National Institute of Immunology v. Vinod Kumar Gupta

9. In support of his case, the workman examined himself as WW[1], and filed his affidavit as WW1/A while relying upon the documents Ex. WW1/1 to WW1/10. The management, for buttressing their averments, examined Sh. P.L. Dahra as MW[1], who tendered his affidavit as MW1/A and relied upon the documents Ex. MW1/1 to MW1/7.

10. Upon hearing both the sides, the learned Labour Court while relying upon judgement passed in Bangalore Water Supply and Sewerage Board etc. Vs. R.Rajappa & Ors reported as 1978 (3) SCR 207, reached the conclusion that the management qualifies as an „industry‟ under the I.D. Act. Learned Labour Court further held that in the absence of any charge and enquiry conducted by the management against the workman, it cannot be presumed that workman abandoned duty on his own accord. Issue no. 3 i.e., term of reference was decided in favour of the workman, thereby holding that workman was never appointed for the specific Project ETT and therefore the services were illegally terminated by the management under the garb of completion of the aforesaid project. With such observations, vide award dated 09.12.2002, learned Labour Court awarded a lumpsum compensation of Rs. 50,000/- in lieu of reinstatement and backwages in favour of the workman.

11. The aforesaid award dated 09.12.2002 became enforceable w.e.f. 30.07.2003 as per Section 17-A of the I.D. Act.

12. Aggrieved by the impugned award, the management preferred the W.P. (C) No. 5016/2003 challenging the validity of the same. While on the other hand, the workman is aggrieved by the fact that learned Labour Court erred in not awarding reinstatement, hence has filed W.P.(C) No. 16023/2004 for appropriate modification in the impugned award.

SUBMISSIONS MADE ON BEHALF OF THE WORKMAN

13. Mr. N.S. Dalal, learned counsel appearing for the workman has submitted that the learned Labour Court while passing the impugned award erred in not awarding reinstatement to the workman, even when it is proved that the management acted in violation of the Section 25 of the I.D. Act. The learned Labour Court has overlooked the established principle of law that in circumstances where it is amply established that the management illegally terminated the services of a workman, the order of reinstatement with full back wages is a natural consequence of such illegal termination.

14. Moreover, learned counsel submitted that the workman was performing the duty of a typist in the Hindi department and such work was of perennial nature. In such a case, the management indulged themselves in unfair labour practice by denying the right of regularization of the services to the workman. It is stated that the learned Labour Court possessed wide power under Section 11-A of the I.D. Act to give appropriate relief to the workman in case of illegal termination, but it failed to exercise such a power and erroneously denied the relief of reinstatement to the workman.

15. It is averred that the contentions of the management that the workman‟s service was dispensed with due to the closure of the project ETT for which he was appointed is prima facie false and misleading. The learned Labour Court rightly concluded that the management nowhere proved that the workman was appointed against the post in the said project. In absence of any evidence that suggests that the workman was initially appointed in the said project, the management‟s plea that workman‟s tenure was co-terminus with that of the project is not sustainable. With these submissions, the counsel for workman prayed for relief of reinstatement along with the payment of full back wages, and continuity of service with all consequential benefits.

SUBMISSIONS MADE ON BEHALF OF THE MANAGEMENT

16. Mr. G.D. Sharma, learned counsel appearing on behalf of the management, has impugned the validity of the impugned award by submitting that the learned Labour Court erroneously placed the management under the definition of „industry‟ as provided under Section 2(j) of the I.D. Act. The learned Labour Court committed a gross error by omitting to appreciate that the management is an autonomous research institution working under the aegis of the Department of Biotechnology, Ministry of Science and Technology. It is engaged purely in research work in applied immunology and disseminates scientific research to the public at large. The institute during the pandemic has worked alongside the ICMR to develop vaccine for the COVID-19. There exists no element of an industry, as envisaged under the I.D. Act, as the scientific result of the high calibre research is not commercially exploited for gaining profits out of it. The management functions on basis of the grant-in-aid received from the Government of India and other organisations, therefore it does not operate itself on basis of the commercial motives and is not involved in production of goods and services to satisfy human wants.

17. With regard to the question whether the management falls under the ambit of „industry‟, the learned counsel placed reliance upon Physical Research Laboratory v. K.G. Sharma, reported as (1997) 4 SCC 257. Learned counsel submitted that the Hon‟ble Supreme Court in the aforesaid matter held that the Physical Research Laboratory (PSL), which works under Department of Space of Government of India, is not an industry under Section 2(j) of the I.D. Act. It is submitted that similar to PSL, the management is also involved in conducting research without any commercial motive, hence it also does not qualify to be termed as an „industry‟.

18. Mr. Sharma, for bolstering his arguments, drawn attention of this court towards the judgement delivered in Union of India v. Vartak Labour Union (2), reported as (2011) 4 SCC 200 wherein the apex court relied upon State of Karnataka v. Umadevi (3), reported as (2006) 4 SCC 1 with respect to the regularisation of the casual/daily wage workers. They have further relied upon Haryana State F.C.C.W. Store Ltd. v. Ram Niwas, reported as (2002) 5 SCC 654 in support of their case.

COUNTER ARGUMENTS MADE ON BEHALF OF THE WORKMAN

19. Learned counsel for the workman vehemently argued that the judgement relied upon by the management, delivered in Physical Research Laboratory (Supra) has no applicability in the present matter. While distinguishing between the factual matrix of both the cases, the counsel has averred that in Physical Research Laboratory (Supra) the issue revolved around the retirement age of the permanent workman, however no such issue exists in the present matter. Moreover, the PSL, as observed by the Apex Court, was engaged in sovereign functions i.e. space research. However, in the present matter, by no stretch of imagination, it can be said that the management was performing a sovereign function of the state.

LEGAL ANALYSIS BASED ON THE FACTS OF THE MATTER

20. This Court had heard the arguments advanced by both the parties and perused the record and Judgments relied upon by the parties.

21. Before expressing any opinion with respect to the alleged illegal termination of the workman and subsequent relief, it is crucial to determine the maintainability of the present writ petition filed by the workman. It has fallen before us to examine whether the management falls under the definition of an „industry‟ under Section 2(j) of the I.D. Act.

22. A careful reading of the Section 2(j) of I.D. Act which defines an „industry‟ is required for examining the aforesaid issue:

(1) any agriculture operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such other activity is the predominant one. Explanation.—For the purposes of this sub-clause, “agricultural operation” does not include any activity carried on in a plantation as defined in clause (f) of Section 2 of the Plantations Labour Act, 1951; or (2) hospitals or dispensaries; or (3) educational, scientific, research or training institutions; or (4) institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service; or (5) khadi or village industries; or (6) any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or (7) any domestic service; or (8) any activity, being a profession practised by an individual or body of individuals, if the number of persons employed by the individuals or body of individuals in relation to such profession is less than ten; or (9) any activity, being an activity carried on by a cooperative society or a club or any other like body of individuals, if the number of persons employed by the cooperative society, club or other like body of individuals in relation to such activity is less than ten;]”

23. It has been a constant submission of the management that it is involved in undertaking pure research work related to the immunology and related discipline cluster in four main themes, namely, infection and immunity, molecular design, gene regulation and reproduction and development. It is contended that the management is not a commercial institute, but a domestic organisation working towards scientific research in basic and applied immunology. Apart from this, the result of the research conducted by the management are not at all commercial in nature, i.e. result is not marketable for extracting profit out of them. On the other hand, the workman has fervently argued that the management qualifies as an „industry‟ under the legislation since it is involved in a systematic activity of research work and renders services to „satisfy the human wants and needs‟.

24. Examination of the fact whether the management is an industry under the Section 2(j) of the I.D. Act warrants a perusal of the Memorandum of Association (MoA), wherein the objectives and functions of the management is elucidated. The relevant clause of the MoA has been reproduced herein below:

25. Test laid down in Bangalore Water Supply case (Supra) acts as a North star for the courts to reach the conclusion regarding applicability of the I.D. Act to an organization by laying down elaborate guidelines with respect to the definition of „industry‟ under Section 2(j) of the I.D. Act.

“(a) „Undertaking‟ must suffer a contextual and associational shrinkage as explained in Banerji and in this judgment; so also, service, calling and the like. This yields the inference that all organized activity possessing the triple elements in I, 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 of „industry‟ undertakings, callings and services, adventures „analogous to the carrying on the trade or business‟. All features, other than the methodology of carrying on the activity viz. in organizing the cooperation between employer and employee, may be dissimilar. It does not matter, if on the employment terms there is analogy.” III

142. Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer 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 off 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, 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 nonemployee 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 stray servants, manual or technical, are hired. Such eleemosynary or like undertakings alone are exempt — not other generosity, compassion, developmental passion or project.” IV

143. The dominant nature test: “(a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not „workmen‟ as in the University of Delhi case [University of Delhi v. Ramlfath, (1964) 2 SCR 703: AIR 1963 SC 1873: (1963) 2 Lab LJ 335] 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 Nagpur will be the true test. The whole undertaking 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.”

26. The Apex Court, further in the aforesaid case, specifically dealt with the issue whether research institutions are „industry‟ for the purpose of the I.D. Act. Court‟s observation are reproduced as herein below:

27. The Hon‟ble Supreme Court in the judgement delivered in Workmen v. Indian Standards Institution, reported as (1975) 2 SCC 847 discussed about element of co-operation between employer and employees which is essential for qualifying as an „industry‟.

28. In the Bangalore Water supply case (Supra), the Apex Court propounded a „triple test‟, under which any activity will be considered an industry if it fulfils the three-pronged test, as under: i. Systematic and organized activity has been carried out; ii. With the cooperation between Employers and employees; iii. For the production and distribution of good and services irrespective of the fact whether the capital has been invested for this activity.

29. Further, Co-ordinate Bench of this Hon‟ble Court in Indian Medical Association v. PO Labour Court-I, reported as 2012 SCC OnLine Del 4852, presented some insights regarding „industry‟ under the I.D. Act. Relevant extract of the judgement has been provided herein below:

30. On conjoint reading of the objectives of the management and the law laid down in Bangalore Water supply case (Supra), Indian Standards Institution (Supra) and Indian Medical Association (Supra), this Court is of the opinion that the management is indeed engaged in a systematic activity of conducting advanced research and educational training. It is not solely undertaking scientific research as contended by the management, but is also proactively engaged in other activities. It is clear that the management for the purpose of achieving their objectives have been involved in organising advanced research by establishing labs and stores, providing consultation services to the public health institutions and veterinary institutes, conducting educational courses by instituting professorship and offering Ph.D. programmes. The management is also operating different laboratories by the name of Immuno-Chemistry, Small Animal facility, Immuno- Endocrinology, Embryo Biotechnology etc. All these activities require a synchronization between all the departments and the employees for smooth functioning of the organisation‟s machinery. There exists not only systematic activity being carried out by the management, but also an element of cooperation between the employee and the employer. The consultative services and the research publication offered by the management can be classified as production of services, intended to satisfy human needs and wishes i.e. development and improvement of the immunology research for developing effective immune response.

31. Ergo, on the anvil of test laid down by the Apex Court, this court is of the view that the management is an industry under Section 2(j) of the I.D. Act and provisions of the said legislation is appliable to the present case.

32. This Court would also like to take this opportunity to distinguish the facts of Physical Research Laboratory case (Supra) from that of the present case. Before that, it is pertinent to refer to the Hon‟ble Supreme Court‟s observations with respect to functioning of P.R.L in the aforesaid judgement.

33. In the above stated judgement, the Hon‟ble Apex Court was of the opinion that P.R.L. being a body under the Department of Space, was carrying out the research which is not marketable in nature i.e. it was not intended to be sold to the outside world. The Court was also of the view that the research work being carried out by P.R.L. was not meant for rendering services to the others and result of their research work cannot be utilised by anyone except the organisation conducting it. However, in the present case, the management is actively involved in establishing linkage with the industries in same field, which is aimed at serving larger public by sharing information for development of vaccines. Therefore, the research outcome of the management has some element of commerciality and such outcomes can be converted into massive profits by the biopharmaceutical companies, hence the facts of the present case differ from that of Physical Research Laborarory (Supra). Furthermore, the research related to Space is essentially a sovereign function of the state, which is controlled majorly by the state in exclusion of the private parties. However, the same cannot be said regarding the research in biotechnology, specifically with respect to development of vaccines and other immunological shields. Therefore, ruling given in Physical Research Laboratory case (Supra), is not applicable to the present case and lends no assistance to the case of the management.

34. Now, since the issue of applicability of the I.D. Act to the present case has been settled, this Court shall proceed to examine whether the workman was illegally terminated by the management in violation of Section 25 of the I.D. Act. It is contended by the management that workman was appointed specifically for the ETT project on a daily wages basis. It is further contended that the ETT project was concluded w.e.f. 31.3.1992, and hence the services of the workman was not required anymore by the management. Moreover, it is averred that the workman absented himself from the duty on his own accord. On the other hand, workman has claimed that he was appointed as a store assistant on a daily wage basis, and not for the ETT project. It is pertinent to examine whether the workman was indeed engaged for ETT project. The testimony of Sh. P.L. Dahra/MW[1] is relevant in this regard, which is stated as under: “It is correct that no appointment letter was issued to the workman at the time of appointment. It is correct that the workman was not informed that he is appointed against the particular project Embryo Bio-Technology/Transfer Technology..”

35. It is an admitted fact that the workman was not informed at the very time of his appointment that his services will be utilised for the specific project, and his service tenure will be co-terminus with that of the project. In such scenario, it cannot be presumed on its own that the workman signed up for a limited term employment with his full consent. It is observed in S.M. Nilajkar v. Telecom District Manager, reported as (2003) 4 SCC 27

36. The Hon‟ble Apex Court has categorically stated in the aforesaid judgement that a termination may not amount to retrenchment if workman was employed for a temporary project, one of the conditions being “the workman ought to have been apprised or made aware of the abovesaid terms by the employer at the commencement of employment.” Moreover, Ex. WW1/3 dated 08.08.1991 which is titled as „proposal for engagement of daily wage clerk/typist‟ states that the workman is assigned duty in „Store Section‟ for Hindi typing and maintaining Challan Register. There is no mention in the said document that the workman is being engaged in the ETT project. Hence, it is not proved that the workman was engaged specifically for ETT project for a fixed duration and he was duly made cognizant about his fixed term employment with the management.

37. Over and above, the contention made by the management that the workman wilfully absented himself from 26.11.1991 from the duty is not at all sustainable. The management has failed to bring on record any evidence to prove that they made efforts towards directing workman to join back the services. This Court is in agreement with the learned Labour Court with respect to the plea of absenteeism taken by the management. Relevant portion of the impugned award is reproduced herein below: “I have considered the rival submissions. Perusal of the record reveals that contention of the management is not supported by any evidence on record. If the workman was not appearing for work, the management was supposed to issue him a show cause notice for his non appearance. It was also supposed to issue a charge Sheet and to conduct a fair and proper enquiry to prove the charges of absentism. In the absence of these measures, it could not be presumed that workman had abandoned the job on his own. Our own Hon'ble Delhi High Court in MCD Vs. Sukhvir Singh & Ors. reported as 1994 LLR 332 has held that enquiry is must even to prove the allegation of abandonment of service by the workman. The issue is, therefore, decided in favour of the workman and against the management.”

38. In view of the foregoing discussion, this Court is of the considered opinion that the workman was illegally and arbitrarily terminated by the management in violation of the provisions of the I.D. Act.

39. As far as prayer of reinstatement with full back wages is concerned, it is a settled principle of law that if termination is held illegal, the relief of reinstatement would not automatically follow. In the present case, the workman worked with the Management as a daily wager for a period of approximately 1 year 4 months in the year 1991. The termination of the workman is held to be illegal as there was violation of Section 25 F of the I.D. Act. Hence, considering the facts of the present case, this Court is of the considered view that the learned Labour Court was right in eschewing an order of reinstatement, being inequitable. This Court has been informed that the workman has already attained the age of 56 years. However, in the interest of justice, in order to put quietus to this dispute, the compensation in lieu of reinstatement granted to the workman is enhanced from Rs. 50,000/- to Rs. 1,50,000/-.

40. Accordingly, the award dated 09.12.2002 passed by the learned Labour Court no. VII, Delhi in I.D. No. 301 of 1993 stands modified. The management is directed to pay the said compensation amount to the workman within 4 weeks from today.

41. W.P.(C) No. 5016 of 2003 stands dismissed, while W.P.(C) NO. 16023 of 2004 is partly allowed. No order as to the cost.

GAURANG KANTH, J. JUNE 02, 2023