J.H. Bhatia, J.
1. All these petitions may be disposed of by common judgment as the common question of law and facts are involved though the dates of appointments of the respondent No. 1 in each of the cases may be different.
2. Rule. Rule made returnable forthwith. In all the petitions with consent of the learned Counsel for the parties the matters are taken up for final hearing immediately.
3. To state in brief, the petitioner claims to be a registered public trust running Anathalaya or Orphanage for the orphan children and is also getting certain grants from Divisional Social Welfare Officer respondent No. 2, who is the Office under Government of Maharashtra. Admittedly respondent No. 1 in each of these 14 petitions was working with the petitioner and according to the petitioner the seniority list of: the staff members was prepared and was also exhibited. These respondents were working either as Dai, Nurse or Nurse-cum-Dai. The seniority list prepared by the petitioner, reveals the names of 19 persons working as Dai, Nurse or Nurse-cum-Dai and their dates of appointment with the petitioner. Admitted fact is that services of all the respondents/ complainants were terminated with effect from September 11, 1997. Services of other: remaining 5 persons were also terminated on the same day. Some of them did not make any complaints; some made complaints before the Labour Court but withdrew the complaints later on because of the settlement and the complainants, who are respondent No. 1 in the present 14 petitions, prosecuted their complaints before the Labour Court. The grievance of each of them was that they were in the employment of the petitioner from the different dates continuously till the date of termination of their service and thus they have attained the status of permanent employee. It was contended by them that they were not paid even the minimum wages under the Minimum Wages Act. They were paid only Rs. 600/- per month and therefore they had a grievance in respect of pay. They had also made the complaint against the petitioner with the Labour Department and therefore inspections were carried out by the officer of Labour Department. The petitioner was reluctant to pay wages as per law and the office bearers of the petitioner asked the complainants to withdraw their complaints and on their refusal, the petitioner terminated their services by the order dated September 11, 1997. The order is illegal, arbitrary, mala fide and the colourable exercise of the powers of the petitioner. It is also in violation of the principles of the natural justice. With these allegations the complainants prayed for reinstatement with continuity of service and back wages.
4. The petitioner contested the complaints before the Labour Court by filing Written Statement. Firstly according to the petitioner it is a charitable trust running orphanage and therefore it is not a shop or commercial establishment nor it is industry, therefore the provisions of Maharashtra Recognition of Trade Union And Prevention of Unfair Labour Practices Act 1971 (in short MRTU & PULP Act) are not applicable. It is denied that the petitioner had indulged in unfair labour practice. It is contended that provisions of Minimum Wages Act are not applicable. It is also denied that services of the complainants were terminated mala fide and without following the procedure of law. It is contended that because the services of the complainants were not required they were terminated with effect from September 11, 1997. Along with termination order the petitioner had offered retrenchment compensation which the complainants had refused to accept. Therefore, the amount of compensation was sent to them by demand draft by registered post acknowledgment due but the same were refused by the complainants. As such provisions of Section 25-F of the Industrial Disputes Act have been properly complied. It is denied that there was any violation of provisions of Section 25(F) or (G) of the Industrial Disputes Act. It is also contended that the petitioner had filed a Writ Petition No. 622/1998 and therein has deposited retrenchment compensation in respect of all the employees with the Court. It is further contended that only two Nurses have been provided with work by the petitioner. Others could not be retained in service for want of availability of work and it was submitted that if the work would be available, the complainants would be provided work as per their seniority.
5. The Labour Court framed certain issues. The Labour Court came to conclusion that the complainants had failed to prove that the petitioner had engaged in unfair labour practice under Item 1 (a), (b), (d) and (f) of the Schedule IV of the MRTU & PULP Act. They had also: failed to prove that they were in service of the petitioner for more than 240 days in calender year or in the year preceeding the year of termination. However the Labour Court found that termination was bad in law and illegal and complainants are entitled to be reinstated with continuity of service but without back wages.
6. Being aggrieved by the order of reinstatement, the petitioner filed Revision Application No. ULP 189/2006 before the Industrial Court and the complainants also filed Revision Application No. ULP No. 111/2007 challenging the refusal of payment of back wages. Both the revision applications were decided by common judgment dated November 19, 2007 by the Industrial Court. Industrial Court found that the observations made by the Labour Court were conflicting. The Industrial Court came to the conclusion that the complainants had proved that they had served continuously for more than 240 days in the year prior to the order of termination; that the petitioner had not followed the procedure of termination as required under Section 25(F) of the Industrial Disputes Act that the seniority list was not properly maintained and there was violation of Section 25(G) and in view of this the Industrial Court dismissed the revision application filed by the petitioner. The Industrial Court maintained the order of reinstatement with continuity of service. However, Industrial Court also allowed the revision application filed by the employees and granted them full back wages from the date of termination till reinstatement. This order has been challenged in the present petition by the management.
7. Heard the learned Counsel for the parties. Perused the relevant record.
8. Learned Counsel for the petitioner vehemently contended that there was no evidence to show that the petitioner is an industry or commercial establishment and therefore provisions of Industrial Disputes Act and MRTU & PULP Act are not applicable. According to the learned Counsel, if the petitioner is not an industry the complaints were not tenable before the Labour Court. According to her, the burden of proof lies on the complainant to prove that he had worked for 240 days continuously in a year before termination of service and in the present case that burden was not properly discharged by cogent and reliable evidence. She claimed that Labour Court had come to conclusion that these complainants had not proved that they had worked for 240 days in a year. According to her the industrial Court wrongly re-appreciated the evidence to come to the conclusion that they had in fact served for 240 days or more in a year and thus the Industrial Court had gone beyond its jurisdiction under Section 44 of the Industrial Disputes Act. It is contended that there was sufficient material on record to show that the provisions of Section 25-F of Industrial Disputes Act were duly followed because the termination order was accompanied by the amount of salary in lieu of notice period and compensation. As it was refused the amount was sent by registered post acknowledgment due and because that was also refused the petitioner deposited that amount in the Court. It is contended that because the services of the Dai and Nurses, who are shown in the seniority list maintained by the petitioner were retrenched for want of work, the question of violation of Section 25-G would not arise. In view of this the learned Counsel for the petitioner contended that order passed by the Courts below for reinstatement with continuity of service and the order passed by the Industrial Court for grant of full back wages cannot be supported by the facts and evidence.
9. Learned Counsel for the respondent/complainants however fully supported the judgment of the Industrial Court and the impugned order. Learned Counsel for the parties also placed reliance on several authorities in support of their respective contentions.
10. As all these petitions, pertaining to 14 workers, are to be disposed of by common-judgment, it will be useful to mention here that one Pramila Avajekar, who is shown at Sr. No. 1 in the seniority list, was appointed on November 2, 1978. Some of them were appointed in 1991, 1992, 1993, 1994 and 1995 and last one Jyoti Meshram on November 21, 1996. On a notice given by the complainants the petitioner management had submitted a seniority list dated August 30, 1997 showing the name of staff members according to their post and as per the dates of their appointments. First part of that seniority list pertains to administrative staff, second part pertains to Dai and Nurses and third pertains to Social Workers etc. We are not concerned with part one and part three of the seniority list. In the seniority list prepared by the petitioner itself the dates of appointment of all the 19 persons who were working as Dai, Nurses etc are given. The dates of their appointment are no more in dispute. The complainants had stated that they were working since their respective dates of appointment till the date of their termination of their service. There is no dispute about the date of termination because all of them were removed from service by order dated September 11, 1997. It is true that none of the complainants had specifically stated that she had continuously worked for 240 days or more in a year or in the year immediately preceding the date of termination. However each of them had specifically pleaded that from the date of her appointment she was continuously in service till the date of termination. It is material to note that the petitioner in the Written Statement had no where pleaded that the complainants had worked for a period less than 240 days in any year. The petitioner had nowhere denied that the complainants were in continuous service from the date of their appointment till the date of termination. If continuous service is counted from the date of their respective appointment till the date of termination, it would be clear that each of them had contiuously worked for more than 240 days prior to the termination. Learned Counsel for the petitioner vehemently contended that in the Written Statement the petitioner had not admitted that these complainants or any of them had worked continuously for 240 days or not. It is not material whether the petitioner has specifically admitted this fact. Material fact is that the petitioner has not denied the continuous service of the complainant from the dates of the respective appointment till the date of termination. If same fact pleaded by the complainant is not denied, it amounts to implied admission. It is a well settled principle of law that if a particular fact is pleaded by a party and that is not denied by the other side it is presumed to be correct, because purpose of filing the Written Statement is to provide an opportunity to the defendants to contradict the pleadings of the claimants or the plaintiff. It is material to note that as per the provisions of Order 8 Rule 3 Civil Procedure Code it shall not be sufficient for a defendant in his Written Statement to deny the grounds alleged by the plaintiff generally but defendant must deal specifically with each allegation of fact of which he does not admit the truth. Order 8 Rule 4 provides that defendant denies an allegation of fact in the plaint, he must not do so evasively but answer the point of substance. If there is an evasive reply that is not a denial. Civil Procedure Code is not strictly applicable to the industrial disputes but rules about pleadings are not different. In the present case there is no denial about the continuous service of the claimants from the date of their appointment till the date of their termination. In view of this without any further evidence, the Labour Court should have come to a conclusion that all the complainant had worked for 240 days continuously. If that was not sufficient there was some other material also on record to come to the conclusion that complainants had worked 1 for 240 days.
11. Complainants entered into the witness box and deposed that they were in continuous service from the respective dates of appointment till the date of termination and there was no denial to this even in the cross examination. On behalf of the management one Shrikant Sirpurkar Member of the ad hoc Committee constituted by the High Court in some proceedings in the year 2002, filed his affidavit in examination in chief and he was cross examined. Admittedly he had no personal knowledge about the service or service conditions of the complainants because they were terminated in September 1997 i.e. almost 5 years before Shrikant Sirpurkar was appointed as a Member of the ad hoc Committee. On behalf of the petitioner no responsible person was examined as a witness before the Court to deny that these persons had worked for 240 days or to assert otherwise. The petitioner did not produce any documents pertaining the muster roll, record about wage bills etc. to show that these persons had not worked for 240 days. It is material to note that a notice was given by the complainants to the management when the matter pending was before the Labour Court, to produce those documents and some other documents. In response to that notice management produced only the seniority list and no more documents. Inference could be drawn that if the management would have produced the record, particularly muster roll and about payment of wages, it would not be favourable to the management. It is also material to note that the petitioner had specifically claimed that provisions of Section 25-F of the Industrial Disputes Act were strictly followed because the retrenchment compensation and the salary for the notice period was offered along with retrenchment order. It is also contended that after the refusal of the complainants to accept that amount, same was sent by demand draft by registered post AD but the envelopes containing the notice and the demand draft were not accepted and were returned by the postal authorities with an endorsement of refusal. Correctness of these pleadings will be i considered in the following paras. However if the complainants had not completed 240 days the provisions of Section 25-F would not be applicable. Section 25-F provides that no workman employed in any industry who has been in continuous service for not less than one year under the employer shall be retrenched by that employer until the workman has been given one month's notice indicating the reasons for their retrenchment or wages for the notice period and until the retrenchment compensation is also paid. One year means service of minimum 240 days in a year. From this it is clear that until the workman had worked for 240 days continuously in a year preceding the retrenchment, the workman would not be entitled either to the notice or the wages in lieu of notice or the retrenchment compensation. It is presumed that the management was fully aware about the provisions of Section 25-F when the management allegedly offered the wages for notice period and retrenchment compensation. It indicates that the management was aware that each of the complainant had worked for 240 days or more in a year.
12. Learned Counsel for the petitioner placed reliance on number of authorities including R.M. Yellatti v. Asstt. Executive Engineer : AIR 2006 SC 355 : (2006) 1 SCC 106 : 2006-J-LLJ-442, Surendranagar District Panchayat v. Dahyabhai Amarsinh : AIR 2006 SC 110 : (2005) 8 SCC 750 : 2006-I-LLJ-424, Krishna Bhagya Jala Nigam Ltd. v. Mohammad Rafi : 2006-III-LLJ-755, Rajasthan State Ganganagar S. Mills Ltd. v. State of Rajasthan and Anr. : AIR 2005 SC 4065 : (2004) 8 SCC 161 : 2004-III-LLJ-832 and Municipal Corporation, Faridabad v. Siri Niwas : 2004-III-LLJ-760 (SC). In each of these cases the Supreme Court had held that burden of proof lies on the complainant to prove that he had worked for 240 days. Mere affidavits or self serving statements of workman will not be sufficient and it is for the workman to adduce cogent evidence both oral and documentary. There is no dispute about the legal position. In the present case as pointed out above besides the oral evidence of the complainant there was sufficient material to prove that each of them had worked for 240 days or more. This fact was not denied by the management in the pleadings or in the oral evidence and if the pleadings of the complainants are read with seniority list prepared by the management itself it was clear that they had worked for 240 days or more.
13. Inspite of this material on record, the Labour Court held that complainants had not proved that they had worked for 240 days. Industrial Court after appreciating the material on record came to the conclusion that they had worked for 240 days or more. I do not find any fault with the finding of the Industrial Court on this issue.
14. It was the grievance of the complainants that they were not being paid wages as per the Minimum Wages Act and therefore they had made complaints to the Labour Officers resulting in some inspections by them. According to them in view of this the management had asked them to withdraw the complaints and on their refusal the management terminated their services by order dated September 11, 1997. From the seniority list filed by the management it appears that till September 11, 1997 in all 19 persons were working as Dai or Nurses. It is not explained by the management as to why services of all the 19 persons were terminated en block. It is not the case of the management that the Orphanage was closed or that certain services, which were provided by the management prior to September 11, 1997, were stopped and therefore there was no need to retain that staff. The petitioner is not a shop or establishment run on proprietorship or partnership basis. It claims to be registered public trust getting certain grants from Government of Maharashtra. Under such circumstances the management was expected to pass certain Resolutions regarding the reasons why the services of all the Dai and Nurses were no more required and were required to be terminated enblock. Neither any oral evidence nor any documentary evidence is placed on record to explain this fact. It appears that after termination of all these persons, atleast two of them were reemployed as Nurses. In the affidavit in examination-in-chief filed by Shrikant Sirpurkar, on behalf of the management, it is stated that:
To our knowledge, none of the complainants is qualified and trained for appointment as a Dai as well as nurse. Moreover at present, no such work is available for the complainants since at present as per the directions of the government trained and qualified persons are working with our institution. At this place I further say that, before making such appointments, the institution had issued an advertisement in the local newspaper in the year 2003-2004 as work was available at the relevant time.
From this affidavit it does not appear that work for Nurse or Dai was not available. In fact it indicates that work was available but because of certain directions given by the Government trained and qualified staff was required to be recruited and therefore the complainants who were not so qualified and trained could not be engaged. It also indicates that in the year 2003-04 the management recruited certain persons for the post of Dai and Nurses. Petitioner has not produced any such Government Rules, Regulations or directions to appoint Dai/Nurses with certain qualifications. There is no material to show that Government had directed the petitioner to terminate the services of Dai/nurses who were already in service if they were not having necessary qualifications. There is nothing to show that from 1997 to the year 2003 no work was available for Dai and Nurse. The management has not explained why the services of 19 Nurses and Dai were required to be terminated enblock keeping complete vacuum in that department. In view of the circumstances there appears substance in the contention of the complainants that their services were terminated because they had taken up the matter with the Labour Department about non payment of wages as per law. In view of these circumstances it is not difficult to come to the conclusion that petitioner had discharged or dismissed the complainants from employment by way of victimization for patently false reasons that no work was available and the termination was not in good faith but in colourable exercise of employer's right and thus the unfair labour practice as per item 1 (a), (b) and (d) of Schedule IV of the Act were indulged into by the employer. The learned Labour Court observed that unfair labour practice was not proved. This finding of the Labour Court was in total disregard of the material on record and thus perverse.
15. Coming back to the following of the procedure prescribed under Section 25-F of the Industrial Disputes Act, the petitioner pleaded that such procedure was duly followed. The wages in lieu of the notice period and retrenchment compensation was offered along with termination order but same were not accepted and therefore the amount was sent by demand draft by registered post AD which was also refused. The record reveals that no document was produced by the management about the offer of wages in lieu of notice period and the retrenchment compensation nor any; original document was placed on record to show that any demand draft or notice was sent to complainants by registered post AD. If any notice and demand draft or cheque was really sent to the complainants by registered post AD and it was returned by the postal authorities with endorsement of refusal, the management could produce original postal receipts showing that such envelopes were sent by registered post or could produce the original envelopes, received back from the postal authorities for the perusal of the Court. The Court could see the endorsement from the postal authorities to find out whether the addressee/complainant had refused the same and whether there was proper service. It could be opened and the contents thereof could be seen to verify the contention of the petitioner about issuance of the demand draft towards payment of wages in lieu of notice period and the retrenchment compensation. The record reveals that only xerox copies of the so called notice and the envelopes were produced. The xerox copies could not take place of the original. Learned Counsel for the petitioner vehemently contended that in the Labour Court the copies are produced and they are admitted in evidence. However Labour Court specifically noted that the documents marked Article A and B were produced. I have perused the original record and proceedings of the Labour Court. Article A and B are only xerox copies. In para 15 of the judgment, the Labour Court has specifically noted that originals are not brought on record and therefore Article A and B being the xerox copies could not be exhibited and admitted in evidence. As stated earlier on behalf of the management nobody was examined who would be personally aware of the facts and circumstances which took place in 1997 when the services of complainants were terminated. In absence of any such oral or documentary evidence which was available but not produced, inference could be drawn against the management. In view of this it was rightly held by both the Courts below that management had failed to prove that the provisions of Section 25-F were followed. I find no fault with the said finding.
16. In view of the above it becomes clear that the management had indulged in unfair labour practice and had failed to comply with the provisions of Section 25-F while terminating the services of the complainants. The question as to whether there was also breach of Section 25-G of the Industrial Disputes Act, which requires that employer shall ordinarily retrench the workman who was a last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman. Naturally for the compliance of this provision it is required that the employer must maintain a seniority list of the workers. In the present case Courts below held that provisions of Section 25-G were also violated because the seniority list was not maintained and the seniority list which was produced before the Court purports to have been prepared and published for the first time on August 30, 1997, i.e. just 12 days before the termination orders and it is observed that there is no material to show that this seniority list was actually published and served on the employees. In my considered opinion much importance need not be given to Section 25(G) because in the complaint it was nowhere pleaded by the complainants that some juniors were retained and seniors were retrenched. In fact as pointed out earlier the management had terminated the services of the 19 employees of that category en-block by the order dated September 11, 1997. If some of them would have been retained while retrenching the services of the complainants, the question of Section 25-G would arise. In view of want of pleadings on this point and in view of the fact that all of them were retrenched, atleast violation of Section 25-G is not proved.
17. Learned Counsel for the petitioner vehemently contended that under Section 44 of MRTU & PULP Act the Industrial Court shall have power of superintendence over the Labour Courts. Revisional applications are filed before the Industrial Court under Section 44. Learned Counsel vehemently contended that in the revisional jurisdiction the Industrial Court could not appreciate evidence and come to a conclusion different from the one drawn by the Labour Court. In support of this learned Counsel placed reliance on several authorities including Hindustani Prachar Sabha and Ors. v. Dr. (Miss) Rama Sen Gupta and Anr. : (1986) 52 FLR. 312, Kirloskar Cummons Ltd. v. Subhash Shripati Darekar and Ors. (1997) 76 FLR 465, M.K. Bhuvaneshwaran v. Premier Tyres Ltd. and Anr. 2001 III LLJ (Supp) 669 (Bom), Motor Industries Co. Ltd. Nashik v. Popat Murlidhar Patil and Anr. : 2008-III-LLJ-891 (Bom), Vithal Gatlu Marathe v. Maharashtra State Road Transport Corporation and Ors. : 1996-I-LLJ-494 (Bom). In each of these cases Bombay High Court held that jurisdiction of the superintendence vested in the Industrial Court under Section 44 is limited and in exercise of that power the Industrial Court cannot re-appreciate the evidence and overcome the finding of facts. Section 44 itself does not prescribe how the power of superintendence shall be exercised while dealing with the revision applications. However some guidance can be had from the provisions of Section 115 of the Code of Civil Procedure though that Section is not strictly applicable to the Industrial Courts. Under Section 115, High Court may exercise revisional jurisdiction and if the High Court finds that subordinate Court appears-
(a) to have exercised a jurisdiction not vested in it by law; or
(b) to have failed to exercise a jurisdiction so vested; or
(c) to have acted in the exercise of its jurisdiction illegally or with material irregularity,
it may pass such order as it may deem fit. It is not the case where the Labour Court had no jurisdiction. It is also not a case where the Labour Court had failed to exercise its jurisdiction. However if the material on record as noted earlier is looked into it appears that the Labour Court had exercised its jurisdiction illegally or with material irregularity. At the costs of repetition it may be noted that in view of the pleading by the complainant they had continuously worked from the date of their appointment till date of termination which clearly means that they had worked for 240 days in the year and this fact was not even denied in the Written Statement. There was sufficient material, as indicated earlier, to show that there was practical admission that they had worked for 240 days and more and inspite of that the Labour Court gave a finding that they had not worked for 240 days. There was sufficient material to show that the management had engaged in unfair labour practice under Item l(a), (b) and (d) and inspite of that the Labour Court held that the unfair labour practice was not proved. It is interesting to note that under Section 30 of MRTU & PULP Act the Labour Court can give certain directions only if it decides that any person named in the complaint had engaged in an unfair labour practice. If the complainant fails to prove that the persons who are named had engaged in unfair labour practice, the Labour Court does not have jurisdiction to give any direction under Section 30. Learned Counsel for the petitioner rightly placed reliance on Premier Automobiles Ltd. v. Engineering Mazdoor Sabha and Ors. : 1982- II-LLJ-73 (Bom), wherein, this Court had clearly held that when the finding of the Industrial Court was that the alleged unfair practice had not been proved, the power under Section 30 could not be exercised by the Industrial Court. Once the Labour Court came to a conclusion that the complainant had not proved that they had worked for 240 days or more and that they had not proved that the employer had engaged in unfair labour practice, he could not give any direction for reinstatement. Inspite of having given the finding on these two issues against the employees, he gave a direction against the management which indicates that Labour Court had passed the order and given directions, even though it had no jurisdiction to give such direction under Section 30 of the Act. It indicates that Labour Court was totally confused. The findings of the Labour Court on: the two vital issues are contrary to the final decision, particularly about the reinstatement with continuity of service. In fact the findings on issues 1 and 2 may be called perverse and totally against the material on record and therefore in my considered opinion Industrial Court was justified in looking to the evidence in the peculiar circumstances of the case and giving different findings on these two points. Therefore, I am unable to accept the contention of the learned Counsel for the petitioner that the Industrial Court was wrong in interfering with the order of the Labour Court. In fact petitioner itself had filed a revision application before the Industrial Court contending that Labour Court had committed serious errors in passing the impugned order. Similar grievance was made by the employees in their counter revision applications. The Industrial Court tried to set right the situation.
18. Learned Counsel for the petitioner vehemently contended that there is no material to show that the petitioner is an industry or a commercial establishment. It is contended that it is only a Public Trust maintaining orphanage for the orphan children. Courts below noted that even though the petitioner claims to be registered public trust and claims that it is run only on certain grants from the Government and donations from the people, it has failed to produce any record in support of its claim. According to the claimants, the institution is run on systematic and regular basis and this institution has employed a large number of persons, as is clear from the seniority list. It is contended that merely because the profit is not a goal, it is not sufficient to hold that it is not an industry. Record reveals that complainants had issued a notice to the petitioner to produce the record, particularly its constitution, its balance sheet and other record. Inspite of that notice no such record was produced. If the Constitution, balance sheet and other books of accounts would be produced before the Court the petitioner could show to the Court that it is only discharging philanthropical or social activities by giving shelter to the poor children and that it is run on the basis of only grants and donations. However, no such evidence was placed on record inspite of the fact that, an opportunity was given to the petitioner when a notice to produce the record was given by the complainants. In President, Anath Mahjila Ashram, Kolhapur v. Ajagaonkar J.G. (Smt) 1997 III LLJ (Supp) 342, this Court had an opportunity to consider whether the Industry also includes Charitable Institution. In that case the Court was dealing with President, Anath Mahjila Ashram, Kolhapur v. Ajagaonkar J.G. (Smt)(supra) and it was argued that motive being not profit but charity and because of total lack of business or trade, activity of the petitioner Ashram could never amount to an industry. Hon'ble Shri Justice B.N. Srikrishna (as His Lordship then was) observed as follows in para 7 and 8 at pp. 344 to 347 of LLJ:
7. In my judgment, the contention appears to be wholly misconceived. In fact, the contention is no longer res integra in view of the locus classicus on the subject, Bangalore Water Supply and Sewerage Board v. Rajappa and Ors. : 1978-I-LLJ-349. Bangalore Water. Supply and Sewerage Board v. Rajappa and Ors. (supra) was a judgment of seven learned Judges of the Supreme Court delivered after a survey of all extant decisions, dealing with the concept of the 'industry' within the meaning of Section 2(j) of the Act. After minute analysis of the concept of 'industry' in Section 2(j) of the Act, the Supreme Court laid down the test of an 'industry' in these unmistakable words (vide paragraph 161):
161. 'Industry' as defined in Section 2(j) and explained in Banerji, : AIR 1953 SC 58 has a wide import.
(a) where (i) systematic activity, (ii) organised by co-operation between employer and employee (the direct and substantial element is chimercial)(iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss i.e. making on a large scale prasad or good) prima facie there is an industry in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other Section.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.
(d) If the organisation is a trade or business it does not cease to be one because of philanthropy animating the undertaking.
II Although Section 2(j) uses words of the widest amplitude in its two limbs their meaning cannot be magnified to overreach itself.
(a) Undertaking must suffer a contextual and associational shrinkage as explained in Banerji and this judgment; so also service calling and the like. This yields the inference that all organised activity possessing the triple elements in I (supra) although not trade or business, may still be 'industry' provided the nature of the activity, viz the employer-employee basis bears resemblance to what we find in trade or business. This takes into the fold 'industry' undertakings, callings the services, adventures 'analogous to the carrying on of trade or business'. All features, other than the methodology of carrying on the activity viz. in organising the co-operation between employer and employee, may be dissimilar, it does not matter, if on the employment terms there is analogy.III. Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or out sense of motivation for or resultant of the economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen the range of this statutory ideology must inform the reach of the statutory definition nothing less nothing more.
(a) The consequences are (i) professions, (ii) clubs (iii) educational institutions (iv) co-operatives (v) research institutes (vi) charitable projects and (vii) other kindred adventures, if they fulfil the triple tests listed in I (supra) cannot be exempted from the scope of Section 2(j).
(b) A restricted category of professions, clubs co-operatives and even gurukulas and little research labs, may qualify for exemption if in simple ventures substantially and going by the dominant nature criterion substantively no employees are entertained but in minimal matters, marginal employees are hired without destroying the non employee character of the unit.
(c) If in a pious or altruistic mission many employ themselves, free or for small honoraria or like return, mainly drawn by sharing in the purpose or cause, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the bidding of the holiness divinity or like central personality and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of Master and servant relationship, then the institution is not an industry even if stay servants, manual or technical, are hired. Such elemosynary or like undertaking alone are exempt - not other generosity, compassion, developmental passion or project.
IV. The dominant nature test:
(a) where a complex of activities, some of which qualify for exemption, other not, involves employees on the total undertaking, some of whom are not workmen as in the University of Delhi v. Ram Nath case : 1963-II-LLJ-335 (SC) or some departments are not productive of goods and services if isolated even then the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of City of Nagpur v. Employees : 1960-I-LLJ-523 (SC), will be 'industry' although those who are not 'workmen' by definition may not benefit by the status.
(b) Notwithstanding the previous clauses, sovereign functions, strictly understood (alone) qualify for exemption not the welfare activities or economic adventures undertaken by Government or statutory bodies.
(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within Section 2(j).
(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby.
V. We overrule Management of Safdarjung Hospital v. Kuldeep Singh Sethi : AIR 1970 SC 1407 : (1970) 1 SCC 735 : 1970-II-LLJ-266, Solicitors' case : AIR 1962 SC 1080, Madras Gymkhana Club Employees Union v. Gymkhana Club : 1967-II-LLJ-720 (SC). Delhi University supra, Dhanrajgiri Hospital v. Workmen : AIR 1975 SC 2032 : (1975) 4 SCC 621 : 1975-II-LLJ-409 (SC) and other rulings whose ratio runs counter to the principles enunciated above, and State of Bombay v. Hospital Mazdoor Sabha : AIR 1960 SC 610 : 1960-I-LLJ-251 is hereby rehabilitated.
In my view this judgment is a complete answer to the contention of Mr. Kochar. However, considering the unusual persistence with which Mr. Kochar pursued the point, I shall refer to his contention in somewhat greater details than it normally would have merited.
8. In Bangalore Water Supply and Sewerage Board v. Rajappa and Ors. (supra) the Supreme Court specifically considered the sweep of the term 'industry' as defined in Section 2(j) of the Act and also whether it would take within its ambit a 'charitable institution. The Supreme Court categorically rejected the argument that, because there is absence of trade, commerce or business in the running of a charitable establishment or because there is absence of profit motive, a charitable institution would not fall within the definition 'industry' under Section 2(j) of the Act. As the Supreme Court points out, 'Profit making motive is not a sine qua non of 'industry' functionally or definitionally.' While emphatically rejecting this argument, the Supreme Court quoted with approval the observations of Powers, J. in Federated Muinicipal and Shire Employees' Union of Australia v. Melbourne Corporation 26 CLR 508 (Aus).If that argument were sufficient, then a philanthropist who acquired a clothing factory and employed the same employees as the previous owner had employed would not be engaged in an occupation about which an industrial dispute could arise, if he distributed the clothes made to the poor free of charge or even if he distributed them to the poor at the bare cost of production.
The Supreme Court posed the question. Are Charitable institutions Industries? and answered it thus (vide paragraph 125):
Can charity be 'industry'? This paradox can be unlocked only by examining the nature of the activity of the charity, for there are charities and charities. The grammar of labour law in a plurality society tells us that worker is concerned with wages and conditions of service, the employer with output and economics and the community with peace, production and stream of supply. This complex of work, wealth and happiness, firmly grasped will dissolve the dilemma of the law bearing on charitable enterprises. Charity is free industry is business. Then how? A lay look may scare a legal book will see; a social look will see through a hiatus inevitable in a sophisticated society with organisational diversity and motivational dexterity.
The Supreme Court pointed out that charitable institutions would broadly fall into one of the following three categories:
(i) Where the enterprises like any other yields profits but they are siphoned off for altruistic objects.
(ii) Where the institution makes no profit but hires the services of employees as in other like businesses but the goods and services which are the output, are made available at law or no cost, to the indigent needy who are priced out of the market.
(iii) Where the establishment is oriented on a humane mission fulfilled by men who work, not because they are paid wages, but because they share the passion for the cause and derive job satisfaction from their contribution.
The Supreme Court held that the first two are 'industry', while the third is not, Despite his vehement submissions, Shri Kochar does not dispute that the petitioner falls in Category No. (ii), which the Supreme Court has clearly held to be an industry. Finally after the survey of the entire law, the test for determining which activity would fall within the ambit of the term 'industry' under Section 2(j) was postulated by the Supreme Court in paragraph 161 as already extracted.
19. It was held that the Anath Mahila Ashram was industry within the meaning of Section 2-A of the Industrial Disputes Act. In my considered opinion the facts and legal position stated in the authority in President, Anath Mahila Ashram, Kolhapur v. Ajagaonkar J.G. (Smt)(supra) are aptly applicable to the facts of the present case. Learned Counsel for the petitioner relied upon Kamyani Vidya Mandir v. Sangeeta Eknath Sanghpal and Anr. : 2008-I-LLJ-712 (Bom), wherein the petitioner was Educational institution giving training to mentally challenged persons. While imparting training children were manufacturing goods and selling the same during the festival season. It was held that institution was not an industry and the teacher was not a workman. In my considered opinion that authority is not applicable to the facts of the present case. In view of the facts and legal position I find that the respondent complainants are workman.
20. In view of the above it appears that the management had engaged in unfair labour practice and had not followed the provisions of Section 25-F of the Industrial Disputes Act and therefore the 44 termination orders are liable to be set aside. In these circumstances I find no fault with the order passed by both the Courts below for reinstatement of the complainants with continuity of service. The question is about the payment of back wages. Labour Court had refused the back wages while Industrial Court granted full back wages. Learned Counsel for the employees contended that the complainants come from poor class and they are kept out of job since September 1997 and that they had no income and therefore the payment of full back wages is justified. In support of this he placed reliance on Taranjitsingh I Bagga v. Maharashtra State Road Transport Corporation Amravati : 2008-III-LLJ-273 (Bom), wherein this Court had held that where an employee is wrongfully dismissed, it would be unjust to insist upon a technical requirement of pleading and proof of absence of gainful employment.
In that case Labour Court and Industrial Court had granted full back wages and that order was modified by single Judge of this Court. The Division Bench set aside the order passed by the single Judge and restored the order of the Labour and Industrial Courts about the payment of full back wages. On the other hand learned Counsel for the petitioner contended that full back wages cannot be given in every case. It depends on facts of each and every case. For this he placed reliance on U.P. State Brassware Corporation Ltd. and Anr. v. Udai Narayan Pande : 2006-I-LLJ-496 (SC). In that case the services of daily wage earner were terminated without compliance of Section 25-F. Labour Court passed an award for reinstatement with full back wages. That award was maintained upto High Court. Industrial undertaking was closed in 1992. Supreme Court held that no precise formula could be laid down as to under what circumstances, payment of full back wages, should be allowed. It depends on facts and circumstances of each case. In that case Supreme Court awarded 25% of the back wages from the date of termination till closure of the company. In the present case each of the complainant is unqualified Dai or Nurse. They were working with the petitioner which is running an Orphanage. As they were working as Dai it is impossible to believe that they would not get any work during last 12 years. It is also difficult to believe that they would simply, sit idle waiting for their reinstatement. Even though the petitioner is held to be an industry, it cannot be denied that it is running an orphanage and it is also getting certain grants from the Government on the basis of the strength of the children in the orphanage. It may have some other sources also. If full back wages are granted, the management may find it very difficult and there is a possibility that the management may not be in a position to run the institute itself if it is forced to pay full back wages to all these workers. In my considered opinion from the date of termination till the order passed by the Labour Court on June 22, 2006 for reinstatement, the petitioner should be required to pay 25% of the back wages. In view of that order naturally the complainants must be actually looking forward for their reinstatement. However for last more than 2 years petitioner has failed to give reinstatement, therefore from that date till actual reinstatement the petitioner may be required to pay 50% of the back wages with direction to reinstate the complainants within a specified period.
21. For the aforesaid reasons Writ Petitions are partly allowed only in respect of back wages. Order passed by the Courts below for reinstatement of the complainant respondents No. 1 in each petition with continuity of service from the date of termination is maintained. Petitioner shall pay 25% of the back wages from the date of termination till the order of the Labour Court dated June 22, 2006 and from the date of that order till the date of actual reinstatement the petitioner shall pay 50% of the back wages. Petitioner shall reinstate all these complainants within 45 days from this day and in case of failure to reinstate within the stipulated period, the petitioner shall pay full wages after expiry of 45 days from this day. The petitions stand disposed of accordingly.