1997 JTR(SC) 799
1997 AIR(SC) 2663 ; 1997 AIR(SCW) 2627 ; 1997 2 CLR 387 ; 1997 91 FJR 322 ; 1997 76 FLR 851 ; 1997 5 JT 611 ; 1998 2 KarLJ 272 ; 1997 LIC 2651 ; 1997 2 LLJ 698 ; 1997 3 LLN 69 ; 1997 3 RSJ 510 ; 1997 4 Scale 304 ; 1997 5 SCC 434 ; 1997 SCC(L&S) 1229 ; 1997 SCR 46 ; 1997 3 SCT 277 ; 1997 4 SLR 582 ; 1997 KHC 1686 ; 1997 6 Supreme 13
1997(6) Supreme 13
SUPREME COURT OF INDIA
K. Ramaswamy and D.P. Wadhwa, JJ.
The Executive Engineer (State of Karnataka) -Appellant
versus
K. Somasetty & Ors. -Respondents
Civil Appeal No. 3637 of 1997
(Arising out of SLP (C) No. 15786 of 1996)
Decided on 2-5-1997
Counsel for the Parties :
For the Appellant : P. Mahale, Advocates.
For the Respondents : Ms. T. Kanaka Durga, Advocates.
IMPORTANT POINT
Function of public welfare of the State being a sovereign function, State is not an "industry" under the Industrial Disputes Act.
Act
Referred
:CONSTITUTION OF INDIA : Art.12
INDUSTRIAL DISPUTES ACT : S.2(j), S.10
(A) The Industrial Disputes Act sections referencedSection 2(j) defining 'Industry' and Section 10 governing reference to Labour Courtapply within the constitutional framework of Article 12, which defines 'State' for fundamental rights purposes. The judgment clarifies that public welfare departments like Irrigation and Tele-communication are not 'Industries' under the Act, as the function is sovereign and mandated by Directive Principles, thereby excluding the respondent's daily wage engagement from the Act's purview in the context of a closed project.
(B) Key principles include that public welfare functions are not industries, a closed project negates continuity of service, reinstatement orders may be subject to final court determination, and dismissal claims do not apply when appointment was inherently temporary.
Facts of the case:
The respondent was appointed on daily wages in a project on July 25, 1986, and discharged upon its closure on January 15, 1989. The Labour Court under Section 10 held the discharge amounted to dismissal with back wages, a view confirmed by a single High Court judge subject to 50% wage deduction, partially overturned on appeal, leading to special leave litigation.
Findings of Court:
The Court found that the departments are not industries under the Act, the project's closure ended any employment right, and the respondent has been reinstated subject to the final order, with contempt proceedings used to enforce reinstatement.
Issues:
Whether daily wage appointments in a closed welfare project attract Industrial Disputes Act protections, and whether reinstatement orders remain provisional subject to final adjudication.
Ratio Decidendi:
Since the activity is not an industry and the project is closed, the respondent had no right to continuity of service, and the appeal must be allowed to set aside the Labour Court and High Court orders.
Result:
The appeal is allowed, setting aside the Labour Court and High Court orders, and declaring the respondent not entitled to back wages under the Industrial Disputes Act.
(A) The Industrial Disputes Act sections referencedSection 2(j) defining 'Industry' and Section 10 governing reference to Labour Courtapply within the constitutional framework of Article 12, which defines 'State' for fundamental rights purposes. The judgment clarifies that public welfare departments like Irrigation and Tele-communication are not 'Industries' under the Act, as the function is sovereign and mandated by Directive Principles, thereby excluding the respondent's daily wage engagement from the Act's purview in the context of a closed project.
(B) Key principles include that public welfare functions are not industries, a closed project negates continuity of service, reinstatement orders may be subject to final court determination, and dismissal claims do not apply when appointment was inherently temporary.
Facts of the case:
The respondent was appointed on daily wages in a project on July 25, 1986, and discharged upon its closure on January 15, 1989. The Labour Court under Section 10 held the discharge amounted to dismissal with back wages, a view confirmed by a single High Court judge subject to 50% wage deduction, partially overturned on appeal, leading to special leave litigation.
Findings of Court:
The Court found that the departments are not industries under the Act, the project's closure ended any employment right, and the respondent has been reinstated subject to the final order, with contempt proceedings used to enforce reinstatement.
Issues:
Whether daily wage appointments in a closed welfare project attract Industrial Disputes Act protections, and whether reinstatement orders remain provisional subject to final adjudication.
Ratio Decidendi:
Since the activity is not an industry and the project is closed, the respondent had no right to continuity of service, and the appeal must be allowed to set aside the Labour Court and High Court orders.
Result:
The appeal is allowed, setting aside the Labour Court and High Court orders, and declaring the respondent not entitled to back wages under the Industrial Disputes Act.
ORDER
Leave granted.
2. The respondent was appointed on daily wages in a project taken up by the appellant on July 25, 1986. The respondent was discharged from the work on its closure on January 15, 1989. Thereafter, he approached the Labour Court under Section 10 of the Industrial Disputes Act. On a reference, the Labour Court held that the respondent is entitled to continuity of service with back wages since it amounts to dismissal. The order was confirmed by the learned single Judge of the High Court subject to payment of 50% of the back wages. Writ Appeal No. 878/96 was dismissed by the Division Bench. Thus, this appeal by special leave.
3. It is now well settled legal position that the Irrigation Department and Tele-communication Department are not an Industry within the meaning of definition under the Industrial Disputes Act as held in Union of India v. Jai Narayan Singh1, and in State of H.P. v. Suresh Kumar Verma2. The function of public welfare of the State is a sovereign function. It is the constitutional mandate under the Directive Principles, that the Government should bring about welfare State by all executive and legislative actions. Under these circumstances, the State is not an industry under the Industrial Disputes Act. Even otherwise, since the Project has been closed, the respondent has no right to the post since he had been appointed on daily wages. It is brought to our notice that respondent has been reinstated. The order of the reinstatement has been placed before us which indicates that at the threat of contempt of Court, the order has been enforced. It is stated therein that it is subject to the final order of this Court in this appeal.
4. Under these circumstances, the appeal is accordingly allowed. The order of the Labour Court stands set aside. The order and judgment too stand set aside.
Appeal allowed.
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