The Delhi High Court has clarified that the non-production of employment records by an employer, when such records are exclusively in its possession, warrants an adverse inference - establishing a critical precedent for casual and daily-rated workers seeking reinstatement under the Industrial Disputes Act, 1947. While the petitioners failed to prove statutory eligibility for retrenchment protection, the Court’s reasoning on evidentiary burden sets a vital doctrinal standard for future industrial disputes.
Background & Facts
The Dispute
The petitioners, Kishan Sharma, Sunder Lal, and Vinod Kumar, were engaged as casual, daily-rated Mali/Beldar workers in the Horticulture Department of the Municipal Corporation of Delhi (MCD) at Roshanara Garden, New Delhi. They performed duties identical to those of regular employees but were denied benefits such as earned leave, casual leave, and pay scale adherence. Their services were terminated on 26.09.1990 without notice, reason, or payment of retrenchment compensation.
Key Facts
- The petitioners claimed continuous service from approximately 1986 to 26.09.1990.
- No appointment letters were issued to them at the time of engagement.
- They were paid wages on a daily/muster-roll basis, with no formal employment documentation.
- Other workers performing the same duties were regular employees receiving statutory benefits.
- The petitioners had no access to wage vouchers, attendance registers, or any official proof of employment.
- The Respondent (MCD) admitted that muster roll records for the period 26.06.1986 to 26.09.1990 had been seen but were later destroyed.
- No policy or rule governing destruction of records older than 15 years was produced before the Labour Court or this Court.
Procedural History
- 26.09.1990: Termination of services of all three petitioners without notice or compensation.
- September 1993: Petitioners filed a demand notice before the Labour-Cum-Conciliation Officer.
- 27.10.1994: The appropriate Government referred the dispute for adjudication to Labour Court No. IX, Karkardooma, Delhi, as I.D. No. 2016/1994.
- Terms of Reference: Whether the services of the petitioners were terminated illegally and, if so, what relief they were entitled to.
- 25.10.2007: Labour Court passed the impugned award, holding that no employer-employee relationship existed and rejecting all claims.
- 12.02.2026: Writ Petition (W.P.(C) 1162/2008) heard by the Delhi High Court.
- 01.04.2026: Judgment delivered by Justice Shail Jain.
The Parties' Positions
Petitioners’ Position:
- They were engaged on a regular and perennial basis, performing duties identical to regular employees.
- Their termination violated Section 25F of the Industrial Disputes Act, 1947, as no notice or retrenchment compensation was provided.
- The Respondent’s failure to produce muster rolls, wage registers, or attendance records warranted an adverse inference.
- The Labour Court erred in ignoring settled principles on burden of proof and evidentiary obligations of employers.
Respondent’s Position:
- No employer-employee relationship existed.
- Petitioners’ names did not appear in the seniority list for 1986 - 1991.
- No wage vouchers were signed by the petitioners.
- Muster roll records were destroyed after 15 years as per routine practice.
- The industrial dispute was barred by limitation and lacked substantiation.
Relief Sought
The petitioners sought:
- Quashing of the Labour Court’s award dated 25.10.2007.
- Reinstatement in service with continuity and full back wages.
- Costs of the petition.
The Legal Issue
The central question was whether the Labour Court’s refusal to draw an adverse inference against the employer for non-production of muster roll records, despite their exclusive custody and material relevance, amounted to a patent illegality warranting interference under Article 226 of the Constitution. Additionally, whether the petitioners’ failure to plead or prove completion of 240 days of service in the preceding year precluded them from claiming protection under Section 25F of the Industrial Disputes Act, 1947.
Arguments Presented
For the Petitioner
The petitioners’ counsel argued that:
- The initial burden to establish employment lies with the workman, but once a claim is made and records are in the employer’s exclusive possession, the burden shifts.
- The Respondent admitted that muster rolls for the relevant period (26.06.1986 to 26.09.1990) had been seen, yet failed to produce them.
- No statutory rule justifying destruction of records during a pending industrial dispute was produced.
- Precedents such as R.M. Yellatti v. Assistant Executive Engineer and Gopal Krishnaji Ketkar v. Mahomed Haji Latif mandate adverse inference where best evidence is withheld.
- The Labour Court’s failure to apply these principles rendered its finding perverse.
For the Respondent
The Respondent contended that:
- The petitioners failed to discharge the initial burden of proving employment.
- Absence from seniority lists and lack of signed wage vouchers negated any claim of employment.
- Destruction of records after 15 years was routine and not mala fide.
- The petitioners never pleaded or proved completion of 240 days of service in any twelve-month period preceding termination, making Section 25F inapplicable.
- The Labour Court’s findings were based on evidence and could not be disturbed in writ jurisdiction.
The Court's Analysis
The Court began by affirming the limited scope of its jurisdiction under Article 226: it cannot re-appreciate evidence or act as an appellate forum. Interference is permissible only where the award suffers from patent illegality, perversity, or jurisdictional error.
The Court then examined the settled legal position on employer-employee relationships in cases involving casual workers. It held that while the initial burden lies on the workman to prove engagement, once the workman asserts employment and calls upon the employer to produce records within its exclusive control, the burden shifts. The non-production of such records, particularly muster rolls, wage registers, and attendance records, justifies an adverse inference.
"The failure of the Respondent to produce the muster roll records, which were material for determining the Petitioners’ employment during the relevant period, and were the best evidence, warranted such an inference."
The Court emphasized that the Respondent’s claim of destruction after 15 years was not supported by any rule or policy. Crucially, the industrial dispute had been raised in 1993, and the records in question were directly relevant to the adjudication. The Labour Court’s acceptance of this explanation without scrutiny was held to be legally unsustainable.
The Court relied on R.M. Yellatti v. Assistant Executive Engineer (2006) and Gopal Krishnaji Ketkar v. Mahomed Haji Latif (1968) to affirm that withholding best evidence, even without a formal burden of proof, permits an adverse inference. It also cited its own Coordinate Bench’s decision in M/s Punjab Steel Works v. Shambhu Saran Singh (2025), which held that employers, as custodians of statutory records, must produce them upon request.
The Court concluded that the Labour Court’s finding on the absence of an employer-employee relationship was perverse and liable to be set aside.
However, the Court turned to the second limb of the petitioners’ claim: entitlement under Section 25F. It held that Section 25F applies only if the workman has completed one year of continuous service as defined under Section 25B, which requires proof of 240 days of actual work in the preceding twelve months.
"The petitioners have not even laid such foundational facts. In the absence of any pleading or evidence to this effect, this Court cannot presume completion of 240 days of service."
The Court noted that while the petitioners claimed four years of service, they never pleaded or proved that they had worked 240 days in any single year preceding termination. Their affidavits were general and lacked specific dates or days worked. The Court declined to substitute proof with presumption, even while acknowledging the hardship faced by casual workers.
The Court distinguished Goverdhan v. Chief Municipal Officer (MP HC) and Municipal Corporation, Faridabad v. Siri Niwas (2004), noting that in those cases, the workmen had at least pleaded or adduced some evidence of 240 days, triggering the burden shift. Here, no such foundation existed.
The Verdict
The petitioners succeeded in part. The Court set aside the Labour Court’s finding that no employer-employee relationship existed, holding that the non-production of muster rolls warranted an adverse inference. However, the petitioners failed to establish completion of 240 days of service in the preceding year, as required under Section 25B of the Industrial Disputes Act, 1947. Consequently, they were not entitled to protection under Section 25F. The ultimate rejection of their claim for reinstatement and back wages was upheld. The writ petition was dismissed. There shall be no order as to costs.
What This Means For Similar Cases
Adverse Inference Is Mandatory When Best Evidence Is Withheld
- Practitioners must now argue that failure to produce muster rolls, wage registers, or attendance records - when exclusively in the employer’s custody - triggers an automatic adverse inference.
- Employers must produce such records or face presumption of employment.
- The burden shifts once the workman establishes a prima facie case of engagement and identifies records in the employer’s possession.
Section 25B Requires Specific Pleading - General Claims Are Insufficient
- Workmen must specifically plead and prove completion of 240 days of work in the twelve months preceding termination.
- General assertions of "several years of service" or "daily work" are inadequate.
- Courts will not presume 240 days; the burden remains on the workman to provide evidence, even if documentary proof is scarce.
- Oral testimony must be specific: dates, months, and number of days worked per month.
Casual Workers Must Document Even Informal Employment
- Casual workers should maintain personal records of attendance, wage receipts, or witness statements.
- Legal notices and representations should explicitly state the number of days worked in the preceding year.
- Failure to do so, even if the employer is at fault, may bar statutory relief under Section 25F.
