LAL MOHAMMAD AND ORS. versus INDIAN RAILWAY CONSTRUCTION CO. LTD. & ORS.

Citation: [2007] 1 S.C.R. 784 · Decided: 11-01-2007 · Supreme Court of India · Bench: A.K. MATHUR · Disposal: Dismissed

Judgment (excerpt)

A 
LAL MOHAMMAD AND ORS. 
v. 
INDIAN RAILWAY CONSTRUCTION CO. LTD. & ORS. 
JANUARY 11, 2007 
B 
(A.K. MATHUR AND ALTAMAS KABIR, JJ.] 
Labour Laws: 
Industrial Disputes Act, 1947-Sections 25-F, 25-FFF and 25-0-
C 
Regularization of service-Claim of-Project of Government Company 
closed on its completion-Termination of workmen thereafter-Correctness 
of-Held: Workmen were appointed for completion of the project-They 
are not employees of company but of the project-On completion of the 
project they have no vested right to claim regularization of their services 
D 
with regular pay scales in the company-When the project comes to an 
end, services of the employees also comes to an end and have to be 
terminated-Also it is not necessary for the company to necessarily employ 
these persons at other project-However, they are entitled to notice and 
compensation-Appointment of the workmen was ad hoc, only for a particular 
project and not in terms of the Rules of the Company-Thus retrenchment 
E 
on completion of the project not illegal-Constitution of India, 1950-
Articles 12, 14, 16 and 21-lRCON Recruitment Rules, 1979. 
The question which arose for consideration in these appeals was 
whether retrenchment of the workers was illegal in view of the fact that 
F 
they were employees of the company-respondent no. 1 and not merely 
project employees whose services would come to an end upon termination 
of the project. 
G 
H 
Respondent Company, wholly owned by the Government oflndia is 
engaged in various construction projects throughout the country and 
abroad. Respondent Company took up the project of construction of railway 
line. Workmen were employed in the project and assigned different nature 
of jo~s. l»i!iaUy these workmen were required to undertake training and 
thereafter were treated as appointed on ad hoc basis. They were to be given 
pay scale after successful completion of the training. Workmen could be 
transferred to any other project of the Company in India but on undertaking 
784 
LALMOHAMMADv. INDIANRAILWAYCONSTRUCTIONCO.LTD. 785 
-- any other job or business they had to seek permission of the competent 
A 
authority. The project was completed and the workmen were served with the 
notices of retrenchment. The retrenchment benefits were given under 
section 25-F(b) of the Industrial Disputes Act, 1947. Writ petitioners 
challenged the retrenchment. Workmen filed writ petitions against 
respondent no. 1-company. The Full Bench of High Court dismissed the 
petitions holding that the petitioners were not entitled to the benefit of 
regularization as the project stood closed; that project stood completed in 
B 
all respect; and that the petitioners did not apply for recruitment in service 
of the Company as per the Service Rules and those who appeared and were 
found suitable were selected and appointed under the service rules of the 
Company but others who could not appear, their services were terminated 
C 
in accordance with law. Hence the present appeals. 
Dismissing the matters, the Court 
· -HELD: 1.1. Once the project is completed then it is not incumbent on 
the company to necessarily employ these persons at other projects in any 
D 
other part of the country. Employees working under a scheme/pro;ect have 
no vested right so as to claim regularisation of their services with regular 
pay scales. When the scheme/project comes to an end, the services of the 
employees working in the project also come to an end. The workmen are 
' not entitled to regularise their services in the Company and they are not 
E 
employees of Company. [Paras 24, 25 and 28) [814-E-G, 815-B] 
1.2. With regard to the question whether factually the closure was 
effected in February/March 1998 or not, the Full Bench of High Court 
answered with reference to various communications that the closure was 
effected in 1998 and an intimation was sent to all the respective contracting 
F 
parties and concluded that the closure was effected much before the 
issuance of the notices of 1998. The finding given by the Full Bench that 
the work stood completed in 1998 is satisfactory and a perusal of all these 
certificates leaves no manner of doubt that work was completed much 
before the notices were issued in March, 1998. 
G 
[Para 11] (795-C, 796-A-B) 
1.3. It cannot be said that the appellants were the employees of the 
Company and not of Project. In the appointment orders it was mentioned 
that appointment was adhoc and they were directed to j

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