Hotel Corporation Rajasthan Th Vs Rameshwar Lal and Ors.

The present writ petition is directed against award dated 08.03.2001 passed by the Labour Court-I, Jaipur (hereinafter to be referred as 'the Labour Court'), whereby the termination of Respondent No.1–workman was held to be in violation of Section 25F of the Industrial Disputes Act, 1947 (hereinafter to be referred as 'the Act of 1947') and the petitioner–employer was directed to reinstate the workman with continuity of service. However, wages for the intervening period were denied to the workman by the Labour Court. Aggrieved thereby, the employer has invoked the supervisory and constitutional jurisdiction of this Court under Articles 226 and 227 of the Constitution of India.

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The factual matrix, in brief, reveals that Respondent No. 1–workman was engaged by the petitioner on daily wages basis for

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a limited period on 09.06.1989. His engagement was not pursuant to any regular process of recruitment, nor against a sanctioned post. Upon discontinuance of his services on 29.03.1990, an industrial dispute was raised, culminating in the impugned award dated 08.03.2001. The Labour Court, while recording a finding that the mandatory requirements of Section 25F of the Act were not complied with, proceeded to grant the relief of reinstatement along with continuity in service. However, relief with regard to grant of wages for the intervening period was denied to Respondent No. 1- workman.

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Instead of challenging the findings of the Labour Court relating to illegality of termination in entirety, learned counsel appearing for the petitioner confined his arguments only to the question of relief and contended that the Labour Court committed a manifest error in granting reinstatement as a matter of course merely upon finding violation of Section 25F of the Act of 1947. It was urged that Respondent No. 1-workman, who was engaged purely as a daily wager, had rendered only short-term service and was never appointed through a regular selection process. Learned counsel further submitted that there was a long lapse of time between the date of termination and the adjudication of the dispute, during which period the very nature of the employer’s establishment/ department has undergone substantial change. Reliance was placed upon catena of decisions of the Hon’ble Supreme Court, including Ranbir Singh v. Executive Engineer PWD (2021) 14 SCC 815 , State of Uttarakhand & Another v. Raj Kumar (2019) 14 SCC 353 and recent decision of Hon’ble

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Supreme Court in the case of Amit Kumar Dubey v. M.P.P.K.V.V. Co. Ltd. & Another, (SLP (Civil) No. 20902/2024 decided on 29.01.2025), to contend that reinstatement is not an automatic consequence of a technical violation of Section 25F and that monetary compensation would meet the ends of justice.

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Despite service, no one is present on behalf of Respondent No. 1-workman to argue the matter.

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The principal question that arises for consideration before this Court is that whether the Labour Court was justified in granting the relief of reinstatement merely on account of violation of Section 25F of the Act of 1947, or whether the award deserves to be modified by substituting reinstatement with monetary compensation.

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It is no longer res integra that violation of Section 25F of the Act of 1947 renders the retrenchment illegal. However, the more nuanced and settled position of law is that the nature of relief consequent to such illegality is not automatic and must depend upon the facts and circumstances of each case. The earlier approach of treating reinstatement as an inevitable consequence has undergone a marked and reasoned shift.

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The Hon’ble Supreme Court in the case of Bharat Sanchar Nigam Limited v. Bhurumal (2014) 7 SCC 177 , followed consistently in subsequent decisions including Ranbir Singh (supra) and State of Uttarakhand & Another v. Raj Kumar (supra) , has clearly held that in cases involving daily wagers, ad hoc or contractual employees, particularly where the engagement was for a short duration and the dispute has been

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adjudicated after a long lapse of time, monetary compensation is a more appropriate and equitable relief than reinstatement. The Hon'ble Apex Court has cautioned against mechanical reinstatement which may disturb the administrative and financial equilibrium of the employer.

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In Ranbir Singh (supra) , despite holding that Section 25F of the Act of 1947 was violated, the Hon'ble Supreme Court declined reinstatement and awarded lump sum compensation, observing that there was no material to suggest unfair labour practice or victimization. Similarly, in Amit Kumar Dubey (supra) , the Hon'ble Supreme Court reiterated that reinstatement should not be granted as a matter of routine and emphasised proportional compensation based on length of service @ Rupees 1.5 Lakh per year for the period the employee had worked.

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Co-ordinate Bench of this Court in the case of State of Rajasthan & Others v. Bhagwan Das & Another, 2015 SCC OnLine Raj 8518 and other decisions following the same line, has consistently adopted the principle that reinstatement of daily wagers after decades of litigation serves neither industrial harmony, nor justice and compensation is a pragmatic substitute.

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Applying the aforesaid principles to the facts of the present case, it is evident that Respondent No. 1 was engaged as a daily wager, dehors any regular recruitment process and had rendered limited service. There is no finding recorded by the Labour Court of any mala fide action, unfair labour practice, or retention of juniors in violation of Sections 25G or 25H of the Act. Moreover, a considerable period has elapsed since the date of termination. In

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such circumstances, directing reinstatement would be wholly disproportionate and contrary to the settled legal position.

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This Court is conscious that the jurisdiction under Articles 226 and 227 of the Constitution of India is not appellate in nature; however, where the Labour Court grants relief in disregard of binding precedents and settled principles of law, interference is not only permissible, but necessary to prevent miscarriage of justice.

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For the foregoing reasons, this Court is of the considered view that while the finding of the Labour Court regarding violation of Section 25F of the Act of 1947 does not warrant interference, the relief of reinstatement granted to Respondent No. 2–workman cannot be sustained.

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Accordingly, the writ petition is partly allowed. The impugned award dated 08.03.2001 passed by the Labour Court is modified to the extent that the direction of reinstatement with continuity of service is set aside. In lieu thereof, Respondent No. 1– workman shall be entitled to lump sum monetary compensation of Rs. 1,50,000/- (Rupees One Lac and Fifty Thousands) for the period of one year, the workman had worked, taking into account the nature of engagement, length of service, and the time elapsed since termination. The said amount shall be paid by the petitioner within a period of 8 weeks from the date of receipt of certified copy of this judgment, failing which Respondent No.1-workman shall be entitled to interest @ 9% per annum.

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(ANAND SHARMA),J

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MANOJ NARWANI /3

Hotel Corporation Rajasthan Th v. Rameshwar Lal and Ors.

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Hotel Corporation Rajasthan Th v. Rameshwar Lal and Ors.

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