 It is contended by the learned counsel for the  appellant-Panchayat that the Supreme Court by its number  of decisions has categorically held that the initial burden of  proof that the workman has worked for 240 days in a year  preceding the date of termination, lies on the workman and  that the workman has failed to discharge that burden.  It is  further urged that it is not the case of the respondent- workman that he was in continuous service of the Panchayat  for one year within the meaning of sub-section (1) of  Section 25B of the Industrial Disputes Act.  The case of the  workman-respondent was that he had worked for 240 days  with the employer in a year, therefore, necessarily the  dispute raised by the workman, fall under sub-section (2) of  Section 25B of the Industrial Disputes Act, to be regarded as  his continuous service, wherein the workman had to prove  that he had actually worked for 240 days during the period  of 12 calendar months preceding the date of termination, to  be retrenchment under Section 2(oo) of the Act.  The non- production of the 10 years record by the employer does not  call for drawing an adverse inference against the Panchayat.   On the other hand, learned counsel for the respondent has  urged that the employer being in possession of the relevant  material, is duty bound to produce it and non-production of  the record, called for by the Labour Court, the Labour Court  was right in drawing an adverse inference.  He further  contended that the employer being in possession of the  necessary material, burden lies on the employer to prove  that the workman had not worked for 240 days in a year  preceding the relevant period.                 On the basis of the rival contention, it is necessary  for us to consider the scope and ambit of the relevant  provisions, namely Section 2 (oo), Section 25B and Section  25F of the Industrial Disputes Act.  The appropriate  provisions are reproduced below: Section 2(oo)         "retrenchment" means the termination by the  employer of the service of a workman for any reason  whatsoever, otherwise than as  punishment inflicted by  way of disciplinary action, but does not include -  

a)      voluntary retirement of the workman; or  b)      retirement of the workman on reaching the age of  superannuation if the contract of employment between   the employer and the workman concerned contains a  stipulation in that behalf; or

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bb)     termination of the service of a workman as a result  of the non-renewal of the contract of employment between  the employer and the workman concerned on its expiry or  of such contract being terminated under a stipulation in  that behalf contained therein; or c)      termination of the service  of a workman on the  ground of continued ill-health;

Section 25B: Definition of Continuous Service: - For  the purposes of this Chapter -  

(1)     a workman shall be said to be in continuous service  for a period if he is, for that period, in uninterrupted  service, including service which may be interrupted on  account of sickness or authorized leave or an accident or  as 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; (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 employer -- (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 -- (i)     one hundred and ninety days in the case  of a    workman employed below ground in a  mine ;  and (ii)    two hundred and forty days, in any other          case;

(b)     for a period of six months, if the workman, during a  period of six calendar months preceding the date with  reference to which calculation is to be made, has actually  worked under the employer not less than --       (i)     ninety five days, in the case of a  workman         employed below ground in a mine;  and  (ii)    one hundred and twenty five days, in any          other case.

Explanation-For the purposes of clause (2), the number of  days on which a workman has actually worked under an  employer shall Include the days on which -- (i)     he has been laid-off under an agreement or as  permitted by Standing Orders made under the Industrial  Employment (Standing Orders) Act, 1946 (20 of 1946), or  under this Act or under any other law applicable to the  industrial establishment; (ii)    he has been on leave with full wages, earned in the  previous years ;  (iii)   he has been absent due to temporary disablement  caused by accident arising out of and in the course of his  employment ; and  (iv)    in the case of a female, she has been on maternity  leave; so however, that the total period of such maternity  leave does not exceed twelve weeks.  

Section 25F - 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 --

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(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 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.                          As per Section 25F, no workman who is in  continuous service for not less than one year under an  employer shall be retrenched by that employer unless  conditions laid therein are fulfilled.  The retrenchment is  defined in Clause (oo) of Section 2 of the Industrial Disputes  Act 14 of 1947 (hereinafter referred to as Act).  Under the  definition termination of the service of a workman by the  employer by any reason whatsoever, otherwise than, as a  punishment,  by way of disciplinary action, would constitute  retrenchment except in cases accepted in the Section  itself,  they   are :- i) a voluntary retirement of a workman; ii)  retirement of a workman on reaching the age of  superannuation; iii) termination of the service of a workman  as a result of non-renewal of the contract of employment; or  iv)termination of the service on the ground of continued ill- health of the workman. Unless these reasons are existed  and proved, termination by the employer of the service of a  workman for any reason, would constitute retrenchment.  Therefore, if the employer is to retrench the workmen  employed in his industry who is in continuous service has to  follow the provisions of Section 25F of the Act.  To attract  provisions of Section 25F, the workman claiming protection  under it, has to prove that there exists relationship of  employer and employee;that he is a workman within the  meaning of Section 2(s) of the Act; the establishment in  which he is employed is an industry within the meaning of  the Act and he must have put in not less than one year of  continuous service as defined by Section 25B  under the  employer.  These conditions are cumulative. If any of these  conditions are missing the provisions of Section 25F will not  attract.  To get relief from the court the workman has to  establish that he has right to continue in service and that his  service has been terminated without complying with the  provisions of Section 25F of the Act.  The Section postulates  three conditions to be fulfilled by an employer for getting a  valid retrenchment, namely :- i)      one month’s clear notice in writing indicating the  reasons for retrenchment or that the workman has  been paid wages for the period of notice in lieu of  such notice;

ii)     payment of retrenchment compensation which  shall be equivalent to 15 days average pay for every  completed year of continuous service or any part  thereof, in excess of six  months;

iii)    a notice to the appropriate Government in the  prescribed manner.

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               To attract the provisions of Section 25F, one of the  condition required is that the workman is employed in any  industry for a continuous period which would not  be not less  than one year.  Section 25B of the Act defines continuous  service for the purposes of Chapter V-A "Lay-off and  Retrenchment".  The purport of this Section is that if a  workman has put in an uninterrupted service of the  establishment, including the service which may be  interrupted on account of sickness, authorized leave, an  accident, a strike which is not illegal, a lock-out or cessation  of work, that is not due to any fault on the part of the  workman, shall be said to be a continuous service, for that  period.  Thus the workmen shall be said to be in continuous  service for one year i.e., 12 months irrespective of the  number of days he has actually worked with interrupted  service, permissible under Section 25B.  However, the  workmen must have been in service during the period, i.e.,  not only on the date when he actually worked but also on  the days he could not work under the circumstances set out  in Sub-Section (1). The workmen must be in the  employment of the employer concerned on the days he has  actually worked but also on the days on which he has not  worked.  The import of  Sub Section(1) of Section 25B is  that the workmen should be in the employment of the  employer for the continuous, uninterrupted period for one  year except the period the absence is permissible as  mentioned hereinabove.  Sub-section (2) of Section 25B  introduces the fiction to the effect that even if the workman  is not in continuous service within the meaning of Clause (i)  of Section 25-B for the period of one year or six months he  shall be deemed to be in continuous service for that period  under an employer if he has actually worked for the days  specified in clause (a) and (b) of Sub-s(2).  By the legal  fiction  of Sub-s2(a) (i), the workmen shall be deemed to be  in continuous service for one year if he is employed  underground in a mine for 190 days  or 240 days in any  other case.  Provisions of the Section postulate that if the  workmen has put in at least 240 days with his employer,  immediately prior to the date of  retrenchment, he shall be  deemed to have served with the employer for a period of  one year to get the benefit of Section 25F.                                   For the purposes of calculation of number of days  worked by the employee, by fiction his days of absence from  work have been included if the workman has been laid off  under an agreement or as permitted by Standing Orders  made under the Industrial Employment (Standing Orders)  Act 1946, (20 of 1946), or under the Industrial Disputes Act  1947, or in any other law applicable to the industrial  establishment; (ii) has been on leave with full wages, earned  in the previous year;  (iii) has been absent due to temporary  disablement caused by accident arising out of and in the  course of employment ; and (iv) has been on maternity  leave, in case the employee is a female, however, that the  total number of such maternity leave does not exceed 12  weeks.                 In S.K. Verma  vs.  The Central Government  Industrial Tribunal-cum-Labour Court, New Delhi, AIR  1981 S.C. 422, speaking for three Judges Bench, O.  Chinnappa Reddy, J. while considering the original provisions  of Section 25B and the amendment brought about by Act 36  of 1964 of Section 25B of the Act, has said that Section 25F  requires that  a workman should be in a continuous service   for not less than  one year under an employer before that

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provision applies.  While so, present, S.25-B(2)  steps in and  says that even if a workman has not been in continuous  service under an employer for a period of one year, he shall  be deemed to have been in such continuous service for a  period of one year, if he has actually worked under the  employer for 240 days in the preceding period of twelve  months.                 In the matter of Mohan Lal   vs. Management  of M/s. Bharat Electronics Ltd., (1981) 3 S.C.C. 225,  this Court has said that sub-s.(2) of Section 25B  comprehends a situation where a workman is not in  continuous service within the meaning of sub-section (1) for  a period of one year or six months, he shall be deemed to be  in continuous service under an employer for a period of 12  months just preceding the date with reference to which  calculation is to be made, has actually worked under that  employer for not less than 240 days.  It is not necessary for  the purpose of Sub-s. (2)(a) that the workman should be in  service for a period of one year and that his service is  continuous service within the meaning of sub-s.(1).  If his  case is governed by sub-s.(1)  then it need not be covered  by sub-s.(2).  Sub-s.(2) envisages  a situation not governed  by sub-s.(1) and sub-s.(2) provides for a fiction to treat a  workman in continuous service for a period of one year  despite the fact that he has not rendered uninterrupted   service for one year but has rendered service for  a period   of 240 days during the period of 12 Calendar months  counting backwards and just preceding the relevant date,  being the date of retrenchment.                 In the matter of Workman of American Express  International Banking Corporation vs. Management of  American Express International  Banking Corporation  reported in 1985 (4) S.C.C. 71, the Court has said that the  explanation of Section 25 B is not exhaustive.  It does not  purport that only those days which are mentioned in the  Explanation to Section 25B(2) of the Act should be taken  into account for the purpose of calculating the number of  days on which the workman had actually worked though he  had not worked on those days.  The Court said that the  expression "actually worked under the employer" is only  clarificatory and cannot be used to limit the expanse of the  main provision.  The expression "actually worked under the  employer" is capable of comprehending the days during  which the workman was in employment and was paid wages  by the employer and there is no reason why the expression  should be limited by the explanation.                     In the matter of Standard Motor Products of  India  Ltd.  vs.  Parthasarthy, (1985) 4 S.C.C. 78, this  Court has said that the actual working for less than 240 days  would include Sundays and other paid holidays if the  workman is in employment of the employer although for less  than a period of 12 months.                 These decisions in unambiguous words laid down  that Sub-s.(1) and (2) of Section 25B comprehends different  situations for the calculation of continuous service for not  less than one year and continuous service which is less than  one year but for 240 days in 12 months preceding the date  of termination under an employer.                 In Mohan Lal  vs. Management of M/s. Bharat  Electronics Ltd. (1981)  3 SCC 225, it is said by this  Court that before a workman can claim  retrenchment  not  being in consonance of Section 25F of the Industrial  Disputes Act, he has to show that he has been in continuous  service of not less than one year with the employer who had  retrenched him from service.  

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               In  Range Forest Officer vs. S.T. Hadimani,  (2002) 3 S.C.C. 25 - (At Page 26, Para 3), this Court  held that "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.  Filing of an affidavit is only his  own statement in his favour and that cannot be regarded as  sufficient evidence for any court or tribunal to come to the  conclusion that a workman had, in fact, worked for 240 days  in a year.  No proof of receipt of salary or wages for 240  days or order or record of appointment or engagement for  this period was produced  by the workman.  On this ground  alone, the award is liable to be set aside."                 More recently, in Rajasthan State Ganganagar  S. Mills Ltd. vs. State of Rajasthan & Another, (2004) 8  S.C.C. 161,  Municipal Corporation, Faridabad  vs. Siri  Niwas, (2004) 8 S.C.C. 195 and  M.P. Electricity Board  vs. Hariram,  (2004) 8 S.C.C. 246, this Court has  reiterated the principal 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 alleged  retrenchment and it is for the workman to adduce an  evidence apart from examining himself to prove the factum  of his being in employment of the employer.                   In the light of the aforesaid, it was necessary for  the workman to produce the relevant material to prove that  he has actually worked with the employer for not less than  240 days during the period twelve calendar months  preceding the date of termination. What we find is that apart  from the oral evidence the workman has not produced any  evidence to prove the fact that he has worked for 240 days.  No proof of receipt of salary or wages or any record or order  in that regard was produced; no co-worker was examined;  muster roll produced by the employer has not been  contradicted.  It is improbable that workman who claimed to  have worked with the appellant for such a long period would  not possess any documentary evidence to prove nature of  his engagement and the period of work he had undertaken  with his employer.  Therefore, we are of the opinion that the  workman has failed to discharge his burden that he was in  employment for 240 days during the preceding 12 months of  the date of termination of his service.  The Courts below  have wrongly drawn an adverse inference for non production  of the record of the workman for ten years.  The scope of  enquiry before the Labour Court was confined to only 12  months preceding the date of termination to decide the  question of continuation of service for the purpose of Section  25F of the Industrial Disputes Act.  The workman has never  contended that he was regularly employed  in the Panchayat  for one year to claim the uninterrupted period of service as  required under Section 25B(1) of the Act. In the fact &  situation and in the light of the law on the subject, we find  that the workman-respondent is not entitled for the  protection or compliance of Section 25F of the Act before his  service was terminated by the employer. As regards non- compliance of Sections 25G and 25H suffice is to say that   Witness Vinod Mishra examined by the appellant has stated  that no seniority list was maintained by the department of  daily wagers.  In the absence of regular employment of the  workman, the appellant was not expected to maintain

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seniority list of the employees engaged on daily wages and  in the absence of any proof by the respondent regarding  existence of the seniority list and his so called seniority no  relief could be given to him for non-compliance of   provisions of the Act.  The courts could have drawn adverse  inference against the appellant only when seniority list was  proved to be in existence and then not produced before the  court.  In order to entitle the court to draw inference  unfavourable to the party, the court must be satisfied that  evidence is in existence and could have be proved.                 As a result of the discussion above, the appeal is  allowed.  The orders passed by the Labour Court and the  High Court are set aside.  However, as a result of the order  passed by the Labour Court, if the respondent was employed  in service, the wages paid to him shall not be recovered.  There shall be no order as to the cost.