Delhi High Court Upholds Labour Court’s Award: “Charitable Trust Not an Industry Under Section 2(j) of the Industrial Disputes Act” – Petitioner’s Claim of Full-Time Employment Since 1995 Rejected

Court’s Decision:

The Delhi High Court dismissed the writ petition filed by the petitioner under Article 226 of the Constitution. The court upheld the Labour Court’s award that:

1. The respondent, a charitable trust, does not qualify as an “industry” under Section 2(j) of the Industrial Disputes Act, 1947.
2. There was no employer-employee relationship between the petitioner and the respondent.
3. As a result, the petitioner’s claim for reinstatement and back wages was untenable.

Facts:

1. Petitioner’s Claims:
   • The petitioner alleged that he had been employed by the respondent as a full-time worker since 1995.
   • He claimed that he was terminated verbally in 2005 without due cause, after raising a dispute seeking regularization of his services.
   • The petitioner sought reinstatement with full back wages and alleged that he was denied statutory benefits afforded to permanent employees.
2. Respondent’s Contentions:
   • The respondent argued that it was a public charitable trust engaged in supporting destitute and orphaned children and did not qualify as an “industry.”
   • It maintained that the petitioner was not employed on a permanent basis but worked as a daily wage laborer for cleaning and other menial tasks.
   • The respondent denied the existence of an employer-employee relationship and stated that the petitioner had never been issued an appointment letter.
3. Labour Court Findings:
   • The Labour Court concluded that there was no evidence to establish that the respondent was an “industry” or that the petitioner had an employer-employee relationship with the respondent.
   • Based on the evidence, the Labour Court dismissed the petitioner’s claims.

Issues:

The case raised three main legal issues:

1. Whether the respondent could be classified as an “industry” under Section 2(j) of the Industrial Disputes Act.
2. Whether an employer-employee relationship existed between the petitioner and the respondent.
3. Whether the petitioner was entitled to reinstatement and back wages following the alleged termination of employment.

Petitioner’s Arguments:

1. Employment Relationship:
   • The petitioner asserted that he was a permanent employee, working full-time in a permanent position.
   • He argued that the respondent wrongfully denied his status and terminated him without proper cause.
2. Nature of the Respondent:
   • He claimed the respondent’s activities qualified it as an “industry” under Section 2(j) of the Industrial Disputes Act.
3. Relief Sought:
   • Since the respondent was allegedly closed, the petitioner sought reasonable compensation in lieu of reinstatement.

Respondent’s Arguments:

1. Charitable Nature of Activities:
   • The respondent emphasized that it was a charitable trust, not an industry, and thus not governed by the provisions of the Industrial Disputes Act.
   • The respondent’s primary focus was on ameliorating the condition of poor and orphaned children.
2. Employment Denial:
   • It argued that the petitioner was not employed in any permanent position but worked as a daily wage laborer on a need basis.
   • Payment vouchers submitted by the petitioner himself reflected that he was paid daily wages for cleaning tasks.
3. Labour Court Findings:
   • The Labour Court’s findings were based on relevant evidence, and the respondent argued there was no reason for interference by the High Court.

Analysis of the Law:

1. “Industry” Status:
   • Under Section 2(j) of the Industrial Disputes Act, an “industry” is defined as a systematic activity aimed at production, trade, or service.
   • The onus to prove that the respondent’s trust qualified as an “industry” rested with the petitioner. This was consistent with the Supreme Court’s ruling in State of Gujarat v. Pratamsingh Narsinh Parmar (2001).
   • The court observed that the respondent’s activities were charitable, aimed at helping orphaned and poor children, and did not involve systematic economic activity.
2. Employer-Employee Relationship:
   • The petitioner failed to provide evidence of permanent employment, such as an appointment letter or other documentary proof.
   • Payment vouchers indicated that the petitioner was paid on a daily basis for cleaning tasks, undermining his claim of full-time employment.
3. Scope of Article 226:
   • The court reiterated that its jurisdiction under Article 226 is supervisory and not appellate.
   • Findings of fact by the Labour Court can only be interfered with in cases of substantial injustice or procedural impropriety.

Precedent Analysis:

The court referred to several judgments to support its decision:

1. Sangram Singh v. Election Tribunal, Kotah (1955):
   • Held that Article 226 is not appellate jurisdiction, and High Courts must not reappraise factual findings unless substantial injustice is evident.
2. State of Gujarat v. Pratamsingh Narsinh Parmar (2001):
   • Clarified that the burden of proving the industrial status of an establishment lies on the claimant.
3. State Bank of India v. Ram Lal Bhaskar (2011):
   • Restricted writ jurisdiction from being used to reappraise evidence or reach new factual conclusions.

Court’s Reasoning:

1. “Industry” Status:
   • The Labour Court’s findings that the respondent was not an industry were upheld. The petitioner failed to present positive evidence or rebut the respondent’s claims that it was a charitable trust.
   • The respondent’s witness testified about its charitable nature, and this testimony remained unchallenged during cross-examination.
2. Employer-Employee Relationship:
   • The petitioner’s inability to produce evidence of permanent employment, coupled with the nature of payment vouchers submitted, supported the Labour Court’s conclusion that no employer-employee relationship existed.
3. Limited Scope of High Court Jurisdiction:
   • The High Court emphasized that the Labour Court’s findings were based on relevant material, and no procedural or legal errors were apparent.

Conclusion:

The High Court found no merit in the petitioner’s arguments and upheld the Labour Court’s award. The writ petition was dismissed.

Implications:

1. Charitable Entities:
   • The judgment clarifies that entities primarily engaged in charitable work, without systematic economic activity, may not fall within the definition of “industry.”
2. Burden of Proof:
   • Employees seeking relief under the Industrial Disputes Act must substantiate claims of employer-employee relationships and industrial status with positive evidence.
3. Judicial Oversight:
   • The ruling reinforces the principle that writ jurisdiction under Article 226 should not be used as an appellate mechanism to reassess factual findings unless there is evidence of substantial injustice.

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