Gujarat High Court
K.K.Biscuit Bakery vs Bhanabhai Balubhai Rathod on 2 February, 2017
Author: K.M.Thaker
Bench: K.M.Thaker
C/SCA/25925/2006 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 25925 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE K.M.THAKER Sd/-
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1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy of NO
the judgment ?
4 Whether this case involves a substantial question of NO
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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K.K.BISCUIT BAKERY....Petitioner(s)
Versus
BHANABHAI BALUBHAI RATHOD....Respondent(s)
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Appearance:
NANAVATI ASSOCIATES, ADVOCATE for the Petitioner(s) No. 1
MR DIPAK R DAVE, ADVOCATE for the Respondent(s) No. 1
MR MANISH P MEHTA, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 02/02/2017
ORAL JUDGMENT
1. Heard Mr.Nanavati, learned advocate for Page 1 of 33 HC-NIC Page 1 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT the petitioner and Mr.Dave, learned advocate for the respondent.
2. In present petition, the petitioner has placed under challenged award dated 1.2.2006 passed by the learned Labour Court at Valsad in Reference (LCV) No.153 of 1994 whereby the learned Labour Court directed present petitioner to reinstate the claimant with continuity of service and full backwages.
3. So far as the factual background is concerned, it has emerged from the record and from rival submissions of contesting parties that the original claimant, i.e. present respondent raised industrial dispute with allegation that the opponent employer illegally terminated his service on 15.4.1993. Appropriate Government referred the dispute for adjudication to learned Labour Court at Valsad. The dispute was registered as Reference (LCV) No.153 of 1994.
3.1 In his statement of claim, the claimant
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alleged that he was working with the opponent employer as permanent workman since 1987 at salary of Rs.1,100/ per month and the opponent employer, without following procedure prescribed by law, illegally terminated his service by oral order dated 14.4.1993. He alleged that the employer did not pay retrenchment compensation and also violated principles of natural justice. With such allegation, the claimant demanded that he should be reinstated in service with all benefits.
3.2 The opponent employer opposed the reference and the demand of the claimant. The opponent employer contended that it was the claimant who voluntarily abandoned the service without any intimation and without any reason. The opponent employer also contended that the establishment named K.K. Biscuit Bakery is not in existence and that, therefore, the reference is not maintainable. The opponent employer also contended that the claimant is gainfully employed Page 3 of 33 HC-NIC Page 3 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT in other establishment and the claimant has suppressed the fact and that the company named K.K. Bakery Pvt. Ltd. is closed since September 1997. With such details and submissions, the opponent employer requested the learned Labour Court to reject the reference.
3.3 After the contesting parties concluded their pleadings, the learned Labour Court received and recorded oral as well as documentary evidence from both sides. Upon conclusion of the evidence by both sides, the learned Labour Court heard rival submissions and after considering material available on record and rival submissions, the learned Labour Court passed impugned award.
4. Mr.Nanavati, learned advocate for the petitioner reiterated the facts which were mentioned in the written statement before the learned Labour Court. He submitted that K.K. Biscuits Bakery was a partnership firm and it was in existence upto March 1996 and thereafter there Page 4 of 33 HC-NIC Page 4 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT was change in the partners / firm and thereafter in May 1997, the firm was closed down. He further submitted that the establishment named K.K. Bakery was taken over by the company named K.K. Bakers Pvt. Ltd. and the said company also came to be closed down in September 1997 and that, therefore, the reference was not maintainable. He also submitted that the learned Labour Court failed to appreciate that the claimant did not place any material on record before the learned Labour Court to establish that he was working as Driver since last 5 years and though there was no material on record to support the allegation by the claimant, the learned Labour Court believed the same and passed the award and that, therefore, the award deserves to be set aside. Mr.Nanavati, learned senior counsel contended that the claimant abruptly stopped reporting for work with effect from 15.4.1993 and thereafter he raised dispute in 1994. In the light of such details, learned senior counsel tried to contend that the claimant raised dispute with incorrect Page 5 of 33 HC-NIC Page 5 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT allegations and that obviously he could not be worked with the private limited company, however, the learned Labour Court failed to appreciate the said aspect. In the light of the said submission, Mr.Nanavati, learned senior counsel also tried to contend that the award suffers from error of non application of mind.
5. The submissions are opposed by learned advocate for the workman who contended that present petitioner failed to establish that the establishment named K.K. Bakery is not in existence and/or that the said establishment was taken over by the company named K.K. Bakers Pvt. Ltd and/or that the said company is also closed down and neither the establishment named K.K. Biscuits Bakery nor the company are in existence. Without prejudice to the contention that the claimant had not voluntarily abandoned the service, Mr.Dave, learned advocate further contended that even if the petitioner's allegation that the workman voluntarily abandoned Page 6 of 33 HC-NIC Page 6 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT the service is taken into account, then from very same allegation it comes out that before the date on which the claimant allegedly abandoned th service, he was in service with the petitioner and that, therefore, the factum of employment is established by the petitioner's contention. He submitted that the service of the claimant was illegally terminated inasmuch as the petitioner had not followed procedure prescribed by law inasmuch as neither compensation was paid nor notice pay was paid nor principles of natural justice were complied with. With such contentions, learned advocate for the claimant submitted that there is no error in the award and the petition deserves to be rejected.
6. I have considered rival submissions and material available on record as well as the impugned award.
7. Before proceeding further, it is necessary to mention that the original claimant died on 5.5.2013, i.e. during the pendency of the Page 7 of 33 HC-NIC Page 7 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT petition. An application being Civil Application No.1296 of 2013 was circulated for permission to implead the heirs / legal representatives of the original respondent (since deceased). The said application came to be allowed vide order dated 25.11.2013 and thereby the widow of deceased respondent and the son of the deceased respondent came to be impleaded as party respondent in present petition. In view of the sad demise of the original claimant, the direction to reinstate the claimant now does not survive.
8. Now, so far as the claimant's employment with the petitioner and total tenure of his service and termination of his service are concerned, it has emerged from the record that the claimant contended that he worked with the petitioner since 1987 and that his service came to be terminated by oral instructions on 14.4.1993. Thus, according to the claimant, he worked with the opponent employer from 1987 to April 1993, i.e. for about 6 years. On the other Page 8 of 33 HC-NIC Page 8 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT hand, when the written statement filed by the opponent employer is examined, it comes out that the opponent employer (i.e. the petitioner), in its written statement, came out merely with general denial, however, the employer did not specifically dispute the fact that the claimant had not joined the service in 1987. The employer also did not mention the date from which, according to the employer's record, the claimant joined the service. The employer contended that the claimant suddenly and voluntarily stopped reporting for duty from 15.4.1993. The said submission or allegation by the employer at least establishes the factum of employment, viz. that the claimant worked with the opponent employer. Of course, the claimant alleged that his service was terminated, whereas the opponent employer claimed that he voluntarily stopped reporting for work. However, the fact that the claimant worked with the opponent employer, did not remain under cloud of doubt in the light of the written statement filed by the employer, wherein the Page 9 of 33 HC-NIC Page 9 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT employer claimed that the claimant voluntarily stopped reporting for duty. Thus, while there is dispute between the parties as regards the mode in which the claimant's service came to an end or the reason on account of which the claimant's service came to an end (inasmuch as the claimant alleged that the employer illegally terminated his service by oral instructions, whereas the employer contended that the claimant on his own volition stopped reporting for work), there is no dispute so far as the date on which his service came to an end. The version of the claimant and the employer matches on this count which establishes the fact that the claimant's service came to an end on 14/15.4.1993. So far as the date of appointment is concerned, the employer has neither disputed the date mentioned by the claimant nor the employer has mentioned any other date as the date on which the claimant joined the service with the petitioner. Therefore, the learned Labour Court proceeded on the premise that the claimant joined the service with present Page 10 of 33 HC-NIC Page 10 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT petitioner in 1987. From the written statement filed by the employer and from the deposition by the witness of the employer, i.e. Mr.Rajesh Khemchand Parvane it also comes out that according to the case of the employer, the claimant stopped reporting for work from 15.4.1993. Further, the witness of the opponent employer did not deny, in his deposition (examinationinchief or crossexamination), that the claimant had not worked for about 5 years as claimed by him and/or that the claimant had not worked for 240 days as claimed by the claimant. In absence of denial by the employer, the assertions by the claimant that he worked with the employer for 5 years and in each year he had worked more than 12 months and for not less than 240 days and that he was engaged for driving vehicle (Tempo) of the firm and the car of partner - Mr.Prakashbhai and that said Mr.Prakashbhai terminated his service, remained uncontroverted and that, therefore, they have been accepted by the learned Labour Court.
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Actually, it was not and even now it is not the case even of the petitioner that the claimant was not a permanent employee or that he was engaged for a very short duration on casual basis and/or that he had not worked for 240 days in preceding 12 months. In that view of the matter, the detail with regard to the attendance of the claimant is not in dispute but at the same time it is not very relevant either. Nonetheless, it may be mentioned that there is no dispute with regard to the fact that the claimant had worked for more than 240 days in each year / preceding 12 months. In this factual background, the decision by the learned Labour Court to accept the assertions by the claimant, more particularly in absence of any denial of the facts by the employer, cannot be faulted.
9. Consequently, the facts which would emerge from the assertions in the statement of claim and the deposition of the claimant and deposition of the employer's witness is that the Page 12 of 33 HC-NIC Page 12 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT claimant had worked with the opponent employer for more than 12 months (5 years as concluded by the learned Labour Court) and that he was permanent workman of the opponent employer and that he had worked for more than 240 days in each year.
10. Therefore, unless it comes out from the evidence that the service of the claimant came to end in accordance with law, termination of his service would be termed 'illegal'.
11. On this count, it is pertinent to note that it was not the case of the petitioner that the claimant's service was terminated on account of misconduct and/or that when his service was discontinued, the procedure prescribed by Section 25F and Rule 81 was followed.
12. In view of the fact that the requirement for attracting Section 25F of the Act and the obligation prescribed by that section viz. that the workman must have worked for 12 months or Page 13 of 33 HC-NIC Page 13 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT more and should have worked for not less than 240 days, have been established by the claimant the aspect which was required to be examined by the learned Court was whether the conditions and procedure for terminating service of an employee prescribed by Section 25F were followed or not.
13. On this count the claimant alleged that despite such factsituation, the employer did not pay retrenchment compensation and salary in lieu of one month's notice.
14. It is pertinent that the petitioner did not even claim that it had paid notice pay and retrenchment compensation.
15. In this view of the matter, the findings of fact by the learned Labour Court led the learned Labour Court to further conclusion that while the claimant had fulfilled the conditions required for attracting Section 25F of the Act the employer had, undisputedly, not complied the conditions prescribed by Section 25F, i.e. while Page 14 of 33 HC-NIC Page 14 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT discontinuing the service of the claimant, it had not paid notice pay and/or retrenchment compensation and the said failure resulted into breach of Section 25F of the Act by the employer and that, therefore, the claimant's service was terminated in violation of statutory provisions.
16. During hearing of this petition, any material from the record of the petition is not brought to the notice of this Court so as to assail the findings of fact recorded by the learned Labour Court.
17. Any material, which could demonstrate that the findings of fact recorded by the learned Labour Court are incorrect or perverse, is not shown by the petitioner.
18. In light of the details which emerge from the foregoing discussion, the said conclusion by the learned Labour Court cannot be faulted.
19. In this background, it becomes necessary Page 15 of 33 HC-NIC Page 15 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT to take into account the case set up by the petitioner before the learned Labour Court which was to the effect that the establishment K.K. Biscuit Bakery was partnership firm and it was taken over by a private limited company viz. K.K. Bakers Pvt. Ltd. and subsequently, the company also came to be closed down.
20. In this context, it is relevant to recall and note that according to the petitioner, the partnership establishment, its business, its activities, assets, etc. came to be taken over in May 1997 as going concern by K.K. Bakers Pvt. Ltd., a company registered under the Companies Act. Even if the case of the petitioner that the firm had undergone change in its constituents somewhere in 1996 and thereafter the firm was closed in May 1997, is, for the sake of examining the petitioner's case, accepted, then also the fact would remain that the claimant's service was terminated in 1993 i.e. when the firm was running its activities and business.
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21. Further, according to the petitioner's case, the business / assets and activities of the firm were taken over by the company. Therefore, the company had steppedin the shoes of the firm and for all purposes, the company was successor ininterest of the said firm. Even otherwise, in light of the provisions under Section 18 of the Act, the said K.K. Bakers Pvt. Ltd. would be statutorily obliged to comply the award [which came to be rendered by the learned Labour Court on 9.2.2006 i.e. before the date (6.9.1997) on which the company came to be allegedly closed down] against erstwhile K.K. Biscuit Bakery whose establishment, business activities, assets, etc. came to be taken over by the said private limited as going concern.
22. Having regard to above discussed facts, it comes out that the conclusion by the learned Labour Court that the provision under Section 25F was applicable and attracted in present case, is correct and justified and does not warrant any Page 17 of 33 HC-NIC Page 17 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT interference.
23. Further, in view of the fact that even the petitioner never claimed that it had complied the condition prescribed under Section 25F, the conclusion by the learned Labour Court that the claimant's service was terminated in violation of breach of Section 25F and Rule 81, cannot be faulted.
24. When the learned Labour Court concluded that the claimant fulfilled the requirement for attracting Section 25F of the Act and when it is found that the finding by the learned Labour Court that the claimant's service was terminated in 1993 in violation of statutory provision, are found to be justified and are such which cannot be faulted, more particularly because any material to dislodge such finding is not available on record, the limited question which would survive is with regard to appropriate relief. Ordinarily, the breach of statutory provision at the time of termination of service Page 18 of 33 HC-NIC Page 18 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT of the workman would attract direction for reinstatement. In present case the learned Labour Court has, after considering the material and evidence on record and in light of final conclusion, considered it appropriate to direct the employer to reinstate the workman.
25. However, in view of the subsequent unfortunate event, i.e. sad demise of the claimant, the question of complying the said direction now does not survive.
26. This event would bring in picture the direction by the learned Labour Court with regard to the backwages.
27. It has emerged from the record that the claimant worked as Driver with the opponent employer. Under the circumstances, the claimant could not have remained unemployed during the period when the proceedings before the learned Labour Court were pending. While passing the direction with regard to backwages, the learned Page 19 of 33 HC-NIC Page 19 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT Labour Court has not taken into account relevant facts and circumstances.
27.1 In this context reference may be had to the observations by the Apex Court in case of Reetu Marbles vs. Prabhakant Shukla [(2010) 2 SCC 70] wherein Hon'ble Apex Court observed, inter alia, that:
"11. The only limited issue to be determined by us, in this appeal, is whether the High court was justified in granting full back wages to the respondent in spite of the denial thereof by the Labour Court. In our opinion the High Court erred in law in not examining the factual situation. The High Court merely stated that it was not the case of the employer that the workman had been gainfully employed elsewhere. Although it noticed the principle that the payment of back wages having a discretionary element involved in it, has to be dealt with in the circumstances of each case and no strait jacket formula can be evolved, yet the award of the Labour Court was modified without any factual basis.
12. In the case of M/s. Hindustan Tin Works Pvt. Ltd. vs. The Employees of M/s. Hindustan Tin Works Pvt. Ltd. and Ors. AIR 1979 SC 75, it has been held as follows:
"9....Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full backs except to the extent he was gainfully employed during the enforced idleness. That is the normal rule."
13. These observations were subsequently considered in the case of Hindustan Motors Ltd. vs. Tapan Kumar 8 Bhattacharya and Anr. (2002) 6 SCC 41 and it was observed as follows:
"11. Under Section 11A as amended in 1971, the Industrial Tribunal is statutorily mandated, while setting aside the order of discharge or dismissal and directing reinstatement of the workman to consider the terms and conditions, subject to which the relief should be granted or to give such other relief to the workman including the award of any other punishment in lieu of the discharge or dismissal, as the circumstances of the case may require. The section is couched in wide and comprehensive terms. It vests a wide discretion in the Tribunal in the matter of awarding proper Page 20 of 33 HC-NIC Page 20 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT punishment and also in the matter of the terms and conditions on which reinstatement of the workman should be ordered. It necessarily follows that the Tribunal is dutybound to consider whether in the circumstances of the case, back wages have to be awarded and if so, to what extent.
12. From the award passed by the Industrial Tribunal which has been confirmed by the Division Bench of the High Court, it is clear that the order for payment of full back wages to the workman was passed without any discussion and without stating any reason. It appears that the Tribunal and the Division Bench had proceeded on the footing that since the order of dismissal passed by the management was set aside, the order of reinstatement with full back wages was to follow as a matter of course.
13. In Hindustan Tin Works (P) Ltd. v. Employees a threeJudge Bench of this Court laid down: (SCC p. 86, para 11) "11. In the very nature of things there cannot be a straitjacket 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. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice, according to law and not humour. It is not to be arbitrary, vague and fanciful but legal and regular.
16. As already noted, there was no application of mind to the question of back wages by the Labour Court. There was no pleading or evidence whatsoever on t he aspect whether the respondent was employed elsewhere during this long interregnum."
14. The aforesaid judgment was subsequently considered in the case of UP State Brassware Corpn. Ltd. vs. Uday 10 Narain Pandey (2006) 1 SCC 479 it was observed as follows:
"17. Before adverting to the decisions relied upon by the learned counsel for the parties, we may observe that although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter is being taken by the court realizing that an industry may not be compelled to pay to the workman Page 21 of 33 HC-NIC Page 21 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched.
22. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on technical grounds or otherwise an order of termination is found to be in contravention of the provisions of Section 6N of the U.P. Industrial Disputes Act.
43. The changes brought about by the subsequent decisions of this court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalization, privatization and outsourcing, is evident."
15. From the above observations it becomes apparent that payment of full back wages upon an order of termination being declared illegal cannot be granted mechanically. It does not automatically follow that reinstatement must be accompanied by payment of full back wages even for the period when the workman remained out of service and contributed little or nothing to the industry.
16. Again in the case of Haryana State Electricity Development Corporation Ltd. vs. Mamni (2006) 9 SCC 434 this court reiterated the principle. The principles laid down in UP State Brassware Corp. Ltd. (supra). Recently this Court again examined the issues with regard to payment of full back wages in the case of P.V.K. Distillery Ltd. vs. Mahendra Ram (2009) 5 SCC 705. After examining the relevant case law it has been held as follows:
"18. Although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter is being taken by the court realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched.
19. In Haryana Urban Development Authority v. Om Pal it is stated that: (SCC p. 745, para 7) "7.... It is now also well settled that despite a wide discretionary power conferred upon the Industrial Courts under Section 11A of the 1947 Act, the relief of reinstatement with full back wages should not be granted automatically only Page 22 of 33 HC-NIC Page 22 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT because it would be lawful to do so. Grant of relief would depend on the fact situation obtaining in each case. It will depend upon several factors, one of which would be as to whether the recruitment was effected in terms of the statutory provisions operating in the field, if any."
20. In deciding the question, as to whether the employee should be recompensed with full back wages and other benefits until the date of reinstatement, the tribunals and the courts have to be realistic albeit the ordinary rule of full back wages on reinstatement. (Western India Match Co. Ltd. v. Industrial Tribunal)"
Applying the aforesaid ratio of law we have examined the factual situation in the present case. The services of the respondent were admittedly terminated on 11.6.87. The Labour Court gave its award on 27.9.02. Therefore, there is a gap of more than 15 years from the date of termination till the award of reinstatement in service. Labour Court upon examination of the entire issue concluded that the respondent would not be entitled to any back wages for the period he did not work. A perusal of the award also shows that the respondent did not place on the record of the Labour Court any material or evidence to show that he was not gainfully employed during the long spell of 15 years when he was out of service of the appellant.
18. In the writ petition the respondent was mainly concerned with receiving wages in accordance with the Minimum Wages Act and for inclusion of the period spent in Conciliation Proceedings for the calculation of financial benefits. The High Court without examining the factual situation, and placing reliance on the judgment in M/s. 14 Hindustan Tin Works Pvt.
Ltd. vs. The Employees of M/s. Hindustan Tin Works Pvt. Ltd. and ors. held that the normal rule of full back wages ought to be followed in this case. We are of the considered opinion that such a conclusion could have been reached by the High Court only after recording cogent reasons in support thereof. Especially since the award of the Labour Court was being modified. The Labour Court exercising its discretionary jurisdiction concluded that it was not a fit case for the grant of back wages.
19. In the case of P.V.K. Distillery Ltd. (supra), it is observed as follows:
"15. The issue as raised in the matter of back wages has been dealt with by the Labour Court in the manner as above having regard to the facts and circumstances of the matter in the issue, upon exercise of its discretion and obviously in a manner which cannot but be judicious in nature. There exists an obligation on the part of the High court to record in the judgment, the reasoning before however denouncing a judgment of an inferior tribunal, in the absence of which, the judgment in our view cannot stand the scrutiny of otherwise being reasonable."
20. In our opinion the High Court was unjustified in awarding full back wages. We are also of the opinion that the Labour Page 23 of 33 HC-NIC Page 23 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT Court having found the termination to be illegal was unjustified in not granting any back wages at all. Keeping in view the facts and circumstances of this case we direct that the respondent shall be paid 50 per cent of the back wages from the date of termination of service till reinstatement." 27.2 In the decision in case of Allahabad Jal Sasthan vs. Daya Shankar Rai [(2005) 5 SCC 124] Hon'ble Apex Court observed, inter alia that: "6. A law in absolute term cannot be laid down as to in which cases, and under what circumstances, full back wages can be granted or denied. The Labour Court and/or Industrial Tribunal before which industrial dispute has been raised, would be entitled to grant the relief having regard to the facts and circumstances of each case. For the said purpose, several factors are required to be taken into consideration. It is not in dispute that the Respondent No. 1 herein was appointed on an ad hoc basis; his services were terminated on the ground of a policy decision, as far back as on 24.1.1987. The Respondent No. 1 had filed a written statement wherein he had not raised any plea that he had been sitting idle or had not obtained any other employment in the interregnum. The learned counsel for the Appellant, in our opinion, is correct in submitting that a pleading to that effect in the written statement by the workman was necessary. Not only no such pleading was raised, even in his evidence, the workman did not say that he continued to remain unemployed. In the instant case, the Respondent herein had been reinstated from 27.2.2001.
7. In Tapan Kumar Bhattacharya (supra), this Court noticed that there was no pleading or evidence as to whether the Respondent therein was employed elsewhere during the long interregnum, and in the fact situation obtaining therein, the Appellant was directed to pay 50% of the back wages till the date of reinstatement.
8. Yet again in Jarina Bee (supra), this Court observed that the award of full back wages was not the natural consequence of an order of reinstatement.
9. In Rahmat Ullah (supra), a Bench of this Court held that as the Respondent therein was out of service since 1990 as an ordinary worker, he must have been working elsewhere to earn his livelihood; and there was no material to show that he was not gainfully employed whereupon , a direction to pay 50% of the back wages was made.
10. In Ram Ashrey Singh Another vs. Ram Bux Singh and Others [(2003) 9 SCC 154], questioning the order of termination after six year was considered to be one of the factors for denying an order of reinstatement with back wages to the workman. In the fact situation obtaining therein, it was held that ends of justice would be subserved if the Appellants therein were directed to pay a sum of Rs. 35,000/ by way of compensation in addition to what has already been paid. [See also Management of Page 24 of 33 HC-NIC Page 24 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT M/s. Sonepat Cooperative Sugar Mills Ltd. vs. Ajit Singh 2005 (2) SCALE 151].
11. In Haryana State Coop. Land Dev. Bank Vs. Neelam [2005 (2) SCALE 434], it was held :
"It is trite that the courts and tribunals having plenary jurisdiction have discretionary power to grant an appropriate relief to the parties. The aim and object of the Industrial Disputes Act may be to impart social justice to the workman but the same by itself would not mean that irrespective of his conduct a workman would automatically be entitled to relief. The procedural laws like estoppel, waiver and acquiescence are equally applicable to the industrial proceedings. A person in certain situation may even be held to be bound by the doctrine of Acceptance Sub silentio."
12. Let us now consider the decisions cited by the ld. Counsel for the Respondent No.1.
In Workmen of Subong Tea Estate (supra), whereupon, strong reliance has been placed by the learned counsel for the Respondents, no principle of law has been laid down. The Court merely directed in the fact situation obtaining therein to reinstate the workmen with full wages.
13. In M/s Hindustan Steel Ltd. (supra), this Court again did not lay down any law. A finding of fact was arrived at by the Labour Court that the Respondents had no alternative employment which was not challenged. The only ground which was urged before the High Court was that the Respondents had not proved that they had tried to mitigate their losses during the period of unemployment. The questions which have been raised herein had not been raised therein. The argument was confined only to mitigation of the losses. This Court did not interfere with the discretionary jurisdiction of the High Court in interfering with the award.
14. In Indian Railway Construction Co. Ltd. (supra), this Court merely stated :
"30. Question then would be how the conflicting interests can be best balanced. By an interim order dated 552000 the appellant was directed to reinstate the respondent subject to an interim payment of Rs 3 lakhs towards the back wages. Direction for reinstatement does not automatically entitle an employee to full back wages. In Hindustan Tin Works (P) Ltd. v. Employees, a three Judge Bench of this Court laid down:
"11. In the very nature of things there cannot be a straitjacket 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. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice, according to law and not humour. It is not to be arbitrary, Page 25 of 33 HC-NIC Page 25 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT vague and fanciful but legal and regular (see Susannah Sharp v. Wakefield 12, AC at p. 179).""
15. In Nicks (India) Tools (supra), this Court again in the fact situation obtaining therein refused to interfere with the discretionary jurisdiction exercised by the High Court particularly having regard to the fact that it was for the first time before the writ court, such plea was raised by way of additional evidence, which had been rejected.
16. We have referred to certain decisions of this Court to highlight that earlier in the event of an order of dismissal being set aside, reinstatement with full back wages was the usual result. But now with the passage of time, it has come to be realized that industry is being compelled to pay the workman for a period during which he apparently contributed little or nothing at all, for a period that was spent unproductively, while the workman is being compelled to go back to a situation which prevailed many years ago when he was dismissed. It is necessary for us to develop a pragmatic approach to problems dogging industrial relations. However, no just solution can be offered but the golden mean may be arrived at.
17. In view of the fact that the Respondent had been reinstated in service and keeping in view the fact that he had not raised any plea or adduced any evidence to the effect that he was remained unemployed throughout from 24.1.1987 to 27.2.2001, we are of the opinion that the interest of justice would be sub served if the Respondent is directed to be paid 50% of the back wages."
27.3 In the decision in case of General Manager, Haryana Roadways vs. Rudhav Singh [(2005) 5 SCC 591] Hon'ble Apex Court observed that:
"6. The next question, which requires consideration is whether the respondent is entitled to any back wages. The Industrial Tribunalcum Labour Court awarded 50% back wages on the ground that in Rohtak District of State of Haryana work of the nature, which was being done by the respondent, is available in plenty as a large work force comes from Eastern UP and Bihar for doing such kind of work. However, a general observation has been made that keeping in view the facts and circumstances of the case it will be proper to award 50% back wages. The High Court has also not given any reason for upholding this part of the award.
7. In our opinion certain factors, which are relevant for forming an opinion regarding award of back wages, have been completely ignored and, therefore, the award on this point is vitiated. The list of dates given in the Special Leave Petition, which have not been controverted, show that though according to the own case of the respondent his services had been terminated on 18.2.1989, yet he served a demand notice praying for reinstatement in service after two and half years Page 26 of 33 HC-NIC Page 26 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT on 24.8.1991. The State Government made reference to the Industrial TribunalcumLabour Court in the year 1997, which means eight years after the termination of service. Normally, a reference should not be made after lapse of a long period. A labour dispute should be resolved expeditiously and there is no justification for the State Government to sleep over the matter and make a reference after a long period of time at its sweet will. It causes prejudice both to the workman and also to the employer. It is not possible for an employer to retain all the documents for a long period and then to produce evidence, whether oral or documentary, after years as the officers, who may have dealt with the matter, might have left the establishment on account of superannuation or any other reason. The employer is not at fault if the reference is not made expeditiously by the State Government, but it is saddled with an award directing payment of back wages without having taken any work from the concerned workman. The plight of the workman who is thrown out of employment is equally bad as it is a question of survival for his family and he should not be left in a state of uncertainty for a long period.
8. There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of Section 25F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment, i.e., whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service, which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period, i.e., from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily wage employment though it may be for 240 days in a calendar year.
9. The written statement filed by the respondent shows that between 16.3.1988 to 31.10.1988 he had been given short term appointments as Helper, Wash Boy and Water Carrier with breaks of two days and seven days respectively on two occasions. After 31.10.1988 he was employed as Helper on 8.1.1989 after a gap of more than two months. This appointment was only up to 31.1.1989 and thereafter he was given fresh appointment on 7.2.1989, which came to an end on 28.2.1989. These facts show that the respondent had not worked continuously from 16.3.1988 to
28.2.1989 in the establishment of the appellant. A person appointed on daily wage basis gets wages only for days on which he has performed work.
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10. In Smt. Saran Kumar Gaur and others vs. State of Uttar Pradesh and others [JT 1991 (3) SC 478], this Court observed that when work is not done remuneration is not to be paid and accordingly did not make any direction for award of past salary. In State of U.P. and Anr. vs. Atal Behari Shastri and anr. [JT 1992 (5) 523], a termination order passed on 15.7.1970 terminating the services of a Licence Inspector was finally quashed by the High Court in a writ petition on 27.11.1991 and a direction was issued to pay the entire back salary from the date of termination till the date of his attaining superannuation. This Court, in absence of a clear finding that the employee was not gainfully employed during the relevant period, set aside the order of the High Court directing payment of entire back salary and substituted it by payment of a lumpsum amount of Rs.25,000/. In Virender Kumar, General Manager, Northern Railways, New Delhi vs. Avinash Chandra Chadha and others [(1990) 3 SCC 472], there was a dispute regarding seniority and promotion to a higher post. This Court did not make any direction for payment of higher salary for the past period on the principle 'no work no pay' as the respondents had actually not worked on the higher post to which they were entitled to be promoted. In Surjit Ghosh vs. Chairman and Managing Director, United Commercial Bank and others [(1995) 2 SCC 474], the appellant (Assistant Manager in the Bank) was dismissed from service on 28.5.1985, but his appeal was allowed by this Court on 6.2.1995 as his dismissal order was found to be suffering from an inherent defect. His claim for arrears of salary for the past period came to about Rs.20 lakhs but this Court observed that a huge amount cannot be paid to anyone for doing no work and accordingly directed that a compensation amount of Rs.50,000/ be paid to him in lieu of his claim for arrears of salary. In Anil Kumar Gupta vs. State of Bihar [(1996) 7 SCC 83], the appellants were employed as daily wage employees in Water and Land Management Institute of the Irrigation Department of Government of Bihar and they were working on the posts of stenotypists, typists, machine operators and peons, etc. This Court allowed the appeal of the workmen and directed reinstatement but specifically held that they would not be entitled to any past salary. These authorities show that an order for payment of back wages should not be passed in a mechanical manner but host of factors are to be taken into consideration before passing any order for award of back wages.
11. In the case in hand the respondent had worked for a very short period with the appellant, which was less than one year. Even during this period there were breaks in service and he had been given short term appointments on daily wage basis in different capacities. The respondent is not a technically trained person, but was working on a class IV post. According to the finding of the Industrial TribunalcumLabour Court plenty of work of the same nature, which the respondent was doing, was available in the District of Rohtak. In such circumstances we are of the opinion that the respondent is not entitled to payment of any back wages."
27.4 It would be appropriate to also refer to
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the decision in case of U.P. SRTC vs. Mitthu Singh [(2006) 7 SCC 180] wherein Hon'ble Apex Court observed, inter alia, that:
13. In G.M. Haryana Roadways v. Rudhan Singh, [2005] 5 SCC 591, this Court held that there is no rule of thumb that in each and every case, where a finding is recorded by Court or Tribunal that the order of termination of service was illegal that an employee is entitled to full back wages. A host of factors must be taken into account. The Court stated:
"8. There is no rule of thumb that in every case where the Industrial Tribunal gives a findings that the termination of service was in violation of Section 25F of the Act, entire back wages should be awarded. A host of actors like the manner and method of selection and appointment i.e. whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period i.e. from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily wage employment though it may be for 240 days in a calendar year."
14. Again, in Allahabad Jal Sansthan v. Daya Shankar Rai, [2005] 5 SCC 124, after considering the relevant cases on the point, the Court stated"
"16 We have referred to certain decisions of this Court to highlight that earlier in the event of an order of dismissal being set aside, reinstatement with full back wages was the usual result. But now with the passage of time, it has come to be realized that industry is being compelled to pay the workman for a period during which he apparently contributed little or nothing at all, for a period that was spent unproductively, while the workman is being compelled to go back to a situation which prevailed many years ago when he was dismissed. It is necessary for us to develop a pragmatic approach to Page 29 of 33 HC-NIC Page 29 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT problems dogging industrial relations. However, no just solution can be offered but the golden mean may be arrived at."
15. Recently, in U.P.S.R.T.C. Ltd. v. Sarada Prasad Misra, [2006] 4 SCC 733 JT (2006) 5 SC 114 one of us (C.K. Thakker, J.) had an occasion to consider a similar issue. Referring to earlier caselaw, it was observed :
"16. From the above cases, it is clear that no precise formula can be adopted nor `cast iron rule' can be laid down as to when payment of full back wages should be allowed by the court or Tribunal. It depends upon the facts and circumstances of each case. The approach of the Court/Tribunal should not be rigid or mechanical but flexible and realistic. The Court or Tribunal dealing with cases of industrial disputes may find force in the contention of the employee as to illegal termination of his services and may come to the conclusion that the action has been taken otherwise than in accordance with law. In such cases obviously, the workman would be entitled to reinstatement but the question regarding payment of back wages would be independent of the first question as to entitlement of reinstatment in service. While considering and determining the second question the Court or Tribunal would consider all relevant circumstances referred to above and keeping in view the principle of justice, equity and good conscience, should pass an appropriate order.
16. Thus, entitlement of a workman to get reinstatement does not necessarily result in payment of back wages which would be independent of reinstatement. While dealing with the prayer of back wages, factual scenario and the principles of justice, equality and good conscience have to be kept in view by an appropriate Court/Tribunal.
17. In the instant case the record clearly reflects that the services of the respondentworkman were never found to be satisfactory. In fact, before more than 30 years, his services were terminated but he was taken back by giving a chance to improve. Unfortunately, however, the respondent did not utilise it. Even prior to the three incidents in question, at several times, the respondentworkman was warned. It was, therefore, not a fit case to grant back wages and the Labour Court and the High Court were not right in granting the said prayer. To that extent, therefore, the order deserves interference.
18. For the foregoing reasons, the appeal is partly allowed. The order passed by the Labour Court and confirmed by the High Court is set aside to the extent of granting back wages and it is held that the respondentworkman is not entitled to back wages. The appeal is accordingly disposed of. In the facts and circumstances of the case, however, there shall be no order as to costs."
27.5 Thus, what emerges from the abovequoted observations by Hon'ble Apex Court is that the Page 30 of 33 HC-NIC Page 30 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT direction with regard to payment of backwages should not be passed mechanically and only because relief of reinstatement is granted. The issue with regard to award for backwages should be decided by taking into account host of relevant facts and circumstances including total tenure of service of the claimant prior to termination, the ground on which the claimant's service was terminated, the ground on which the order / action terminating service of the claimant is set aside, the fact as to whether the claimant was gainfully employed during interregnum, any exceptional circumstances pleaded and established by the employer against claimant for backwages etc.
28. In light of the above quoted observations, it appears that the direction with regard to the backwages i.e. to pay 100% backwages is not justified in present case and it deserves to be modified.
29. In light of the foregoing discussion and Page 31 of 33 HC-NIC Page 31 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT the facts which have emerged, it appears that following order and direction would balance equity and would meet ends of justice.
30. In light of the above mentioned reasons, the impugned award is partly modified and following order is passed:
The order directing the petitioner to reinstate the claimant is not disturbed.
However, the question of the said direction would not survive after 2013, i.e. from the date of sad demise of the original claimant.
So far as the order directing the payment of full backwages is concerned, having regard to the facts and circumstances of the case, the said direction is partly set aside and modified with the direction that the petitioner shall pay 50% backwages to the claimant. The heirs / legal representatives of the original claimant would be entitled to receive 50% backwages. The employer will Page 32 of 33 HC-NIC Page 32 of 33 Created On Sun Aug 13 07:49:12 IST 2017 C/SCA/25925/2006 JUDGMENT take necessary steps to comply the direction to pay 50% backwages as expeditiously as possible and preferably within eight weeks.
With the aforesaid clarifications and directions, the award is partly set aside and modified and the petition is partly allowed.
Rule is made absolute to the aforesaid extent.
Sd/ (K.M.THAKER, J.) Bharat Page 33 of 33 HC-NIC Page 33 of 33 Created On Sun Aug 13 07:49:12 IST 2017