Partly allowed

The Patancheru Municipality, Medak District, v. M. Shanker

Telangana HC1 Mar 2012WA/1300/2011

Case brief

AI extract

What is this about?

The Division Bench dismissed writ appeals filed by the Greater Hyderabad Municipal Corporation against Labour Court awards reinstating terminated sanitation workers. The court held the workers were 'workmen' within Section 2(s) and their termination without compliance with Section 25-F constituted illegal retrenchment.

What did the court decide?

The writ appeals were dismissed, directing the appellant to reinstate the respondent-workmen into service forthwith within two weeks from the date of receipt of the order.

The Patancheru Municipality, Medak District, Vs M… — Service and Employment | Telangana HC (2012)

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HON’BLE SRI JUSTICE V.ESWARAIAH AND HON’BLE SRI JUSTICE K.G.SHANKAR

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Writ Appeal Nos.1236 of 2011; 302, 958, 966 and 967 of 2010; 1244, 1238, 1239, 1245, 1247, 1255, 1256, 1262, 1269, 1274, 1276, 1300, 1302, 1308, 1311, 1322, 1323, 1324, 1326, 1376, 1373, 1372, 1374, 1375, 1303 and 1389 of 2011

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Date: 01-3-2012

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Between

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The Patancheru Municipality, Medak district,

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Now presently Greater Hyderabad Municipal Corporation, Circle XIII, Rep. by its Commissioner & Special Officer, Tank Bund, Hyderabad

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… Appellant/Petitioner

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and

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K.Srinivas Chary and others

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… Respondents/Respondents

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HON’BLE SRI JUSTICE V.ESWARAIAH AND

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HON’BLE SRI JUSTICE K.G.SHANKAR

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Common Judgment: (per V.Eswaraiah, J.)

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The Greater Hyderabad Municipal Corporation

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(the GHMC, for short), Circle XIII, represented by its Commissioner, filed all these writ appeals against the common order of the learned single Judge dated 30-12-2009 in W.P.No.17425 of 2009 and batch.

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The writ petitions also are filed by the appellant questioning the common award dated 04-3-2009 in various I.Ds filed by the respondents. The I.Ds were filed by the respondents before the Labour Court II, Hyderabad, raising a dispute under Section 2-A(2) of the Industrial Disputes Act, 1947 (the Act, for short) questioning the termination order dated 01-4-2006. All the said I.Ds were allowed partly and the termination order dated 01-4-2006 was set aside and the respondentappellant herein was directed to reinstate the said workmen into service with continuity of service, but without back wages and attendant benefits. The learned single Judge by the impugned common order dismissed the writ petitions. Aggrieved by the same, these writ appeals are filed.

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2. The undisputed facts of the case are that all the respondents herein were originally appointed on 01-4-1992 as NMR Non Public Health Workers on contract basis for sanitation work in the then Gram Panchayat of Medak district. To meet the expenditure towards their wages, the Government vide its Memo No.10219/Estt.4/1989, dated 09-01-1989, permitted to

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incur the expenditure and accordingly the then Patancheru Gram Panchayat engaged the services of the respondents on contract basis initially for a period of one year from 01-4-1992 to 31-3-1993 and the said contract was renewed from year to year regularly without any break up to 31-3-2006. From 01-4-2006 their services were terminated and they were not allowed to the sanitation work. Aggrieved by the said action of the then Gram Panchayat, which was later converted into a Municipality and thereafter merged with the GHMC, in terminating their services without giving one month notice and without assigning any reasons by passing an order of retrenchment in writing and without following the principles of natural justice an industrial dispute was raised as the said action was illegal and unsustainable and that there was no dispute with regard to their continuous work for a period of 14 years and though they were engaged as contract labour year after year without any break, but, in fact, they are workmen within the meaning of Section 2(s) of the Act in an industry i.e. the then Gram Panchayat, presently the Municipality and now the GHMC, which is an industry as defined under Section 2(j) of the Act and therefore, and that their termination of services is in violative of Section 25-F of the Act. It is stated that under Section 25 of the Act,

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no workman employed in any industry who has been in continuous service for a period of 240 days in an year can

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be retrenched without giving one month notice in writing, indicating the reasons for retrenchment and without paying the month’s pay in lieu of the said notice period of one month.

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3. It was the case of the then Patancheru Municipality that the respondents-workmen were not appointed on 01-4-1992 as NMR workers and there was no appointment order but they were employed from time to time for utilizing their services on a fixed remuneration for the fixed period and therefore, it cannot be said that they were appointed as NMRs.

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4. Before the Labour Court, on behalf of the respondents, the workman was examined as W.W.1 and marked Exs.W-1 and W-2 and on behalf of the appellant, M.W.1 was examined and three documents Exs.M-1 to M- 3 were marked. Ex.M-1 is the proceedings of the Collector permitting to incur expenditure on contract basis from year to year from the funds of the Gram Panchayat for the payment of the wages to the respondents contract labour, Ex.M-2 is ten Acquittance Registers of the employees in proof of working of the respondents from 014-1992 to 31-3-2006 i.e. for a period of 14 years and Ex.M-3 is the Attendance Registers containing nine registers.

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The witness, who was examined on behalf of the appellant through whom the said documents were

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marked, admitted that all the respondents-workmen were appointed as per the proceedings issued by the Collector under Ex.M-1 and the common order of termination was given by the Municipality terminating the services of the respondents. He further admitted that all of them were working with the Gram Panchayat, which was converted into Municipality and salaries are being paid to them from the funds of the Gram Panchayat, which later became a Municipality and the Gram Panchayat/ Municipality also maintained Acquittance Registers during the said period and the particulars of the salary paid to them disclosed in the said Acquittance Registers about their attendance and payment of wages and the respondents-workmen were terminated without giving any notice and one month payment in lieu of the notice was also not paid.

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5. Thus, the Labour Court based on records found that the respondents-workmen have been working continuously from 01-4-1992 to 31-3-2006 and therefore, their termination is in violation of Section 25-F of the Act. However, the Labour Court, having regard to the facts and circumstances of the case, directed for their reinstatement into service with continuity of service, but without back wages and attendant benefits. Accordingly, the I.Ds were allowed and termination orders were set aside directing for their reinstatement into service with continuity of service, but without back wages and attendant benefits.

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6. The learned single Judge while rejecting the contention of the Municipality held that the Municipality is an industry in view of the law laid down by the Hon’ble Supreme Court in the case of BANGALORE WATER

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SUPPLY & SEWERAGE BOARD v. A.RAJAPPA^[1] and the scope of judicial review under Article 226 of the Constitution of India, opined that the findings of the Labour Court was based on the evidence available on record and declined to interfere with the findings on facts recorded by the Labour Court and held that as admittedly, no prior notice was given under Section 25-F of the Act disengaging the workmen while admitting that they have worked for more than 240 days preceding their termination and the said termination is not in accordance with Section 25-F of the Act and accordingly, while holding that the decision in the case of M.D., KARNATAKA HANDLOOM DEV. CORPN. LTD v. MAHADEVA LAXMAN RAVAL^[2] is not applicable to the facts of the case for the instant case, dismissed the writ petitions.

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The learned Standing Counsel appearing for the appellant-GHMC submits that the law laid down by the Hon’ble Supreme Court in the case of M.D., KARNATAKA HANDLOOM DEV. CORPN. LTD (2 supra) is squarely applies to the instant case and it is stated that in the said case also, the services of the workmen were engaged on contract basis for a period of 9 months and in

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that case also, the Labour Court allowed the I.D., which was confirmed by the High Court but the Supreme Court set aside the same and held that the engagement was purely contractual and when once the period is over, the contract gets automatically terminated and therefore, the question of allowing the procedure under

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Section 25-F of the Act does not arise. It is stated that this case also falls under the provisions of Section 2(oo)(bb) of the Act and as the respondents herein were engaged only on contract basis and the onus with regard to their appointment as NMR workers is on the workmen but they have failed to discharge the said onus and the onus with regard to their working for more than 240 days cannot be shifted on the employer.

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We have carefully perused the aforesaid judgment of the Hon’ble Supreme Court. In the said case, the appointment was made for a period of nine months. As per the appointment order, the workman was appointed as expert weaver on a stipend of Rs.1,000 per month for a period of nine months on the terms and conditions contained therein. As per the terms and conditions, his appointment is purely contractual and the term of contract will be for 9 months and he will be liable for termination without any notice and without payment of any compensation and without assigning any reasons thereof at any time during the period of contract and the contract of his appointment stands automatically

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terminated on the expiry of nine months from the date of his reporting for duty. The Supreme Court held that he was appointed to supervise the weaving but he was not a workman in the employment of the employer but he was a weaver in the area as any other weaver in the area and was getting certain concessions from the Corporation. The appointment was made under a specific scheme, which scheme was discontinued in the next year of his appointment and the contract was ended and therefore, it was held that his discontinuance is not a dismissal or termination and is not a retrenchment and therefore, it does not attract compliance of Section 25-F of the Act. The Supreme Court further held that discontinuance of the contract cannot be treated as a retrenchment as per clause (bb) of Section 2(oo) of the Act. It is stated that the engagement of the workman itself was temporary in nature and he was being paid only an honorarium for supervising the work during the particular scheme.

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7. Whereas, in the instant case, the sanitation work is perennial and continuous in nature. The aforesaid documents and registers such as Attendance Registers, Acuittance Registers, payments of wages indicate that the services of the respondents-workmen were taken up without any break in service and without discharging them. The respondents-workmen are not seeking any regularization contrary to the provisions of the Contract

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Labour (Regulation and Abolition) Act, 1970 but their case is that admittedly they have been working continuously and before their termination, they worked for more than 240 days and therefore, termination of their services is in violation of Section 25-F of the Act.

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It is not a retrenchment within the meaning of Section 2(oo) of the Act and it is not the case of voluntary retirement or retirement of the workman on reaching the age of superannuation or the termination of the services of the 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 termination of the service of

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a workman on the ground of continued ill health.

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Whether such retrenchment is retrenchment within the exception under Section 2(oo)(bb) of the Act, the said question has been considered by the Hon’ble Supreme Court in a recent judgment in DEVINDER SINGH v.

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MUNICIPAL COUNCIL, SANAUR^[3] and the relevant paras are as follows:

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“9. We have considered the respective submissions and carefully perused the record. Sections 2(oo), 2(s) and 25-F of the Act which have a bearing on the decision of this appeal read as under:

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**“2.Definitions.-- * * ***

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(oo) ‘retrenchment’ means the termination by the employer of the service of a workman for any reason

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whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include--

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(a) voluntary retirement of the workman; or

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(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 the 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

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(c) termination of the service of a workman on the ground of continued ill health;

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(s) ‘workman’ means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person--

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(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or

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(ii) who is employed in the police service or as an officer or other employee of a prison; or

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(iii) who is employed mainly in a managerial or administrative capacity; or

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(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

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25-F. Conditions precedent to retrenchment of workmen.- No workman employed in any industry who

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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:

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(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

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(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.”

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10. The definition of the term “retrenchment” is quite comprehensive. It covers every type of termination of the service of a workman by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action. The cases of voluntary retirement of the workman, retirement on reaching the age of superannuation, termination of service as a result of non renewal of the contract of employment or of such contract being terminated under a stipulation contained therein or termination of the service of a workman on the ground of continued ill health also do not fall within the ambit of retrenchment.

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11. In SBI v. N.Sundara Money (1976) 1 SCC 822, a three-Judge Bench of this Court analysed section 2(oo) and held: (SCC pp.826-27, para 9)

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"9. ….. ‘Termination ... for any reason whatsoever' are the key words. Whatever the reason, every termination spells retrenchment. So the sole question is, has the employee's service have been terminated? Verbal apparel apart, the substance is decisive. A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term. To protect the weak against the strong this policy of

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comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, but the fact of termination howsoever produced. May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of Section 25-F and Section 2(oo). Without speculating on possibilities, we may agree that 'retrenchment' is no longer terra incognita but area covered by an expansive definition. It means 'to end, conclude, cease'.”

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The ratio of the aforementioned judgement was approved by the Constitution Bench in Punjab Land Development and Reclamation Corpn. Ltd. v. Labour Court (1990) 3 SCC 682.

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12. Section 2(s) contains an exhaustive definition of the term “workman”. The definition takes within its ambit any person including an apprentice employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward and it is immaterial that the terms of employment are not reduced into writing. The definition also includes a person, who has been dismissed, discharged or retrenched in connection with an industrial dispute or as a consequence of such dispute or whose dismissal, discharge or retrenchment has led to that dispute. The last segment of the definition specifies certain exclusions. A person to whom the Air Force Act, 1950 or the Army Act, 1950 or the Navy Act, 1957 is applicable or who is employed in police service as an officer or other employee of a prison or who is employed mainly in managerial or administrative capacity or who is employed in a supervisory capacity and is drawing specified wages per mensem or exercises mainly managerial functions does not fall within the definition of the term “workman”.

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13. The source of employment, the method of recruitment, the terms and conditions of employment/contract of service, the quantum of wages/pay and the mode of payment are not at all relevant for deciding whether or not a person is a

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workman within the meaning of section 2(s) of the Act. It is apposite to observe that the definition of workman also does not make any distinction between full-time and parttime employee or a person appointed on contract basis. There is nothing in the plain language of Section 2(s) from which it can be inferred that only a person employed on regular basis or a person employed for doing wholetime job is a workman and the one employed on temporary, part- time or contract basis on fixed wages or as a casual employee or for doing duty for fixed hours is not a workman.

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14. Whenever an employer challenges the maintainability of industrial dispute on the ground that the employee is not a workman within the meaning of Section 2(s) of the Act, what the Labour Court/Industrial Tribunal is required to consider is whether the person is employed in an industry for hire or reward for doing manual, unskilled, skilled, operational, technical or clerical work in an industry. Once the test of employment for hire or reward for doing the specified type of work is satisfied, the employee would fall within the definition of “workman”.

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15. In Birdhichand Sharma v. Civil Judge (1961) 3 SCR 161 this Court considered the question whether bidi rollers were workmen within the meaning of the term used in the Factories Act, 1948. The factual matrix of the case reveals that the workers who used to roll the bidis had to work at the factory and were not at liberty to work at their houses. Their attendance was noted in the factory and they had to work within the factory, though there was freedom of doing work for particular hours. They could be removed from service on the ground of absence for eight days. The wages were paid on piece-rate basis. After considering these facts, the Court held that the bidi rollers were workmen. The Court observed that when the operation was of a simple nature and did not require supervision, the control could be exercised at the end of the day by the method of rejecting bidis which did not meet the required standard and such supervision was sufficient to establish the employer-employee relationship.

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16. In Silver Jubilee Tailoring House v. Inspector of Shops and Establishments (1974) 3 SCC 498 the three-Judge Bench held that the tailors employed in a tailoring shop, who were paid according to their skill and work and the quality of whose work was regularly checked were employees covered by the Andhra Pradesh (Telangana Area) Shops and Establishments Act, 1951. I n L.Robert D'Souza v. Southern Railway (1982) 1 SCC 645 the Court held that even a daily- rated worker would be entitled to protection of Section 25-F of the Act if he had continuously worked for a period of one year or more.

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17. Section 25-F is couched in a negative form. It imposes a restriction on the employer's right to retrench a workman and lays down that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched until he has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired or he has been paid wages for the period of notice and he has also been paid, at the time of retrenchment, compensation equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months and notice in the prescribed manner has been served upon the appropriate Government or the authority as may be specified by the appropriate Government by notification in the Official Gazette.

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18. This Court has repeatedly held that the provisions contained in Section 25-F (a) and (b) are mandatory and termination of the service of a workman, which amounts to retrenchment within the meaning of Section 2(oo) without giving one month's notice or pay in lieu thereof and retrenchment compensation is null and void/illegal/inoperative - State of Bombay v. Hospital Mazdoor Sabha AIR 1960 SC 610, Bombay Union of Journalists v. State of Bombay AIR 1964 SC 1617, SBI v. N.Sundara Money (supra), Santosh Gupta v. State Bank of Patiala (1980) 3 SCC 340, Mohan Lal v. Bharat Electronics Ltd. (1981) 3 SCC 225, L.Robert D'Souza v. Southern Railway (supra), Surendra Kumar Verma v.

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Central Government Industrial Tribunal-cum-Labour Court (1980) 4 SCC 443, Gammon India Ltd. v. Niranjan Dass (1984) 1 SCC 509, Gurmail Singh v. State of Punjab (1991) 1 SCC 189 and Pramod Jha v. State of Bihar (2003) 4 SCC 619.

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19. In Anoop Sharma v. Public Health Division (2010) 5 SCC 497, the Court considered the effect of violation of Section 25-F, referred to various precedents on the subject and held the termination of service of a workman without complying with the mandatory provisions contained in Section 25-F (a) and (b) should ordinarily result in his reinstatement.”

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8. Therefore, we are of the opinion that the plea taken by the appellant-GHMC that the action taken by it covered by Section 2(oo)(bb) of the Act is clearly misconceived and cannot be entertained, and, however, such plea was not at all taken by the appellant-GHMC before the Labour Court or before the learned single Judge and therefore, the Certiorari jurisdiction under Article 226 of the Constitution of India is for correcting errors of jurisdiction i.e. when a tribunal or subordinate court is found to have acted without jurisdiction or by assuming jurisdiction where there exists none, or in excess of its jurisdiction by overstepping or crossing the limits of jurisdiction, or acting in flagrant disregard of law or the rules of procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice.

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9. Therefore, we do not see any grounds to interfere with the common order of the learned single Judge

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confirming the common awards passed by the Labour Court. Accordingly, we are not inclined to interfere with the said common order passed by the learned single Judge and therefore, the appeals are liable to be dismissed.

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Though the writ petitions were dismissed on 30-12-2009 i.e. more than two years back, the appellantGHMC has not reinstated the respondents-workmen into service. It is stated that they are working under some agency for the appellant-GHMC alone.

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The learned counsel appearing for the respondentsworkmen submits that some of the respondents are not engaged and therefore, as it is stated that they are entitled to claim the wages from the date of the orders of the Tribunal, we are not inclined to accept the said contention as admittedly, the respondents have not reinstated into service and therefore, when they have not at all worked, the question of payment of wages does not arise.

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10. As per the common award of the Labour Court, the respondents-workmen are entitled to be reinstated into service with continuity of service, but without back wages and attendant benefits. We are not inclined to order payment of wages till their reinstatement. If the appellantGHMC fails to reinstate the respondents into service, it shall pay the wages whether the respondents-workmen are engaged into service or not, on expiry of two weeks

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from the date of receipt of a copy of this order.

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11. Accordingly, we dismiss the writ appeals directing the appellant-GHMC to reinstate the respondents-workmen into service forthwith within a period of 2 (two) weeks from the date of receipt of a copy of this order.

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In view of disposal of the writ appeals, the miscellaneous petitions pending in the appeals also stand dismissed. No costs.

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___________________ V.ESWARAIAH, J.

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K.G.SHANKAR, J.

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01^st March, 2012.

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Note:- Issue C.C. in one week. (B/o) Ak

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HON’BLE SRI JUSTICE V.ESWARAIAH AND HON’BLE SRI JUSTICE K.G.SHANKAR

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Writ Appeal Nos.1236 of 2011; 302, 958, 966 and 967 of 2010; 1244, 1238, 1239, 1245, 1247, 1255, 1256, 1262, 1269, 1274, 1276, 1300, 1302, 1308, 1311, 1322, 1323,

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1324, 1326, 1376, 1373, 1372, 1374, 1375, 1303 and 1389 of 2011 (Common Judgment of the Division Bench delivered by VE, J.)

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01^st March, 2012. (Ak)

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[1] AIR 1978 SC 969

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[2] AIR 2007 SC 631

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[3] (2011) 6 SCC 584

The Patancheru Municipality, Medak District, v. M. Shanker

Case brief

What is this about?

What did the court decide?

The Patancheru Municipality, Medak District, v. M. Shanker

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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