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KEY TAKEAWAYS

  • The Supreme Court has held that the Irrigation Department of the State of Madhya Pradesh is not a "Industrial Establishment" under Section 25L of the Industrial Disputes Act, and that the test for determining whether or not a Department is an Industrial Establishment is to consider the Department's primary functions and activities.
  • The Irrigation Department of the first appellant will not be an Industrial Establishment within the meaning of Section 25L” - observed a bench of Justices Ajay Rastogi and Abhay S Oka in State of Madhya Pradesh and Ors v. Somdutt Sharma.

BACKGROUND

  • Somdutt Sharma ("Respondent" in this case) was hired as a daily wage employee in the Irrigation Department of the State of Madhya Pradesh to work as a Helper. His employment was terminated on December 1, 1995.
  • On the Chief Minister’s directions, Sharma was again taken back in service in August 2004 but his employment was terminated again in July 2005.
  • Sharma filed a complaint, which was forwarded to the Labour Court for resolution by the competent government.
  • The Tribunal ordered Sharma's reinstatement in the Rajghat Canal Project because the State did not comply with section 25N of the Act, citing Chapter VB of the Industrial Disputes Act, 1947 ("Act").
  • The Tribunal, on the other hand, refused to pay back earnings.
  • The State went to the Single Judge of the High Court, enraged by the Tribunal's decision. The award was upheld by a single judge of the High Court.
  • On December 11, 2019, the High Court's Division Bench affirmed the Single Judge's decision to sustain the Tribunal's verdict.
  • Aggrieved, the State approached the Supreme Court.

COURT’S OBSERVATION

  • The Court noted that the Irrigation Department was responsible for disaster management, calamity management, flood control works maintenance, reservoir operations, and so on, in addition to creating and managing irrigation potential through the building of water resources projects.
  • None of these functions, however, would fall under the definition of an Industrial Establishment.
  • Thus the Supreme Court allowed the appeal and set aside the judgements and orders and held that Sharma’s termination of employment was legal and valid.

What do you think about Mr Sharma’s termination of employment, valid or not? Let us know in the comments below!

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