RAJINDER SINGH CHAUHAN AND ORS. versus STATE OF HARYANA AND ORS.

Citation: [2005] SUPP. 5 S.C.R. 360 · Decided: 21-11-2005 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
RAJINDER SINGH CHAUHAN AND ORS. 
v. 
STATE OF HARYANA AND ORS. 
NOVEMBER 21, 2005 
B 
[ARIJIT PASAYAT AND R.V. RAVEENDRAN, JJ.] 
Labour Laws: 
Industrial Disputes Act, 1947-Sections 25-F and 25-N-CONFED Staff 
C Service Rules, 1975-Rule 35(b)-Retrenchment-Of employees of non-
industrial establishment-Applying provisions of Section 25-F -Employees 
demanding applicability of Section 25-N instead of Section 25-F and 
applicability of the Rule-Writ Petition-Dismissal of-In appeal, held: Section 
25-N will not apply to the present case because the establishment in question 
D is not an industrial establishment-Employees are entitled to benefits under 
the Rule as they have to be inferentially treated as permanent employees after 
expiry of their probation period 
Appellants were employees of State Federation of Consumer Co-
operative Wholesales Stores Limited (CONFED) which was not an 
E industrial establishment. They were retrenched in terms of Section 25-F 
oflndustrial Disputes Act, 1947. Appellants filed Writ Petitions taking the 
stand that provisions of Section 25-N and not 25-F were applicable and 
that they were entitled to the benefits in terms of Rule 35(b) of CONFED 
Staff Service Rules, 1975 being permanent employees after completion of 
p their probation period. The stand of the respondent was that the appellants 
were not confirmed employees. High Court dismissed the Writ Petitions. 
Hence the present appeal. 
Allowing the appeal, the Court 
G 
HELD: I. Section 25-N of Industrial Disputes Act, 1947 refers to 
workman in an industrial establishment. The expression "Industrial 
Establishment" is defined in Section 25-L, which means a factory or a mine 
or a plantation. The employer is not covered by the definition of the 
"Industrial Establishment". Therefore, the High Court was right in holding 
H that Section 25-N has no application. (365-F, G] 
360 
.• 
' 
RAJINDERSINGHCHAUHANv. STATEOFHARYANA [PASAYAT, J.)361 
2. The stand of the appellants that they were deemed to have been A 
confirmed after expiry of probation period and they were permanent 
employees is in terra firma. 'Salesmen' belong to Class III of the category 
of permanent employees. The definition of "Probationer" given in Rule 
4(b) fully supports the appellants' stand that the probation period shall 
not exceed 24 months in all. Therefore, the appellants inferentially have B 
to be treated as permanent employees, and consequently the benefits under 
Rule 35(b) were available to them. But the same shall not be in addition 
to what is payable under Section 25-F. The amount which is higher of the 
two i.e. of Section 25-F or Rule 35(b) shall be paid to the appellants. 
(369-B, CJ 
State of Punjab v. Dharam Singh, AIR (1968) SC 1210, followed. 
Om Prakash Maury v. UP. Co-operative Sugar Factories Federation, 
Lucknow and Ors., AIR (1986) SC 1844 and High Court of MP. through 
Registrar and Ors. v. Satya Narayan Jhavar, (2001) 7 SCC 161, relied on. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 302 of 2004. 
From the Judgment and Order dated 12.2.2002 of the Punjab and 
Haryana High Court in C.W.P. No. 2684 of 2002. 
U.S. Chaudhury and Ms. Sunita Sharma for the Appellants. 
Praveen Kumar Rai, Shibashish Misra, Ajay Siwach, T.V. George and 
Dr. Kailash Chand for the Respondents. 
The Judgment of the Court was delivered by 
c 
D 
E 
ARIJIT PASA Y AT, J. Appellants call in question legality of the F 
judgment rendered by a Division Bench of the Punjab and Haryana High 
Court holding that the appellants' stand about applicability of Section 25-N 
of the Industrial Disputes Act, 1947 (in short the 'Act') was not correct. 
Controversy lies within a narrow compass. 
Appellants were employees of the Haryana State Federation of 
Consumers Co-operative Wholesales Stores Limited (in short the 'CONFED'), 
fourth respondent herein. The service conditions of its employees are covered 
G 
by CONFED Staff Service Rules, 1975 (in short the 'Rules'). On account of 
continued financial losses, a restructuring plan for gainful employment for H 
employees was prepared. It was noted that Retail Outlets (in short the 'ROL') 
362 
SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R. 
A were causing huge loss to the organization. Therefore, it was decided that all 
ROL should be closed being financially non-viable. Retrenchment 
compensation in terms of Section 25-F of the Act was paid. In the retrenchment 
order it was specifically stated as follows: 
B 
c 
"It is made clear
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