Madras High Court
The Management Of Lupin Ltd vs O.S.Dilip Menon
Author: R.Subramanian
Bench: R.Subramanian
W.A.No.3475 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on Delivered on
10.03.2025 20.03.2025
CORAM:
THE HONOURABLE MR. JUSTICE R.SUBRAMANIAN
AND
THE HONOURABLE MR. JUSTICE G.ARUL MURUGAN
W.A.No.3475 of 2024
and
C.M.P.Nos.1309, 1310 & 1313 of 2025 & 27044 of 2024
The Management of Lupin Ltd.,
No.159, C.S.T.Road, Kalima,
Santa Cruz (East), Mumbai - 400 098. ... Appellant
Vs.
1.O.S.Dilip Menon
2.The Presiding Officer,
Labour Court, Salem. ...Respondents
Prayer: Writ Appeal filed under Clause 15 of the Letters Patent, praying to
set aside the order dated 15.09.2023 in W.P.No.13805 of 2016.
For Appellant : Mr.Anand Gopalan
for M/s.Agam Legal
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W.A.No.3475 of 2024
For Respondents : Mr.N.G.R.Prasad
for M/s.Row and Reddy for R1
R2 - Labour Court
******
JUDGMENT
(Judgment of the Court was delivered by R.SUBRAMANIAN, J.) Aggrieved by the order of the writ Court dated 15.09.2023 made in W.P.No.13805 of 2016, the Management is on appeal. Challenge in the writ Court was to the award of the labour Court dated 25.05.2015 made in I.D.No.120 of 2011.
The said industrial dispute arose on the following backdrop:-
2. The respondent herein had joined the services of the appellant as a Medical Representative at Salem on 08.08.1994. His services were confirmed on 07.02.1995. He took part in Union activities and became the District Secretary of Tamil Nadu Medical and Sales Representatives Union.
Unable to digest the Union activities of the respondent, the Management issued an order on 02.06.2010 transferring the respondent to New Delhi. The respondent objected to the said transfer and did not join the duty at the transferred location viz., New Delhi. This resulted in a charge memo being Page No.:2 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 issued on 08.10.2010. The respondent sent out his explanation on 18.10.2010. Not satisfied with the explanation, the appellant directed the petitioner to appear for domestic enquiry at Mumbai on 25.10.2010. The petitioner sent a reply on 23.10.2010 stating that he could not make his travel arrangements and therefore he sought for another date. Again by letter dated 25.10.2010, the respondent was informed that the enquiry would be conducted on 09.11.2010 to 11.11.2010 at Mumbai. The respondent again sent a letter stating that he is unable to make travel arrangement and sought for adjournment of the domestic enquiry proceedings. This request was not acceded to and the appellant proceeded with an ex parte enquiry. An order of termination came to be passed on 12.11.2010.
3. The industrial dispute was raised which resulted in conciliation and upon failure of conciliation, the matter was referred to the labour Court and was numbered as I.D.No.120 of 2011. The labour Court which examined the proceedings concluded that even as per the appointment order of the respondent which amounted to a contract of employment between the parties, the respondent was in a transferable job and therefore he cannot question the transfer and refuse to abide by the order of the transfer. On the Page No.:3 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 said finding, the labour Court dismissed the industrial dispute confirming the termination. Aggrieved the respondent moved the writ Court as aforesaid.
4. The writ Court, on the issue of opportunity at the domestic enquiry, concluded that the respondent was in fact offered an opportunity and he failed to utilize the same. The writ Court however went into the question of proportionality of punishment and decided that the punishment of dismissal from service/ termination was not warranted and it shocks the conscience of the Court. The writ Court thus directed reinstatement within Tamil Nadu with 25% back wages. It is this order of the writ Court which is under challenge.
5. We have heard Mr.Anand Gopalan, learned counsel appearing for the appellant and Mr.N.G.R.Prasad, learned counsel appearing for the 1st respondent.
6. Mr.Anand Gopalan, learned counsel appearing for the appellant would vehemently contend that while the writ Court had powers to direct reinstatement, it ought not to have chosen the place of work of the Page No.:4 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 respondent also. Once the appointment order issued very clearly stipulates that the respondent is liable to be transferred to any place in India where the Company has got business, non-compliance with the transfer order would amount to serious dereliction of duty and therefore the writ Court ought not to have interfered with the punishment. He would also draw our attention to the appointment order dated 7th February 1995, wherein, it is very clearly stated that the respondent is transferable anywhere in India to any of the existing or future Headquarters of the Company. He would also submit that transfer being an incident of service cannot be interfered with unless it is proved that it is either penal or malafide. Non-compliance with the transfer order by itself would afford a ground for termination.
7. Going one step further Mr.Anand Gopalan, learned counsel would submit that the writ Court though empowered to go into the proportionality of punishment under the circumstances where the punishment is so harsh that it shocks the conscience of the Court, the same cannot extend to choosing the place of work. The writ Court ought not to have directed reinstatement in any place within Tamil Nadu.
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8. Contending contra Mr.N.G.R.Prasad, learned counsel appearing for the workman would submit that if the workman is terminated, upon restoration he should be employed at his original place of work. There cannot be a reinstatement outside the place of work of the workman. He would also submit that he being a medical representative who will have to interact with Doctors and other vendors unless he is acquainted with the language which is predominant in the transferred station, he cannot render useful service to the Company. Therefore, according to the learned counsel the order of the writ Court is perfectly justified.
9. When this appeal came up for admission we had granted a limited interim order staying the direction to re-employ the petitioner within Tamil Nadu alone. In view of the said order, the employer has issued proceedings on 9th December 2024 requiring the respondent to join either at Delhi or at Vijayapura in Karnataka, which is nearer to the current location viz., Salem. The respondent sent a reply to the said letter stating that he would work only within Tamil Nadu.
10. After the said correspondence, the respondent has come up with Page No.:6 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 three applications viz., C.M.P.Nos.1309 and 1310 of 2025 praying for vacation of the limited stay order that was granted and for payment of 50% of sum of Rs.7,50,000/- which represents the back wages and CMP.No.1313 of 2025 to reinstate the petitioner in service immediately or pay the 17B wages at the rate of his last drawn salary of Rs.19,000/-. When these applications were listed for hearing the learned counsel for the parties agreed that the Writ Appeal itself could be taken up for disposal and hence we have heard the Writ Appeal finally.
11. The sum and substance of the contentions of Mr.Anand Gopalan, learned counsel appearing for the Management is that the writ Court was not right in issuing a direction for reinstatement of the respondent at a particular place or the place within Tamil Nadu. This according to the learned counsel is beyond the powers of the writ Court and militates against the settled position of law.
12. Mr.Anand Gopalan, learned counsel would rely upon the judgment of the Hon'ble Supreme Court in Deepali Gundu Surwase Vs. Kranti Junior Adhyapak Mahavidyalaya and others reported in (2013) 10 SCC Page No.:7 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 324, wherein, the Hon'ble Supreme Court had held that the word reinstatement means to re-install or to re-establish or to restore the state or position from which the object or person had been removed. Therefore, according to the learned counsel, the restoration should be to the place where the workman was working on the date of his termination.
13. Mr.Anand Gopalan, would strongly rely upon the fact that the order of transfer issued on 02.06.2010 was never under challenge to buttress his submission that on the date of termination, the respondent workman was deemed to be serving in New Delhi and therefore the reinstatement should be only at New Delhi.
14. He would also rely upon the judgment of the Hon'ble Supreme Court in J.K.Synthetics Limiteed Vs. K.P.Agarwal and another reported in (2007) 2 SCC 433, wherein, the Hon'ble Supreme Court had pointed out that the back wages is not automatic and it should be shown that the employee was not employed gainfully or was not engaged in any gainful business. The learned counsel would also point out to the fact that the employee has admitted that he has started a small venture and he is carrying on the very Page No.:8 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 same Pharmaceutical business in Salem before the labour Court and therefore the order directing payment of back wages is also not justified.
15. Reliance is also placed by the learned counsel on the judgment of the Hon'ble Supreme Court in Kendriya Vidyalaya Sangathan and another Vs. S.C.Sharma reported in (2005) 2 SCC 263, where again the question of back wages was considered and the law as laid down in J.K.Synthetics Limiteed Vs. K.P.Agarwal and another cited supra was reiterated.
16. In response to the submission of the learned counsel for the appellant Mr.N.G.R.Prasad, learned counsel appearing for the respondent / workman would draw our attention to the judgment of the two Division Benches of this Court first one in Lakshmi Mills Ltd., Coimbatore Vs. Labour Court, Coimbatore and another reported in 1997 (3) L.L.N 354 and the second one in The Management, Micro Labs Limited Vs. Patil Veershetty made in W.A.No.3129 of 2021 dated 24.01.2022. Mr.N.G.R.Prasad, learned counsel would vehemently contend that once reinstatement is directed, the Management cannot contend that it will reinstate the employee in some other station.
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17. Both those cases arose in a completely different circumstances. In both the cases it was the order directing payment of 17B wages. There was an order for reinstatement, it was not complied by the Management and when it came to the question of 17B wages, the Management offered to employ the employee in some other station. It was on these facts this Court held that the reinstatement must be in the same station. Those cases cannot form a precedent for the contention of Mr.N.G.R.Prasad that in a case where the employee is terminated for not obeying the transfer order, the reinstatement should be in the station where he was working before transfer.
18. Upon examination of the rival contentions as well as the facts that were narrated above, we find ourselves in agreement with the writ Court, where it held that imposition of punishment of termination from service was disproportionate to the proved delinquency. Therefore, we find ourselves in agreement with the conclusion of the writ Court that the punishment of termination from service needs to be set aside.
19. This leaves us with the only question whether the writ Court was Page No.:10 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 justified in granting back wages as it did and a further direction that the employee must be employed within Tamil Nadu.
20. We have already referred to the fact that the employee was appointed on 7th February 1995 and the terms of employment clearly stipulated that he can be transferred to any place within India. The mere fact that he was allowed to work for a long period at Salem cannot be a ground to contend that the Management does not have the power of transfer. As rightly pointed out by Mr.Anand Gopalan the transfer order is not under challenge. Therefore, once reinstatement is ordered by the writ Court or the labour Court, the reinstatement will be only in the place where he was transferred and not in the place where he was originally working. Therefore, the writ Court was not justified in issuing a further direction requiring the workman to be permitted to work anywhere within Tamil Nadu.
21. The powers of the labour Court under Section 11A on which the writ Court has also relied upon was dealt with by the Hon'ble Supreme Court in The Workmen of M/s.Firestone Tyre and Rubber Co. of India (Pvt.) Ltd., Vs. The Management and others reported in (1973) 1 SCC 813. Para Page No.:11 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 41-A of the said judgment reads as follows:-
41-A. Another change that has been effected by Section 11-A is the power conferred on a Tribunal to alter the punishment imposed by an employer. If the Tribunal comes to the conclusion that the misconduct is established, either by the domestic enquiry accepted by it or by the evidence adduced before it for the first time, the Tribunal originally had no power to interfere with the punishment imposed by thee management. Once the misconduct is proved, the Tribunal had to sustain the order of punishment unless it was harsh indicating victimisation. Under Section 11-A, though the Tribunal may hold that the misconduct is proved, nevertheless it may be of the opinion that the order of discharge or dismissal for the said misconduct is not justified. In other words, the Tribunal may hold that the proved misconduct does not merit punishment by way of discharge or dismissal. It can, under such circumstances, award to the workman only lesser punishment instead. The power to interfere with the punishment and alter the same has been now conferred on the Tribunal by Section 11-A. Page No.:12 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024
22. The power conferred is subject to the Court arriving at a conclusion that the punishment is disproportionate to the delinquency found. Having held that the termination was made after giving appropriate opportunity to the respondent, the writ Court had come to the conclusion that the punishment was disproportionate. Having come to the said conclusion the writ Court must have imposed certain punishment instead of termination. That punishment can be taken to denial of back wages to the extent of 75%. A further direction to re-employ at a particular place or within a particular State in our considered opinion is in excess of the power conferred under Section 11-A of the Industrial Disputes Act.
23. The writ Court in our considered opinion exceeded its jurisdiction in directing reinstatement within Tamil Nadu. As rightly pointed out by Mr.Anand Gopalan reinstatement will have to be at a place where the workman was serving on the date of his termination. The transfer order has not been challenged. Therefore, the respondent workman was deemed to be serving at New Delhi on the date of his termination. Therefore, he could have either joined at New Delhi or accept the offer made by the Management on 09.12.2024.
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24. Coming to the question of back wages the writ Court has awarded 25% back wages. It is contended by Mr.Anand Gopalan that the writ Court has not taken into account the fact that the employee/ workman was engaged in a gainful business and the said fact has also been admitted. As we have already adverted to in Kendriya Vidyalaya Sangathan and another Vs. S.C.Sharma and J.K.Synthetics Limiteed Vs. K.P.Agarwal and another cited supra, the Hon'ble Supreme Court has held that back wages is not automatic. The workman should prove that he was not gainfully employed or not doing any other gainful business during the period of non- employment.
25. In the case on hand there is evidence to show that the respondent has been carrying on business in the same field viz., Pharmaceutical business. It is also admitted that he is making some money out of the business. Of course, it is claimed that the business does not yield a substantial income. In the affidavit filed in support of C.M.P.No.1313 of 2025 the respondent has specifically admitted that he is running a business in the name of the M/s.Sree Krishna Enterprises dealing with Pharmaceutical Page No.:14 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 products and he is earning about Rs.8,000/- every month. He would however state that it is not a gainful employment per se as stated in the para 11 of the counter.
26. In Kendriya Vidyalaya Sangathan and another Vs. S.C.Sharma and J.K.Synthetics Limiteed Vs. K.P.Agarwal and another cited supra, the Hon'ble Supreme Court had made it clear that where reinstatement is a consequence of imposition of lesser punishment, neither back wages nor continuity of service nor consequential benefits, follow as a natural or necessary consequence.
27. As rightly pointed out by the learned counsel for the appellant the Hon'ble Supreme Court has held that where reinstatement is a consequence of imposition of lesser punishment a direction to pay back wages would amount to rewarding the delinquent employee and punishing the employer for taking action for the misconduct committed by the employee.
28. The same principle has been re-stated by the Hon'ble Supreme Court in Rajasthan State Road Transport Corporation Vs. Phool Chand Page No.:15 of 19 https://www.mhc.tn.gov.in/judis ( Uploaded on: 20/03/2025 01:24:11 pm ) W.A.No.3475 of 2024 reported in (2018) 18 SCC 299. In the light of law laid down and in the light of the findings of the writ Court that the punishment of termination is disproportionate and the employee will have to be reinstated with back wages, in such cases would really amount to rewarding the employee for indiscipline. We are therefore of the considered opinion that the grant of back wages as has been done by the writ Court is not justified.
29. In the light of the conclusion above, this writ appeal will stand partly allowed. The order directing reinstatement is confirmed. The other directions viz., to reinstate the respondent in any place within Tamil Nadu and for payment of back wages at 25% will stand set aside. The parties will bear their own costs in this appeal. The connected miscellaneous petitions are closed.
(R.SUBRAMANIAN, J.) (G.ARUL MURUGAN, J.)
20.03.2025
dsa
Index : Yes
Internet : Yes
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W.A.No.3475 of 2024
Neutral Citation : Yes
Speaking order
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W.A.No.3475 of 2024
To
1.The Presiding Officer,
Labour Court, Salem.
2.The Management of Lupin Ltd.,
No.159, C.S.T.Road, Kalima,
Santa Cruz (East), Mumbai - 400 098.
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W.A.No.3475 of 2024
R.SUBRAMANIAN, J.
and
G.ARUL MURUGAN, J.
dsa
W.A.No.3475 of 2024
20.03.2025
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