Delhi District Court
Sh. Gourav Sharma vs M/S. Sardari Lal & Sons on 10 January, 2023
IN THE COURT OF GORAKH NATH PANDEY,
ADDL. DISTRICT & SESSIONS JUDGE,
PRESIDING OFFICER : LABOUR COURT - IV,
ROUSE AVENUE COURTS : NEW DELHI.
LIR No.7102/2016
CNR No.DLCT13-000403-2016
IN THE MATTER OF:-
Sh. Gourav Sharma,
S/o late Sh. Ram Sewak Sharma,
R/o D-120, Chand Bagh,
Gali No.1, near Bhajanpura, Delhi - 110094.
Through:
Akhil Bhartiya Trade Union (Regd.),
Chamber No.F-507, 5th Floor, Karkardooma Court,
Delhi - 110094.
...... Workman/Claimant
Versus
M/s. Sardari Lal & Sons.,
1455/4-5, Shriram Market,
Gali Chhipiyan, Maliwada, Nai Sarak,
Delhi - 110006.
....... Management
Date of institution of the case : 20.01.2016
Date of passing the Award : 10.01.2023
Decision : Award Passed.
AWARD
1. The workman filed this statement of claim under
Section 2A (2) of The Industrial Disputes Act, 1947 stating
therein that he had been working with the management since
October, 1999 at the post of 'Counter Salesman' and his last
drawn salary was Rs.10,000/ per month; during his entire tenure
of service with the management, he had not afforded any
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opportunity of any complaint whatsoever to the management nor
there was any allegation against him.
It is contended that the management has not
provided the legal facilities to the workman such as appointment
letter, attendance register, leave book, payslip, leave encashment,
overtime, minimum wages etc. The workman further contended
that he time and again demanded the said legal facilities from the
management and due to the said reason, the management got
annoyed from the workman and started harassing him. Lastly, the
management terminated his services on 31.07.2014 withholding
his earned wages for the period 01.04.2014 to 31.07.2014
without issuing any notice/charge sheet. The workman alleged
that the management got obtained his signatures on certain blank
papers and the same can be misused against him. Aggrieved from
the termination, the workman made a complaint dated
22.08.2014 to the police against the management. The claimant
also issued legal demand notice dated 22.08.2014 to the
management for his reinstatement and back wages which was not
replied nor the workman was reinstated. The workman also filed
his statement of claim before the Conciliation Officer but of no
avail and hence the present case.
The workman claims to be unemployed from the
date of his illegal termination. As claimed, the termination of
service of the workman is illegal and unjustified as the
management violated the provisions of I.D. Act. Further, the
management has not issued any charge-sheet/warning nor
conducted any domestic enquiry while terminating the service of
the workman. It is prayed that an award be passed in favour of
workman and against management directing the management to
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reinstate him with consequential benefits including full back
wages and continuity in service.
2. Notice of the statement of claim was issued to the
management. Management made its appearance and filed written
statement contended that the workman joined the management
only w.e.f. 01.04.2010; he was issued appointment letter but the
copy of the same is with him; the management has never
employed more than 3-4 workmen since 2005 till date and can
not be termed as industry for the purpose of any claim; the
workman was not only paid all dues upto 31.07.14 but was
having an obligation to refund the advance which was standing as
per the accounts acknowledged by the workman at Rs.46,329/- as
on 31.07.2014; the workman with a view to avoid the repayment
of advance either by way of adjustment or otherwise, has shown
intend not to continue beyond 31.07.14; the workman was paid a
sum of Rs.7,645/- towards leave encashment equivalent to 27
days; the workman never worked with the firm Sardari Lal &
Sons but was working with the Firm M/s. S. L. Satish Kumar on
the date when he was permitted to leave the job for joining the
another employment having higher perks as per the workman and
to avoid payment of advance back to the management. The
management denied the other averments made in the statement of
claim and prayed to dismiss the claim petition.
3. Vide order dated 19.10.2016, the following issues
were framed in view of pleadings of the parties:-
ISSUES:
(1) Whether there exists any relationship of employer
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and employee between the claimant and the management M/s.
Sardari Lal and Sons?OPW
(2) If yes, whether the management is an 'industry'?
(3) Whether the services of the claimant were illegally
terminated by the management or whether the claimant had left
the services of the management voluntarily?
(4) Whether the claimant is gainfully employed after his
termination by the management?
(5) Relief.
The case was, thereafter, fixed for evidence of
workman.
4. In order to discharge the onus and prove the issue,
the claimant had appeared as witness and filed in evidence, his
examination in chief by way of affidavit Ex.WW1/A wherein he
had reiterated the contents of his statement of claim on solemn
affirmation. Besides this, he had also placed on record the
following documents :-
(i) Ex.WW1/1 to Ex.WW1/3: Demand notice dated
22.08.2014 issued to the management and its postal and courier
receipts respectively;
(ii) Ex.WW1/4 & Ex.WW1/5: Complaint dated
22.08.2014 made to the police against the management and its
postal receipt;
(iii) Ex.WW1/6: Complaint dated 18.09.2014 sent to the
Labour Department against the management;
(iv) Mark A: Failure report dated 16.04.2015 of Labour
Inspector.
The evidence of the workman was thereafter closed.
5. In rebuttal, management had examined Sh. Atul
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Rastogi as MW1 who filed his affidavit by way of evidence as
Ex.MW1/A, reiterating the factual contents of the written
statement of management. Besides this, he had also placed on
record the following documents :-
(i) MW1/1 (Colly): Register of employment and
remuneration; and
(ii) MW1/2: Details of payment of leave encashment.
6. I have heard the final arguments addressed by the
AR for the parties. I have also gone through the materials lying
on record. The AR for the Management also filed written
submissions and the case law titled Chhavi Chander Jha v.
Vishwakarma Engineering Works reported as 2019 Lawpack
(Del) 69413 in support of his contentions.
7 My issue-wise findings are as under:
Issue No.1:
Whether there exists any relationship of employer and employee
between the claimant and the management M/s. Sardari Lal and
Sons?OPW
8. The onus to prove the relationship of employer-
employee between the management and the workman was on the
workman/claimant. It is no longer res-integra that the burden of
proving the employer-employee relationship primarily rests upon
the person who asserts its existence. In a situation where a person
asserts to be an employee of the management which the
management denies, the duty primarily rests upon the person so
asserting to give positive evidence in his favour and discharge his
initial burden. Once such a person has given positive evidence in
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his favour, only then, the burden would shift on the management
to give evidence to counter such claims. This is because it is
always easier to prove positive facts than a negative.
9. In the judgment titled Automobile Association
Upper India v. P.O. Labour Court-II & Anr., reported as 130
(2006) DLT 160, Hon'ble Delhi High Court has held that
"engagement and appointment of the workman in service can
be established either by direct evidence like existence and
production of appointment letter or written agreement, or by
circumstantial evidence of incidental or ancillary records, in
nature of attendance register, salary register, leave records,
deposit of PF contribution, ESI etc. or even by examination
of co-worker who may depose before the court that the
workman was working with the management".
10. The Hon'ble Supreme Court in "Workman of Nilgiri
Coop. Mkt. Society Ltd. Vs State of Tamil Nadu", reported as
AIR 2004 SC 1639 held as under:-
"47. It is a well - settled principle of law that the person
who is set up a plea of existence of relationship of
employer and employee, the burden would be upon him.
48. In N.C. John Vs Secretary Thodupuha Taluk Shop
and Commercial Establishment Workers' Union and
others [1973 Lab. I.C. 398], the Kerala High Court held :
"The burden of proof being on the workman Jai Prakash
Vs M/s J.K. Sales Corporation 19.12.2019 Page No. 14
of 21 to establish the employer - employee relationship
an adverse inference cannot be drawn against the
employer that if he were to produce books of accounts
they would have proved employer-employee
relationship."
50. The question whether the relationship between the
parties is one of the employer and employee is a pure
question of the fact and ordinarily the High Court while
exercising its power of judicial review shall not interfere
therewith unless the findings is manifestly or obviously
erroneous or perverse."
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11. In 'Kanpur Electricity Supply Co. Ltd. Vs Shamim
Mirza', (2009/ 1 SCC 20, the Hon'ble Supreme Court held as
under :-
"20. It is trite that the burden to prove that a claimant
was in the employment of a particular management,
primarily lies on the person who claims to be so but the
degree of proof, so required, varies from case to case. It
is neither feasible nor advisable to lay down an abstract
rule to determine the employer - employee relationship.
It is Jai Prakash Vs M/s J.K. Sales Corporation
19.12.2019 Page No. 15 of 21 essentially a question of
fact to be determined by having regard to the cumulative
effect of the entire material placed before the
adjudicatory forum by the claimant and the
management."
12. Similarly, the Hon'ble Delhi High Court in case
Babu Ram Vs Govt. of NCT of Delhi & Anr., 247 (2018) Delhi
Law Times 596 was pleased to observe :
"it is well settled principle of law that the person, who
sets up a plea of existence of relationship of employer
and employee, the burden would be upon him. In this
regard, the Hon'ble Supreme Court in the case of
Workmen of Nilgiri Coop. Mkt. Society Ltd. V. State of
T.N. and Others, (2004) 3 SCC 514 has approved the
judgment of Kerala and Calcutta High Court, where the
plea of the workman that he was employee of the
company was denied by the company and it was held
that it was not for the company to prove that he was not
an employee. Para 48 to 50 of the said judgment reads
as under :
"In N.C. John v. Secy., Thodupuzha Taluk Shop and
Commercial Establishment Workers' Union & Ors,
(1973 Lab IC 398) the Kerala High Court held : The
burden of proof being on the workmen to establish the
employer employee relationship an adverse inference
cannot bedrawn against the employer that if he were to
produce books of accounts they would have proved
employer employee relationship.
In Swapan Das Gupta & Ors. v. The First Labour Court
of W.B. (1976 Lab IC 202 (Cal)) it has been held :
Where a person asserts that he was a workman of the
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company and it is denied by the company, it is for him
to prove the fact. It is not for the company to prove that
he was not an employee of the company but of some
other person.
The question whether the relationship between the
parties is one of employer and employee is a pure
question of fact and ordinarily the High Court while
exercising its power of judicial review shall not
interfere therewith unless the finding is manifestly or
obviously erroneous or perverse."
And observed:
"The petitioner has placed on record his self supporting
affidavit, demand notice and postal receipts in evidence
which does not prove his relationship with the
respondent as employee and employer. In these
circumstances, I do not find that the impugned Award
suffers from any illegality or perversity. There is no
merit in the petition. The same is accordingly dismissed
with no order as to costs."
13. The question regarding onus and degree of proof for
a claim of employment of a workman with the management was
examined in the case of Bank of Baroda v. Ghemarabhai
Harijibhai Rabari reported as 2005 (10) SCC 792. It was held that
onus of proof was on the claimant, namely the workman who
claimed to have been employed by the management. It was also
held that the degree of proof is vary from case to case and if the
workman had established a prima facie case, it would be the
responsibility of the management to rebut the same.
In view of afore-said law, it was for the claimant to
prove that he was employee of the management. The statement of
claim filed by the workman along-with defence of management
has been mentioned at the outset. The workman claimed that he
joined the management in October, 1999 at the post of Counter
Salesman; his last drawn salary was Rs.10,000/- p.m. and his
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services were terminated illegally and unjustifiably by the
management on 31.07.2014.
The management on the one hand in the written
statement admitted that the workman was accepted as an
employee by the management only w.e.f. 01.04.2010; he was
issued appointment letter but on the other hand it is submitted
that the workman has never worked with the Firm - Sardari Lal
& Sons but was working with the Firm M/s. S. L. Satish Kumar
on the date when he was permitted to leave the job for joining
another employment having higher perks as per the workman.
The workman examined as WW1 and relied upon
the documents mentioned above. The WW1/workman during
cross-examination deposed as under:-
"I had joined the firm Sardari Lal & Sons but the
management used to pay the monthly wages etc. to me
through M/s. S. L Satish Kumar. I joined the management as
salesman in the year 1999. I joined in October - 1999 but I
do not remember the date.
Xxxx The owner of the management are three persons
namely Sh. Satish Kumar Rastogi, Sh. Atul Rastogi and Sh.
Nishant Rastogi.
Xxxxx I had not received any appointment letter at the time
of joining the management firm. I have never seen that the
management had ever issued the appointment letter to any of
its employee during the course of my employment.
Xxxxxx The management constituting of three persons
alongwith three employees, as stated above, were part of M/s.
S. L. Satish Kumar and also M/s. Sardari Lal & Sons".
In this cross-examination, the workman reiterated
his case regarding joining with the management herein as
'Counter Salesman'.
The management examined MW1 who deposed vide
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affidavit Ex.MW1/A. During cross-examination, the MW1
deposed that:
"I do not remember the exact date, month and year of the
commencement of business in the name of M/s. S. L. Satish
Kumar but I will have not check my record and confirm the
same. It is wrong to suggest that M/s. S. L. Satish Kumar was
not in existence prior to 2010. It is correct that the
management herein is an old firm. There is no full form of
M/s. S. L. Satish Kumar as it is registered in the same name
since its inception. It is wrong to suggest that the full name of
S. L. Satish Kumar is M/s. Sardari Lal Satish Kumar. It is
correct that Sh. Satish Kumar is the son of late Sh. Sardari
Lal".
In view of admission by the management in the
written statement as well as the testimony of the witnesses it is
duly proved that the claimant was employed by the management
herein. The Issue no.1 is decided accordingly in favour of the
workman and against the management.
Issue No.2:
If yes, whether the management is an 'industry'?
The onus to prove this issue was on the workman.
14. It is claimed that the workman was appointed by the
management as 'Counter Salesman'; no appointment letter was
issued nor any legal facility was extended to the workman. The
management on the other hand reiterated that the workman was
accepted as an employee by the management only w.e.f.
01.04.2010; the appointment letter was duly issued, however, the
copy of the same is with the workman, who is purposely
withholding the same; the management has never employed more
than 3-4 workmen since 2005 till date and can not be termed as
Industry. The "Industry" is defined in cl. (j) as follows:-
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"industry" means any business, trade, undertaking, manufacture
or calling of employers and includes any calling, service,
employment, handicraft, or industrial occupation or avocation of
workmen". The word "employer" is defined by cl. (g) of the
section as:
15. There is no dispute that the management is engaged
in the business running for profit. There is no basis of the claim
by the management that its not an Industry at all.
16. Hon'ble Mr. Justice Krishna Iyer has construed
various expressions used in the definition of industry for
recording following conclusion in Bangalore Water Supply and
Sewerage Board Vs. A. Rajappa, (1978) 2 SCC 213. Relevant
extract of the judgment reads as under:
"140. Industry as defined' in Sec.2(j) and explained in Banerji's,
has a wide import.
"(a) Where (i) systematic activity, (ii) organized by cooperation
between employer and employee (the direct and substantial
element is chimerical) (iii) for the production and/or distribution
of goods and services calculated to satisfy human wants and
wishes (not spiritual or religious but inclusive of material things
or services geared to celestial bliss i.e., making, on a large scale
prasad or food), prima facie, there is an 'industry' in that
enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be
the venture in the public, joint, private or other sector.
(c) The true focus is functional and the decisive test is the nature
of the activity with special
emphasis on the employer-employee relations.
(d) If the organization is a trade or business it does not cease to
be one because of philanthropy animating the undertaking."
"141. Although section 2(j) uses words of the widest amplitude
in its two limbs, their meaning cannot be magnified to overreach
itself.
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"(a) 'Undertaking' must suffer a contextual and associational
shrinkage as explained in Banerji and in this judgment; so also,
service, calling and the like. This yields the inference that all
organized activity possessing the triple elements in I, although
not trade or business, may still be 'industry' provided the nature
of the activity, viz. The employer-employee basis, bears
resemblance to what we find in trade or business. This takes into
the fold of 'industry' undertakings, callings and services,
adventures 'analogous to the carrying on of trade or business'.
All features, other than the methodology of carrying on the
activity viz. In organizing the cooperation between employer
and employee, may be dissimilar. It does not, matter, if on the
employment terms there is analogy."
"142. Application of these guidelines should not stop short of
their logical reach by invocation of creeds, cults or inner sense
of incongruity or outer sense of motivation for or resultant of the
economic operations. The ideology of the Act being industrial
peace, regulation and resolution of industrial disputes between
employer and workmen, the range of this statutory ideology
must inform the reach of the statutory definition. Nothing less,
nothing more."
"(a) The consequences are (i) professions, (ii) clubs, (iii)
educational institutions, (iv) cooperatives, (v) research institutes,
(vi) charitable projects, and (vii) other kindred adventures, if
they fulfill the triple tests listed in I, cannot be exempted from
the scope of Section 2(j).
(b) A restricted category of, professions, clubs, cooperatives
and even gurukulas and little research labs, may qualify for
exemption if, in simple ventures, substantially and, going by the
dominant nature criterion, substantively, no employees are
entertained but in minimal matters, marginal employees are
hired. Without destroying the non-employee character of the
unit.
(c) ....................."
Finding: In view of the above referred law, it is held that the
management is an 'industry' as defined under Section 2 (j) of I. D.
Act, 1947. Issue No.(2) is, therefore, decided against the
management.
Issues No.3 & 4
(3) Whether the services of the claimant were illegally
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terminated by the management or whether the claimant had left
the services of the management voluntarily?
(4) Whether the claimant is gainfully employed after his
termination by the management?
Both these issues shall be decided together being
inter-related.
17. The workman claimed that he joined the services of
the management in October, 1999; his services were illegally
terminated by the management on 31.07.2014 without paying his
earned wages for the period 01.04.14 to 31.07.14 and other
consequential benefits.
The management on the other hand claimed that the
workman was accepted as an employee by the management only
w.e.f. 01.04.2010; the workman was paid all the dues upto
31.07.2014 and the workman intended not to continue beyond
31.07.2014 with a view to avoid the repayment of advance of
Rs.46,329/-.
It is reiterated that the workman examined himself as
WW1/A and deposed regarding the relevant documents as
mentioned above. The workman was cross-examined by the
management and deposed as under:
"3. The management were not maintaining the record of
my daily attendance and wages. The management used to
obtain my signatures on the revenue stamp affixed on the
blank paper and also on blank papers without having revenue
stamp. I used to sign as I used to be informed that the said
paper on which revenue stamp was affixed and my
signatures were obtained would be used for (HISAB KE
LIYE) accounting purpose by the management. (vol)
Whenever I used to ask for PF, over time or bonus etc.
4. The management had terminated my services on
31.07.2014 due to my above mentioned demands. I have
always demanded the above mentioned demands orally only
and never demanded the same in writing during the course of
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my employment. I had visited the shop of the management
2-3 times after my termination and thereafter, I filed a
complaint at Nimri Colony, Labour Office. I do not know if
any Labour Inspector had visited the premises of the
management after I filed the complaint. At this stage witness
is shown Document already mark A dated 16.04.2015 in the
examination in chief. This document had been prepared by
the Labour Inspector on my complaint dated 18.09.2014.
Document mark A is a correct and true document. Document
mark A is now exhibited a Ex.WW1/M1.
5. It is wrong to suggest that after 31.07.2014 I am
working with M/s Mani Dhari Sares having office at 1443.
Gali Chipyan, Maliwada, Nai Sarak, Delhi. It is wrong
suggest that I am working there at a higher salary.
6. It is wrong to suggest that I had taken an advance of
Rs.46,329/- from the management during the course of my
employment . It is wrong to suggest that I did not continue
my employment with the intention not to repay the same. I
had not received any appointment letter at the time of joining
the management firm. I have never seen that the
management had ever issued the appointment letter to any of
its employee during the course of my employment.
7. Between 31.07.2014 to 18.09.2014, I had also made a
complaint to the PS Kotwali, Chandni Chowk. I do not know
about the fate of my complaint. I had made the said
complaint because of the threat extended to me by Shri
Satish Kumar Rastogi, owner of the management".
The workman was further cross-examined on
25.01.2019 and deposed that:
I am unemployed since the date of termination of my services
by the management. It is correct that I am the sole earning
person in my family. My mother is bearing my expenses as
she is receiving rent as well as widow person. The rent is
around Rs.8,000/- to Rs.9,000/- per month and pension is
Rs.2,500 per month. I have not disclosed this fact to my AR
at the time of preparation of my claim. I do not remember
whether I have disclosed this fact to my AR at the time of
preparation of my evidence by way of affidavit or not. It is
wrong to suggest that my mother does not have any sources
of income, as stated above. It is wrong to suggest that I
myself left the services of management as I had got better
opportunity else where. I sign both in Hindi and English,
preferably in Hindi. It is correct that the management had got
obtained my signature on salary register. It is correct that I
have signed on document, which is attendance-cum-salary
register, at point A on each page, photocopy of which is
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Ex.WW1/M2 (colly.) (four pages). It is wrong to suggest that
I have received salary from the management for the period
April 2004 till July 2014. I got to know that the register has
been filled after obtaining my signature, during the course of
present proceeding. I have disclosed the fact that the register
has been filled after obtaining my signature, to my AR at the
time of preparation of my affidavit. It is correct that this fact
is not mentioned in my affidavit. At the time of my last
working for the management, there were two more
employees other than me working with the management.
Their names are Sh. Rajiv Sharma and Sh. Narender Kumar
Kanojia. The management constituting of three persons
alongwith three employees, as stated above, were part of M/s
S.L. Satish Kuamar and also M/s Sardari Lal & Sons. I have
not filed any complaint with any authority against the
management for filing the attendance-cum-salary register
after obtaining my signatures. The management used to
obtain my signatures on attendance-cum-salary register after
every 2 to 3 months. It is wrong to suggest that this is fake
story created by me in order to get wrongful gain from the
management as I used to sign the attendance-cum-salary
register every month after settling my account. Before the
present dispute, I used to get Rs.10,000/- per month from the
management without any settlement of account. I have never
obtained any advance or loan, during the course of my
employment with the management.
The workman was further cross-examined on
21.08.2019 and deposed that:
"I had never received any leave encashment from the
management. It is correct that I was getting my salary in
cash".
18. In order to prove the contention, the management
examined MW1 by way of affidavit of evidence Ex.MW1/A.
MW1 was cross-examined by the workman and deposed that"
"Xxxxxxxx It is correct that I have not mentioned in my
entire pleadings the date, month and year of advancement of
loan to the workman. Vol. The same is mentioned in the
register for the workman which is already part of the record
and which is already Ex.WW1/M2 (Colly). It is correct that I
have not mentioned in my pleadings about the mode of
payment of the advance to the workman.
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Xxxxxxxx It is correct that all the four pages of Ex.WW1/M2
(Colly) as well as Ex.MW1/2 bears the signatures of the
workman only on the revenue stamp. The workman has not
given in writing that he do not want to continue the services
with the management any more. The workman has not given
in writing to the management to settle his account. I have
settled the account of the workman. Vol. My amount of
Rs.46,329/- is due towards the workman. I have not issued
any notice to the workman to demand my due amount of
Rs.46,329/- not filed any case against him till today. The
workman worked as a Helper. It is wrong to suggest that the
workman has worked with the management since October,
1999 as Counter Sales Man. It is wrong to suggest that
Labour Inspector was not satisfied regarding the complaint of
the workman. I can not tell whether the attendance register,
wages register etc. maintained by the management for the
period October, 1999 till the year, 2010 are available or not
and I can answer only after checking it. The management is
not ready and willing to employ the workman even if he is
ready and willing to join the management. It is wrong to
suggest that the workman was illegally terminated on
31.07.2014 and he is entitled for relief as claimed in his
statement of claim".
The workman during his crossexamination
reiterated that the management had terminated his services due to
his demands for PF, overtime, bonus etc. The workman denied
the suggestion that he had taken an advance of Rs.46,329/ from
the management during the course of his employment. The MW1
during his crossexamination admits that he has not mentioned in
his entire pleadings the date, month and year of advancement of
loan to the workman or mode of payment of loan. He also admits
that the workman has not given in writing that he do not want to
continue the services with the management anymore. He further
admits that the workman has not given in writing to the
management to settle his account. On the other hand, the
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Gaurav Sharma v. Sardari Lal & Sons.
Page 16 of 28
claimant claimed that his services were terminated by the
management illegally/unjustifiably. Though the workman
claimed that he joined the management in October, 1999 but he
has not filed any document on record in support of his
employment since October, 1999 as claimed in the petition.
There is no document placed on record by the management to
show that the workman left the services of the management
voluntarily. The management has also failed to prove that the
claimant is gainfully employed after his termination by the
management by summoning witnesses or proving relevant
documents.
The receipt of the legal notice by the management is
not denied at all. There is no document on record placed by the
management to show that workman was issued any notice to join
his duties or subsequent enquiry was made against him. The
contention and claim of the workman appears to be coherent.
19. There is nothing in testimony of WW1 during his
cross examination to controvert the claim. The workman
categorically proved that he worked with the management and
completed 240 days of working in the preceding year of his
termination. As noted, no inquiry has been made by the
management in the matter as well.
20. It is settled that where an employer has failed to
make an enquiry before dismissal or discharge of a workman, it
is open for him to justify the action before the labour court by
LIR No.7102/2016
Gaurav Sharma v. Sardari Lal & Sons.
Page 17 of 28
leading evidence before it. It is relevant to refer the observations
of Hon'ble Supreme Court in Civil Appeal No.142/2021 titled
State of Uttarakahand and Ors. vs. Smt. Sureshwati decided on
20.01.2021. As held in the relevant para no.14 -
14. This Court has in a catena of decisions held that where an
employer has failed to make an enquiry before dismissal or
discharge of a workman, it is open for him to justify the action
before the Labour Court by leading evidence before it. The entire
matter would be open before the tribunal, which would have the
jurisdiction to satisfy itself on the evidence adduced by the
parties whether the dismissal or discharge was justified. A four
Judge Bench of this Court in Workmen of the Motipur Sugar
Factory Private Ltd. v. Motipur Sugar Factory (AIR 1965 SC
1803) held that:
" 11. It is now well settled by a number of decisions of this Court
that where an employer has failed to make an enquiry before
dismissing or discharging a workman it is open to him to justify
the action before the tribunal by leading all relevant evidence
before it. In such a case the employer would not have the benefit
which he had in cases where domestic enquiries have been held.
The entire matter would be open before the tribunal which will
have jurisdiction not only to go into the limited questions open to
a tribunal where domestic enquiry has been properly held (see
Indian Iron & Steel Co. v. Workmen (AIR 1958 SC 130) but also
to satisfy itself on the facts adduced before it by the employer
whether the dismissal or discharge was justified. We may in this
connection refer to Sana Musa Sugar Works (P) Limited v.
Shobrati Khan (AIR 1959 SC 923), Phulbari Tea Estate v.
Workmen (AIR 1959 SC 1111) and Punjab National Bank
Limited v. Workmen (AIR 1960 SC 160). These three cases were
further considered by this Court in Bharat Sugar Mills Limited
v. Jai Singh (1962) 3 SCR, 684 and reference was also made to
the decision of the Labour Appellate Tribunal in Ram Swarath
Sinha v. Belsund Sugar Co. (1954) LAC 697 . It was pointed out
that "the important effect of omission to hold an enquiry was
merely this: that the tribunal would not have to consider only
whether there was a prima facie case but would decide for itself
on the evidence adduced whether the charges have really been
made out". It is true that three of these cases, except Phulbari Tea
Estate case, were on applications under Section 23 of the
Industrial Disputes Act, 1947. But in principle we see no
difference whether the matter comes before the tribunal for
approval under Section 33 or on a reference under Section 10 of
the Industrial Disputes Act, 1947. In either case if the enquiry is
defective or if no enquiry has been held as required by Standing
Orders, the entire case would be open before the tribunal and the
employer would have to justify on facts as well that its order of
dismissal or discharge was proper. Phulbari Tea Estate
LIR No.7102/2016
Gaurav Sharma v. Sardari Lal & Sons.
Page 18 of 28
case was on a reference under Section 10, and the same principle
was applied there also, the only difference being that in that case
there was an inquiry though it was defective. A defective
enquiry in our opinion stands on the same footing as no enquiry
and in either case the tribunal would have jurisdiction to go into
the facts and the employer would have to satisfy the tribunal that
on facts the order of dismissal or discharge was proper."
Subsequently in Delhi Cloth and General Mills Co. v.
Ludh Budh Singh (1972) 1 SCC 595 this Court held that :
"(1) If no domestic enquiry had been held by the management, or
if the management makes it clear that it does not rely upon any
domestic enquiry that may have been held by it, it is entitled to
straightway adduce evidence before the Tribunal justifying its
action. The Tribunal is bound to consider that evidence so
adduced before it, on merits, and give a decision thereon. In such
a case, it is not necessary for the Tribunal to consider the validity
of the domestic enquiry as the employer himself does not rely on
it.
....
(3) When the management relies on the enquiry conducted by it, and also simultaneously adduces evidence before the Tribunal, without prejudice to its plea that the enquiry proceedings are proper, it is the duty of the Tribunal, in the first instance, to consider whether the enquiry proceedings conducted by the management, are valid and proper. If the Tribunal is satisfied that the enquiry proceedings have been held properly and are valid, the question of considering the evidence adduced before it on merits, no longer survives. It is only when the Tribunal holds that the enquiry proceedings have not been properly held, that it derives jurisdiction to deal with the merits of the dispute and in such a case it has to consider the evidence adduced before it by the management and decide the matter on the basis of such evidence.
Reliance is also placed on the judgment of this Court in Workmen of Firestone Tyre & Rubber Co. of India (P) Ltd. v. The Management of Firestone Tyre & Rubber Co. of India (P) Ltd and Others. (1973) 1 SCC 813 wherein the broad principle regarding holding of the enquiry were spelt out as:
"32. From those decisions, the following principles broadly emerge:
"(1) The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but if a dispute is referred to a Tribunal, the latter has power to see if action of the employer is justified.
(2) Before imposing the punishment, an employer is expected to conduct a proper enquiry in accordance with the provisions of the Standing Orders, if applicable, and principles of natural justice. The enquiry should not be an empty formality. (3) When a proper enquiry has been held by an employer, and the finding of misconduct is a plausible conclusion flowing from the evidence, adduced at the said enquiry, the Tribunal has no LIR No.7102/2016 Gaurav Sharma v. Sardari Lal & Sons.Page 19 of 28
jurisdiction to sit in judgment over the decision of the employer as an appellate body. The interference with the decision of the employer will be justified only when the findings arrived at in the enquiry are perverse or the management is guilty of victimisation, unfair labour practice or mala fide. (4) Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, had to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action, and it is open to the employee to adduce evidence contra.
(5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry.
(6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective.
(7) It has never been recognised that the Tribunal should straightaway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.
(8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power to refuse. The giving of an opportunity to an employer to adduce evidence for the first time before the Tribunal is in the interest of both the management and the employee and to enable the Tribunal itself to be satisfied about the alleged misconduct. (9) Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed before a Tribunal for the first time, punishment imposed cannot be interfered with by the Tribunal except in cases where the punishment is so harsh as to suggest victimisation. (10) In a particular case, after setting aside the order of dismissal, whether a workman should be reinstated or paid compensation is, as held by this Court in Management of Panitole Tea Estate v. Workmens, (1971) 1 SCC 742 within the judicial decision of a Labour Court or Tribunal. ..........
40. Therefore, it will be seen that both in respect of cases where a domestic enquiry has been held as also in cases where the LIR No.7102/2016 Gaurav Sharma v. Sardari Lal & Sons.
Page 20 of 28Tribunal considers the matter on the evidence adduced before it for the first time, the satisfaction under Section 11-A, about the guilt or otherwise of the workman concerned, is that of the Tribunal. It has to consider the evidence and come to a conclusion one way or other. Even in cases where an enquiry has been held by an employer and a finding of misconduct arrived at, the Tribunal can now differ from that finding in a proper case and hold that no misconduct is proved.
41. We are not inclined to accept the contentions advanced on behalf of the employers that the stage for interference under Section 11-A by the Tribunal is reached only when it has to consider the punishment after having accepted the finding of guilt recorded by an employer. It has to be remembered that a Tribunal may hold that the punishment is not justified because the misconduct alleged and found proved is such that it does not warrant dismissal or discharge The Tribunal may also hold that the order of discharge or dismissal is not justified because the alleged misconduct itself is not established by the evidence. To come to a conclusion either way, the Tribunal will have to re- appraise the evidence for itself. Ultimately it may hold that the misconduct itself is not proved or that the misconduct proved does not warrant the punishment of dismissal or discharge. That is why, according to us, Section 11-A now gives full power to the Tribunal to go into the evidence and satisfy itself on both these points. Now the jurisdiction of the Tribunal to reappraise the evidence and come to its conclusion enures to it when it has to adjudicate upon the dispute referred to it in which an employer relies on the findings recorded by him in a domestic enquiry. Such a power to appreciate the evidence and come to its own conclusion about the guilt or otherwise was always recognised in a Tribunal when it was deciding a dispute on the basis of evidence adduced before it for the first time. Both categories are now put on a par by Section 11-A."
It is reiterated that in this case no steps were taken by the management in respect of charge sheet and inquiry at all.
21. In view of the aforesaid discussions, it is held that the management herein has not been able to discharge its onus in support of contentions. It is duly proved from the materials on record and the testimony of the witnesses that the services of the claimant were terminated illegally/unjustifiably by the management. The citation relied upon by the AR for the LIR No.7102/2016 Gaurav Sharma v. Sardari Lal & Sons.
Page 21 of 28management in support of his contention is not squarely applicable in the facts and circumstances of the case. In view of the above discussions, the Issues no.3 and 4 are decided in favour of the workman and against the management.
Issue no.5:
Relief
22. The claimant herein has sought the relief of reinstatement in the service with full back wages along with the continuity of service and all the consequential benefits. The prayer of the claimant is denied by the management claiming that he is not entitled for any relief. The term "reinstatement" has not been elucidated in the Industrial Disputes Act, 1947. The Shorter Oxford English Dictionary, Vol. II, 3rd Edition stated that, the word "reinstate" means to reinstall or reestablish (a person or thing in a place, station, condition etc.); to restore to its proper and original state; to reinstate afresh and the word "reinstatement means the action of reinstating; reestablishment. "As per Black's Law Dictionary, 6th Edition, "reinstatement" means 'to reinstall, to reestablish, to place again in a former state, condition, or office, to restore to a state or position from which the object or person had been removed'.
23. In the case titled as Tapash Kumar Paul Vs BSNL & Anr, and reported as of JT 2014 (7) SC 589, the Hon'ble Supreme Court has held that the court may either award the compensation or order for reinstatement in the cases which do not fall within LIR No.7102/2016 Gaurav Sharma v. Sardari Lal & Sons.
Page 22 of 28the five categories as described by the Hon'ble Supreme Court in the aforesaid judgment. The relevant portion of this judgment is reproduced as under :
"It is no doubt true that a Court may pass an order substituting an order of reinstatement by awarding compensation but the same has to be based on justifiable grounds viz.(i) where the industry is closed; (ii) where the employee has superannuated or going to retire shortly and no period of service is left to his credit; (iii) where the workman has been rendered incapacitated to discharge the duties and cannot be reinstated and/or; (iv) when he has lost confidence of the Management to discharge duties. What is sought to be emphasized is that there may be appropriate case on facts which may justify substituting the order of reinstatement by award of compensation, but that has to be supported by some legal and justifiable reasons indicating why the order of reinstatement should be allowed to be substituted by award of compensation. In the instant matter, we are not satisfied that the appellant's case falls in to any of the categories referred to hereinbefore which would justify compensation in lieu of reinstatement. We thus find no justification for the High Court so as to interfere with the Award passed by the Tribunal which was affirmed even by the single Judge, but the Division Bench thought it appropriate to set aside the order of reinstatement without specifying any reasons whatsoever, as to why it substituted with compensation of a meager amount of Rs.20,000/ to the appellant."
24. Hon'ble Supreme Court in Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya and Ors., (2013) 10 SCC 324 discussed the concept of reinstatement as under:
"22. The very idea of restoring an employee to the position which he held before dismissal or removal or termination of service implies that the employee will be put in the same position in which he would have been but for the illegal action taken by the employer. The injury suffered by a person, who is dismissed or removed or is otherwise terminated from service cannot easily be measured in terms of money..... The reinstatement of such an employee, which is preceded by a finding of the competent judicial/quasijudicial body or court that the action taken by the employer is ultra vires the relevant statutory provisions or the principles of natural justice, entitles LIR No.7102/2016 Gaurav Sharma v. Sardari Lal & Sons.Page 23 of 28
the employee to claim full back wages. If the employer wants to deny back wages to the employee or contest his entitlement to get consequential benefits, then it is for him/her to specifically plead and prove that during the intervening period the employee was gainfully employed and was getting the same emoluments. The denial of back wages to an employee, who has suffered due to an illegal act of the employer would amount to indirectly punishing the employee concerned and rewarding the employer by relieving him of the obligation to pay back wages including the emoluments." (emphasis supplied).
25. It is settled law that reinstatement and back wages are not automatic and it depends upon the facts and circumstances of each case. In Ashok Kumar Sharma Vs Oberoi Flight Services reported as AIR 2010 Supreme Court 502, Hon'ble Supreme Court while relying upon various judgments of the Hon'ble Supreme Court held that compensation in lieu of reinstatement and back wages would be appropriate. The relevant para of judgment is reproduced as under :
"8. In the case of Sita Ram v. Moti Lal Nehru Farmers Training Institute 2(2008 AIR SCW 2256) this Court considered the matter thus :
"2. JT 2008 (3) SC622.
"21. The question, which, however, falls for our consideration is as to whether the Labour Court was justified in awarding reinstatement of the appellants in service.
22. Keeping in view the period during which the services were rendered by the respondent (sic appellants); the fact that the respondent had stopped its operation of bee farming, and the sen/ices of the appellants were terminated in December 1996, we are of the opinion that it is not a fit case where the appellants could have been directed to be reinstated in service.LIR No.7102/2016
Gaurav Sharma v. Sardari Lal & Sons.Page 24 of 28
23. Indisputably, the Industrial Court, exercises a discretionary jurisdiction, but such discretion is required to be exercised judiciously. Relevant factors therefore were required to be taken into consideration; the nature of appointment, the period of appointment, the availability of the job, etc. should weigh with the court for determination of such an issue.
24. This Court in a large number of decisions opined that payment of adequate amount of compensation in place of a direction to be reinstated in service in cases of this nature would subserve the ends of justice. (See Jaipur Development Authority v. Ramsahai [(2006) 11 SCC 684] : (2006 AIR SCW 5963), M.P. Admn. v. Tribhuban [(2007) 9 SCC 748] : (2007 AIR SCW 2357) and Uttaranchal Forest Development Corpn. v. M.C. Joshi [(2007) 9 SCC 353] : (2007 AIR SCW 7305).
25. Having regard to the facts and circumstances of this case, we are of the opinion that payment of a sum of Rs. 1,00,000 to each of the appellants, would meet the ends of justice. This appeal is allowed to the aforementioned extent. In the facts and circumstances of this case, there shall be no order as to costs."
9. The aforereferred two decisions of this Court and few more decisions were considered by us in the case of Jagbir Singh v. Haryana State Agriculture Marketing Board3(2009 AIR SCW 4824) albeit in the context of retrenchment of a daily wager in violation of section 25F of Industrial Disputes Act who had worked for more than 240 days in a year and we observed thus :
3. JT 2009 (9) SCC 396."7.
It is true that earlier view of this Court articulated in many decisions reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an LIR No.7102/2016 Gaurav Sharma v. Sardari Lal & Sons.
Page 25 of 28employee is in contravention to the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice."
It is not necessary to multiply the decisions of this Court wherein award of compensation in lieu of reinstatement and back wages has been held to be adequate and in the interest of justice.
In light of the aforesaid legal position, the view of the High Court that monetary compensation in lieu of reinstatement of the workman would be proper cannot be said to be unjustified."
In case titled as Mohd. Shakir And Sunder Lal Jain Hospital 2010ILLJ245 (Del) High Court of Delhi, it was held that:
"Illegality of dismissal/termination from service of a workman did not in itself ipso facto result in his reinstatement. The long history of litigation and acrimony between the parties leading to trust deficit in this case was considered by the Labour Court and it had rightly concluded that reinstatement might not be appropriate remedy will justified award of compensation in lieu of the reinstatement of the workman."
Hon'ble Supreme Court in the matter of 'Rajasthan State Transport Corporation, Jaipur Vs Sri Phool Chand' in Civil Appeal No. 1756/2010 has reiterated that to be entitled for back wages during the pendency of proceedings, the employee should not be employed in any establishment during the pendency of such proceedings. Further if a worker had been employed during the pendency of such proceedings and had been receiving adequate remuneration, no back wages would be payable for the period of such pendency. It was further held that a worker cannot automatically be entitled to back wages and has no right to claim back wages purely on the basis that the dismissal order has been set aside. As held :
"In order to claim back wages, a worker is required to prove (by adducing evidence) that he was not gainfully LIR No.7102/2016 Gaurav Sharma v. Sardari Lal & Sons.Page 26 of 28
employed anywhere after dismissal, and had no earnings to maintain himself and / or his family. An employer is required to prove that a worker was gainfully employed elsewhere - however the initial burden lies on the worker to substantiate his unemployment."
Further in 'Deepali Gundu Surwase Vs Kranti Junior Adhyapak Mahavidyalya (D.Ed) & Ors. reported as (2013) in SCC 324, Hon'ble Supreme Court held that in the case of wrongful termination of a worker, reinstatement with continuity of service and back wages was a normal rule. However, the payment of back wages has to be determined as per the facts and circumstances of his case and cannot be automatically granted on a order of reinstatement of the worker. The worker has to specifically raise the claim for back wages as well as present supporting evidence demonstrating his unemployment. This court also set out various factors for calculating the back wages, which include, among others.
(a) the length of service of a worker ;
(b) the nature of misconduct, if any, proved against worker ; and
(c) the financial condition of employer.
26. In the present case, the workman served the management before his illegal termination on 31.07.2014. Since, the parties are litigating for more than five years, the relationship of the workman with the management will not be cordial due to the rift and prolonged litigation. Further, the workman may not be considered sitting idle after his termination. Hence, in these circumstances, it would not be in the interest of justice and industrial piece to direct reinstatement and the ends of justice can be met by granting lump sum compensation. Considering the above facts, the statement of claim as filed by the workman is allowed and it is appropriate that management is directed to pay LIR No.7102/2016 Gaurav Sharma v. Sardari Lal & Sons.
Page 27 of 28lumpsum compensation of Rs.50,000/ (Rs. Fifty Thousand only) to the workman.
27. Management is directed to pay the said compensation within 30 days of publication of this award to the workman, failing which, the amount shall also be carrying an interest @ 8% per annum till the date of its realization.
28. Award is passed and reference is answered accordingly.
29. Copy of the award be sent to the Labour Commissioner for publication. The award be also sent to server.
File be consigned to Record Room. GORAKH Digitally signed by
GORAKH NATH
NATH PANDEY
Date: 2023.01.21
PANDEY 15:07:55 +0530
Announced in the open (Gorakh Nath Pandey),
Court on 10.01.2023 Addl. District & Sessions Judge,
Presiding Officer Labour Court- IV,
Rouse Avenue District Courts, New Delhi.
LIR No.7102/2016
Gaurav Sharma v. Sardari Lal & Sons.
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