Karnataka High Court
Basavalingaswamy And Others vs M/S Mach Aero Components Private ... on 14 February, 2023
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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RP No. 747 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 14TH DAY OF FEBRUARY, 2023
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
REVIEW PETITION NO. 747 OF 2022
BETWEEN:
BASAVALINGASWAMY AND OTHERS
REPRESENTED BY MACH AERO COMPONENTS,
WORKERS UNION
REP BY ITS PRESIDENT,
C/O TRADE UNION OFFICE,
NO.138, GROUND FLOOR,
9TH CROSS, 4TH MAIN,
CHAMARAJPET,
BENGALURU-560018
...PETITIONER
(BY SRI: K. SUBHA RAO, SR. COUNSEL FOR
SRI: L MURALIDHAR PESHWA, ADVOCATE OF
Digitally M/S SUBHARAO & CO.)
signed by
POORNIMA AND:
SHIVANNA
Location: M/S MACH AERO COMPONENTS PRIVATE LIMITED
HIGH NO.278, DODDABALLAPUR INDUSTRIAL AREA,
COURT OF BANGALORE RURAL DISTRICT-561203
KARNATAKA REPRESENTED BY ITS AUTHORIZED SIGNATORY)
...RESPONDENT
(BY SRI: M.R.C. RAVI, SR. COUNSEL FOR
SRI: PRASHANTH B.R., ADVOCATE OF
M.R.C. RAVI ASSOCIATES)
THIS REVIEW PETITION IS FILED UNDER ORDER 47 RULE 1 OF
CPC, R/W ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING
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RP No. 747 of 2022
TO REVIEW THE ORDER DATED 11/08/2022 PASSED IN WRIT
PETITION NO. 15919/2022 AND MAY BE PLEASED REVOKE THE PARA
NO.5, THE PART OF THE ORDER WHICH HAS PROVIDED LIBERTY TO
THE RESPONDENT TO FILE FRESH APPLICATION BEFORE THE TRIAL
COURT IN REFERENCE NO. 8/2017, TO SUMMONS THE COMPANIES
AND ANY OTHER APPROPRIATE ORDERS AS THIS HONBLE COURT
MAY DEEM FIT TO PASS, INCLUDING THE COSTS, IN THE INTEREST
OF JUSTICE AND EQUITY.
THIS REVIEW PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS COMING ON FOR PRONOUNCEMENT OF ORDERS, THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
1. The petitioner is before this Court seeking for the following reliefs:
"To Review the order dated 11-08-2022 passed in Writ Petition No.15919 of 2022 and may be pleased revoke the para no.5, the part of the order which has provided liberty to the Respondent to file fresh application before the trial court in Reference No.8/2017, to summon the companies, and any other appropriate orders as this Hon'ble Court may deem fit to pass, including the costs, in the interest of justice and equity."
2. The respondent had filed WP No.15919/2022 seeking for the following reliefs:
a) Issue a writ or direction in the nature of certiorari to quash the order dated 25.07.2022, in Ref.No.8/2017 passed by the Presiding Officer, I Additional District & Sessions Judge, Bengaluru Rural District, Bengaluru, vide Annexure-A. -3- RP No. 747 of 2022
b) Allow the IA dated 30.03.2022 filed by the petitioner in Ref.No.8/2017 before Presiding Officer, I Additional District & Sessions Judge, Bengaluru Rural District, Bengaluru, for summoning the documents from the companies, vide Annexure-D.
c) Issue any other appropriate writ or direction, as this Hon'ble Court deems fit and proper to grant in the circumstances of the case in the interest of justice and equity.
3. The said Writ Petition was premised on the facts that an application under Order XVI Rule 6 of CPC read with Section 11 of Industrial Disputes Act, 1947 (for short, 'I.D.Act'), which had been filed seeking for summons to be issued to the General Managers of about 34 Companies to produce details of employment and other details had been rejected. This Court vide order dated 11.08.2022 dismissed the said Writ Petition.
4. The rejection of the said application was on the ground that all the necessary details of the Companies or entities from whom the information as regards dismissed workmen being gainfully employed -4- RP No. 747 of 2022 had not been provided. This Court, while dismissing the Writ Petition, permitted the petitioner therein to file a fresh application by providing details of each employee with details of Companies.
5. Apparently, subsequent to the said order, an application has been filed, and it is then that the petitioner came to know about the order passed and is before this Court seeking for review of the order insofar as the permission granted to the respondents herein to file a fresh application.
6. Sri.K.Subba Rao, learned Senior Counsel for the petitioner submits that:
6.1. The proceedings before the Labour Court have been pending from the year 2017. There is no particular progress which had been made in the said matter. The management has been availing adjournments after adjournments, which is to the detriment of the workmen. The workmen having been dismissed from service in -5- RP No. 747 of 2022 the year 2017 have been left high and dry. The employer had resorted to unfair labour practices. 43 workmen who were members of the Union having been refused work with effect from 30.01.2017 and their services having been terminated on 20.04.2017. The said termination of services is illegal. By resorting to similar techniques out of 80 permanent workmen nearly 60 workmen have been removed from services by the respondent by resorting to one methodology or the other.
6.2. It is upon the failure of the conciliation proceedings, that the matter was referred to adjudication in Reference No.8/2017. From the date of reference, the employer-respondent has been seeking for and obtaining adjournments in the matter delaying the proceedings. The workmen have led their evidence. Initially, the employer led evidence of 4 witnesses. When -6- RP No. 747 of 2022 the matter was posted for arguments, it got adjourned for 12 occasions.
6.3. The employer kept quiet and only on 06.08.2020, an application had been filed for reopening the stage and leading evidence of 12 witnesses. Though the said application was opposed by the workmen, it came to be allowed by the Labour Court by imposing costs of Rs.6,000/-.
6.4. After the evidence of these 12 witnesses were led and they were cross-examined, the matter was once again posted for arguments. Again, there were nearly 12 adjournments taken by the respondent at that stage.
6.5. It is only on 08.01.2021 that the employer filed an application to lead further evidence on gainfully employment of the workmen. This application also came to be allowed by the Labour Court despite objections of the workmen by imposing costs of Rs.2,000/-. The employer -7- RP No. 747 of 2022 led the evidence of two more witnesses and marked certain documents and thereafter the matter was posted for arguments for third time on 04.01.2022.
6.6. At this stage, instead of arguing, the employer sought for reference to Lok-adalath promising to settle the matter. However, when the same was taken up on 05.03.2022 before Lok-
adalath, no settlement was arrived at and the matter was remitted back to Labour Court. 6.7. It is only thereafter that three interlocutory applications were filed before the Labour Court seeking for recall of the stage, permission to lead further evidence and for summons to be issued to the Companies detailed in Ex.No.82 which had been produced by MW-16 who had been examined subsequent to reopening the case on 08.01.2021.
-8-RP No. 747 of 2022 6.8. This application also not being proper, no details having been furnished, the said application came to be dismissed which was impugned in WP No.15919/2022.
6.9. He submits that the above being the background of the case, the same has been suppressed from this Court and this Court being of the opinion that the earlier application having been dismissed on technical grounds, a new application could be permitted to be filed. He submits that if all the facts had been brought to the notice of this Court, this Court probably would not have permitted the employer to file such an application. The order which had been passed though innocuous is causing harm and injustice to the workmen and as such, the permission granted to file the application ought to be recalled.
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6.10. He relies upon the decision of Hon'ble Apex Court in the case of DEEPALI GUNDU SURWASE VS. KRANTI JUNIOR ADHYAPAK MAHAVIDYALAYA (D.Ed.) AND ORS.1 more particularly, Para 33, which is reproduced hereunder for easy reference:
33. The propositions which can be culled out from the aforementioned judgments are:
i) In cases of wrongful termination of service, reinstatement with continuity of service and back wages is the normal rule.
ii) The aforesaid rule is subject to the rider that while deciding the issue of back wages, the adjudicating authority or the Court may take into consideration the length of service of the employee/workman, the nature of misconduct, if any, found proved against the employee/workman, the financial condition of the employer and similar other factors.
iii) Ordinarily, an employee or workman whose services are terminated and who is desirous of getting back wages is required to either plead or at least make a statement before the adjudicating authority or the Court of first instance that he/she was not gainfully employed or was employed on lesser wages. If the employer wants to avoid payment of full back wages, then it has to plead and also lead cogent evidence to prove that the employee/workman was gainfully employed and was getting wages equal to the wages he/she was drawing prior to the termination of service. This is so because it is settled law that the burden of proof of the existence of a particular fact lies on the person 1 (2013) 10 SCC 324
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who makes a positive averments about its existence. It is always easier to prove a positive fact than to prove a negative fact. Therefore, once the employee shows that he was not employed, the onus lies on the employer to specifically plead and prove that the employee was gainfully employed and was getting the same or substantially similar emoluments.
iv) The cases in which the Labour Court/Industrial Tribunal exercises power under Section 11-A of the Industrial Disputes Act, 1947 and finds that even though the enquiry held against the employee/workman is consistent with the rules of natural justice and / or certified standing orders, if any, but holds that the punishment was disproportionate to the misconduct found proved, then it will have the discretion not to award full back wages. However, if the Labour Court/Industrial Tribunal finds that the employee or workman is not at all guilty of any misconduct or that the employer had foisted a false charge, then there will be ample justification for award of full back wages.
v) The cases in which the competent Court or Tribunal finds that the employer has acted in gross violation of the statutory provisions and/or the principles of natural justice or is guilty of victimizing the employee or workman, then the concerned Court or Tribunal will be fully justified in directing payment of full back wages. In such cases, the superior Courts should not exercise power under Article 226 or 136 of the Constitution and interfere with the award passed by the Labour Court, etc., merely because there is a possibility of forming a different opinion on the entitlement of the employee/workman to get full back wages or the employer's obligation to pay the same. The Courts must always be kept in view that in the cases of wrongful / illegal termination of service, the wrongdoer is the employer and sufferer is the employee/workman and there is no justification to give premium to the employer of his wrongdoings by relieving him of the burden to pay to the employee/workman his dues in the form of full back wages.
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RP No. 747 of 2022
vi) In a number of cases, the superior Courts have interfered with the award of the primary adjudicatory authority on the premise that finalization of litigation has taken long time ignoring that in majority of cases the parties are not responsible for such delays. Lack of infrastructure and manpower is the principal cause for delay in the disposal of cases. For this the litigants cannot be blamed or penalised. It would amount to grave injustice to an employee or workman if he is denied back wages simply because there is long lapse of time between the termination of his service and finality given to the order of reinstatement. The Courts should bear in mind that in most of these cases, the employer is in an advantageous position vis-à-vis the employee or workman. He can avail the services of best legal brain for prolonging the agony of the sufferer, i.e., the employee or workman, who can ill afford the luxury of spending money on a lawyer with certain amount of fame. Therefore, in such cases it would be prudent to adopt the course suggested in Hindustan Tin Works Private Limited v. Employees of Hindustan Tin Works Private Limited (supra).
vii) The observation made in J.K. Synthetics Ltd. v. K.P. Agrawal (supra) that on reinstatement the employee/workman cannot claim continuity of service as of right is contrary to the ratio of the judgments of three Judge Benches referred to hereinabove and cannot be treated as good law. This part of the judgment is also against the very concept of reinstatement of an employee/workman. 6.11. He refers to Rule 10B of the Industrial Disputes (Karnataka) Rules, 1957 (for short, 'Rules'), which is reproduced hereunder for easy reference:
10-B Proceedings before the Labour Court or the Tribunal-
(1) Where the State Government refers any industrial dispute for adjudication to a Labour Court or Tribunal,
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within two weeks of the date of the receipt of the order of reference, the party representing workmen [or in the case of an individual workman, the workman himself] and the employer involved in the dispute shall file with the Labour Court or Tribunal, as the case may be, a statement of the demands relating only to the issues as are included in the order of reference and shall also forward a copy of such statement to each one of the opposite parties involved in the said dispute:
[Provided that where the Labour Court, or the Tribunal as the case may be considers it necessary, it may-
a. Extend the time limit for filing of such statement; or b. Reduce the time limit for filing of such statement to one week in emergent cases for reasons to be recorded in writing; or c. Where both the parties agree, reduce the time limit for filing of such statement as per agreement; or d. Where both the parties agree, dispense with the requirement of filing such statement altogether.] (2) Within two weeks of the receipt of the Statement referred to in sub-rule (1), the opposite party shall file its rejoinder with the Labour Court or Tribunal, as the case may be, and simultaneously forward a copy thereof to the other party:
Provided that such rejoinder shall relate only to such of the issues as are included in the order of reference.
[Provided further that where the Labour Court or the Tribunal, as the case may be, considers it necessary, it may-
a. Extend the time limit for filing of such rejoinder; or b. Reduce the time limit for filing of such rejoinder to one week in emergent cases for reasons to be recorded in writing; or
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c. Where both the parties agree, reduce the time limit for filing of such rejoinder as per agreement; or d. Where both the parties agree, dispense with the requirement filing of such rejoinder altogether] (3) The Labour Court or Tribunal, as the case may be, shall ordinarily fix the date for the first hearing of the dispute within six weeks of the date on which it was referred for adjudication:
Provided that the Labour Court or Tribunal, as the case may be, may for reasons to be recorded in writing, fix a later date for the first hearing of the dispute.
(4) The hearing shall ordinarily be continued from day-to-
day and adjournments shall follow immediately after the closing of evidence.
(5) The Labour Court or Tribunal, as the case may be, shall not ordinarily grant an adjournment for a period exceeding a week at a time, not more than 3(three) adjournments in all at the instance of any one of the parties to the dispute:
Provided that the Labour Court or Tribunal, as the case may be, may for reasons to be recorded in writing, grant an adjournment exceeding a week or more than three adjournments at the instance of any one of the parties to the dispute (6) The Labour Court or Tribunal, as the case may be, shall make a brief memorandum of substance of the evidence of every party or witness, as the examination of the party or of the witness proceeds, and such memorandum, shall be written and signed by the Presiding Officer of such Labour Court or Tribunals, as the case may be, with his own hand and shall form part of the record;
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RP No. 747 of 2022Provided that if the Presiding Officer is prevented from making such memorandum he shall record the reason of his inability to do so and shall cause such memorandum to be made in writing from his dictation and shall sign the same and such memorandum shall form part of the record;
Provided further that the Labour Court or Tribunal, as the case may be, may follow the procedure laid down in Rule 5, Order XVIII of the First Schedule to the Code of Civil Procedure, 1908, if it considers necessary to do in view of the nature of the particular Industrial Dispute pending before it.
6.12. By referring to above provision, he submits that there is a time frame which has been fixed for disposal of the matter. This time frame has been so fixed for the purpose of expeditious disposal of disputes involving workmen and employer for the reason that the workmen would be suffering on account of any order being passed by the employer against the workmen either dismissing them from service or withholding any amounts or increments. 6.13. The labour/wages not being paid or the work having been denied, the same would have an impact on the workman and his family and as
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RP No. 747 of 2022such, it is required that all labour proceedings are required to be disposed at the earliest in terms of Rule 10B of the Rules.
6.14. He submits that the procedure which has been prescribed would require an industrial dispute to be disposed of in a maximum period of 6 months. In the present case, the reference having been made in January 2017, even now in January 2023, after a period of 6 years, there is no resolution of dispute which is causing harm and injury to the workman. There is a specific provision made in terms of Sub-Rule (6) of Rule 10B that entire evidence is not required to be recorded. It is only a statement of evidence tendered which is required to be recorded. Instead of so doing, the Labour Court is recording extensive evidence by way of affidavit in lieu of evidence
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RP No. 747 of 2022and cross examination, which is only delaying the matter.
6.15. Lastly, he submits that the workmen having clearly and categorically pleaded in the claim statement that they were not gainfully employed, it was for the employer to have led evidence about their alleged gainfully employment at the initial stage itself, since the respondent was aware of the stand of the workmen that they were not gainfully employed. The employer has been delaying the proceedings only to frustrate the workmen. The conduct of the employer does not require any equitable consideration at the hands of this Court as considered in the order under review and therefore, the review petition is required to be allowed.
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RP No. 747 of 2022
7. Per contra, M.R.C.Ravi, learned Senior Counsel appearing for the respondent-employer would submit that:
7.1. there is reverse burden of proof on the employer to establish that the workmen are gainfully employed when the workmen alleges that they are not. Thus, all and every opportunity is required to be granted to the employer to place on record the necessary facts and proof of gainfully employment.
7.2. It is very difficult to prove gainful employment since the workmen could be changing posts or jobs. It is not that the employer would get to know if the workmen are gainfully employed or not. As soon as the employer got to know about the gainful employment of the workmen, the employer has filed necessary application first time with the details as available and subsequently with all the details as regards which the defects were pointed out. He
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submits that this opportunity to the employer should not be deprived and the review petition is required to be dismissed.
7.3. There is no delay on the part of the employer inasmuch as there being only 4 adjournments which have been sought for by the employer viz., 12.4.2018, 31.10.2018, 08.02.2019 and 14.10.2019. Apart from these 4 dates, no adjournments have been sought for by the employer. Thereafter, the covid pandemic occurring, the delay which has been caused is not on account of the employer. Most of the adjournments which have been ordered are on account of lack of time with the Court since the I Additional District and Sessions Court, Bangalore, is also handling criminal and civil matters and as such, it is not a designated Labour Court. Least priority is given to labour matters and highest priority is given to criminal
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RP No. 747 of 2022matters. The recordal of adjournments by consent in the order sheet is on account of the matter not reaching and not on account of any adjournments being sought for. If there was designated Labour Court, the matter could have been taken up and disposed by now. The above fact not being in the control of the employer, the employer cannot be blamed for it.
7.4. He submits that it is required for the workmen to have entered the witness box and to have stated on oath about the workmen not gainfully employed. In the present case, all the workmen have not entered the witness box. It is only the President of the Union who had entered the witness box and out of 43 workmen, only 2 workmen have entered the witness box. The other 41 not having entered the witness box, there is no statement on oath
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RP No. 747 of 2022on record by way of affidavit in lieu of evidence or otherwise to indicate that the workmen are not gainfully employed.
7.5. He relies on the decision of the Hon'ble Apex Court in the case of K.K.VELUSAMY VS. N.PALANISAMY2 more particularly Para 14 thereof, which is reproduced hereunder for easy reference.
14. The amended provisions of the Code contemplate and expect a trial court to hear the arguments immediately after the completion of evidence and then proceed to judgment. Therefore, it was unnecessary to have an express provision for reopening the evidence to examine a fresh witness or for recalling any witness for further examination. But if there is a time gap between the completion of evidence and hearing of the arguments, for whatsoever reason, and if in that interregnum, a party comes across some evidence which he could not lay his hands on earlier, or some evidence in regard to the conduct or action of the other party comes into existence, the court may in exercise of its inherent power under Section 151 of the Code, permit the production of such evidence if it is relevant and necessary in the interest of justice, subject to such terms as the court may deem fit to impose.
2 (2011) 11 SCC 275
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RP No. 747 of 20227.6. By relying on the above judgment, he submits that even in civil matters under the Code of Civil Procedure, whenever the matter is posted for arguments, if there is a time gap between leading of evidence and arguments wherein a party come across some evidence, which he could not lay his hands on earlier, the Court by exercising powers under Section 151 CPC ought to permit for production of such evidence. 7.7. He relies on the judgment of the Madras Judicature in the case of CHENNAI AIRPORT CONTRACT WORKERS UNION (REPRESENTED BY ITS SECRETARY), CHENNAI VS. PRESIDING OFFICER, CGIT & ANR3 more particularly Para 4 thereof, which is reproduced hereunder for easy reference:
4. Paragraph 7, at pages 791 and 792, of the said judgment on this aspect is to the following effect:3
2002 1 LLN 353
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"... When a party to a proceeding before ever the matter is closed comes forward to place truthful facts, no Court could ever hesitate to receive such materials. Dispensation of justice depends only on ascertainment of truth and nothing else. There could be no question of shutting it out, on a technical ground, that the matter is already posted for arguments. Even before the delivery of judgment, if the truthful position comes to the knowledge of the Court and which would have a direct bearing on the ultimate finding to be rendered by it, there could be no hesitation in receiving truth into Court. It is not a question of finding out whether the person involved is a workman, or a debtor, or a tenant, or belonging to a weaker section of the society and shut out truth which would be adverse to him. If not he could unjustly enrich himself. There will be instances in which at the last moment truthful materials may be brought forth by such persons. The one and the only objective of the Court in administering justice is to never stand in the way of the truth being brought to its knowledge whatever be its stage. Undoubtedly, before the verdict is given, it has to be brought to its knowledge. Sometimes, it may be done in appellate stage also, if the Court finds that truth is forthcoming, it would not refuse to entertain it. Hence, this Court considers that, the strenuous arguments putforth by Sri Vijay Narayan that by reopening the matter, a workman would be compelled to undergo further cross-examination and that the decision may be delayed, are secondary to the primordial consideration of truth being ascertained, on the nature of the claim putforth by petitioner. The material which is sought to be relied upon certainly would not result in long delay in the disposal of the matter, and if really as claimed, the second respondent has been eking out his livelihood during the long span of thirteen years, it would be most relevant material for the disposal of the petition. Regarding failure to furnish particulars,
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sufficient indication was available as to where he had been employed. Undoubtedly, there is no need for any of the parties to the proceedings to disclose what questions they want to put, when evidence is to be reopened.
(emphasis supplied.) 7.8. By relying on the above, he submits that what is necessary is for the truth to be placed on record and for the truth not to be shut off from the proceedings since the Labour Court would have to ascertain and decide on the truth of the matter. The summoning of 34 Companies by directing them to furnish the information relating to the workmen is in aid of placing truth on record which ought not to be shut off.
7.9. He relies on the judgment of the Hon'ble Apex Court in the case of TALWARA CO-OPERATIVE CREDIT AND SERVICE SOCIETY LIMITED VS.
SUSHIL KUMAR4 more particularly Para 13 4 (2008) 9 SCC 486
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RP No. 747 of 2022thereof, which is reproduced hereunder for easy reference:
13. This Court in a large number of cases noticed the paradigm shift in the matter of burden of proof as regards gainful employment on the part of the employer holding that having regard to the provisions contained in Section 106 of the Evidence Act, the burden would be on the workman. The burden, however, is a negative one. If only the same is discharged by the workman, the onus of proof would shift on to the employer to show that the employee concerned was in fact gainfully employed.
In Surinder Kumar [(2006) 5 SCC 173 : 2006 SCC (L&S) 967] , this Court held : (SCC p. 177, paras 12-
14) "12. The Labour Court and the High Court also proceeded wrongly on the premise that the burden of proof to establish non-completion of 240 days of work within a period of twelve months preceding the termination, was on the management. The burden was on the workman. (See U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey [(2006) 1 SCC 479 : 2006 SCC (L&S) 250 : JT (2005) 10 SC 344] and State of M.P. v. Arjunlal Rajak [(2006) 2 SCC 711 : 2006 SCC (L&S) 429] .)
13. Equally well settled is the principle that the burden of proof, having regard to the principles analogous to Section 106 of the Evidence Act that he was not gainfully employed, was on the workman. (See RBI v. S. Mani [(2005) 5 SCC 100 : 2005 SCC (L&S) 609] .)
14. It is also a trite law that only because some documents have not been produced by the management, an adverse inference would not be
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RP No. 747 of 2022drawn against the management. (See S. Mani [(2005) 5 SCC 100 : 2005 SCC (L&S) 609] .)"
7.10. By relying on the above decision, he submits that the burden initially is on the workman to establish that he is not employed. It is only thereafter that the burden would shift to the employer. The workman not having led evidence of his unemployment, the burden of proof has not shifted to the employer.
7.11. He also places reliance on the judgment of the Hon'ble Apex Court in the case of DEEPALI GUNDU SURWASE VS. KRANTI JUNIOR ADHYAPAK MAHAVIDYALAYA (D.Ed.) AND ORS5 which had been relied upon by Sri.K.Subbarao, learned Senior Counsel for the review petitioner but for his purposes, he refers to and relies upon Para 32, which is reproduced hereunder for easy reference:5
(2013) 10 SCC 324
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32. We may now deal with the judgment in J.K. Synthetics Ltd. v. K.P. Agrawal and another (supra) in detail. The facts of that case were that the respondent was dismissed from service on the basis of inquiry conducted by the competent authority. The Labour Court held that the inquiry was not fair and proper and permitted the parties to adduce evidence on the charges levelled against the respondent. After considering the evidence, the Labour Court gave benefit of doubt to the respondent and substituted the punishment of dismissal from service with that of stoppage of increments for two years. On an application filed by the respondent, the Labour Court held that the respondent was entitled to reinstatement with full back wages for the period of unemployment. The learned Single Judge dismissed the writ petition and the Division Bench declined to interfere by observing that the employer had willfully violated the order of the Labour Court. On an application made by the respondent under Section 6(6) of the U.P. Industrial Disputes Act, 1947, the Labour Court amended the award. This Court upheld the power of the Labour Court to amend the award but did not approve the award of full back wages. After noticing several precedents to which reference has been made hereinabove, the two Judge Bench observed:
"There is also a misconception that whenever reinstatement is directed, "continuity of service" and "consequential benefits" should follow, as a matter of course. The disastrous effect of granting several promotions as a "consequential benefit" to a person who has not worked for 10 to 15 years and who does not have the benefit of necessary experience for discharging the higher duties and functions of promotional posts, is seldom visualised while granting consequential benefits automatically. Whenever courts or tribunals direct reinstatement, they should apply their judicial mind to the facts and
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circumstances to decide whether "continuity of service" and/or "consequential benefits" should also be directed.
Coming back to back wages, even if the court finds it necessary to award back wages, the question will be whether back wages should be awarded fully or only partially (and if so the percentage). That depends upon the facts and circumstances of each case. Any income received by the employee during the relevant period on account of alternative employment or business is a relevant factor to be taken note of while awarding back wages, in addition to the several factors mentioned in Rudhan Singh and Uday Narain Pandey. Therefore, it is necessary for the employee to plead that he was not gainfully employed from the date of his termination. While an employee cannot be asked to prove the negative, he has to at least assert on oath that he was neither employed nor engaged in any gainful business or venture and that he did not have any income. Then the burden will shift to the employer. But there is, however, no obligation on the terminated employee to search for or secure alternative employment. Be that as it may.
But the cases referred to above, where back wages were awarded, related to termination/retrenchment which were held to be illegal and invalid for non- compliance with statutory requirements or related to cases where the Court found that the termination was motivated or amounted to victimisation. The decisions relating to back wages payable on illegal retrenchment or termination may have no application to the case like the present one, where the termination (dismissal or removal or compulsory retirement) is by way of punishment for misconduct in a departmental inquiry, and the court confirms the finding regarding misconduct, but only interferes with the punishment being of the view that it is
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excessive, and awards a lesser punishment, resulting in the reinstatement of employee. Where the power under Article 226 or Section 11-A of the Industrial Disputes Act (or any other similar provision) is exercised by any court to interfere with the punishment on the ground that it is excessive and the employee deserves a lesser punishment, and a consequential direction is issued for reinstatement, the court is not holding that the employer was in the wrong or that the dismissal was illegal and invalid. The court is merely exercising its discretion to award a lesser punishment. Till such power is exercised, the dismissal is valid and in force. When the punishment is reduced by a court as being excessive, there can be either a direction for reinstatement or a direction for a nominal lump sum compensation. And if reinstatement is directed, it can be effective either prospectively from the date of such substitution of punishment (in which event, there is no continuity of service) or retrospectively, from the date on which the penalty of termination was imposed (in which event, there can be a consequential direction relating to continuity of service). What requires to be noted in cases where finding of misconduct is affirmed and only the punishment is interfered with (as contrasted from cases where termination is held to be illegal or void) is that there is no automatic reinstatement;
and if reinstatement is directed, it is not automatically with retrospective effect from the date of termination. Therefore, where reinstatement is a consequence of imposition of a lesser punishment, neither back wages nor continuity of service nor consequential benefits, follow as a natural or necessary consequence of such reinstatement. In cases where the misconduct is held to be proved, and reinstatement is itself a consequential benefit arising from imposition of a lesser punishment, award of back wages for the period when the employee has not worked, may amount to rewarding the delinquent employee and punishing the employer
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RP No. 747 of 2022for taking action for the misconduct committed by the employee. That should be avoided. Similarly, in such cases, even where continuity of service is directed, it should only be for purposes of pensionary/retirement benefits, and not for other benefits like increments, promotions, etc. But there are two exceptions. The first is where the court sets aside the termination as a consequence of employee being exonerated or being found not guilty of the misconduct. Second is where the court reaches a conclusion that the inquiry was held in respect of a frivolous issue or petty misconduct, as a camouflage to get rid of the employee or victimise him, and the disproportionately excessive punishment is a result of such scheme or intention. In such cases, the principles relating to back wages, etc. will be the same as those applied in the cases of an illegal termination.
In this case, the Labour Court found that a charge against the employee in respect of a serious misconduct was proved. It, however, felt that the punishment of dismissal was not warranted and therefore, imposed a lesser punishment of withholding the two annual increments. In such circumstances, award of back wages was neither automatic nor consequential. In fact, back wages was not warranted at all."
7.12. By referring to the aforesaid paragraph, he submits that whenever reinstatement is directed continuity of service and consequential benefits should not follow, the workmen being
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RP No. 747 of 2022neither employed nor engaged in any gainful business or venture ought to have been stated on oath. He lays emphasis on the usage of the word 'oath' in the aforesaid judgment and submits that 'oath' means evidence being recorded. He again reiterates that since 41 of the workmen have not led evidence on oath, the burden of proof has not been shifted to the employer.
7.13. On the basis of the above, he submits that the Review Petition is required to be dismissed.
8. Heard Sri.K.Subba Rao, learned Senior counsel for the petitioner and Sri.M.R.C.Ravi, learned Senior Counsel for the respondent and perused papers.
9. On the basis of the arguments which have been advanced, the following points would arise for determination?
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RP No. 747 of 2022
1) Whether the workman has to lead evidence to place on record that the workman is not gainfully employed, or would a pleading to this effect in the claim petition be sufficient?
2) Whether an employer would be entitled to, as a matter of right, seeks to reopen the matter from the stage of arguments for leading evidence as regards gainful employment of the workmen?
3) Whether the rejection of an application for leading evidence regarding gainful employment would amount to a denial of opportunity to the employer?
4) Whether in the event of the Labour Court or Industrial Tribunal directing reinstatement of the workman, continuity of service and consequential benefits would naturally follow?
5) Whether, in the present case, the permission granted to the employer to file a fresh application is required to be recalled?
6) What order?
10. I answer the above points as under:-
11. Answer to Point No.1: Whether the workman has to lead evidence to place on record that the workman is not gainfully employed, or would a pleading to this effect in the claim petition be sufficient?
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RP No. 747 of 202211.1. The contention of Sri.M.R.C.Ravi, learned Senior Counsel for the employer is that on account of there being a reverse burden of proof on the employer to establish that the workmen are gainfully employed, it is required for the workmen to lead evidence by entering the witness box. It would be required for the workmen to enter the witness box and lead evidence. In this regard, he relies upon the decision in Sushil Kumar's case and he contends that the onus of proof is on the workmen initially which would shift to the employer to show that the workmen is not gainfully employed.
11.2. A perusal of the decision in Sushil Kumar's case, does not indicate that the workmen have to enter the witness box and lead evidence. What is only stated is that having regard to Section 106 of the Evidence Act, the burden
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RP No. 747 of 2022would be on the workmen which is a negative one and if the same is discharged, the positive burden would shift to the employer. 11.3. It is trite law that negative fact cannot be proved that is to say that a workman cannot prove that he is not employed. He can state and/or make a submission that he is not employed. That statement is in my considered opinion sufficient to discharge the negative burden under Section 106 of Evidence Act. 11.4. Once such a statement is made, it is for the employer to establish by positive evidence that the workman is gainfully employed. In my further considered opinion, the shifting of burden takes place as soon as the statement is made by the workman. If such a statement is made in the claim petition then the employer is immediately put on notice that the employer has to prove the gainful employment of the workman and it is for the employer to
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RP No. 747 of 2022immediately make necessary arrangements for the same.
11.5. Thus, I answer Point No.1 by holding that the workman is not required to lead evidence by entering box. A statement made in the claim petition that the workman is not gainfully employed is sufficient.
12. Answer to Point No.2: Whether an employer would be entitled to, as a matter of right, seeks to reopen the matter from the stage of arguments for leading evidence as regards gainful employment of the workmen? 12.1. The contention of Sri.M.R.C.Ravi, learned counsel for employer is that if there is a long time gap between the time of leading evidence and arguments then in terms of Veluswamy's case, the party should be permitted to reopen the case, if there is a statement made that such a party was unable to lay its hand on the evidence earlier when evidence was led.
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RP No. 747 of 202212.2. The above proposition laid down by the Hon'ble Apex Court in Veluswamy's case does not confer a right on a party to seek for re-opening of the case from the evidence stage. The discretion whether to grant such leave or not is vested in the Court. The Court would have to examine whether the party seeking for such reopening is doing so in a bonafide manner or not and furthermore, consider whether such evidence is relevant for a matter or not. 12.3. It is only in such event that a party could seek for reopening of the stage for evidence even after the matter is posted for arguments, provided, there is a long period of time between leading evidence and stage of arguments. 12.4. In the present case an averment having been made in the claim statement itself that the workmen were not gainfully employed, the
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RP No. 747 of 2022employer was put to notice that he has to lead evidence in that regards. The employer cannot when the matter was posted for arguments seek for reopening the stage of evidence. 12.5. I answer point no.2 by holding that an employer would not be entitled to, as a matter of right, seek to reopen the matter from the stage of arguments for leading evidence as regards gainful employment of the workmen, if the workman in his claim statement has made an averment that he is not gainfully employed.
13. Answer to Point No.3: Whether the rejection of an application for leading evidence regarding gainful employment would amount to a denial of opportunity to the employer?
13.1. As answered to Point No.1 above, the burden of proof is on the employer to prove the gainful employment as soon as the statement is made
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RP No. 747 of 2022by the workman that he is not gainfully employed. This duty having been cast as soon as such statement is made. If such a statement is made in the claim petition, the employer had been put to notice thereof as on that day itself. Thus, it is for the employer to have prepared itself to lead evidence on the gainful employment of the workman if any by securing such data and documents as may be necessary. The employer cannot merely because he wants to prove gainful employment seek for repeated reopening of the stage from the stage of arguments by contending that valuable right is vested with it.
13.2. The valuable right vested in the employer comes with an important duty and obligation on part of the employer to lead evidence at the earliest on the aspect of the gainful employment of the workmen.
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RP No. 747 of 202213.3. If no averment to the effect that the workman was not gainfully employed is made in the claim statement, then unless a demand is made in relation thereto the employer is not required to lead evidence as regards the workman being gainfully employed or not. In such a situation even if the matter was posted for arguments, if there is a demand made by the workman during arguments, then the employer has to be given an opportunity to lead evidence in regard thereto.
13.4. If an averment to the effect that the workman was not gainfully employed was made in the claim statement, the employer not having led evidence in relation thereto cannot on that ground seek for reopening the case from that or argument to evidence, the employer not having diligently conducted the matter.
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14. Answer to Point No.4: Whether in the event of the Labour Court or Industrial Tribunal directing reinstatement of the workman, continuity of service and consequential benefits would naturally follow?
14.1. Sri.K.Subba Rao and Sri.M.R.C.Ravi, learned Senior counsels have placed reliance on Deepali Gunda's case to contend the opposite. Sri.Subba Rao contending that continuity of service and consequential benefits flows out of an order of reinstatement by relying on the said judgment whereas Sri.M.R.C.Ravi, by relying on the very same judgment contends that they do not so flow. 14.2. Para 32 and 33 of the said judgment have been extracted hereinabove. The Hon'ble Apex Court has stated that in case of wrongful termination of service, reinstatement with continuity of service and back wages is a normal rule but however, the same is subjected to a rider that
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RP No. 747 of 2022while deciding the issue of back wages, the adjudicating authority would have to take into consideration the length of service of the employee/workman, nature of misconduct if any proved, financial condition of the employer and other similar factors. Thus, it is clear that the Hon'ble Apex Court made a distinction between the continuity of service and back wages. The continuity of service was made a normal rule but back wages was subject to the above conditions.
14.3. Hence, I answer Point No.4 by holding that in terms of the decision of the Hon'ble Apex Court in Deepali Gunda's case in the event of the termination of service of a workman being held to be wrongful and the workman is reinstated, continuity of service would have to naturally follow since it is on account of the wrongful act of the employer that is to say wrongful
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RP No. 747 of 2022termination of services that the workman was refused employment, if not for which, the workman would have to continued his service. As regards backwages, the same would depend on other factors as aforestated.
14.4. I would however like add another exception to the aspect of continuity of service viz., where the delinquent workman has been unauthorisedly absent, then, in the event of reinstatement, the period of unauthorized absence depending on facts and circumstances of the case, would have to be deducted for the purpose of calculation of continuity of service.
15. Answer to Point No.5: Whether, in the present case, the permission granted to the employer to file a fresh application is required to be recalled?
15.1. When the order under review was passed it was not brought to the notice of this Court about several adjournments which had been secured
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RP No. 747 of 2022by the employer. A perusal of the order sheet which has been produced along with Review Petition indicates that the matter was posted for evidence on 17.03.2018. On 12.4.2018, it was the employer who sought for time. Similar time was sought for on 31.10.2018 for cross examination of WW-1. On 19.01.2019, and 08.02.2019, the employer sought for time to lead its evidence. The employer led the evidence of MW-1 on 20.04.2019 and marked nearly 77 documents. But Section 65B certificate was not produced. Hence, the matter was adjourned. Once again time was sought on 27.04.2019 for the same. On 1.7.2019 adjournment was sought for by the employer. Further evidence of MW-2 was led on 18.7.2019 and on 22.08.2019, the employer submitted that its evidence was closed and the matter was posted for arguments. On 14.10.2019 and 2.11.2019, the employer
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RP No. 747 of 2022sought time to file written arguments, which came to be filed on 19.11.2019 and when the matter was posted for reply arguments of the workmen, the counsel for the employer was absent on 25.06.2020, 27.07.2020 and finally on 6.8.2020 an application came to be filed by the employer to recall the order dated 22.08.2019 and reopen the stage for evidence which was considered on the very same day and came to be allowed by imposing costs of Rs.6,000/-.
15.2. Thereafter on 29.08.2020, a list of 11 witnesses having been furnished, the employer was directed to file affidavit in lieu of evidence of the said 11 witnesses, which came to be filed on 5.9.2020. Subsequently, they were examined and cross examined.
15.3. On 8.1.2021, the employer sought for time to lead evidence on gainful employment, which came to be allowed on 19.1.2021 on costs of
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RP No. 747 of 2022Rs.2,000/-. Subsequently thereto MW-15 and MW-16 were examined and Ex.M-81 to Ex.M-84 were marked and the matter posted for arguments.
15.4. The matter being adjourned for arguments on several dates, when the employer sought for time. On 5.3.2022, the employer submitted that if the matter is referred to Lok-adalath, the dispute could be settled amicably. However, no settlement happened before Lok adalath. On 30.03.2022 I.A.No.1/2022 had been filed seeking for reopening the case and issuing summons to 34 entities, which came to be dismissed on account of the said application not containing sufficient details.
15.5. It is thereafter that the employer came before this Court and the order under review order passed.
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RP No. 747 of 202215.6. A perusal of the conduct of the case before the Industrial Tribunal clearly, categorically and unimpeachably establishes the lackdasical manner in which the employer has conducted the matter. Rule 10B of the Industrial Disputes (Karnataka) Rules, 1957 has been reproduced hereinabove which fixes a time frame as also the manner in which the proceedings would have to be continued. Though the said Rule may not be capable of being complied with in its entirety due to lack of Judges, pressure on Judges on account of number of matters posted, non cooperation of advocates and/or parties by seeking adjournments or for any other reason, I am of the considered opinion atleast the essence of Rule 10B is required to be followed.
15.7. In the present case, the said essence of Rule 10B has completely been flouted by the
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RP No. 747 of 2022employer and the workmen have been left to run from pillar to post for the last 5 years for no fault of theirs.
15.8. The employer having been put on notice about the employee not being gainfully employed, the employer ought to have led positive cogent evidence of the gainful employment of the workman way back in the year 2018, the employer having led some evidence in relation thereto cannot be seeking for reopening of the stage time and again to do so.
15.9. A Court comes to rescue of only a diligent litigant and not a negligent or as in this case, litigant who has been abusing the process of the Court by delaying the proceedings. 15.10. These facts having been suppressed from this Court in WP No.15919/2022 which had been filed, I am of the considered opinion the order dated 11.08.2022 insofar as providing an
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RP No. 747 of 2022opportunity to the employer to file a fresh application is required to be set aside.
16. Answer to Point No.6: What order?
16.1. In view of the above discussion, I pass the following:
ORDER i. The Review Petition is allowed.
ii. The order dated 11.08.2022 in WP No.15919/2022 insofar as providing an opportunity to the employer to file fresh applications is set aside.
iii. The trial Court is directed to proceed with the matter as expeditiously as possible, hear the arguments of both the parties and dispose the matter as expeditiously as possible at any rate within three months from the date of receipt of copy of this order.
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iv. Both the counsels are directed to immediately obtain and furnish a copy of this order to the trial Court forthwith.
v. Registry is directed to forward a copy of this order to the trial Court forthwith.
vi. Registrar General is directed to examine the functioning of labour courts, especially with reference to compliance with Rule 10B of the Industrial Disputes (Karnataka) Rules, 1957 and implement measures to comply with the same.
Sd/-
JUDGE PRS List No.: 3 Sl No.: 1