Delhi District Court
Sh. Jagmohan vs (2) M/S. M-Five Security Pvt. Ltd on 6 October, 2022
IN THE COURT OF GORAKH NATH PANDEY,
ADDL. DISTRICT & SESSIONS JUDGE,
PRESIDING OFFICER : LABOUR COURT - IV,
ROUSE AVENUE COURTS : NEW DELHI.
LCA No.148/2017
CNR No.DLCT130116652017
IN THE MATTER OF:
Sh. Jagmohan,
S/o Sh. Nathi Lal,
R/o RZ-2, Z-Block, New Rohtak Road,
Najafgarh, Delhi
Through
Rashtriya General Mazdoor Union (Regd.),
B-239, Karampura, New Delhi - 110015.
....WORKMAN/CLAIMANT
VERSUS
(1) M/s. FIIT JEE,
Plot No.47, Sector-12, Dwarka, Delhi.
(2) M/s. M-Five Security Pvt. Ltd.,
126, Green View Apartment, Mandi Road,
New Mangla Puri, Mahroli, New Delhi - 110030.
....MANAGEMENTS
Date of institution of the case : 10.10.2017
Date of passing the Award : 06.10.2022
Decision : Allowed.
AWAR D
1. The workman filed this statement of claim on
10.10.2017 stating therein that he was appointed by the
management no.2 as 'Security Guard' in the month of January,
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 1 of 34
2008 and his last drawn wages were Rs.9,800/- per month; he
was deputed with management no.1; he worked honestly,
efficiently, punctually and regularly and has never given any
chance of complaint to his superior or any officials of the
management.
It is further contended that the workman compelled
to work for 12 hours a day but no overtime was paid to him. The
managements deprived the workman from providing the statutory
benefits such as casual leave, pay slip, leave book, overtime
wages, PF, CA, yearly increment etc. The workman time and
again demanded the said facilities from the management no.1 and
2 but of no avail. Further, the management no.1 and 2 has started
to get rid to the workman but failed and on 31.08.2016, the
management no.2 terminated the services of the workman on the
direction of management no.1 without any rhyme or reason and
without conducting any domestic enquiry and without paying his
earned wages for the month of August, 2016. Aggrieved
therefrom, the workman made a complaint to the Assistant
Labour Commissioner, Hari Nagar, New Delhi against the
managements and the Labour Inspector visited the managements
and advised the managements to reinstate the workman but of no
avail. Legal demand notice dated 19.02.2017 was also issued to
the managements by the workman which was not replied. The
workman also filed his statement of claim before the Conciliation
Officer but the managements did not appear there nor reinstated
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 2 of 34
the services of the workman and hence the present claim petition.
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 managements violated
the provisions of Section 25F, 25G of I.D. Act. It is prayed that
an award be passed in favour of workman and against
managements directing the managements to reinstate him with
consequential benefits including full back wages and continuity
in service.
2. Notice of the statement of claim was issued to the
managements and the management no.2 had filed its written
statement to the statement of claim of workman contended that
that the claimant was appointed as Security Guard on 26.06.2012
on temporary basis; during the period of his engagement, his
work and conduct was not found satisfactory by the principal
employer as well as Supervisors of the management; he was
warned on several occasions to be alert and diligent as he was
assigned to the duty of keeping security and safety and instead of
improving his work, the claimant absented himself from the
services w.e.f. 31.08.2016 and as such abandoned the job; he
withdrew his remaining salary thereafter and refused to join the
duty as he immediately joined job with different employer; the
management served a show cause notice to the workman to
explain the reason of his absenteeism from the job dated
05.10.2016 but the claimant did not send any reply nor appeared
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 3 of 34
before the management; the workman apart from the salary
received till his abandonment, had also received settlement
amount in three installment of Rs.5133/-, Rs.12054/- and
Rs.5968/- (totalling Rs.23155/-), one in the month of December,
2016 and two in month of February, 2017 in his saving bank
account no.SB/01/001099 for not involving in any labour union
act and initiate case against the management no.2. The
management no.2 denied the other allegations made in the
statement of claim and prayed to dismiss the claim petition.
3. Vide order dated 29.01.2018, the following issues
were framed in view of pleadings of the parties:-
ISSUES:
(i) Whether the workman has voluntarily abandoned his
job after taking all his dues from the management? OPM2
(ii) Whether the services of workman have been
terminated illegally or unjustifiably by the management? OPW.
(iii) If the answer of aforementioned issue is in
affirmative, to what consequential remedies the workman is
entitled to?OPW
(iv) Relief.
4. On 13.09.2018, the management no.1 made its
appearance in the case and filed written statement of the
statement of claim contended that the management no.1 never
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 4 of 34
appointed the workman as an individual rather the contract was
tendered to management no.2 through an agreement through
which the workman was appointed by the management no.2 and
the management no.1 had nothing to do with the salary, EPF etc.
of the workman. The management no.1 denied the averments
made in the statement of claim and prayed to dismiss the claim
petition qua management no.1.
5. Vide order dated 13.09.2018, the following
additional issue I-A was framed:
"Whether there existed relationship of the
employer and employee between management
no.1 and workman? OPW".
The case was, thereafter, fixed for evidence of
workman.
6. In order to discharge the onus and prove the issues,
the workman had appeared as witness and filed in evidence, his
examination in chief by way of affidavit Ex.WW1/1 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: Statement of claim filed before the
Conciliation Officer;
(ii) Ex.WW1/2: Certificate under Section 2A of I.D.Act,
1947 issued by Conciliation Officer; and
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 5 of 34
(iii) Ex.WW1/3: Unserved postal envelop having the
address of the management.
7. In rebuttal, management no.2 had examined Sh.
Ibhrahim Ali as M2W1 who filed his affidavit by way of
evidence as Ex.M2W1/A, reiterating the factual contents of the
written statement of management no.2. Besides this, he had also
placed on record the following documents:
(i) Ex.M2W1/1: Notice dated 05.10.2016 issued to the
workman;
(ii) Ex.M2W1/2: Application for employment;
(iii) Ex.M2W1/3: Notice dated 05.10.2016 issued to
management no.1 by Labour Inspector; and
(iv) Mark A: Register of Payment of Wages.
8. The management no.2 had also summoned M2W2
Sh. Anirudh Pratham, Branch Head, Corporation Bank, Ghitorni
Branch, Delhi who deposed as under:
"I have brought the summoned record i.e. bank statement of
saving account bearing no. SB/01/001099 in the name of
Jagmohan at Corporation Bank, Ghitorni Branch, Delhi w.e.f.
01.12.2016 till 28.02.2017 which is Ex.M2W2/1. The
account statement is attested as per the bankers book of
evidence act and bears my signature at point A Ex.M2W2/1".
9. I have heard the final arguments addressed by the
AR for the parties. I have also gone through the materials lying
on record. My issue-wise findings are as under:
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 6 of 34
Additional Issue No.I-A:
"Whether there existed relationship of the employer and
employee between management no.1 and workman? OPW".
10. 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
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.
11. 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."
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 7 of 34
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."
12. 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.
13. 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".
14. In 'Kanpur Electricity Supply Co. Ltd. Vs Shamim
Mirza' (2009/ 1 SCC 20, the Hon'ble Supreme Court held as
under :-
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 8 of 34
"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."
15. 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
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 9 of 34
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."
In view of afore-said law, it was for the claimant to
prove that he was employee of the management no.1.
16. The statement of claim filed by the workman along-
with defence of managements has been mentioned at the outset.
The workman claimed that he was appointed by management
no.2 on the post of Security Guard in the month of January, 2008
and his last drawn wages were Rs.9800/- p.m.; he was deputed
with the management no.1; his services was illegally terminated
on 31.08.2016 without paying legal dues; he issued demand
notice to the managements dated 19.02.17 which was not replied.
The management no.1 had filed its written statement
and contended that the management no.1 never appointed the
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 10 of 34
workman nor paid any salary, EPF to him. On the other hand, the
management no.2 in its written statement admitted that the
claimant was appointed on 26.06.2012 on temporary basis.
The workman also deposed in the affidavit
Ex.WW1/A that he was appointed by management no.2 and
reiterated the same during his cross-examination. There is
nothing on record to show that the workman was appointed by
management no.1. The witness/claimant has relied upon the
documents as aforesaid during his examination by way of
affidavit. The testimony of the workman/WW1 alongwith the
documents relied by him in support of his claim itself shows that
the workman was under the employment of management no.2
only and there was no employee-employer relationship between
the workman and management no.1 at all. In view of the
documents produced on record by the workman, it is
categorically proved that workman was under the employment of
management no.2 only and there existed no employee employer
relationship between management no.1 and workman. This issue
is accordingly decided in favour of the management no.1 and
against the workman.
Issues No.1 to 3
(i) Whether the workman has voluntarily abandoned his
job after taking all his dues from the management? OPM2
(ii) Whether the services of workman have been
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 11 of 34
terminated illegally or unjustifiably by the management? OPW.
(iii) If the answer of aforementioned issue is in
affirmative, to what consequential remedies the workman is
entitled to?OPW
17. The onus to prove the Issue no.1 was on the
management no.2 whereas the Issues no.2 & 3 were to be proved
by the workman. All these issues shall be decided together being
inter-related.
The statement of claim filed by the workman along-
with defence of managements has been mentioned at the outset.
The workman claimed that he joined the management no.2 in the
month of January, 2008 as 'Security Guard' and his last drawn
wages were Rs.9800/- p.m.; his service was illegally terminated
on 31.08.2016 without paying his legal dues. The workman has
produced the relevant records i.e. Ex.WW1/1 to Ex.WW1/3. The
employee employer relationship between workman and
management no.2 is admitted. The only defence of the
management no.2 remained that the workman voluntarily left the
job after receiving his full and final dues.
It is reiterated that the workman examined himself
as WW1 and deposed regarding the claim. The witness has also
proved the relevant documents as above-said. The documents
relied by the WW1 are not disputed. The witness during cross-
examination by management no.2 deposed as under:-
"I came in employment of management no.2 in the year 2012.
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 12 of 34
No appointment letter was issued to me by management no.2.
Document Ex.WW1/MX1 bears my signature at point A on
each page. Document Ex.WW1/MX2 bears my signature at
point A. I was terminated from service on 30.09.2016. No
termination letter was, however, issued to me.
XXXX XXXX XXXX
I was working with management no.1 even prior to my
appointment under management no.2. I was verbally
terminated by one Sh. Bhardwaj working with management
no.1. Mark DA does not bear my handwriting or signature.
XXXX XXXX XXXX
It is correct that I was getting a salary of Rs.9800/- per month
(approx.) after statutory deductions such as ESI and EPF.
Earlier I was getting salary in cash, however, later on
management had started through bank. I was having an account
in Corporation Bank, Ghitorni Branch.
XXXX XXXX XXXX
It is wrong to suggest that after settlement of my accounts in
full and final I had sent the demand notice Ex.WW1/3 to the
management. It is wrong to suggest that I had left the job on
my own dated 31.08.2016. It is wrong to suggest that
management is not liable to pay me any single penny".
The workman during his cross-examination denied
the suggestion that he has left the job after settlement of the
account in full and final on 31.08.2016. The defence of the
management no.2 appears to be contradictory as on the one hand,
the management no.2 claimed that the workman left the job and
settled the account whereas MW2/1 in his affidavit in para 8
deposed that:
"Management had to take extreme measure to terminate his
job in view of the appointment letter dated 26.06.2012."
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 13 of 34
The witness has also deposed regarding the show
cause notice issued to the workman dated 05.10.16 but the
witness has deposed during his cross-examination contrary to his
averments in the affidavit Ex.M2W1/A. The witness M2W1
during cross-examination deposed that:
"It is correct that the management did not issue any so cause
notice or warning letter regarding his work conduct. Vol. He was
called to the office giving warning of the misconduct during the
course of employment. The management was called to the
workman in the month of August, 2016. I do not remember the
exact date when the management has called to the workman in
the office for giving warning. The management has called to
workman in his office in August, 2016 because the workman
had taken alcohol on duty. No any medical examination was
conducted by the management of the workman.
XXXX XXXX XXXX
I cannot tell the date when the complaint was made regarding
the alcohol against the workman. No such complaint is filed on
record. No specific so cause notice was issued to the workman
in respect of alcohol. It is wrong to suggest that no such notice
was issued as the workman has not consumed the alcohol. The
last day of working of the workman was 31.08.2016. It is wrong
to suggest that the service of the workman was terminated on
31.08.2016 evening. Notice was issued to the workman for
calling on duty which is on record. The postal receipt for
sending Ex. MW1/7 is not filed on record. Except Ex. MW1/7
no other notice was issued to the workman. No domestic inquiry
was conducted against the workman. The management has filed
the reply in Hari Nagar. The said reply is not filed on record".
The testimony of the witness of management no.2
during his cross-examination controvert the claims of the
management and failed to prove the contentions that the
workman has left the job on his own and settled the accounts.
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 14 of 34
As regards the settlement of dues, it remains to be seen whether
the stated settlement is at all valid. To understand the word 'full
and final settlement', it is to be understood first that what amount
may come or may be included in full and final settlement. As far
as I.D. Act is concerned, there is no definition of 'full and final
settlement'. In view of various pronouncements, the word 'full
and final settlement' would simply mean that it would include
such an amount which if paid by the management and accepted
and received by the workmen then thereafter there would be no
claim either of the management upon the workmen or vice versa
with respect to any monetary benefits qua the terms and nature
of employment. Therefore, if a wider view is taken then it would
include that all amount which the management paid to the
workmen at the time of leaving/retiring/terminating the job i.e.
their earned wages, leave encashment, bonus, amount of PF,
amount towards gratuity if payable, retirement benefits and
which may also include any other amount which the workman
owe to the management including the amount which the
management has given to the workman during its tenure by way
of advancing loan or by way of any legal facility attached to the
job entrusted to the workman like accommodation or conveyance
if any, or any other such benefit which the workman have to
return to the management at the time of such settlement & after
adjusting all such benefits, the terms of full and final would be
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 15 of 34
arrived at.
18. There is prescribed procedure under Section 58 of
The Industrial Disputes (Central) Rules, 1957 regarding the
Memorandum of settlement. Furthermore, it is to be noted that in
Section 2 (p) of The Industrial Disputes Act 1947 and Rule 58 of
The Industrial Disputes (Central) Rules 1957 it has been
specifically provided that in case of a settlement arrived
otherwise than in the course of conciliation proceedings, a
copy of the same has to be sent to the authorities as mentioned in
Rule 58 (4) of The Industrial Disputes (Central) Rules 1957. Rule
58 (3) of the Industrial Disputes (Central) Rules 1957 provides
that where a settlement is arrived at in the course of conciliation
proceedings, the Conciliation Officer shall send a report to
Central Government together with a copy of memorandum of
settlement signed by the parties to the dispute. Hence, the
legislature has provided appropriate provisions for protecting
poor workman from being forced to enter into settlement by
requiring that a copy of settlement is to be sent to the Central
Government even in case the settlement is arrived before the
Conciliation Officer (who is an officer superior to Labour
Inspector). The legislature has nowhere provided that in case the
settlement is arrived in the presence of Labour Inspector then
there is no requirement of compliance of provisions Rule 58(4)
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 16 of 34
of The Industrial Disputes (Central) Rules 1957. It is also to be
noted that the legislature has provided appropriate provision for
safety of workman even in case a settlement is arrived during the
course of conciliation proceedings by requiring a copy of the
same being sent to Central Government under Rule 58(3) of the
Industrial Disputes (Central) Rules, 1957.
While enacting Section 2 (p) of the ID Act 1947 and
Rule 58 of the Industrial Disputes (Central) Rules 1957 the
legislature was well aware that a poor workman may be forced or
coerced to enter into settlement under the pressure or threat and
on that account necessary provisions were made whereby it was
directed that the appropriate authorities as provided in the said
provisions, shall be informed about the settlements in order to
prevent abuse of authority by the management or union or any
officials of the government.
In Workmen of Delhi Cloth and General Mills Co.
Ltd. v. Management of Delhi Cloth and General Mills Co. Ltd.,
1970 Lab. IC 1470, it was held that the settlement has to be in
compliance with the statutory provisions, as they are of a
mandatory character. Hence, in view of Section 2 (p) of I.D. Act
1947 read with Rule 58 of Industrial Dispute ( Central) Rules
1957 a copy of settlement was required to be sent to the
authorities as mentioned in Rule 58 (4) however, it has not been
proved that any copy of the alleged settlement was ever sent to
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 17 of 34
the authorities as mentioned in Rule 58 (4) of Industrial Dispute
(Central) Act. In view of decisions of our own Hon'ble High
Court in Om Prakash Sikka Vs. Presiding Officer, Labour Court
another (Supra) the alleged settlement is inoperative.
19. In Om Prakash Sikka v. The Presiding Officer,
Labour Court and Anr., 1983 (46) FLR 172, it was observed that
it has been held in decided cases that where there is non
compliance with Rule 58(4) the settlement is invalid because the
settlement has to be in strict compliance with the statutory
provisions of Rule 58(4) and in such cases it cannot be contended
that the copy sent to the Labour Commissioner was in full
compliance with subrule (4) of Rule 58, in as much as a copy of
the settlement has to be sent to the authorities named specified
therein. It was held that where a copy is not sent to the authorities
named in subrule (4), it must be held that the settlement is
inoperative.
20. In the Case of Workmen of M/s. Delhi Cloth and
General Mills v. Management of M/s. Delhi Cloth and General
Mills Ltd., reported as 1970 SCR (2) 886, the Hon'ble Supreme
Court has held:
"(2) Rule, 28F(4) of the Industrial Disputes (Central)Rules
1957 made under S. 38 of the Industrial Disputes Act has full
force of law of which judicial notice can be taken. This rule
must be fully complied with if the settlement is to have a
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 18 of 34
binding effect on all workmen."
21. In P. Selvaraj v. The Management of Shardlow India
(W.A.No.1478 of 2006), the Madras High Court was of the
opinion that where a full and final settlement was a predicament
whereby it was mandatory for an employee to sign it to get any
amount, even if it was less than the sum he was entitled to, in
those cases the full and final settlement will not stand, and the
employee can claim the sum he was entitled to. It also asserted
that an employee cannot be estopped from claiming the gratuity
amount by virtue of section 14 of Payment of Gratuity Act, 1972,
since it has an overriding effect over any other enactment or any
instrument or contract.
22. The compliance with the Rule 58 (4) was mandatory
and same view was also held in another case of the Management
of Cooperative Stores Ltd. vs. Ved Prakash Bhambri reported as
36 (1988) DLT 185, wherein it was reiterated that Rule 58 and
Form H of Industrial Dispute(Central) Rules 1957 have to be
strictly followed before the statement could be considered as
valid.
23. Full and final settlement is usually used by the
employers to absolve themselves from all the previous dues and
claims of their employees. It is usually actuated in the form of a
settlement contract and effectively concludes the employer
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 19 of 34
employee relationship. Ideally such a settlement ought to serve
its purpose and lead to the dissolution of all the preexisting
disputes and claims between the employer and employee. Sadly,
that is not always the case. Employers usually get dragged into
the labour courts for certain previous dues or claims which are
claimed by the employees to be beyond the purview of the terms
of settlement.
24. In the present case, the workman herein is not in a
position to understand the intricacies of the "full and final"
settlement as imposed upon him by the management herein. The
management herein has not been able to discharge its onus to
prove that the workman herein had settled by way of amounts as
"Full and final" settlement or he left the job by remaining absent.
The settlement projected by the management is not in conformity
with Rule 58 (4) of the Industrial Disputes (Central) Rules, 1957.
Therefore, in view of above referred judgments, the settlement
claimed by the management can not be upheld. In view of the
aforesaid discussion, the management has failed to prove that
workman had settled the matter by way of "Full & Final"
Settlement.
The onus to prove the issue no.1 was upon the
management who had failed to discharge the same by adducing
any cogent evidence to prove leaving of job on the part of the
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 20 of 34
workman after full and final settlement of the accounts. 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.
The workman on the other hand issued legal notice to the
management which was not replied. It is settled that where an
employer has failed to make an enquiry before dismissal or
discharge of a workman, it is opened for him to justify the action
before the labour court by leading evidence before it.
25. 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 no.2
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.
26. 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
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
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 21 of 34
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
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 22 of 34
dismissal or discharge was proper. Phulbari Tea Estate
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 LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.Page 23 of 34
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 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 LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.Page 24 of 34
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 Tribunal 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.
LCA No.148/2017Jagmohan v. M/s. FIIT JEE & Anr.
Page 25 of 34Such 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.
27. In view of the aforesaid discussions, it cannot be said that the claimant had voluntarily left the services of the management No.2 after tendering his resignation and settling his dues in full and final. The management no.2 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 no.2. In view of the above discussions, the Issue No.1 is decided against the management no.2 whereas the Issues no.2 & 3 are decided in favour of the workman and against the management no.2.
Issue no.4:
Relief
28. 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 term "reinstatement" has not been elucidated in the Industrial Disputes Act, 1947. The Shorter Oxford English Dictionary, Vol. II, 3rd LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.
Page 26 of 34Edition 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'.
29. In Hindustan Tin Works Pvt. Ltd. Vs. The Employees of Hindustan Tin Works Pvt. Ltd., (1979 (2) SCC 80). The three judges Bench of the Hon'ble Supreme Court has laid down :
"In the very nature of things there cannot to a straight jacket formula for awarding relief of back wages. All relevant considerations will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances..."
30. In cases of wrongful termination of service, reinstatement with continuity and back wages is the normal rule as held by the Hon'ble Supreme Court in Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya and Ors., (2013) 10 SCC 324. The concept of reinstatement was also discussed therein:
"22. The very idea of restoring an employee to the position LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.Page 27 of 34
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/quasi-judicial body or court that the action taken by the employer is ultra vires the relevant statutory provisions or the principles of natural justice, entitles 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).
Further, the Hon'ble Supreme Court laid down the following principles to govern the payment of back wages:
(Deepali Gudnu Surwase case, SCC pp. 356-58, para 38) "38.1. In cases of wrongful termination of service, reinstatement with continuity of service and back wages is the normal rule. 38.2 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.
38.3 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 LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.Page 28 of 34
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 who makes a positive averment 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. 38.4 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 or full back wages. 38.5 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 victimising the employee or workman, then the court or tribunal concerned 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 keep in view that in the cases of wrongful/illegal termination of service, the wrongdoer is the employer and the sufferer is the employee/workman and there is no justification to give a 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.
38.6 In a number of cases, the superior courts have interfered with the award of the primary adjudicatory authority on the premise that finalisation 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 LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.
Page 29 of 34wages 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-a- 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 frame. Therefore, in such cases it would be prudent to adopt the course suggested in Hindustan Tin Works (P) Ltd. v. Employees".
31. 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 the 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 emphasised 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 LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.Page 30 of 34
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."
32. Hon'ble High Court of Delhi in the matter titled as Thomas Reuters Private Limited vs. Ld. Presiding Officer, Labour Court & Ors. cited as MANU/DE/2665/2021, dated 30.09.2021 has held that in cases of illegal dismissal, the normal rule is reinstatement with full back wages. The Hon'ble High Court of Delhi in Paras No. 102, 106 and 119 thereof has held as under :
"102. In view of the conspectus of the aforesaid judgements, be it ingeminated that whenever an employee is dismissed, removed or terminated and the action of the employer is found to be illegal, the normal rule, albeit subject to exceptions, is that the employee should be restored to the position which he or she held before the umbilical cord broke between the employer and the employee. As noticed by the Hon'ble Supreme Court, the word 'reinstatement' means to reinstall/re- establish/restore to the earlier position or former state, condition or office.
"106. Recent trend of judgements shows that Courts have been holding that reinstatement may not be a natural or automatic consequence of setting-aside of dismissal order. However, reading of the two aforesaid judgements and other recent judgements, in my considered view, leads to an inevitable conclusion that for the purpose of grant of relief of reinstatement, Courts have always understood and appreciated the difference in the nature of employment of the employee as well as the length of service. In the present case, Respondent No.2 was a regular employee, with over nineteen years of continuous and unblemished service and clearly falls within the axiomatic jurisprudence and legal regime laid down by the Hon'ble Supreme Court in Hindustan Tin Works (supra) and not in the exceptions in the later judgements.
"119. On a reading of the above conspectus of judgements and the principles propounded in Deepali Gundu (supra), it is clear LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.Page 31 of 34
that the law on back wages is no longer res integra. In cases of wrongful termination, reinstatement with back wages is the normal rule, subject to course to a caveat that while deciding the issue of back wages, Courts may take into consideration a host of factors, such as length of service of the employee, financial condition of the employer, etc. The employee is required to plead that he or she was no gainfully employed or was employed on lesser wages. As observed in Deepali Gundu (supra), in cases where the Competent Court or Tribunal finds that employer has acted in gross violation of statutory provisions and/or Principles of Natural Justice, etc. then it shall be fully justified in directing payment of full back wages and in such cases, Superior Courts should not exercise powers under Article 226 or Article 136 of the Constitution of India and interfere with the Award, only because there is possibility of forming a different opinion. Hon'ble Supreme Court has also struck a note of caution that Courts must always keep in view that in cases of wrongful termination, wrongdoer is the employer and sufferer is the employee/workman and thee is thus no justification to give a premium to the employer for their wrongdoing by relieving them of the burden to pay back wages."
33. In the present case, the claimant had worked with the management no.2 continuously for 8 years before his illegal termination on 31.08.2016, as such, this court is of the considered view that the case of the claimant does not fall in any of the categories as mentioned by Hon'ble Supreme Court in the case of Tapash Kumar Paul Vs BSNL & Anr,(Supra) and therefore, in the present case claimant is entitled to be reinstated in services.
34. The claimant in statement of claim as well as his affidavit Ex.WW1/A deposed that he is unemployed since the date of his illegal termination despite his best efforts. In the LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.
Page 32 of 34present case, the management no.2 has not been able to show that the claimant herein is gainfully employed elsewhere by summoning of relevant witnesses or proving the documents as per law. The claimant is, therefore, entitled for full back wages as well.
35. The reference is answered accordingly in favour of the claimant and the claimant namely Sh. Jagmohan is entitled for reinstatement in services on the post on which he was working on the date of termination with full back wages with effect from 31.08.2016 i.e. the date of termination of the claimant up-to-the date of the award with other consequential benefits.
36. Management no.2 is directed to pay the amount accrued in favour of claimant within three months from the date of publication of award. If the management no.2 fails to pay the amount within the time stipulated, the accrued amount shall carry interest @ 9% per annum from the date of accrual and till the final payment is made.
37. Award is passed and reference is answered accordingly.
38. Digitally signed copy of Award be uploaded on the LCA No.148/2017 Jagmohan v. M/s. FIIT JEE & Anr.
Page 33 of 34website of RADC. A copy of the award be sent to the concerned Dy. Labour Commission for publication as per rules.
39. File be consigned to the Record Room.
Digitally signed by GORAKH GORAKH NATH PANDEY
NATH PANDEY Date: 2022.10.17 14:55:25
+0530
Announced in the open (Gorakh Nath Pandey)
Court on 06.10.2022 Addl. District & Sessions Judge,
Presiding Officer Labour Court- IV,
Rouse Avenue District Courts, New Delhi.
LCA No.148/2017
Jagmohan v. M/s. FIIT JEE & Anr.
Page 34 of 34