1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.5738 OF 2008
Khadi and Village Industries Commission,
At Sutari Lohari Udyog Workshop,
Dahanu Road, Taluka Dahanu,
Dist. Thane-401 601. ...Petitioner.
Vs.
1. Jagdish Balkrishna Patil,
2. Navase Babu Rasale.
Both residing At & Post Chikhale,
Taluka Dahanu, Dist.Thane. ...Respondents.
....
Mr. D.A. Athawale for the Petitioner.
Mr. Y. M. Pendse for the Respondents.
.....
CORAM : DR.D.Y.CHANDRACHUD, J.
September 30, 2008.
ORAL JUDGMENT :
Rule, by consent of Counsel returnable forthwith. Counsel
appearing on behalf of the Respondents waives service. By consent
of Counsel and at their request taken up for hearing and final
disposal.
::: Downloaded on – 09/06/2013 13:55:16 :::
2
2. The Petitioner before the Court is a statutory body
constituted under the Khadi and Village Industries Commission Act,
1956. The activities of the Petitioner are subject to the supervision
and control of the Central Government. The expenditure incurred by
the Petitioner, including the salaries of its employees, is provided from
the Consolidated fund. The Central Government appoints the
Chairman and other Directors on the Board of Directors of the
Petitioner.
3. The two Respondents are unskilled workmen, who are
engaged in an establishment conducted by the Petitioner at Dahanu,
known as the Gajanan Naik Multidisciplinary Trading Centre. The
workmen were initially engaged in 1988 as daily wagers. In 1992
their services came to be terminated. The Respondents challenged
the dispensation of their services and succeeded before the Labour
Court at Thane. The workmen were reinstated in service by the
Petitioner as daily wagers and have continued to thereafter remain in
::: Downloaded on – 09/06/2013 13:55:16 :::
3
service.
4. A complaint of unfair labour practices was instituted by the
Respondent-workmen, being Complaint (ULP) 212 of 2006 under
Items 5, 6 and 9 of Schedule IV of the Maharashtra Recognition of
Trade Unions and Prevention of Unfair Labour Practices Act, 1971.
The relief that was sought against the Petitioner was that the
workmen be made regular employees and be given the status of
permanent employees. Consequential relief of the fixation of pay
scales, increments and allowances was also sought. Evidence was
adduced before the Industrial Court. On behalf of the workmen, the
First Respondent and on behalf of the Petitioner, an officer of the rank
of Assistant Director working in the Workshop at Dahanu, filed
affidavits in lieu of Examination-in-Chief.
5. The defence to the complaint of unfair labour practices was
that the activities of the Petitioner are subject to the administrative
control of the Central Government under the Khadi and Village
::: Downloaded on – 09/06/2013 13:55:16 :::
4
Industries Commission Act, 1956. It has been stated that the Central
Government has laid down the procedure for making appointments to
various categories of posts. Before appointments are made, posts
have to be sanctioned and the procedure for selection, including by
advertising of posts, has to be followed. Reliance was placed on
Standing Order 766 dated 28th April 1969. It has been stated that the
workshop at Dahanu was suffering heavy losses and the consolidated
balance sheet in respect thereof would show an accumulated loss of
Rs. 1.26 crores. According to the Petitioner, sufficient work was not
available even for the regular employees of the Commission and the
salaries of the regular employees have not been paid on time. In the
circumstances, it was stated that the establishment of the Petitioner is
not in a position to absorb an additional burden by way of salary
expenditure and there was no question, therefore, of recruiting
additional man power. It was stated that there was no vacant post of
a helper at Dahanu sanctioned by the Central Government. As a
matter of fact, the officers of the Petitioner have been directed to stop
appointing daily wagers altogether. In any event, it was submitted,
::: Downloaded on – 09/06/2013 13:55:16 :::
5
the Respondents could not be regularized by bypassing the regular
recruitment procedure.
6. Before the Industrial Court one of the defences which was
raised was as regards the jurisdiction of the Court under the
Maharashtra Recognition of Trade Unions and Prevention of Unfair
Labour Practices Act, 1971. This challenge is founded on the
argument that the appropriate Government in respect of the Petitioner
is the Central Government and not the State Government under
Section 2(a)(i) of the Industrial Disputes Act, 1947. In so far as this
aspect is concerned, the issue is no longer res integra and is covered
by the judgment of a Division Bench of this Court dated 5th May 2005
in Khadi and Village Industries Commission vs. Jagdish B.Patil
(LPA 55 of 2004 in Writ Petition 5312 of 2001). In fact, the judgment
was in a case involving the Respondents to these proceedings. The
Division Bench held that the appropriate Government in relation to
industrial disputes concerning the Khadi and Village Industries
Commission is the State Government. In the circumstances, the first
::: Downloaded on – 09/06/2013 13:55:16 :::
6
issue would stand concluded by the judgment of the Division Bench.
7. The Industrial Court by its order dated 21st April 2008 held
that the workmen had been continued as daily wagers ever since
1988 and that it was necessary that the posts on which they were
working should be got sanctioned. The operative direction which was
issued by the Industrial Court was to the following effect :
“The respondents are hereby directed to consider the claim
of the complainants on priority and if at any time in nearfuture the posts on which they are working are sanctioned
and if not it is further directed that the Respondents should
take necessary positive steps to submit proposal to the
appropriate authority of the concerned for gettingsanctioned posts on which the complainants are working,
so that the same needs to be get sanctioned within thestipulated period of three months from the date of this order
and thereafter the workers concerned be awarded all the
monetary and consequential benefits arising out of the
same.”
8. Counsel appearing on behalf of the Petitioner submitted
that the Industrial Court has transgressed its jurisdiction in issuing a
direction that the Petitioner should submit a proposal for getting the
::: Downloaded on – 09/06/2013 13:55:16 :::
7
posts on which the Respondents are working sanctioned from the
Competent Authority and that the posts should be got sanctioned
within a period of three months upon which the workmen concerned
should be awarded all monetary and consequential benefits arising
therefrom. It was submitted that such a direction for getting the posts
sanctioned by the Central Government could not have been issued
and having regard to the precarious financial position of the Petitioner,
it was impossible to contemplate any further recruitment at this stage.
On the other hand, Counsel appearing on behalf of the Respondent-
workmen supported the order of the Industrial Court.
9. The Petitioner is a statutory body constituted under the
Khadi and Village Industries Commission Act, 1956. The Commission
is established and constituted under Section 4(1) and the members
of the Commission are appointed by the Central Government. The
functions of the Commission under Section 15(1) are to plan,
promote, organize and assist in the establishment and development
of khadi and village industries in rural areas. Section 16 provides that
::: Downloaded on – 09/06/2013 13:55:16 :::
8
the Commission would be bound in the discharge of its functions by
such directions as the Central Government may give to it. Under
Section 17, the Central Government, after due appropriation made by
Parliament by law, pays to the Commission in each financial year
such sums as may be considered necessary for the performance of
the functions of the Commission under the Act. Under Section 20(1)
the Commission is required to prepare and submit its budgets to the
Central Government. Sub-section (2) of Section 20 provides that no
sum shall be expended by or on behalf of the Commission unless the
expenditure is covered by a specific provision in the budget approved
by the Central Government. The Central Government is
empowered to frame rules under Section 26 to give effect to the
provisions of the Act. The Commission is subject to the
administrative control of the Central Government. The Respondents
are daily wagers whose services were dispensed with in 1992.
Following an order of reinstatement passed by the Labour Court, they
have been continued as daily wagers. On behalf of the Petitioner,
evidence was adduced before the Industrial Court. The Assistant
::: Downloaded on – 09/06/2013 13:55:16 :::
9
Director, who deposed, stated that no post of helper had been
sanctioned by the Central Government and even against sanctioned
posts, there was a regular procedure for filling up vacancies. In so far
as the workshop at Dahanu is concerned, it has sustained
accumulated losses of Rs. 1.26 crores and sufficient work was not
available even for regular employees. The Respondents were being
paid minimum wages at the rate of Rs.110/- per day.
10. The Central Government which has the power and
jurisdiction to sanction posts in the establishment of the Commission
was not a party to the complaint. There is merit in the submission
which was urged on behalf of the Petitioner that the Industrial Court
has acted in excess of its jurisdiction in directing that the posts should
be got sanctioned within three months by the Central Government.
The jurisdiction to sanction posts does not vest with the Petitioner,
but with the Central Government. The Central Government was not
before the Industrial Court. A direction that the posts should be got
sanctioned within a period of three months could not have been
::: Downloaded on – 09/06/2013 13:55:16 :::
10
passed in proceedings to which the sanctioning authority was not a
party. That apart, the fundamental point is that the question as to
whether a particular post should be sanctioned or otherwise is entirely
a matter which has to be determined by the Central Government in
its discretion, having regard to the financial and administrative
implications of creating additional posts. It is no part of the
jurisdiction of the Court to intercede in this area. Recruiting additional
manpower impinges on budgetary provisions. Granting permanency
similar affects the financial position of the organization which
government funds. Judicial orders of the nature which the Industrial
Court has passed will only hasten the process of rendering a
disfunctional organization defunct. Courts, including Industrial Courts,
wide as their jurisdiction may be, must be conscious of the clear line
which demarcates judicial review from matters which lie within the
province of government. Sanctioning posts is an instance of a power
which is the realm of the executive. There is merit in the submission
which has been urged on behalf of the Petitioner that having regard to
the precarious financial position, particularly of the workshop at
::: Downloaded on – 09/06/2013 13:55:16 :::
11
Dahanu, there is no need for additional man power, particularly in the
context of a situation where even the regular employees do not have
adequate work. The Petitioner has continued the Respondents in
service in pursuance of the order passed by the Labour Court
following the earlier termination in the year 1992, which was
challenged. That however, cannot confer upon the Respondents a
right to regularization. The direction which was issued by the
Industrial Court to the Petitioner to move the Central Government for
sanction and to get the posts sanctioned within a period of three
months is, in the circumstances, unsustainable and will have to be
quashed and set aside. The Petition has to be allowed and is
accordingly allowed. Rule is made absolute in terms of prayer clause
(a). In the circumstances of the case, there shall be no order as to
costs.
…..
::: Downloaded on – 09/06/2013 13:55:16 :::