Bombay High Court
Chaganlal Prahladrai Singhania vs The Maharashtra State Co-Operative ... on 2 December, 1991
Equivalent citations: (1995)IIILLJ278BOM
JUDGMENT Pendse, J.
1. The petitioner was appointed as a Senior Grader on Salary of Rs. 600/- per month by the respondent on November 19, 1970. The petitioner was arrested on March 15, 1973 by Police authorities at Malshiras and was charge-sheeted in Criminal Case No. 70 of 1974 for misappropriation of certain amount. The petitioner was released from jail pending trial on August 25, 1973. When the petitioner went to resume his duties, the respondent informed him that his services stand terminated with effect from August 26, 1973. The order of termination does not set put any reason for termination, nor any notice was given or enquiry held before issuing order of termination. It seems that the services of the petitioner were terminated solely because the petitioner was arrested by police.
2. The Judicial Magistrate, Malshiras acquitted the petitioner of the charge of misappropriation on May 18, 1977. The petitioner thereafter addressed letter dated July 25, 1977, and August 6, 1977, requesting the respondent to reinstate him in service. The requests were not heeded and the petitioner approached the Conciliation Officer. The Conciliation Officer forwarded failure report and thereupon Deputy Commissioner of Labour, Bombay, made reference to the Labour Court. The petitioner claimed that his services should be reinstated with full back wages with effect from August 16, 1973.
The reference was resisted by the respondent, inter-alia, claiming that the petitioner was appointed for a specific job of a seasonal nature and the services of the petitioner were not required after August 1973. It was also claimed that the respondent had lost confidence in the petitioner in view of the arrest of the petitioner by police.
3. The Labour Court, after recording evidence, by the impugned order dated July 31, 1981, came to the conclusion that the claim of the respondent that the petitioner was a seasonal worker is not correct. The Labour Court also held that the petitioner was removed from service only because the Police had arrested him and the removal was without following any procedure or without serving any notice upon the petitioner. The Labour Court was also not impressed by the claim of the respondent that the employer had lost confidence in the workman. The Labour Court very rightly held that after the petitioner was acquitted of the charge of misappropriation, it is not permissible for the employer to claim that the petitioner was indulging in misappropriation. After recording all these findings, the Labour Court very curiously observed that the petitioner is not entitled to order of reinstatement or back wages because there is ample material to justify the contention of the Company regarding loss of confidence. The Labour Court declined to award back wages on the ground that the workman had not taken any steps to secure a job till he was acquitted by the Criminal Court. The order of the Labour Court is under challenge.
4. Shri Purandare, learned counsel appearing on behalf of the petitioner, submitted that the final order of the Labour Court cannot be sustained. The submission is correct and deserves acceptance. It is not permissible for the employer to throw out the workman on a specious ground of loss of confidence without following any procedure. It is not in dispute that the workman was not served with any notice, nor any steps were taken to hold any enquiry against the workman. The principle of loss of confidence cannot be applied unless there is substantial material on record to indicate that any reasonable employer would lose confidence due to the activities of the workman. In the present case, there is no such material save and except that the Police had arrested the petitioner on the charge of misappropriation. That fact loses all its relevance when the Judicial Magistrate found that the petitioner was not guilty of the charge levelled by the Police. It is not then open for the employer to claim that the loss of confidence is because of framing of charge by the Police in our judgment, the Labour Court was clearly in error in declining to pass order of reinstatement on the ground that the employer was justified in claiming loss of confidence. Shri Purandare is also right in his submission that the Labour Court was in error in denying the back wages. The sole consideration for passing order of removal of the petitioner is arrested by the police. In view of the fact that the petitioner was acquitted, the arrest can have no impact upon the rights of the petitioner". The Labour Court very curiously observed that the petitioner claims to have tried for job but there is no material to corroborate that. The Labour Court overlooked that in accordance with catena of decisions, the burden is upon the employer to establish that the workman was gainfully employed during the interregnum for denial of back wages. The Supreme Court held that the general rule is that the workman shall be awarded backwages once the order of removal is set aside unless during the interregnum he was gainfully employed. The employer has not produced any evidence in that regard. In our judgment, the order of the Labour Court declining reinstatement and back wages cannot be sustained.
5. Initially, Shri C.J. Sawant had filed appearance on behalf of the respondent-employer. When the petition was called out for hearing on last Friday Shri Sawant informed us that the employer had taken away the papers from him and the Law Officer of the employer had contacted him and informed him that some other Advocate has been engaged. No other Advocate was present on behalf of the employer and, therefore, we adjourned the matters till today and requested Shri Sawant to inform the Law Officer who was present in Court that the matter will not be postponed any longer. Today, nobody has appeared on behalf of the respondent. Shri Sawant is permitted to withdraw his appearance.
6. Accordingly, petition succeeds and the impugned order dated July 31, 1981 passed by the Presiding Officer, 2nd Labour Court, Bombay in Reference (IDA) No. 689 of 1979 is set aside and the following order is passed:
"The reference is allowed. The order of termination is set aside. The workman is reinstated with continuity of service in the post from which he was removed with effect from August 16, 1973. The workman is entitled to back wages from August 16, 1973 till the date of reinstatement. The back wages shall be paid by the employer within one month from today. The employer to pay costs."