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Labour & Industrial LawSupreme Court of India

General Manager, Electrical Rengali Hydro Electric Project v. Sri Giridhari Sahu & Ors.

Civil Appeal · 2019 INSC 1020Decided 12 Sept 2019
Civil Appeal No. 8071 of 2010
Justice Sanjay Kishan Kaul · Justice K.M. Joseph

Background

Ninety NMR (non-muster-roll) workers of a hydro-electric project applied under Section 33A of the Industrial Disputes Act claiming they had been tricked into accepting a Voluntary Separation Scheme (VSS): that is, they had signed papers believing they were applying for regularisation of their jobs, but these were instead treated as applications to voluntarily leave service for a payout. The Labour Court agreed, found the VSS was "thrust upon" them without proper notice, and ordered their reinstatement with 70% back-wages; the Orissa High Court upheld this award. The employer-corporation appealed to the Supreme Court.

Decision Breakdown

The Supreme Court went through the evidentiary record in detail and found the Labour Court's finding, that the workers did not know what they were signing, to be factually unsupportable and "perverse": documentary evidence showed the workers' own union had discussed and even sought to negotiate better VSS terms before the scheme was implemented, the workers had accepted and retained the monetary benefits paid under the scheme for months before complaining, and only one worker (out of 90) had ever written any letter suggesting he acted under a wrong impression. Applying the principle that a writ court need not mechanically quash an award merely because an illegality is found, but may decline relief where restoring the award would itself cause manifest injustice, the Court set aside both the High Court's judgment and the Labour Court's award, and dismissed the workers' application, while directing that amounts earlier deposited by some of the workers (to pursue interim relief during the case) be returned to them with 8% interest.

Lesson Learnt

A claim that someone signed an agreement "without understanding" it will fail if the surrounding conduct, such as retaining and spending the money received under that agreement for months without objection, or the person's own representative body having negotiated its terms, shows they clearly knew what they were agreeing to; courts look at the whole conduct, not just a later claim of confusion.

General Manager, Electrical Rengali Hydro Electric Project v. Sri Giridhari Sahu & Ors. – Legal Case Shots | LegalAware