Ram Manohar Lohia Joint Hospital vs Munna Prasad Saini on 20 September, 2021


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Supreme Court of India

Ram Manohar Lohia Joint Hospital vs Munna Prasad Saini on 20 September, 2021

Author: Sanjiv Khanna

Bench: Sanjiv Khanna, Hon’Ble Ms. Trivedi

                                                                                    NON-REPORTABLE

                                                IN THE SUPREME COURT OF INDIA

                                                  CIVIL APPELLATE JURISDICTION

                                                  CIVIL APPEAL NO. 5810 OF 2021
                          (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 9097 OF 2019)

                          RAM MANOHAR LOHIA JOINT HOSPITAL
                          AND OTHERS                                             .....   APPELLANTS(S)

                                                        VERSUS

                          MUNNA PRASAD SAINI AND ANOTHER                         ..... RESPONDENT(S)




                                                          JUDGMENT

SANJIV KHANNA, J.

Leave granted.

2. The appellants, Ram Manohar Lohia Joint Hospital and two

others, have filed this appeal taking exception to the order and

judgment dated 15.11.2018 whereby Lucknow Bench of the High

Court of Judicature at Allahabad has upheld the order dated

20.01.2010 passed by the Labour Court, Lucknow directing

reinstatement of the first respondent herein, namely, Munna

Signature Not Verified
Prasad Saini along with compensation of Rs.20,000/- (rupees
Digitally signed by Dr.
Mukesh Nasa

twenty thousand only) for the period of unemployment and
Date: 2021.09.20
18:07:47 IST
Reason:

entitlement to full pay from the date of the said order.

Civil Appeal arising out of SLP (C) No. 9097 of 2019 Page 1 of 9

3. We have heard counsel for the parties at length and are inclined

to partly interfere with the impugned order.

4. The first aspect in the dispute is whether the first respondent

workman was an employee of the second respondent, namely,

Bombay Intelligence Security (I) Ltd. or an employee of the

appellant Hospital.

5. The Presiding Officer, Labour Court, Lucknow, Uttar Pradesh, in

his order dated 20.01.2010, has held that the first respondent was

the employee of the appellant and not of the second respondent.

In arriving at this conclusion, the Labour Court has relied upon the

attendance register/duty chart and the medicine intend book of

male ward from September 2003 to June 2005. The Labour Court

also records that in spite of direction given to the appellant to

produce the attendance register/duty chart for the period, the

records were not produced. In addition, the Labour Court has

referred to the affidavit filed by the workman, and a copy of the

duty chart for April and May, 2005, a copy of the salary payment

register of July, 2004 and a copy of joining report and certificate

issued by the appellant, all enclosed with the affidavit.

Photocopies of these documents were obtained from the appellant

by one Suraj Ram under the Right to Information Act, 2005. The

Civil Appeal arising out of SLP (C) No. 9097 of 2019 Page 2 of 9
Labour Court also took into account the ocular evidence of the first

respondent that he had applied for the said post pursuant to

newspaper advertisement dated 11.04.2003 and thereafter was

appointed as a ward boy in the appellant hospital on a monthly

salary of Rs.2,950/- on 01.09.2003.

6. Learned counsel for the appellant submitted that the first

respondent had impleaded the second respondent as respondent

No.3 before the Labour Court, Lucknow and in paragraph 19 of

the details of the dispute, had referred to the Contract Labour

(Regulation and Abolition) Act, 1970. It is asserted in the said

paragraph that the appellant and the second respondent were

neither registered under the aforesaid Act nor was the registration

certificate issued by the Department of Labour. Our attention was

drawn to Annexure P-1 to the present appeal which is a copy of

Form No.6 issued by the Deputy Labour Commissioner, Lucknow,

Uttar Pradesh, whereby a licence was granted under the aforesaid

Act to the second respondent. The licence mentions the date of

amendment, fee paid for renewal and the date of expiry.

7. We have considered these documents but would not like to

interfere with the factual findings recorded by the Labour Court,

which has been affirmed by the High Court with respect to the

engagement of the first respondent by the appellant hospital. It
Civil Appeal arising out of SLP (C) No. 9097 of 2019 Page 3 of 9
has been explained to us that the first respondent had impleaded

the second respondent as a co-respondent in view of the stand

taken by the appellant regarding the first respondent’s

engagement through the second respondent, which factum was

disputed by the first respondent. No doubt, the appellant has also

placed before us Annexure P-4, an agreement dated 01.04.2003

between the appellant and the second respondent for engaging

contractual workers, including 12 ward boys/aya/patient helpers,

but this contract states that the payment will be made by the

appellant to the second respondent every month within one week

from the date of receipt of bill, which if required will be rectified to

meet valid objections of the appellant. The reason why we would

not like to rely upon the said agreement is that the Labour Court

took notice of documents like attendance register/duty chart, copy

of the joining report, salary payment register, etc. and then arrived

at the conclusion with respect to the employer-employee

relationship. The agreement would not by itself be a determinative

factor as the first respondent is not a party to the agreement. The

factual finding of the Labour Court is comprehensive and requires

no interference.

Thus, we are unable to accept the first contention of the

appellant on the question of employer-employee relationship.

Civil Appeal arising out of SLP (C) No. 9097 of 2019 Page 4 of 9

8. However, on the question of reinstatement and compensation

payable, we are inclined to accept the alternative submissions

made by the appellant. The appellant is a hospital run by the State

Government which requires approval of the State Government for

creation of regular posts and for recruitment and appointment. The

procedure as prescribed under the relevant extant rules has to be

followed. The first respondent has not asserted or claimed that the

procedure prescribed was followed for his selection and

appointment. On the other hand, the appellant is right in relying

upon letter dated 30.03.1999 issued by the Special Secretary,

Government of Uttar Pradesh granting permission to appoint 28

workers on contractual basis at the appellant hospital. Thereafter,

by another letter dated 29.03.2003, the Assistant Secretary,

Government of Uttar Pradesh, had granted approval for 106 posts

to be held on contract and creation of 111 posts in the regular

pay-scale. With regard to the posts to be filled on contract, fixed

salary was payable and no other facility was to be provided to

such employees. Before granting further benefits or facilities,

approval of the Government was necessary. It is the case of the

first respondent that he was appointed on a fixed salary and was

neither entitled to nor granted any perks or other facilities. The

appellant has placed before us the list of 111 regular posts, which

does not include ward boys. On the other hand, the list of 106
Civil Appeal arising out of SLP (C) No. 9097 of 2019 Page 5 of 9
contractual posts states that 35 ward boys/maids had to be

appointed.

9. Therefore, the appointment of the first respondent was on

contractual basis and not to a regular post on proper selection in

terms of the rules. Pertinently, the respondent has not indicated

his educational qualifications and whether he has necessary

qualifications to work as a nurse or a ward boy. It is also obvious

that the contractual term was over. In other words, the first

respondent had worked with the appellant during the period

September, 2003 to June, 2005. He has not worked thereafter.

There is nothing on record to show and establish the appellant

had not followed the rule ‘last to come, first to go’. This is neither

alleged nor proved.

10. In Deputy Executive Engineer v. Kuberbhai Kanjibhai,1 this

Court had referred to several earlier judgments and had quoted

with approval the ratio as expounded in Bharat Sanchar Nigam

Limited v. Bhurumal,2 to the following effect:

“33. It is clear from the reading of the aforesaid judgments
that the ordinary principle of grant of reinstatement with full
back wages, when the termination is found to be illegal is
not applied mechanically in all cases. While that may be a
position where services of a regular/permanent workman
are terminated illegally and/or mala fide and/or by way of
victimisation, unfair labour practice, etc. However, when it
1
(2019) 4 SCC 307
2
(2014) 7 SCC 177
Civil Appeal arising out of SLP (C) No. 9097 of 2019 Page 6 of 9
comes to the case of termination of a daily-wage worker
and where the termination is found illegal because of a
procedural defect, namely, in violation of Section 25-F of
the Industrial Disputes Act, this Court is consistent in taking
the view that in such cases reinstatement with back wages
is not automatic and instead the workman should be given
monetary compensation which will meet the ends of justice.
Rationale for shifting in this direction is obvious.

34. The reasons for denying the relief of reinstatement in
such cases are obvious. It is trite law that when the
termination is found to be illegal because of non-payment
of retrenchment compensation and notice pay as
mandatorily required under Section 25-F of the Industrial
Disputes Act, even after reinstatement, it is always open to
the management to terminate the services of that employee
by paying him the retrenchment compensation. Since such
a workman was working on daily-wage basis and even after
he is reinstated, he has no right to seek regularisation [see
State of Karnataka v. Umadevi (3)]. Thus when he cannot
claim regularisation and he has no right to continue even
as a daily-wage worker, no useful purpose is going to be
served in reinstating such a workman and he can be given
monetary compensation by the Court itself inasmuch as if
he is terminated again after reinstatement, he would
receive monetary compensation only in the form of
retrenchment compensation and notice pay. In such a
situation, giving the relief of reinstatement, that too after a
long gap, would not serve any purpose.

35. We would, however, like to add a caveat here. There
may be cases where termination of a daily-wage worker is
found to be illegal on the ground that it was resorted to as
unfair labour practice or in violation of the principle of last-
come-first-go viz. while retrenching such a worker daily
wage juniors to him were retained. There may also be a
situation that persons junior to him were regularised under
some policy but the workman concerned terminated. In
such circumstances, the terminated worker should not be
denied reinstatement unless there are some other weighty
reasons for adopting the course of grant of compensation
instead of reinstatement. In such cases, reinstatement
should be the rule and only in exceptional cases for the
reasons stated to be in writing, such a relief can be denied.”

Civil Appeal arising out of SLP (C) No. 9097 of 2019 Page 7 of 9

11. This dictum was again followed in State of Uttarakhand and

Another v. Raj Kumar3 and Ranbir Singh v. Executive Eng.

P.W.D.4

12. In view of the facts stated above, it is clear that the first

respondent was not a permanent employee but a contractual

employee. There is no evidence to establish that the appellant had

retained junior workers; such unfair trade practice is not alleged or

even argued before us. The first respondent having worked for

more than 240 days, termination of his services violated the

mandatory provisions of Section 25F of the Industrial Disputes

Act, 1947. Therefore, in the facts of the present case, we modify

the order of the Labour Court by setting aside the direction for

reinstatement and would enhance the compensation by awarding

a lump sum amount.

13. The High Court had stayed reinstatement of the first respondent

but no order under Section 17B of the Industrial Disputes Act was

passed. The first respondent has, however, filed an application

before this Court under Section 17B to direct the appellant to pay

the “last drawn wages”.

3
(2019) 14 SCC 353
4
2021 SCC OnLine SC 670
Civil Appeal arising out of SLP (C) No. 9097 of 2019 Page 8 of 9

14. In view of the aforesaid factual position, we are inclined to award a

lump sum compensation of Rs.10,00,000/- (rupees ten lakhs only)

to the first respondent.

15. The appeal is, accordingly, partly allowed setting aside the

direction for reinstatement, which is substituted with the direction

of award of lump sum compensation of Rs.10,00,000/- (rupees ten

lakhs only). The said amount would be paid within a period of ten

weeks from the date of this order. In case payment is not made

within the said period, the appellant would be liable to pay simple

interest @ 0.5% per month from the date of this order till payment

is made.

………………………………..J.
(R. SUBHASH REDDY)

………………………………..J.

(SANJIV KHANNA)
NEW DELHI;

SEPTEMBER 20, 2021.

Civil Appeal arising out of SLP (C) No. 9097 of 2019 Page 9 of 9



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