Madras High Court
D.Egambaram vs The Presiding Officer on 9 October, 2025
Author: M.S.Ramesh
Bench: M.S. Ramesh
2025:MHC:3010
W.A.Nos.3002 & 3377 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 09.10.2025
CORAM :
THE HONOURABLE MR. JUSTICE M.S. RAMESH
AND
THE HONOURABLE MR. JUSTICE R.SAKTHIVEL
W.A.Nos.3002 & 3377 of 2024
W.A.No.3002 of 2024
D.Egambaram ...Appellant
Vs.
1.The Presiding Officer,
Labour Court, Cuddalore.
2.The Management,
Tamilnadu State Transport Corporation Ltd.,
Villupuram-605 602. ...Respondents
PRAYER: Appeal is filed under Clause 15 of the Letters Patent, praying to
set aside the order dated 31.10.2022 passed in W.P.No.1750 of 2013, and to
direct the second respondent to pay the appellant’s back wages and all
other attendant benefits and also to give him continuity of service for all
purposes namely for annual increments, revision of pay, review, etc., in
addition to the relief of reinstatement with continuity of service for the
purpose of calculation of the gratuity at the time of retirement.
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W.A.Nos.3002 & 3377 of 2024
For Appellant : Mr.V.Ajay Khose
For Respondents : R1 – Labour Court
Mr.M.Aswin for R2
W.A.No.3377 of 2024
The Management,
Tamilnadu State Transport
Corporation (VPM) Ltd.,
Villupuram-605 602. ...Appellant
Vs.
1.D.Egambaram
2.The Presiding Officer,
Labour Court, Cuddalore. ...Respondents
PRAYER: Appeal is filed under Clause 15 of the Letters Patent, praying to
set aside the order dated 31.10.2022 in W.P.No.23029 of 2012.
For Appellant : Mr.M.Aswin
For Respondents : Mr.V.Ajoy Khose for R1
R2 – Labour Court
COMMON JUDGMENT
(Judgment of this Court was delivered by M.S.RAMESH.J) The workman, who was a Conductor, was levelled with the charge that he had not issued tickets for 15 passengers and had 1.5 paisa of excess cash in his bag. The charge was held to be proved in the domestic inquiry Page 2 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 and the Disciplinary Authority had dismissed him from service on 07.05.2001. When the workman challenged the order of punishment before the Labour Court, Cuddalore (hereinafter referred to as “the Labour Court”) in I.D.No.27 of 2002, the Labour Court rendered a preliminary Award, holding that the enquiry was not done in a fair and proper manner.
Consequently, fresh evidences were let in and based on the evidences before it, the Labour Court recorded that none of the charges against the workman were proved. Thus, by an Award dated 07.12.2011, the Industrial Dispute was partly allowed and the workman was directed to be reinstated with continuity of service, but the back wages and other attendant benefits were denied. Both the workman and the Management had challenged the Award before the Writ Court in W.P.Nos.1750 of 2013 and 23029 of 2012 respectively. The learned Single Judge, by a common order dated 31.10.2022, dismissed both the Writ Petitions. The workman, as well as the Management, have challenged the said common order in these two Writ Appeals.
2.By virtue of the powers under Section 11A of the Industrial Disputes Act, the Labour Court would be well within its powers to let in fresh evidences, when a conclusion is arrived that the domestic inquiry was Page 3 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 not conducted in a fair and proper manner. In the instant case also, the Labour Court, after finding that the enquiry was not fair and proper, had let in fresh evidence, wherein the Management had marked 12 documents, Ex.M.1 to Ex.M.12 and examined three witnesses, M.W.1 to M.W.3. On the side of the workman, four witnesses. including the workman, namely W.W.1 to W.W.4, were examined.
3.In the Award dated 07.12.2011, the Labour Court had analyzed the evidences before it and in particular, after analyzing the oral evidences of W.W.3 and W.W.4, had come to the conclusion that the charge that the workman did not issue tickets cannot be said to have been true. In this background, the Labour Court had set aside the dismissal order and ordered for reinstatement with continuity of service for the purpose of calculation of gratuity.
4.For denying the back wages and other attendant benefits, reliance was placed on the decisions in Kanhaiyalal Agarwal Vs. The Factory Manager, Gwalior Sugar Co. Ltd., reported in 2001 LLR 1073 (SC);
Trivandrum Co-operative Urban Bank Ltd., Vs. R.Mohan Kumar and Another reported in 2002 LLR 182 (Ker. H.C.); Allahabad Jal Sansthan Page 4 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 Vs. Daya Shankar Rai and Another reported in 2005 LLR 534 : JT 2005 (5) S.C. 113; U.P.S.R.T.C. Ltd., Vs. V.Sarada Prasad Misra and Another reported in 2006 LLR 586 (SC); U.P. State Electricity Board, Muzhaffarnager Vs. Sr Brahm Singh and Another reported in 2006 LLR 944 (All. H.C.); and U.P. State Road Transport Corporation, Azamgarh Vs. Dinesh Kumar and Others reported in 2004 LLR 678 (All. H.C.).
5.A perusal of all the aforesaid decisions would only indicate that when an order of discharge from service is set aside and reinstatement is ordered, the backwages would only be a discretionary power and no straight jacket formula can be followed and such award of backwages would be based on the facts and circumstances of each case. Apart from referring to the aforesaid decisions, no independent discussion is recorded in the Award. However, the categorical finding of the Labour Court appears to be that the evidences before it demonstrate the dismissal order to be illegal.
6.In a judgment of the Hon'ble Supreme Court in the case of Deepali Gundu Surwase V. Kranti Junior Adhyapak Mahavidyalaya (D.ED.) and Others reported in 2013 (10) SCC 324, the Supreme Court had referred to Page 5 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 some of its own judgments and had culled out the propositions laid therein with regard to the award of backwages. The relevant portion of the judgment reads as follows:-
“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 obligation on the terminated employee to search for or secure alternative employment. Be that as it may.Page 6 of 18
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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 11-A of the Industrial Disputes Act (or any other similar provision) is exercised by any court to interfere with the punishment on the ground that it is excessive and the employee deserves a lesser punishment, and a consequential direction is issued for reinstatement, the court is not holding that the employer was in the wrong or that the dismissal was illegal and invalid.
The court is merely exercising its discretion to award a lesser punishment. Till such power is exercised, the Page 7 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 dismissal is valid and in force. When the punishment is reduced by a court as being excessive, there can be either a direction for reinstatement or a direction for a nominal lump sum compensation. And if reinstatement is directed, it can be effective either prospectively from the date of such substitution of punishment (in which event, there is no continuity of service) or retrospectively, from the date on which the penalty of termination was imposed (in which event, there can be a consequential direction relating to continuity of service). What requires to be noted in cases where finding of misconduct is affirmed and only the punishment is interfered with (as contrasted from cases where termination is held to be illegal or void) is that there is no automatic reinstatement; and if reinstatement is directed, it is not automatically with retrospective effect from the date of termination. Therefore, where reinstatement is a consequence of imposition of a lesser punishment, neither back wages nor continuity of service nor consequential benefits, follow as a natural or necessary consequence of such reinstatement. In cases where the misconduct is held to be proved, and reinstatement is itself a consequential benefit arising from imposition of a lesser punishment, award of back wages for the period when the employee has not worked, may amount to Page 8 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 rewarding the delinquent employee and punishing the employer for taking action for the misconduct committed by the employee. That should be avoided. Similarly, in such cases, even where continuity of service is directed, it should only be for purposes of pensionary/retirement benefits, and not for other benefits like increments, promotions, etc. But there are two exceptions. The first is where the court sets aside the termination as a consequence of employee being exonerated or being found not guilty of the misconduct. Second is where the court reaches a conclusion that the inquiry was held in respect of a frivolous issue or petty misconduct, as a camouflage to get rid of the employee or victimise him, and the disproportionately excessive punishment is a result of such scheme or intention. In such cases, the principles relating to back wages, etc. will be the same as those applied in the cases of an illegal termination.
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 Page 9 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 business is a relevant factor to be taken note of while awarding back wages, in addition to the several factors mentioned in Rudhan Singh and Uday Narain Pandey. Therefore, it is necessary for the employee to plead that he was not gainfully employed from the date of his termination. While an employee cannot be asked to prove the negative, he has to at least assert on oath that he was neither employed nor engaged in any gainful business or venture and that he did not have any income. Then the burden will shift to the employer. But there is, however, no obligation on the terminated employee to search for or secure alternative employment. Be that as it may.
But the cases referred to above, where back wages were awarded, related to termination/retrenchment which were held to be illegal and invalid for non- compliance with statutory requirements or related to cases where the Court found that the termination was motivated or amounted to victimisation. The decisions relating to back wages payable on illegal retrenchment or termination may have no application to the case like the present one, where the termination (dismissal or removal or compulsory retirement) is by way of punishment for misconduct in a departmental inquiry, and the court confirms the finding regarding Page 10 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 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 11-A of the Industrial Disputes Act (or any other similar provision) is exercised by any court to interfere with the punishment on the ground that it is excessive and the employee deserves a lesser punishment, and a consequential direction is issued for reinstatement, the court is not holding that the employer was in the wrong or that the dismissal was illegal and invalid. The court is merely exercising its discretion to award a lesser punishment. Till such power is exercised, the dismissal is valid and in force. When the punishment is reduced by a court as being excessive, there can be either a direction for reinstatement or a direction for a nominal lump sum compensation. And if reinstatement is directed, it can be effective either prospectively from the date of such substitution of punishment (in which event, there is no continuity of service) or retrospectively, from the date on which the penalty of termination was imposed (in which event, there can be a consequential direction relating to continuity of service). What requires to be noted in cases where finding of misconduct is affirmed and only the punishment is interfered with (as Page 11 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 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 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 Page 12 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 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.”
38. The propositions which can be culled out from the aforementioned judgments are:
38.1) In cases of wrongful termination of service, reinstatement with continuity of service and back wages is the normal rule.
38.2) The aforesaid rule is subject to the rider that while deciding the issue of back wages, the adjudicating authority or the Court may take into consideration the length of service of the employee/workman, the nature of misconduct, if any, Page 13 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 found proved against the employee/workman, the financial condition of the employer and similar other factors.
38.3) Ordinarily, an employee or workman whose services are terminated and who is desirous of getting back wages is required to either plead or at least make a statement before the adjudicating authority or the Court of first instance that he/she was not gainfully employed or was employed on lesser wages. If the employer wants to avoid payment of full back wages, then it has to plead and also lead cogent evidence to prove that the employee/workman was gainfully employed and was getting wages equal to the wages he/she was drawing prior to the termination of service. This is so because it is settled law that the burden of proof of the existence of a particular fact lies on the person who makes a positive averments about its existence. It is always easier to prove a positive fact than to prove a negative fact. Therefore, once the employee shows that he was not employed, the onus lies on the employer to specifically plead and prove that the employee was gainfully employed and was getting the same or substantially similar emoluments.
38.4) The cases in which the Labour Court/Industrial Tribunal exercises power under Page 14 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 Section 11-A of the Industrial Disputes Act, 1947 and finds that even though the enquiry held against the employee/workman is consistent with the rules of natural justice and / or certified standing orders, if any, but holds that the punishment was disproportionate to the misconduct found proved, then it will have the discretion not to award full back wages. However, if the Labour Court/Industrial Tribunal finds that the employee or workman is not at all guilty of any misconduct or that the employer had foisted a false charge, then there will be ample justification for award of full back wages.”
7.In line with the aforesaid judgment and by taking into account that the Labour Court had rendered its finding that the dismissal order is per se illegal, we are of the considered view that the workman would be entitled for backwages during the period of non-employment. However, in the given facts and circumstances, we restrict the backwages to 50%.
8. In the light of the above observations, the common order passed in W.P.Nos.1750 of 2013 and 23029 of 2012, dated 31.10.2022, insofar as it denies backwages and other attendant benefits, is set aside. Consequently, paragraph 11 of the Award in I.D.No.27 of 2002 stands modified as Page 15 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm ) W.A.Nos.3002 & 3377 of 2024 follows:-
‘The order of dismissal of the workman, namely D.Egambaram, dated 17.05.2001, is set aside and the Management is directed to reinstate the workman forthwith with continuity of service and all other attendant benefits. Insofar as the backwages is concerned, the same shall be restricted to 50%. The Transport Corporation is also at liberty to deduct the provident fund contributions of the employee from and out of the total monetary benefits. Such orders shall be passed atleast within a period of four weeks from the date of receipt of a copy of this judgement.
9.In the result, W.A.No.3002 of 2024 stands partly allowed and W.A.No.3377 of 2024 stands dismissed. No costs.
[M.S.R., J] [R.S.V.,J]
09.10.2025
Index: Yes
Neutral Citation: Yes
Speaking order
hvk
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W.A.Nos.3002 & 3377 of 2024
To
1.The Presiding Officer,
Labour Court, Cuddalore
2.The Management,
Tamilnadu State Transport Corporation Ltd., Villupuram-605 602.
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and R.SAKTHIVEL, J.
hvk W.A.Nos.3002 & 3377 of 2024 09.10.2025 Page 18 of 18 https://www.mhc.tn.gov.in/judis ( Uploaded on: 27/12/2025 06:07:16 pm )