Gujarat High Court
Gujarat Water Supply & Sewerage Board vs Hemant Ashokbhai Mehta on 5 February, 2020
Author: Sonia Gokani
Bench: Sonia Gokani
C/SCA/17633/2013 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 17633 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS JUSTICE SONIA GOKANI
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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GUJARAT WATER SUPPLY & SEWERAGE BOARD
Versus
HEMANT ASHOKBHAI MEHTA & 1 other(s)
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Appearance:
MR HS MUNSHAW(495) for the Petitioner(s) No. 1
MR AK CLERK(235) for the Respondent(s) No. 1
MR PARITOSH CALLA(2972) for the Respondent(s) No. 2
RULE SERVED(64) for the Respondent(s) No. 2
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CORAM: HONOURABLE MS JUSTICE SONIA GOKANI
Date : 05/02/2020
ORAL JUDGMENT
1. The petitioner is the Gujarat Water Supply and Sewage Board, which through its Executive Page 1 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT Engineer has challenged the judgment and award dated 27.08.2013 passed by the Labour Court, Valsad in Reference (LCV) No.259 of 2006, whereby it ordered respondent No.1 to be reinstated in service with continuity and full back wages w.e.f.31.03.2006.
2. Brief facts leading to the present petition are as follow:
2.1 Respondent No.1 was provided the work as a daily wager w.e.f.01.05.1997 at Kutba Group Water Supply Scheme. It was according to the petitioner, on a temporary and ad-hoc basis without following the due procedure of recruitment and depending upon the availability of the work and the fund. He was then continued in the service and was even paid the benefits under the Government Resolution dated 17.10.1988.
He was also given the fixed salary from 24.10.2003. However, considering the less work load and non-requirement of the service from respondent no.1, the petitioner deemed it Page 2 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT
appropriate not to continue him and terminated his service along with the services of two other employees namely, Mr.J.S.Chaurya and Mr.Ramesh R.Kande. According to the petitioner, respondent No.1 was the junior most in the list. He being the daily wager on the principle of 'first come last go' or the 'last come first go', his services were terminated on paying him his dues as provided under the Industrial Disputes Act, 1947 ('the I.D.Act' hereinafter).
2.2 It is insisted by the petitioner that under Section 25 F of the I.D.Act the benefits which are required to be provided to the petitioner have already been provided while relieving him from the service.
2.3 He raised industrial dispute and the reference was made to the Labour Court, Valsad being Reference (LCV) NO.259 of 2006 where the statement of claim was submitted and he claimed that he was in employment from 01.05.1995 and his services had been terminated without following Page 3 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT the required produce. He was, therefore, entitled to the relief of reinstatement, continuity and full back wages.
2.4 The written statement had been filed by the present petitioner, where his averments have severely been challenged. Parties were availed the opportunities of leading oral evidence and on the strength of the oral as well as documentary evidence, the Labour Court, Valsad passed the judgment and award reinstating respondent No.1 in service with continuity and 100% back wages from 31.03.2006.
2.5 This has severely aggrieved the petitioner, which is before this Court with the following prayers:
"8...
(A) Be pleased to admit the present
Special Civil Application;
(B) Be pleased to allow this Special
Civil Application by way of passing
appropriate orders, writ, mandamus or
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C/SCA/17633/2013 JUDGMENT
directions quashing and setting aside
the award dated 27.08.2013 passed by the Hon'ble Labour Court at Valsad in Reference (LCA) No.259 of 2006 ordering that respondent No.1 herein be reinstated in service with continuity and full back wages with effect from 31.03.2006 annexed as ANNEXURE-F in the interest of justice.
(C) Pending the admission, final hearing and disposal of the present Special Civil Application be pleased to stay the implementation, execution and operation of the award dated 27.08.2013 passed by the Hon'ble Labour Court at Valsad in Reference (LCA) No.259 of 2006 ordering that respondent No.1 herein be reinstated in service with continuity and full back wages with effect from 31.03.2006 annexed as ANNEXURE-F in the interest of justice.Page 5 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020
C/SCA/17633/2013 JUDGMENT
(D) Be pleased to call for the record of
case bearing Reference No.259 of 2006
from the Hon'ble Labour Court at Valsad.
(E) Be pleased to pass such other and further orders as the nature of the case may be required and the Honourable Court may deem thought fit to pass such order."
3. In response to the notice issued by this Court, respondent No.1 appeared and filed his affidavit-in-reply, who has averred that the petitioner had not filed written statement initially and his stage of filing written statement was re-opened on a subsequent date. There is no justification of terminating the services nor is it mentioned that on account of the economic measures, this step had been taken against respondent.
3.1 It is further his say that an application for production of documents had been moved vide Exhibit-30 and the Court directed the petitioner Page 6 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT to produce the documents which were relevant and material for the purpose of adjudication on 14.10.2011. However, the petitioner chose not to produce those documents despite the Court's order. The document like seniority list has not been produced before the Labour Court, Valsad and there was no opportunity,therefore,with the petitioner for challenging the same. No evidence has been led by the petitioner.
4.According to the respondent, he is S.S.C. pass and possessing ITI certificate of electrician. He was appointed in the year 1997 as electric motor operator on original motor supply scheme by the petitioner. He was trained as a computer operator. He participated in computer training and was appointed in the Divisional Office as a Computer Operator. On completion of five years of his service, he was given the monthly fixed pay of Rs.2550. Thereafter, on completion of seven years of service, he was given pay scale of Rs.3050-4590 and was placed in a fixed pay of Rs.3050/- per month in the very scheme. The Page 7 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT Office Order 56/2005 dated 23.08.2005 is sought to be relied upon. His C.P.F. account was opened on 04.02.2005 and was also allotted the number. His service book also was prepared after medical examination and he was given the benefits and allowances. It is his grievance that after his services came to be terminated, one Mr.Girish Bhoye and Mr.Chetan Patil had been appointed in Divisional Office to perform the very duty which he was performing. In absence of the seniority list, which was directed to be produced, he could not have questioned the non-following of provisions of Sections 25 G and 25 H of the I.D.Act. It is, therefore, urged that the petitioner be not permitted to take disadvantage of its own wrong. He is willing to resume his duty as computer operator in a Divisional Office at Ahva, District Daang. There are five persons who have been given the C.P.F. number vide order dated 04.02.2005 after him and all these five persons have continued in service.
5. According to the petitioner, the list which Page 8 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT has been furnished, shows the position as on 31.03.2002 and not as on the date of termination i.e. 31.03.2006. The petition, therefore, deserves no entertainment.
6. This Court has heard extensively the learned advocate, Mr.H.S.Munshaw appearing for the petitioner employee, who drew the attention of this Court that there is sufficient compliance of Section 25 F of the I.D.Act. He has lamented the fact that the trial Court has committed a serious error in holding that there is breach of Section 25 F of the I.D.Act despite the employer having deposited the requisite amount in the Bank account of the respondent. He has also further urged that even if there is some lapse that would not require the Court to hold the breach of Section 25 F of the I.D.Act. According to him, the Court has not regarded the well laid down law in relation to the back wages also and granted 100% back wages. He heavily relied on the decision reported as (2013) 10 SCC 324 and (2018) 18 SCC 299.
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C/SCA/17633/2013 JUDGMENT 6.1 He has urged that when the Respondent
neither pleaded nor proved his not having been gainfully employed, the Court could not have emphatically granted 100% back wages merely by quashing and setting aside the order of termination.
7. The learned advocate, Mr.A.K.Clerk appearing for the respondent employee has urged that the trial Court has on the strength of oral as well as documentary evidence rightly appreciated all relevant circumstances and material, no interference is desirable as the trial Court has not stepped out of its limit and this Court needs to only consider jurisdictional error or whether the trial Court has acted within its bounds as has been set out in the I.D.Act. he has relied on the decision of the Apex Court rendered in case of JAYANTIBHAI RAOJIBHAI PATEL VS. MUNICIPAL COUNCIL, MARKHED & ORS., reported in (2020) LLR 1 where the back wages had been denied to the employee,and, the Court held it to be improper. Page 10 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020
C/SCA/17633/2013 JUDGMENT According to him, once the workman is entitled to the reinstatement,and, the management has not proved on record that the employee was gainfully employed,he is entitled to reinstatement with full back wages. The wrongful termination should be the criteria and once the court holds termination as wrongful under any of the provisions of the I.D.Act, consequence is the grant of back wages. Moreover, in the instant case, the respondent has stated on oath that he had not been gainfully employed, it was then for the employer to prove that he was gainfully employed as the burden has already shifted. 7.1 He has also urged that if there is shortfall in calculating the amount of retrenchment, it is impermissible for the court to uphold the action of the employer since the provision of Section 25 F of the I.D.Act is imperative in nature, in the event of any contravention, the action should be rendered void ab initio.
8. On thus hearing both the sides at length and Page 11 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT on careful consideration of judgement and order along with entire material, at the the outset, the Court requires to remind itself that this is the petition preferred under Articles 226 and 227 of the Constitution of India, where the Court ordinarily is not to interfere with the judgment and award unless it finds that the concerned court has not acted within its own bounds. The law is well laid down that this Court in the exercise of powers under Article 227 is not to interfere as it is not sitting in appeal over the trial Court. What is required to be considered is as to whether that the court has acted within its bounds. Even with the very evidence, this Court is likely to arrive at a different conclusion than also,that is not a permissible ground for the Court to upturn the judgment and award. If the court has acted without jurisdiction or any vital admissible material has been left out completely from consideration, which can have a direct bearing on the outcome, surely, that shall be looked into. If appreciation of evidence is Page 12 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT wholly perverse,it may leave some scope to look into the same for doing complete Justice.
9. The decision of Shalini Shyam Shetty and Another vs. Rajendra Shankar Patil; reported in 2010 8 SCC 329,would require reference here, where the Apex Court held and observed thus:
"62. On an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court's jurisdiction under Article 227 of the Constitution may be formulated:
(a) A petition under Article 226 of the Constitution is different from a petition under Article 227. The mode of exercise of power by High Court under these two Articles is also different.
(b) In any event, a petition under Article 227 cannot be called a writ petition. The history of the conferment of writ jurisdiction on High Courts is substantially different from the history of conferment of the power of Superintendence on the High Courts under Article 227 and have been discussed above.
(c) High Courts cannot, on the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders of tribunals or Courts inferior to it. Nor can it, in exercise of this power, act as a Court of appeal over the orders of Court or tribunal subordinate to it. In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the High Court.
(d) The parameters of interference by High Courts in exercise of its power of superintendence have been repeatedly laid down Page 13 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT by this Court. In this regard the High Court must be guided by the principles laid down by the Constitution Bench of this Court in Waryam Singh (supra) and the principles in Waryam Singh (supra) have been repeatedly followed by subsequent Constitution Benches and various other decisions of this Court.
(e) According to the ratio in Waryam Singh (supra), followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and Courts subordinate to it, `within the bounds of their authority'.
(f) In order to ensure that law is followed by such tribunals and Courts by exercising jurisdiction which is vested in them and by not declining to exercise the jurisdiction which is vested in them.
(g) Apart from the situations pointed in (e) and (f), High Court can interfere in exercise of its power of superintendence when there has been a patent perversity in the orders of tribunals and Courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles of natural justice have been flouted.
(h) In exercise of its power of superintendence High Court cannot interfere to correct mere errors of law or fact or just because another view than the one taken by the tribunals or Courts subordinate to it, is a possible view. In other words the jurisdiction has to be very sparingly exercised.
(I) High Court's power of superintendence under Article 227 cannot be curtailed by any statute. It has been declared a part of the basic structure of the Constitution by the Constitution Bench of this Court in the case of L. Chandra Kumar vs. Union of India & others, reported in (1997) 3 SCC 261 and therefore abridgement by a Constitutional amendment is also very doubtful.
(j) It may be true that a statutory amendment of a rather cognate provision, like Section 115 of the Civil Procedure Code by the Civil Procedure Code (Amendment) Act, 1999 does not and cannot cut down the ambit of High Court's power under Article 227. At the same time, it must be Page 14 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT remembered that such statutory amendment does not correspondingly expand the High Court's jurisdiction of superintendence under Article 227.
(k) The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu.
(l) On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this Article is to keep strict administrative and judicial control by the High Court on the administration of justice within its territory.
(m) The object of superintendence, both administrative and judicial, is to maintain efficiency, smooth and orderly functioning of the entire machinery of justice in such a way as it does not bring it into any disrepute. The power of interference under this Article is to be kept to the minimum to ensure that the wheel of justice does not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the functioning of the tribunals and Courts subordinate to High Court.
(n) This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above.
(o) An improper and a frequent exercise of this power will be counter-productive and will divest this extraordinary power of its strength and vitality."
Examining from these fundamental criteria which have been well laid down, the Court notices that Page 15 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT the Labour Court has held in favour of the respondent on the ground of clear breach under Section 25 F of the I.D.Act. Section 25 of the I.D.Actd laid down conditions precedent to retrenchment of workmen and requires the employer to give notice to the appropriate Government or prescribed authority apart from giving one month's notice in writing or one month's wages in lieu of such notice and the payment of retrenchment compensation to the concerned workman.
10. The Apex Court in case of M/S. EMPIRE INDUSTRIES LIMITED, VS. STATE OF MAHARASHTRA, reported in (2010) AIR SC 1389 has laid down thus:
"21.. Retrenchment is defined in the Act to mean termination of the service of a workman by the employer for any reason whatsoever, otherwise than as punishment for any misconduct and further subject to the four exceptions enumerated in clauses (a), (b), (bb) and (c) of section 2(oo) of the Act. Retrenchment being termination of service for no fault on the part of the workman is likely to visit the concerned worker(s) and his/their families with disastrous consequences. Retrenchment is an important and serious issue in industrial law since its wanton and improper use can become a Page 16 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT major source of industrial unrest and disharmony. The issue of retrenchment is, therefore, not left uncontrolled but is regulated in great detail by the law. The Industrial Disputes Act lays down not only certain inflexible preconditions that must be satisfied before an employer can resort to retrenchment but also a detailed procedure following which retrenchment can be carried out. Section 9A provides that no employer proposing to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule shall effect such change without giving twenty one days notice in the prescribed manner of the nature of change proposed to be effected. Item No.11 of the Fourth Schedule deals with any increases or reduction (other than casual) in the number of persons employed or to be employed in any occupation or process or department or shift (not occasioned by circumstances over which the employer has no control).
28. The view taken by us is fully supported by a Constitution Bench decision of this Court in Workmen of Meenakshi Mills Ltd.. In a more recent decision of this Court in Oswal Agro Furane Ltd. and Anr. vs. Oswal Agro Furane Workers Union and Ors., (2005) 3 SCC 224, this Court even went to the extent of holding that there cannot be any settlement between the parties, superseding the provisions of sections 25N and 25O of the Act. In paragraphs 14, 15 and 16, of the decision, the Court observed as follows:
"14. A bare perusal of the provisions contained in Sections 25- N and 25-O of the Act leaves no manner of doubt that the employer who intends to close down the undertaking and/or effect Page 17 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT retrenchment of workmen working in such industrial establishment, is bound to apply for prior permission at least ninety days before the date on which the intended closure is to take place. They constitute conditions precedent for effecting a valid closure, whereas the provisions of Section 25-N of the Act provides for conditions precedent to retrenchment; Section 25- O speaks of procedure for closing down an undertaking. Obtaining a prior permission from the appropriate Government, thus, must be held to be imperative in character.
15. A settlement within the meaning of Section 2(p) read with sub- section (3) of Section 18 of the Act undoubtedly binds the workmen but the question which would arise is, would it mean that thereby the provisions contained in Sections 25-N and 25-O are not required to be complied with? The answer to the said question must be rendered in the negative. A settlement can be arrived at between the employer and workmen in case of an industrial dispute. An industrial dispute may arise as regard the validity of a retrenchment or a closure or otherwise. Such a settlement, however, as regard retrenchment or closure can be arrived at provided such retrenchment or closure has been effected in accordance with law. Requirements of issuance of a notice in terms of Sections 25-N and 25-O, as the case may, and/or a decision thereupon by the appropriate Government are clearly suggestive of the fact that thereby a public policy has been laid down. The State Government before granting or refusing such permission is not only required to comply with the principles of natural justice by giving an opportunity of hearing both to the employer and the workmen but also is required to assign reasons in support thereof Page 18 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT and is also required to pass an order having regard to the several factors laid down therein. One of the factors besides others which is required to be taken into consideration by the appropriate Government before grant or refusal of such permission is the interest of the workmen. The aforementioned provisions being imperative in character would prevail over the right of the parties to arrive at a settlement. Such a settlement must conform to the statutory conditions laying down a public policy. A contract which may otherwise be valid, however, must satisfy the tests of public policy not only in terms of the aforementioned provisions but also in terms of Section 23 of the Indian Contract Act.
16. It is trite that having regard to the maxim "ex turpi causa non oritur actio", an agreement which opposes public policy as laid down in terms of Sections 25-N and 25-O of the Act would be void and of no effect. The Parliament has acknowledged the governing factors of such public policy. Furthermore, the imperative character of the statutory requirements would also be borne out from the fact that in terms of sub-section (7) of Section 25-N and sub-section (6) of Section 25-O, a legal fiction has been created. The effect of such a legal fiction is now well- known. [See East End Dwellings Co. Ltd. v. Finsbury Borough Council, (1951) 2 All ER 587, Om Hemrajani v. State of U.P., (2005) 1 SCC 617 and Maruti Udyog Ltd. v. Ram Lal (2005) 2 SCC 638."
29. In light of the discussions made above, we arrive at the conclusion that on the material date there was no dispute on the basis of any demand raised by the appellant in regard to retrenchment of any workers in the factory, Garlick Engineering. Secondly, and more Page 19 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT importantly, any retrenchment of worker(s) can only be effected by following the provisions laid down under the Act and the Rules. It follows that it is not open to the management to make a demand/proposal for retrenchment of workmen and disregarding the provisions of the Act ask the government to refer the demand/dispute under section 10(1) to the tribunal for adjudication. The only demand raised by the management regarding imposition of ceiling on dearness allowance was already referred to the Industrial Tribunal. Hence, the appropriate government was fully competent and empowered to issue the impugned order prohibiting closure of the factory. There was no illegality or infirmity in the closure notice." This provision is a safeguard against the arbitrary action on the part of the employer. It is mandatory and obligatory on the part of the employer to follow this provision, which does not permit any workman employed in any industry and who has been in a continuous service for not less than one year under an employment to be retrenched by the employer until he is given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice wages for the period of notice. The Page 20 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT retrenchment compensation paid at the time of terminating the employee shall be equivalent to 15 days average pay for every completed year of continuous service or any part thereof, in excess of six months and there should be a notice in the prescribed manner to be served upon appropriate Government or prescribed authority.
11. As can be noticed from the evidence, which has been brought on the record that the employer had terminated the services of the employee on r31.03.2006. It is not in dispute that the employee had been engaged as a computer operator with the respondent although the dispute is raised with regard to his service being not from 01.05.1995, but from the year 1998 that in the opinion of this Court is hardly relevant. The fact remains that he has been placed in a grade of Rs.3050 from 01.01.2005 and his pay at the time of his termination was Rs.5688. The Office Order of No.56 of 2005 was indicative that on his completion of seven years as a daily wagers as per Dolatbhai Parmar Committee's report, he was Page 21 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT to be placed in the pay scale of Rs.950-1500 scale and new pay scale was by then since Rs.3050-4590, he was placed in the said pay scale. The Office of Deputy Executive Engineer, Public Health, Sub-Division No.2, Ahva, District Daang had prepared his pay slip, which shows -his scale of Rs.3050-75-3950-80-4590. The Bank account number is 01190000898 and the Bank is SBI, Ahwa Branch. For the month of November, 2005, the salary paid in the month of December, 2005 reflected his gross pay as Rs.5688 and after deduction of Rs.895 towards C.P.F, Food grain recovery and professional tax, the net pay of his was Rs.4793.
12. The trial Court has also examined the documents furnished, which is also forming part of the record of this Court, which says that his pay was Rs.3050 and D.A. was Rs.2166. Therefore, his total pay was Rs.5216 and the retrenchment amount as per retrenchment compensation equivalent to 15 days' average pay for very completed year of continuous service would come Page 22 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT to Rs.25,240 and the amount of gratuity was also Rs.25,240. The notice pay was of Rs.5216 making it to Rs.55,696 in total and what has been deposited in the account instead of Rs.33,101. Calculating it on the basis of employer's own document from his salary slip the gross pay is Rs.5688 and the net pay as mentioned herein above is Rs.4793. The requirement of the employer to pay in case of termination notice pay + compensation. The Trial Court has rightly held that the order of termination warranting compliance of Section 25 F of the I.D.Act has not fulfilled the requirement of the law as one month's notice or one month's wages in lieu of the notice couple with the payment of retrenchment compensation.
13. The Apex Court in case of KRISHNA BAHADUR VS. PURNA THEATRE AND OTHERS, reported in (2004) 8 SCC 229 considering the case where the appellant workman was dismissed from service, where the tribunal had set aside the order of dismissal with full back wages and compensation. Page 23 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020
C/SCA/17633/2013 JUDGMENT He joined the services, however, was not paid the back wages and once again was retrenched from the service, where he received the compensation under the protest and the contention raised was that on ground of contravention of the legal requirement as contained in Section 25-G of the Industrial Disputes Act, 1947 as also insufficiency of the amount of compensation paid to the appellant in terms of Section 25-F(b), the interference was necessary, the Apex Court held that the provision of Section 25 F of the I.D.Act is imperative in character which stipulates the fulfillment of three conditions (i) One month's notice in writing indicating the reasons for retrenchment or wages in lieu of such notice; (ii) Payment of compensation equivalent to fifteen days, average pay for every completed year of continuous service or any part thereof in excess of six months; and (iii) Notice to the appropriate Government in the prescribed manner. This being the mandatory requirements. The retrenchment would be rendered void ab initio if there is a Page 24 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT contravention of these mandatory provisions. 13.1 Relevant findings and observations of the Apex Court are as follow:
"12.It is neither in doubt nor in dispute that the provision of Section 25 F(b) is imperative in character. The provision postulates the fulfillment of the following three conditions :
(i) One month's notice in writing indicating the reasons for retrenchment or wages in lieu of such notice;
(ii) Payment of compensation equivalent to fifteen days, average pay for every completed year of continuous service or any part thereof in excess of six months; and
(iii) Notice to the appropriate Government in the prescribed manner.
13. The requirement to comply with the provision of Section 25F(b) has been held to be mandatory before retrenchment of a workman is given effect to. In the event of any contravention of the said mandatory requirement, the retrenchment would be rendered void ab initio.
14. In Workmen of Sudder Workshop of Jorehaut Tea Co. Page 25 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020
C/SCA/17633/2013 JUDGMENT Ltd. vs. The Management [(1980) 2 L.L.J. 124], whereupon reliance had been placed by the Division Bench, this Court held :
"That apart, if there be noncompliance with S. 25F, the law is plain that the retrenchment is bad."
In that case, however, compensation had been computed on the basis of wages previously paid and not on the basis of the Wage Board Award. The retrenchment took place on 5.11.1986. No plea as regard nonpayment of compensation calculated on the basis thereof was taken before the Tribunal. Even the award did not proceed on that basis. The new plea based on the facts was not permitted to be raised by the High Court. This Court noticed that the Wage Board Award was subsequent to the retrenchment; although it was applied retrospectively i.e. with effect from 1.4.1966. In that situation, it was observed :
"In the absence of any basis for this new plea we are unable to reopen an ancient matter of 1966 and, agreeing with the High Court, dismiss the appeal. But the 16 workmen, being eligible admittedly for the Wage Board scale, will be paid the difference for the period between 1.4.1966 to 5.11.1966."Page 26 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020
C/SCA/17633/2013 JUDGMENT
15. We may furthermore notice that the learned Industrial Tribunal interfered with the retrenchment of the appellant not only on the ground of noncompliance of the provisions of Section 25F(b) of the Industrial Disputes Act but also on the ground of contravention of Rule 77A of the West Bengal Industrial Disputes Rules, stating :
"Moreover the company has not shown by means of a seniority lists that the concerned workman was the junior most amongst the same category of workers. When there is such a controversy and when no such lists was maintained by the company although maintaining of such lists can be said to be a compulsory compliance of the rules framed under the Industrial Disputes Act on the part of the Company (Vide 77A of the West Bengal Industrial Disputes Rules) it must be held that the retrenchment was illegal. Mere evidence to show the seniority of the workman of a particular category is not enough to justify a retrenchment of a workman on the ground of surplus hand."
14. It is quite clear that an attempt has been made by the employer to fulfill the requirement under Section 25F of the I.D.Act, however calculating his pay on the basis of the pay slip prepared by the employer, the trial Court has committed no error much less any illegality in Page 27 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT arriving at the conclusion that the amount paid being Rs.55,696 is in clear breach of requirement of section 25 F of the I.D.Act. Any shortfall on the part of the employer in making the payment as required under the law cannot be countenance by looking at the intent and an attempt made to pay the employee. The employer is not required to keep any lacuna while following the mandatory provisions and as held by the Apex Court in case of KRISHNA BAHADUR (SUPRA) this being an essential requirement under the law. The retrenchment if has done contrary to its mandatory requirement, the same will need to be rendered void ab initio. This would require the payment in full and in toto after due calculation which since is missing, it cannot be held to be in accordance with law and therefore, the trial Court has rightly held a breach of Section 25 F of the I.D.Act.
15. So far as the breach of Section 25 G and 25 H of the I.D.Act are concerned, there appears to be Page 28 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT hardly any discretion with regard to Section 25 G and 25 H of the I.D.Act, but the Court briefly had mentioned that there is absence of any seniority list which was directed to be produced and therefore, the breach is feasible and clear. The Court has not then discussed anything but merely on the ground that at the time of terminating the service, it has not chosen to publish the seniority list, held even the breach of Section 25 G and 25 H of the I.D.Act.
16. Attempt is made before this Court to bring on record the seniority list, the one which has been produced before this Court is undisputedly the position as on 31.03.2002 and not on the date of the termination of the employee on 31.03.2006. When there was a specific direction issued to the petitioner at the instance of the employee, there ought to have been production of these documents.
The decision in case of DIRECTOR,
FISHERIES TERMINAL DIVISION VS.
Page 29 of 47
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C/SCA/17633/2013 JUDGMENT
reported in AIR (2010) SC 1236 the
initial burden is of the employee,
however,when it is unable to bring on record the required documents and if either by issuance of the notice or by virtue of the direction of the court if those documents which are vital for determining the aspect of seniority are not brought on the record by the employer in whose possession these documents would be, the Court certainly can draw an adverse inference.
"15.Applying the principles laid down in the above case by this court, the evidence produced by the appellants has not been consistent. The appellants claim that the respondent did not work for 240 days. The respondent was a workman hired on a daily wage basis. So it is obvious, as this court pointed out in the above case that he would have difficulty in having access to all the official documents, muster rolls etc. in connection with his service. He has come forward and deposed, so in our opinion the burden of proof shifts to the employer/appellants to prove that he did not complete 240 days of service in the requisite period to constitute Page 30 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT continuous service. It is the contention of the appellant that the services of the respondent were terminated in 1988. The witness produced by the appellant stated that the respondent stopped coming to work from 10 February, 1988. The documentary evidence produced by the appellant is contradictory to this fact as it shows that the respondent was working during February, 1989 also. It has also been observed by the High Court that the muster roll for 198687 was not completely produced. The appellants have inexplicably failed to produce the complete records and muster rolls from 1985 to 1991, inspite of the direction issued by the labour court to produce the same. In fact there has been practically no challenge to the deposition of the respondent during crossexamination. In this regard, it would be pertinent to mention the observation of three judge bench of this court in the case of Municipal Corporation, Faridabad Vs. Siri Niwas [(2004) 8 SCC 195], where it is observed:
"A Court of Law even in a case where provisions of the Indian Evidence Act apply, may presume or may not presume that if a party despite possession of the best evidence had not produced the same, it would have gone against this contentions. The matter, however, would be different where despite direction by a court the evidence is withheld."Page 31 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020
C/SCA/17633/2013 JUDGMENT
17. The seniority list of 2002 shows the presence of respondent as the junior most employee.
However, the document brought on the record by the respondent dated 04.02.2005 of the petitioner Board indicates that at the time of allocating the CPF number to the employees, the present respondent is shown in the chronology at number 23 whereas there are five more persons after him namely Mr.Boner P.K., Mr.Gavit J.K., Mr.Aahir B.G., Mr.Pathak V.D. and Mr.Pawar V.J.
18. On affidavit, before this Court, the respondent has stated that his juniors namely Mr.Girish Bhoye and Mr.Chetan Patil have been employed and have been doing the work in the divisional office. This has not been disputed nor before the trial Court nor any evidence in that respect has been given.
19. This bring this Court to the third and vital issue with regard to the back wages as the Court has granted 100% back wages, which has been much resisted by the employer and has urged the Court Page 32 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT to either remand the matter on this issue for there being no discretion on the part of the trial and for its not having considered the well laid down law on the subject. Reliance is placed on the decision of DEEPALI GUNDU SURWASE VS.KRANTI JUNIOR ADHYAPAK, reported in 2013 (10) SCC 324 and also the case of RAJASTHAN STATE ROAD TRANSPORT CORPORATION VS.PHOOL CHAND, reported in (2018) 18 SCC 299. The Apex Court time and again has considered the question as to how the back wages are to be decided and what are the factors to be taken into consideration while awarding the same. The initial burden according to the Apex Court is always upon the person, who is claiming the back wages which would mean that it will be the employee and later it will the employer, who shall have to then prove that the employee was gainfully employed during the relevant period and hence,would not be entitled to claim any back wages. The initial burden is of course on the employee.
20. In case of RAJASTHAN STATE ROAD TRANSPORT Page 33 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT CORPORATION VS.PHOOL CHAND the Apex Court has held that:
"11. In out considered opinion, the courts below completely failed to see that the back wages could not be awarded by the Court as of right to the workman consequent upon setting aside of his dismissal/termination order. In other words, a workman has no right to claim back wages from his employer as of right only because the Court has set aside his dismissal order in his favour and directed his reinstatement in service.
12. It is necessary for the workman in such case to plead and prove with the aid of evidence that after his dismissal from the service, he was not gainfully employed anywhere and had no earning to maintain himself or/and his family. The employer is also entitled to prove it otherwise against the employee, namely, that the employee was gainfully employed during the relevant period and hence not entitled to claim any back wages. Initial burden is, however, on the employee.
13. In some cases, the court may decline to award the back wages in its entirety whereas in some cases, it may award partial, depending upon the facts of each case by exercising its judicial discretion in the light of the facts Page 34 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT and evidence. The questions, how the back wages are required to be decided, what are the factors to be taken into consideration awarding back wages, on whom the initial burden lies, etc. were elaborately discussed in several cases by this Court wherein the law on these questions has been settled. Indeed, it is no longer respondent integra. These cases are, M.P.SEB V. JARINA BEE, HARYANA ROADWAYS V. RUDHAN SINGH, U.P.STATE BRASSWARE CORPN. LTD V. UDAY NARAIN PANDEY, J.K.SYNTHETICS LTD.
V K.P.AGRAWAL, METROPOLITAN TRANSPORT CORPN. VS. V.VENKATESAN, JAGBIR SINGH V. HARYANA STATE AGRICULTURAL MKTG.
BOARD AND DEEPALI GUNDU SURWASE VS.
KRANTI JUNIOR ADHYAPAK MAHAVIDYALAYA.
14. The Court is, therefore, required to keep in consideration several factors, which are set out in the aforementioned cases, and then to record a finding as to whether it is a fit case for award of the back wages and, if so to what extent.
15. Coming now to the facts of the case at hand, we find that neither the Labour Court and nor the High Court kept in consideration the aforesaid principles of law. Similarly, no party to the proceedings either pleaded or adduced any evidence to prove the material facts Page 35 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT required for award of the back wages enabling the court to award the back wages."
21. The Court, however for doing substantial justice to the parties concerned though having reiterated the legal principles which covered the question of the award of back wages, granted 50% of the back wages from overall circumstances. The decision of DEEPALI GUNDU SURWASE VS.KRANTI JUNIOR ADHYAPAK has been referred to in the said judgment where the proposition had been culled out in respect of the issuance on the back wages. 21.1 Relevant finding and observation of the Apex Court are as follow:
"37. After noticing several precedents to which reference has been made hereinabove, the two Judge Bench observed:
17. "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 Page 36 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT 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 circumstances to decide whether "continuity of service" and/or "consequential benefits" should also be directed.
18. 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 Page 37 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT obligation on the terminated employee to search for or secure alternative employment. Be that as it may.
19. 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 excessive, and awards a lesser punishment, resulting in the reinstatement of employee. Where the power under Article 226 or Section 11A 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 Page 38 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT 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 for taking action for the misconduct committed by the employee. That should be Page 39 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT 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.
20. 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.
21. 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."
22. The Apex Court in case of JAYANTIBHAI RAOJIBHAI PATEL (supra) has considered as to when Page 40 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT the denial of back wages is not proper.In the matter before the Apex Court, the first inquiry of the appellant ,he was not held guilty of misconduct, whereas, the second inquiry has been declared bad in law. Hence, the workman according to the Apex Court was entitled to reinstatement with back wages. The management did not prove on record that the employee was gainfully employed. The denial of back wages according to the Apex Court would amount indirectly punishing the employee and rewarding the employer which is not the object of the I.D.Act. The Court directed the lump sum compensation to be paid to the person by the management. Relevant finding and observations of the Apex Court are as follow:
"12. In the present case the first inquiry resulted in a report which came to the conclusion that the charge of misconduct was not substantiated. Upon finding that the convening of a fresh inquiry without recording reasons was contrary to law, the High Court would have ordinarily granted liberty to the Municipal Council to take a fresh decision after due notice to the appellant.Page 41 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020
C/SCA/17633/2013 JUDGMENT Such a course of action was, however, rendered impracticable by supervening events. The writ petition institute by the appellant before the High Court in 1996 remained pending for nearly eighteen years. The appellant had been removed from service on 29 June 1996. Considering the lapse of time, reopening the proceedings would not be expedient in the interest of justice particularly when the appellant had, in the meantime, attained the age of superannuation in 2005. Relegating the appellant to a protracted course of action by restoring the proceedings before the disciplinary authority would also not be fair and proper after a lapse of nearly fourteen years since his retirement."
23. It is quite clear from these decisions, which have been relied upon by both the sides that in case of wrongful termination of service, it is a normal rule to award back wages while reinstating the person with continuity of service. However, while so doing, the length of service of the employee workman, the nature of misconduct, if any proved against the employee and the financial condition of the employer and similar other factors are required to be regarded by the Court. It is, of course, for the employee or workman Page 42 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT whose services are terminated and who is desirous of getting the back wages to plead and at least make a statement before the adjudicating authority that he or she had not been gainfully employed or was employed on lesser wages. If the employer is not to pay full back wages, the same is needed to be pleaded and the cogent evidence requires to be brought on the record that he was gainfully employed and was getting wages equal to the wages he was drawing prior to termination. And once the employees shows that he was not employed, the course open to the employer is to specifically plead and prove that he was gainfully employed and was getting the same or substantial or the similar emolument, since the burden then would shift once initial aspect is pleaded and placed on record by employee.
24. In the statement of claim, in the instant case, the respondent employee has pleaded that despite his best of the endeavors, he could not get the service elsewhere and is not in a Page 43 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT position to get the sum as he was getting from the petitioner and had also shown his willingness to be reinstated.
25. In the written statement which is brought on the record, it is made quite clear that he is a healthy bodied person and was earning Rs.10,000 per month. He was not desirous to work for a smaller amount and therefore, by taking disadvantage of the situation,he has made a request for substantial amount.
26.If the deposition of the employee is considered, he has reiterated what he has stated in the statement of claim without elaborating anything further. There is no evidence led by the respondent.
27. It is, of course, mentioned in the statement of claim of the respondent that he is desirous of working with the employer and he does not have the same pay as he was getting from the Page 44 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT petitioner.
28. Since 100% back wages is not automatic and as one can understand that the employee here has merely stated in the statement of claim and thereafter when he was cross examined by the petitioner on this aspect where nothing concrete comes out as to whether he was in fact working and whether he has been getting the same pay as he was getting with the petitioner, there is hardly any evidence that could be said to have been led. It is only once the employee discharges initial burden of proving that he was not gainfully employed or that he was not getting the same amount that he received while in service ,thereafter,such burden would shift upon the petitioner employer. Although, the provisions of Evidence Act do not have very strict appliance, this being the personal details available with the respondent, he is expected to prove it. All in all, on due regard to all the considerations and the principles laid down in this respect if Page 45 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT are followed, the Court finds that the Labour Court, Valsad has not discussed anything on merit and merely because it quashed and set aside the order of termination by holding the breach of Section 25 F of the I.D.Act, it automatically granted 100% back wages.
29. The request of remanding the matter back to the Labour Court at this stage on this issue in the opinion of this Court would serve no purpose as much time has flown. The respondent had already reinstated in the service from 27.03.2014, purpose would be sub-served if the back wages are restricted to 60%.
30. Resultantly, this petition partly succeeds. The modification is only in respect of the back wages from the award which shall be 60% instead of 100% and also bearing in mind the employee's financial condition which had at some time necessitated the reduction in the strength, the amount should be paid by the petitioner within a Page 46 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020 C/SCA/17633/2013 JUDGMENT period of 12 weeks from the date of receipt of a copy of this judgment. The petitioner shall comply with the direction and make available to the respondent all consequential benefits which have not so far been granted.
31. With the above direction and observation, present petition stands partly allowed and disposed of accordingly.
(MS SONIA GOKANI, J) M.M.MIRZA Page 47 of 47 Downloaded on : Sun Jun 14 06:33:26 IST 2020