Gujarat High Court
Bhavnagar Municipal Corporation vs Vinod Naranbhai Makwana on 12 March, 2018
Author: K.M.Thaker
Bench: K.M.Thaker
C/SCA/685/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 685 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE K.M.THAKER
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1 Whether Reporters of Local Papers may be allowed to Yes
see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
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BHAVNAGAR MUNICIPAL CORPORATION
Versus
VINOD NARANBHAI MAKWANA
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Appearance:
MR HS MUNSHAW(495) for the PETITIONER(s) No. 1
MR PV PATADIYA(5924) for the RESPONDENT(s) No. 1
NOTICE NOT RECD BACK(3) for the RESPONDENT(s) No. 1,2
NOTICE SERVED(4) for the RESPONDENT(s) No. 1,2
RULE NOT RECD BACK(63) for the RESPONDENT(s) No. 1,2
RULE SERVED(64) for the RESPONDENT(s) No. 2
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CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 12/03/2018
ORAL JUDGMENT
1. Heard Mr. Munshaw, learned advocate for petitioner Municipality corporation and Mr. 1 C/SCA/685/2015 JUDGMENT Patadiya, learned advocate for respondent.
2. In this petition, the petitioner corporation has challenged award dated 18.4.2014 passed by learned Labour Court at Bhavnagar and Reference (LCB) No.259 of 2000 whereby the learned Labour Court directed present petitioner corporation to reinstate present respondent on his original post with consequential benefits and 50% backwages.
3. So far as factual background is concerned, it has emerged from the record that the respondent herein raised industrial dispute with the allegation that the respondent illegally terminated his service on and from 12.6.1999. Appropriate government referred the dispute for adjudication to learned Labour Court. The learned Labour Court registered the dispute as reference No.259/2000.
3.1 In the statement of claim, the claimant (present respondent) alleged that the corporation employed him as permanent sweeper with effect from 1.4.1980 and that since then he worked with 2 C/SCA/685/2015 JUDGMENT the corporation regularly and continuously. He further alleged that on 12.6.1999 the corporation illegally and arbitrarily terminated his service without following procedure prescribed by law, in violation of statutory provision and without issuing notice and without payment of compensation. With the said allegations the claimant demanded that he should be reinstated in service with all benefits.
3.2 The opponent respondent opposed the reference and demand by the claimant. In its written statement, the corporation claimed that the claimant was engaged on adhoc and daily wage basis, that the claimant was engaged intermittently and he never worked continuously with the corporation. The corporation also claimed that the claimant was engaged on rotation basis for 10 days from amongst several similarly placed daily wagers who were being engaged on rotation basis for 10 days at a time. The corporation claimed that since the claimant never worked with the corporation continuously or 3 C/SCA/685/2015 JUDGMENT regularly and he was not employed on regular establishment, the demand was unjustified and the corporation had not committed any illegality in not engaging the claimant beyond or outside the rotation. With such submission corporation opposed the reference.
3.3 After the parties completed their pleadings, learned Labour Court received evidence from both sides. Upon conclusion of evidence learned Labour Court heard rival submissions. The learned Labour Court, thereafter passed impugned award with above mentioned directions.
4. Mr.Munshaw, learned advocate reiterated the factual details mentioned in the written statement. He also reiterated that the claimant was not engaged on regular establishment and he did not work for 240 days in any year during his entire tenure. Mr. Munshaw submitted that during his total tenure the claimant had worked for only 43.5 days and that therefore the allegation about breach of statutory provision is baseless and 4 C/SCA/685/2015 JUDGMENT unjustified. He submitted that learned Labour Court committed error in drawing presumption against the corporation and in not accepting the case of the corporation that the claimant had not worked for 240 days. He also submitted that the learned Labour Court has committed error in holding with the corporation committed breach of Section 25F, Section 25G and Section 25H. Learned advocate for the corporation submitted that in view of the fact that the claimant failed to prove that he had worked for 240 days and in light of the fact that the claimant had worked only for 43.5 days, the learned Labour Court should have rejected the reference. According to learned advocate for petitioner the award is unjust and arbitrary and should be set aside.
5. The submission by the corporation are denied by the learned advocate for respondent. Learned advocate for the respondent supported the award. He submitted that despite specific demand the corporation did not place on record relevant 5 C/SCA/685/2015 JUDGMENT documents namely attendance register, wage register, payslip etc., and that therefore the decision of the learned Labour Court to draw adverse inference is just and proper. He submitted that the corporation failed to place any material on record to establish that the details mentioned by him (the claimant) in his deposition are incorrect. According to the learned advocate for the respondent the award is based on material which was available on record as well as in view of the corporation's failure to place o record relevant documents. According to the respondent, the petition should be rejected and award should not be disturbed.
6. I have considered rival submissions and the material available on record as well as impugned award.
7. In present case, it is pertinent to note, at the outset, that the witness of the petitioner corporation admitted before the learned Labour Court that: 6 C/SCA/685/2015 JUDGMENT
(i) the corporation did not issue appointment letter to the claimant;
(ii) the corporation did not issue identity card to the claimant;
(iii) the corporation did not issue attendance card to the claimant and did not provide any details/ evidence abut the attndance of the claimant;
(iv) the corporation did not issue payslip to the claimant; (v) the details about attendance and payment of salary i.e. attendance card and payslip were not issued.
7.1 From the said specific admission by the witness of the petitioner corporation, it emerged before the learned Labour Court that the corporation did not issue any document/ evidence or any other material with regard to the appointment, service, length of employment, attendance of the workman, rate of the salary paid to the claimant etc and that therefore the claimant was not able to place any material on record to support his claim and his submission 7 C/SCA/685/2015 JUDGMENT that he was employed by the corporation since April, 1980 and his service came to be orally terminated on and from 12.6.1999 and/ or that he had worked for 240 days in every year and preceding 12 months.
7.2 On the otherhand, despite demand by the claimant, the petitioner corporation did not place on record the attendance register and/ or pay register wherefrom the learned Labour Court could have ascertained as to whether the claimant had worked for 240 days or not and whether any other persons were engaged by the corporation( after discontinuing the claimant) or not.
7.3 In this background, and in light of the corporation's failure to place relevant documents on record, the learned Labour Court considered it appropriate to draw adverse inference against the corporation.
8. At this stage, it is pertinent to mention that the corporation and its witness claimed 8 C/SCA/685/2015 JUDGMENT before the learned Labour Court that the claimant had worked for 43.5 days during entire tenure of his service with the corporation. 8.1 By the said statement, the corporation in the first place, accepted that it had engaged service of the claimant.
8.2 On the other hand, the corporation claimed that concerned workman worked for 43.5 days. 8.3 In this context it is pertinent to note that the witness of the corporation, during his deposition mentioned and clarified that the details about total working/ attendance of the claimant, are mentioned on the basis of record of the corporation. The witness stated before learned Labour Court that he derived the details from the documents/ record of the corporation. The said statement and deposition of the claimant establish that the documents namely attendance register and / or pay register were available with the corporation.
8.4 Despite this position the corporation did not place the documents on the record of the Court. 9
C/SCA/685/2015 JUDGMENT 8.5 The said statement and admission by the corporation witness established that though relevant documents namely attendance register and/ or pay register were available with the corporation, the corporation, for reasons best known to it, did not place on record the said materials and kept back most relevant and crucial evidence/ document.
8.6 It is pertinent as well as interesting to note that learned advocate for the petitioner, submitted that the claimant had submitted an application under Right to Information Act and in reply to the claimant's application under RTI the corporation had provided him the details about his attendance, on the basis of record of the corporation.
8.7 The said submission by learned advocate for corporation reestablishes and emphasizes the fact that though relevant documents namely attendance register and/ or pay register were available with the corporation, the corporation kept back the said material from the Court and 10 C/SCA/685/2015 JUDGMENT did not place the material on record. 8.8 In this view of the matter, the decision by learned Labour Court to draw adverse inference against the corporation and thereby to assume that the claimant had worked for 240 days cannot be faulted.
9. Once above mentioned aspect becomes clear and the conclusion is reached that the learned Labour Court did not commit any error in drawing adverse inference and/ or in assuming that the claimant had worked for 240 days, then the applicability of Section 25F of the Act, cannot be disputed. In light of the said fact, the applicability of Section 25F stands established.
10. In this view of the matter, the question would arise is as to whether the corporation satisfied the condition prescribed under Section 25F or not.
10.1 On this count, it is pertinent to note that it is not the case even of the corporation that when it discontinued to engage the claimant i.e. 11 C/SCA/685/2015 JUDGMENT when it relieved the claimant, it had paid retrenchment compensation to the claimant and had issued notice to the claimant. Differently put, it is not the case even of the corporation that it had complied and fulfilled the condition prescribed under Section 25F by payment of compensation and by issuing notice. 10.2 Under the circumstances, the fact that the corporation did not fulfill the condition and requirement prescribed under Section 25F is not in dispute. Rather the said fact is an admitted position.
11. Under the circumstance, the conclusion by learned Labour Court that claimant's service came to be terminated in breach of Section 25F cannot be faulted.
12. So far as the issue related to the allegation about breach of Section 25G is concerned, it is relevant to note that even according to corporation, it maintains that there are several persons who are engaged by the corporation on 12 C/SCA/685/2015 JUDGMENT rotation basis.
12.1 In that view of the matter, the corporation is under the obligation to demonstrate before learned Labour Court that the claimant was junior amongst other persons who were being engaged on rotation basis.
12.2 Differently put, seniority list of the persons who were being engaged on rotation basis should have been placed before the learned Labour Court and the corporation should have established that the claimant was junior amongst similarly placed employees.
13. However, the corporation, undisputedly failed to place such list on record before learned Labour Court.
14. Under the circumstances, the conclusion by learned Labour Court that the corporation committed breach of Section 25G, cannot be faulted.
15. In this backdrop, even if it is assumed that 13 C/SCA/685/2015 JUDGMENT learned Labour Court committed error in holding that the corporation committed breach of Section 25H then also in light of the facts of this case and material available on record learned Labour Court held that the corporation committed breach of Section F and Section G and that fact cannot be overlooked and the said facts stare in the face of the corporation.
16. In this view of the matter, final conclusion by learned Labour Court that the corporation illegally terminated the service of the claimant, cannot be faulted.
17. This leaves behind only one issue i.e. with regard to appropriate relief.
18. The learned Labour Court vide impugned award directed the corporation to reinstate the claimant on his original post with consequential benefits and 50% backwages.
18.1 So far as the direction to pay backwages is 14 C/SCA/685/2015 JUDGMENT concerned, a glance at the award shows that the learned Labour Court has failed to record any reason to support and justify the order directing the payment of 50% backwages.
18.2 Learned Labour Court could not have directed the payment of backwages, mechanically and without recording reasons and justification for such direction.
18.3 It is pertinent to note that the claimant was engaged on adhoc and daily wage basis and that therefore, the direction to pay backwages, should not and could not have been awarded mechanically.
19. In this context reference can be had to the observations by the Apex Court in case of Reetu Marbles vs. Prabhakant Shukla [(2010) 2 SCC 70] wherein Hon'ble Apex Court observed, inter alia, that:
"11. The only limited issue to be determined by us, in this appeal, is whether the High court was justified in granting full back wages to the respondent in spite of the denial thereof by the Labour Court. In our opinion the High Court erred in law in not examining the factual situation. The High 15 C/SCA/685/2015 JUDGMENT Court merely stated that it was not the case of the employer that the workman had been gainfully employed elsewhere. Although it noticed the principle that the payment of back wages having a discretionary element involved in it, has to be dealt with in the circumstances of each case and no strait jacket formula can be evolved, yet the award of the Labour Court was modified without any factual basis.
12. In the case of M/s. Hindustan Tin Works Pvt. Ltd. vs. The Employees of M/s. Hindustan Tin Works Pvt. Ltd. and Ors . AIR 1979 SC 75, it has been held as follows:
"9....Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full backs except to the extent he was gainfully employed during the enforced idleness. That is the normal rule."
13. These observations were subsequently considered in the case of Hindustan Motors Ltd. vs. Tapan Kumar 8 Bhattacharya and Anr . (2002) 6 SCC 41 and it was observed as follows:
"11. Under Section 11A as amended in 1971, the Industrial Tribunal is statutorily mandated, while setting aside the order of discharge or dismissal and directing reinstatement of the workman to consider the terms and conditions, subject to which the relief should be granted or to give such other relief to the workman including the award of any other punishment in lieu of the discharge or dismissal, as the circumstances of the case may require. The section is couched in wide and comprehensive terms. It vests a wide discretion in the Tribunal in the matter of awarding proper punishment and also in the matter of the terms and conditions on which reinstatement of the workman should be ordered. It necessarily follows that the Tribunal is duty bound to consider whether in the circumstances of the case, back wages have to be awarded and if so, to what extent.
12. From the award passed by the Industrial Tribunal which has been confirmed by the Division Bench of the High Court, it is clear 16 C/SCA/685/2015 JUDGMENT that the order for payment of full back wages to the workman was passed without any discussion and without stating any reason. It appears that the Tribunal and the Division Bench had proceeded on the footing that since the order of dismissal passed by the management was set aside, the order of reinstatement with full back wages was to follow as a matter of course.
13. In Hindustan Tin Works (P) Ltd. v. Employees a three Judge Bench of this Court laid down: (SCC p.86, para 11) "11. In the very nature of things there cannot be a straitjacket formula for awarding relief of back wages. All relevant considerations will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice, according to law and not humour. It is not to be arbitrary, vague and fanciful but legal and regular.
16. As already noted, there was no application of mind to the question of back wages by the Labour Court. There was no pleading or evidence whatsoever on t he aspect whether the respondent was employed elsewhere during this long interregnum."
14. The aforesaid judgment was subsequently considered in the case of UP State Brassware Corpn. Ltd. vs. Uday 10 Narain Pandey (2006) 1 SCC 479 it was observed as follows:
"17. Before adverting to the decisions relied upon by the learned counsel for the parties, we may observe that although direction to pay full 17 C/SCA/685/2015 JUDGMENT back wages on a declaration that the order of termination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter is being taken by the court realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched.
22. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on technical grounds or otherwise an order of termination is found to be in contravention of the provisions of Section 6N of the U.P. Industrial Disputes Act.
43. The changes brought about by the subsequent decisions of this court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalization, privatization and outsourcing, is evident."
15. From the above observations it becomes apparent that payment of full back wages upon an order of termination being declared illegal cannot be granted mechanically. It does not automatically follow that reinstatement must be accompanied by payment of full back wages even for the period when the workman remained out of service and contributed little or nothing to the industry.
16. Again in the case of Haryana State Electricity Development Corporation Ltd. vs. Mamni (2006) 9 SCC 434 this court reiterated the principle. The principles laid down in UP State Brassware Corp. Ltd. (supra). Recently this Court again examined the issues with regard to payment of full back wages in the case of P.V.K. Distillery Ltd. vs. Mahendra Ram 18 C/SCA/685/2015 JUDGMENT (2009) 5 SCC 705. After examining the relevant case law it has been held as follows:
"18. Although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter is being taken by the court realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched.
19. In Haryana Urban Development Authority v. Om Pal it is stated that: (SCC p. 745, para 7) "7.... It is now also well settled that despite a wide discretionary power conferred upon the Industrial Courts under Section 11A of the 1947 Act, the relief of reinstatement with full back wages should not be granted automatically only because it would be lawful to do so. Grant of relief would depend on the fact situation obtaining in each case. It will depend upon several factors, one of which would be as to whether the recruitment was effected in terms of the statutory provisions operating in the field, if any."
20. In deciding the question, as to whether the employee should be recompensed with full back wages and other benefits until the date of reinstatement, the tribunals and the courts have to be realistic albeit the ordinary rule of full back wages on reinstatement. (Western India Match Co. Ltd. v. Industrial Tribunal )"
17. Applying the aforesaid ratio of law we have examined the factual situation in the present case. The services of the respondent were admittedly terminated on 11.6.87. The Labour Court gave its award on 27.9.02. Therefore, there is a gap of more than 15 years from the date of termination till the award of reinstatement in service. Labour Court upon examination of the entire issue concluded that the 19 C/SCA/685/2015 JUDGMENT respondent would not be entitled to any back wages for the period he did not work. A perusal of the award also shows that the respondent did not place on the record of the Labour Court any material or evidence to show that he was not gainfully employed during the long spell of 15 years when he was out of service of the appellant.
18. In the writ petition the respondent was mainly concerned with receiving wages in accordance with the Minimum Wages Act and for inclusion of the period spent in Conciliation Proceedings for the calculation of financial benefits. The High Court without examining the factual situation, and placing reliance on the judgment in M/s. 14 Hindustan Tin Works Pvt. Ltd. vs. The Employees of M/s. Hindustan Tin Works Pvt. Ltd. and ors . held that the normal rule of full back wages ought to be followed in this case. We are of the considered opinion that such a conclusion could have been reached by the High Court only after recording cogent reasons in support thereof. Especially since the award of the Labour Court was being modified. The Labour Court exercising its discretionary jurisdiction concluded that it was not a fit case for the grant of back wages.
19. In the case of P.V.K. Distillery Ltd. (supra), it is observed as follows:
"15. The issue as raised in the matter of back wages has been dealt with by the Labour Court in the manner as above having regard to the facts and circumstances of the matter in the issue, upon exercise of its discretion and obviously in a manner which cannot but be judicious in nature. There exists an obligation on the part of the High court to record in the judgment, the reasoning before however denouncing a judgment of an inferior tribunal, in the absence of which, the judgment in our view cannot stand the scrutiny of otherwise being reasonable."
20. In our opinion the High Court was unjustified in awarding full back wages. We are also of the opinion that the Labour Court having found the termination to be illegal was unjustified in not granting any 20 C/SCA/685/2015 JUDGMENT back wages at all. Keeping in view the facts and circumstances of this case we direct that the respondent shall be paid 50 per cent of the back wages from the date of termination of service till reinstatement."
19.1 In the decision in case of General Manager, Haryana Roadways vs. Rudhav Singh [(2005) 5 SCC 591] Hon'ble Apex Court observed that:
"6. The next question, which requires consideration is whether the respondent is entitled to any back wages. The Industrial TribunalcumLabour Court awarded 50% back wages on the ground that in Rohtak District of State of Haryana work of the nature, which was being done by the respondent, is available in plenty as a large work force comes from Eastern UP and Bihar for doing such kind of work. However, a general observation has been made that keeping in view the facts and circumstances of the case it will be proper to award 50% back wages. The High Court has also not given any reason for upholding this part of the award.
7. In our opinion certain factors, which are relevant for forming an opinion regarding award of back wages, have been completely ignored and, therefore, the award on this point is vitiated. The list of dates given in the Special Leave Petition, which have not been controverted, show that though according to the own case of the respondent his services had been terminated on 18.2.1989, yet he served a demand notice praying for reinstatement in service after two and half years on 24.8.1991. The State Government made reference to the Industrial TribunalcumLabour Court in the year 1997, which means eight years after the termination of service. Normally, a reference should not be made after lapse of a long period. A labour dispute should be resolved expeditiously and there is no justification for the State Government to sleep over the matter and make a reference after a long period of time at 21 C/SCA/685/2015 JUDGMENT its sweet will. It causes prejudice both to the workman and also to the employer. It is not possible for an employer to retain all the documents for a long period and then to produce evidence, whether oral or documentary, after years as the officers, who may have dealt with the matter, might have left the establishment on account of superannuation or any other reason. The employer is not at fault if the reference is not made expeditiously by the State Government, but it is saddled with an award directing payment of back wages without having taken any work from the concerned workman. The plight of the workman who is thrown out of employment is equally bad as it is a question of survival for his family and he should not be left in a state of uncertainty for a long period.
8. There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of Section 25F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment, i.e., whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service, which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period, i.e., from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily wage employment though it may be for 240 days in a calendar year.22
C/SCA/685/2015 JUDGMENT
9. The written statement filed by the respondent shows that between 16.3.1988 to 31.10.1988 he had been given short term appointments as Helper, Wash Boy and Water Carrier with breaks of two days and seven days respectively on two occasions. After 31.10.1988 he was employed as Helper on 8.1.1989 after a gap of more than two months. This appointment was only up to 31.1.1989 and thereafter he was given fresh appointment on 7.2.1989, which came to an end on 28.2.1989. These facts show that the respondent had not worked continuously from 16.3.1988 to 28.2.1989 in the establishment of the appellant. A person appointed on daily wage basis gets wages only for days on which he has performed work.
10. In Smt. Saran Kumar Gaur and others vs. State of Uttar Pradesh and others [JT 1991 (3) SC 478], this Court observed that when work is not done remuneration is not to be paid and accordingly did not make any direction for award of past salary. In State of U.P. and Anr. vs. Atal Behari Shastri and anr. [JT 1992 (5) 523], a termination order passed on 15.7.1970 terminating the services of a Licence Inspector was finally quashed by the High Court in a writ petition on 27.11.1991 and a direction was issued to pay the entire back salary from the date of termination till the date of his attaining superannuation. This Court, in absence of a clear finding that the employee was not gainfully employed during the relevant period, set aside the order of the High Court directing payment of entire back salary and substituted it by payment of a lumpsum amount of Rs.25,000/. In Virender Kumar, General Manager, Northern Railways, New Delhi vs. Avinash Chandra Chadha and others [(1990) 3 SCC 472], there was a dispute regarding seniority and promotion to a higher post. This Court did not make any direction for payment of higher salary for the past period on the principle 'no work no pay' as the respondents had actually not worked on the higher post to which they were entitled to be promoted. In Surjit Ghosh vs. Chairman and Managing Director, United Commercial Bank and others [(1995) 2 SCC 474], the appellant (Assistant Manager in the Bank) was dismissed from service on 28.5.1985, but his appeal was allowed by this Court on 6.2.1995 as his dismissal order was found to be suffering from an inherent defect. His claim for arrears of salary for 23 C/SCA/685/2015 JUDGMENT the past period came to about Rs.20 lakhs but this Court observed that a huge amount cannot be paid to anyone for doing no work and accordingly directed that a compensation amount of Rs.50,000/be paid to him in lieu of his claim for arrears of salary. In Anil Kumar Gupta vs. State of Bihar [(1996) 7 SCC 83], the appellants were employed as daily wage employees in Water and Land Management Institute of the Irrigation Department of Government of Bihar and they were working on the posts of stenotypists, typists, machine operators and peons, etc. This Court allowed the appeal of the workmen and directed reinstatement but specifically held that they would not be entitled to any past salary. These authorities show that an order for payment of back wages should not be passed in a mechanical manner but host of factors are to be taken into consideration before passing any order for award of back wages.
11. In the case in hand the respondent had worked for a very short period with the appellant, which was less than one year. Even during this period there were breaks in service and he had been given short term appointments on daily wage basis in different capacities. The respondent is not a technically trained person, but was working on a class IV post. According to the finding of the Industrial TribunalcumLabour Court plenty of work of the same nature, which the respondent was doing, was available in the District of Rohtak. In such circumstances we are of the opinion that the respondent is not entitled to payment of any back wages."
19.2 It would be appropriate to also refer to the decision in case of U.P. SRTC vs. Mitthu Singh [(2006) 7 SCC 180] wherein Hon'ble Apex Court observed, inter alia, that:
13. In G.M. Haryana Roadways v. Rudhan Singh , [2005] 5 SCC 591, this Court held that there is no rule of thumb that in each and every case, where a 24 C/SCA/685/2015 JUDGMENT finding is recorded by Court or Tribunal that the order of termination of service was illegal that an employee is entitled to full back wages. A host of factors must be taken into account. The Court stated:
"8. There is no rule of thumb that in every case where the Industrial Tribunal gives a findings that the termination of service was in violation of Section 25F of the Act, entire back wages should be awarded. A host of actors like the manner and method of selection and appointment i.e. whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period i.e. from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent dailywage employment though it may be for 240 days in a calendar year."
14. Again, in Allahabad Jal Sansthan v. Daya Shankar Rai ,[2005] 5 SCC 124, after considering the relevant cases on the point, the Court stated"
"16 We have referred to certain decisions of this Court to highlight that earlier in the 25 C/SCA/685/2015 JUDGMENT event of an order of dismissal being set aside, reinstatement with full back wages was the usual result. But now with the passage of time, it has come to be realized that industry is being compelled to pay the workman for a period during which he apparently contributed little or nothing at all, for a period that was spent unproductively, while the workman is being compelled to go back to a situation which prevailed many years ago when he was dismissed. It is necessary for us to develop a pragmatic approach to problems dogging industrial relations. However, no just solution can be offered but the golden mean may be arrived at."
15. Recently, in U.P.S.R.T.C. Ltd. v. Sarada Prasad Misra, [2006] 4 SCC 733 JT (2006) 5 SC 114 one of us (C.K. Thakker, J.) had an occasion to consider a similar issue. Referring to earlier caselaw, it was observed :
"16. From the above cases, it is clear that no precise formula can be adopted nor `cast iron rule' can be laid down as to when payment of full back wages should be allowed by the court or Tribunal. It depends upon the facts and circumstances of each case. The approach of the Court/Tribunal should not be rigid or mechanical but flexible and realistic. The Court or Tribunal dealing with cases of industrial disputes may find force in the contention of the employee as to illegal termination of his services and may come to the conclusion that the action has been taken otherwise than in accordance with law. In such cases obviously, the workman would be entitled to reinstatement but the question regarding payment of back wages would be independent of the first question as to entitlement of reinstatment in service. While considering and determining the second question the Court or Tribunal would consider all relevant circumstances referred to above and keeping in view the principle of justice, equity and good conscience, should pass an appropriate order.
16. Thus, entitlement of a workman to get reinstatement does not necessarily result in payment 26 C/SCA/685/2015 JUDGMENT of back wages which would be independent of reinstatement. While dealing with the prayer of back wages, factual scenario and the principles of justice, equality and good conscience have to be kept in view by an appropriate Court/Tribunal.
17. In the instant case the record clearly reflects that the services of the respondent workman were never found to be satisfactory. In fact, before more than 30 years, his services were terminated but he was taken back by giving a chance to improve. Unfortunately, however, the respondent did not utilise it. Even prior to the three incidents in question, at several times, the respondent workman was warned. It was, therefore, not a fit case to grant back wages and the Labour Court and the High Court were not right in granting the said prayer. To that extent, therefore, the order deserves interference.
18. For the foregoing reasons, the appeal is partly allowed. The order passed by the Labour Court and confirmed by the High Court is set aside to the extent of granting back wages and it is held that the respondent workman is not entitled to back wages. The appeal is accordingly disposed of. In the facts and circumstances of the case, however, there shall be no order as to costs."
19.3 Thus, what emerges from the above quoted observations by Hon'ble Apex Court is that the direction with regard to payment of backwages should not be passed mechanically and only because relief of reinstatement is granted. The issue with regard to award for backwages should be decided by taking into account host of relevant facts and circumstances including total tenure of service of the claimant prior to 27 C/SCA/685/2015 JUDGMENT termination, the ground on which the claimant's service was terminated, the ground on which the order / action terminating service of the claimant is set aside, the fact as to whether the claimant was gainfully employed during interregnum, any exceptional circumstances pleaded and established by the employer against claimant for backwages etc.
20. In view of this Court in light of the facts of the case, the direction to pay backwages is unjustified and the said direction deserves to be set aside.
20.1 This would leave behind the direction granting benefit of continuity of service. 20.2 In light of the undisputed fact that the claimant was being engaged on adhoc and daily wage basis, his seniority and/ or continuity of service has to be considered amongst the daily wager and not amongst the regular and permanent employees of the corporation.
20.3 The learned Labour Court has failed to 28 C/SCA/685/2015 JUDGMENT clarify the said aspect while passing order granting consequential benefits.
21. For reasons mentioned above and in light of foregoing discussion, the order directing reinstatement of the claimant does not warrant any interference.
21.1 However, the order directing payment of backwages is not sustainable and the direction granting consequential benefits of continuity of service requires modification.
22. Therefore, following order is passed:
a. The award impugned in present petition is partly set aside and modified.
b. The direction by learned Labour court directing the corporation to reinstate the claimant on original post is not disturbed. The said direction is hereby confirmed. Therefore the corporation shall be obliged to reinstate the claimant as daily wager.
c. So far as the order directing payment of 50% 29 C/SCA/685/2015 JUDGMENT backwages is concerned, the said direction cannot be sustained for reasons mentioned above.
Therefore, the said direction is set aside.
d. So far as the order granting benefit of continuity of service is concerned, it is clarified that the claimant's service shall be considered continuous amongst the daily wager and not amongst the regular permanent employees of the corporation. Likewise, his seniority shall also be determined interse amongst the daily wager and not amongst the permanent workers of the corporation.
With aforesaid clarification and direction, the petition is disposed of. Orders accordingly.
(K.M.THAKER, J) saj 30