Gujarat High Court
Sandoz(India)Ltd vs Shabbir Ahmed Yusuf Patel on 8 February, 2017
Author: K.M.Thaker
Bench: K.M.Thaker
C/SCA/17618/2006 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 17618 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE K.M.THAKER
===============================================================
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 ?
===============================================================
SANDOZ(INDIA)LTD.....Petitioner(s)
Versus
SHABBIR AHMED YUSUF PATEL....Respondent(s)
================================================================
Appearance:
NANAVATI ASSOCIATES, ADVOCATE for the Petitioner(s) No. 1
MR PH PATHAK, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 1
================================================================
CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 08/02/2017
ORAL JUDGMENT
1. Heard Mr. Nanavati and Mr. Desai, learned Page 1 of 30 HC-NIC Page 1 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT advocates for the petitioner and Ms. Kamani, learned advocate for the respondent. In present petition, the petitioner company has placed under challenge an award dated 9th January, 2006 passed by learned Labour Court at Bharuch in Reference No.35 of 1992 whereby, learned Labour Court directed the company to reinstate the claimant on his original post with 25 % back wages.
2. So far as factual background is concerned, it has emerged from the record and from rival submissions by learned advocates and the present respondent i.e. original claimant raised industrial dispute with the allegation that he was employed as driver with the opponent company and that he was workman with the company since January, 1987. However, without any fault on his part, the company, terminated his services illegally and arbitrarily without following procedure prescribed by the law and in breach of principles of natural justice. With such allegations, the claimant demanded that he should Page 2 of 30 HC-NIC Page 2 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT be reinstated in service with all benefits. 2.1 Appropriate Government referred the dispute for adjudication. Adjudication to learned Labour Court has passed. The dispute culminated into Reference (LCV) No.35 of 1992.
2.2 In his statement of claim, the claimant alleged that he was engaged by the opponent company as Driver with effect from 1st January, 1987 with salary of Rs.650/ per month and that he worked continuously, regularly and diligently with the company. He alleged that the company terminated his services on 31st December 1991 without any fault on his part. He also alleged that the company terminated his service in breach of statutory provisions and principles of natural justice. With such allegations, the claimant demanded that company should be directed to reinstate him with consequential benefits. 2.3 The opponent company opposed the Reference and resisted the demand. In its written Page 3 of 30 HC-NIC Page 3 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT statement, the company contended that the claimant was never employed by it. The company raised objection against maintainability of the Reference on the ground that the claimant was not its employee and therefore, the claimant had no right in law to raise demand against the company. The company further contended that it had awarded a contract to a Travel Agency named Khwaja Travels whereby, the said agency provided Drivers for company's vehicles. The company contended that the claimant was employee of said Khwaja Travels and he was deployed by said Khwaja Travels to drive company's vehicles. In paragraph No.2 in its reply, the company stated, inter alia, that:
"(2) The Company takesup a preliminary contention that since Shri Patel Shabbirbhai, the workman concerned in this Reference was never employed by the Company, the Reference made to this Hon'ble Labour Court being legally not tenable deserves to be dismissed on this preliminary contention alone. The Company begs to point out that the Company had given contract to one Travel Agency named Khwaja Travels to make available drivers for driving the company's vehicles as and when required.
Shri Shabbirbhai Patel, the workman concerned in this Reference was employed by Khwaja Travels and was deputed by Khwaja Travels to drive the Company's vehicles as and when required.
In view of this fact, the workman concerned in this Reference, Shri Patel Shabbirbhai was never employed by the Company and no relationship of master and servant existed between the Company and the workman concerned. The name of the workman concerned was never entered in Page 4 of 30 HC-NIC Page 4 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT the musterroll of the Company, nor he had been paid any wages by the Company, nor he had been paid any wages by the Company. The control of working on the workman concerned always remained with that of Khwaja Travels only and not of this Company. In view of the facts stated above, no relationship existed between the Company and the workman concerned and as the workman concerned was never employed by the Company nor was he ever paid by the Company the dispute raised regarding the alleged termination against the Company is nto maintainable against the Company and the workman concerned Shri Patel has raised false dispute against the Company because in fact he was never employed by the Company."
2.4 Upon conclusion of the pleadings, learned Labour Court received oral and documentary evidence from both sides, when the parties concluded their evidence, learned Labour Court heard rival submissions. After considering rival submissions by learned advocates for the claimant and learned advocate for the company and the material available on record the learned Court passed the impugned award with above mentioned directions.
3. Mr. Nanavati and Mr. Desai, learned advocates for the petitionercompany submitted that the Labour Court failed to appreciate the fact that the claimant was never employedappointed by the company but he was employee of the Contractor Page 5 of 30 HC-NIC Page 5 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT Travel Agency. The learned advocates for the petitionercompany submitted that the contract/agreement which was executed by the company with the Travel Agency was placed before the learned Labour Court and the certificate issued by the Travel Agency stating, interalia, that the claimant was its employee was also placed on record before the Labour Court. However, learned Labour Court ignored or misconstrued the documents and held that the claimant was employee of the company. Learned advocates for the company submitted that said findings and conclusion of learned Labour Court are incorrect and contrary to the documents which were available on record. It is also contended that since the claimant was not employee of the company, it had no obligation to comply with the conditions under Section 25F of the Act or other provisions of Industrial Disputes Act and that therefore, the findings of the learned Labour Court, viz. that the company committed breach of statutory provisions, is incorrect, baseless and Page 6 of 30 HC-NIC Page 6 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT unjustified and contrary to evidence on record. According to learned counsel for the petitioner company, the impugned award suffers from error of nonapplication of mind and the findings are based on misconstruction of document and the learned Labour Court has proceeded on presumption and surmises. According to company, the award deserves to be set aside.
4. Per contra, Ms Kamani, learned advocate for the claimant submitted that learned Labour Court has not committed any error in appreciation of evidence or in reaching to the final conclusion. According to the learned counsel for the respondent, the findings recorded by the learned Labour Court are based on oral and documentary evidence which obtained on record before learned Labour Court and that the findings of learned Labour Court are neither incorrect nor perverse. She submitted that company failed to establish its contentions that the claimant was employee of Travel Agency with which the company had executed Page 7 of 30 HC-NIC Page 7 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT a contract and that even the so called contract was not proved before learned Labour Court and that therefore, also it cannot be said that learned Court committed any error in the award. Learned counsel for the claimant submitted that the proprietor and owner of Travel Agency was examined before the learned Labour Court and his deposition supports the findings recorded by learned Labour Court inasmuch as the said owner and the proprietor of Travel Agency admitted during his crossexamination that any document to establish that the claimant was employee of the agency is not placed on record. According to learned counsel for the claimant, since the proprietor/owner of travel agency failed to establish the claim that the original claimant before the learned Labour Court was appointed/employed by Travel Agency, the findings by Labour Court are justified and there is no infirmity in the conclusions recorded by learned Labour Court. Ms. Kamani, learned counsel for the claimant contended that the petition is without Page 8 of 30 HC-NIC Page 8 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT merits and therefore, it may be rejected.
5. I have considered the rival submissions of learned advocates for the petitioner and the respondent. I have also considered the material available on record including the affidavits and impugned award.
6. The company contended before the learned Labour Court that it had entered into contract with a travel agency whereby an agreement was executed for providing vehicles and drivers. 6.1 It is true that the said document was placed on record before the learned Labour Court. Besides the said contract/ agreement, the company also placed on record a certificate issued by the proprietor of the travel agency whereby the said proprietor stated and certified that the claimant worked with the travel agency as driver between January, 1997 to December, 1997. In the Certificate it is also mentioned that the claimant left the service with the travel agency Page 9 of 30 HC-NIC Page 9 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT of his own accord. The said Certificate does not bear any date. Therefore, it is not clear when the said Certificate was issued. From the Contract/ agreement, which is placed on record, it appears that the agreement was executed on 09.01.1988.
6.2 Thus, there is no corelation between the 2 documents i.e. agreement/contract dated 09.01.1988 and the Certificate issued by proprietor/ owner of the travel agency (Khwaja Travels) inasmuch as on one hand it is contended that the claimant worked with Company from 1987 and his service was terminated in December, 1991, whereas the contract seems to have been executed in January, 1988.
6.3 It is also pertinent to note that the claimant contended that he worked with the Company from 1987 to December, 1991 whereas Certificate issued by the proprietor / owner of the Travel Agency gives out that the claimant worked with the said travel agency from January, Page 10 of 30 HC-NIC Page 10 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 1997 to December, 1997 i.e. 6 years after the claimant's service was allegedly terminated by the company.
6.4 Further, the agreement which was entered into by the Company with the travel agency was executed in January, 1988. The said Contract/ agreement does not mention any period of the agreement i.e. whether the contract was entered into for a period of 1 year or 2 years or for more years. It is also pertinent that there is no provision in the agreement with regard to revision of rates. Further, the contract is executed in January, 1988 whereas the claimant contended that he was working with the company since January, 1987. In this background, the said 2 documents do not render much assistance or support to the case and the petitioner company. Actually, the details mentioned in the Certificate militates against and runs contrary to the case of the company inasmuch as the Contract came to be executed in January, 1988 Page 11 of 30 HC-NIC Page 11 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT whereas the certificate gives out that the claimant was employed by the agency in January, 1997 i.e. 6 years after his alleged termination.
7. On the other hand, learned Labour Court, to justify and support the findings and conclusion, relied on the documents which were referred to by the witnesses during their deposition, more particularly, the documents marked as 24/5 and 24/6.
7.1 Reference of the said documents is found in Para9(c) of the award. Learned Labour Court has made reference of the documents marked 24/5 and 24/6 and on that basis as well as on strength of other documents like logbook, etc learned Labour Court has reached to the conclusion that the claimant was employed by the Company and that he worked with the company.
7.2 The said finding of fact is specifically record by the learned Labour Court and with the said finding of fact, learned Labour Court did Page 12 of 30 HC-NIC Page 12 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT not accept the case of the company that the claimant was not employed by it and he was employee of travel agency.
8. It is true that the claimant did not place on record any document to establish that he was working with the company since 1987 and/ or that he was appointed by the company. It is also true that the claimant did not place on record appointment order issued by the Company engaging him as driver.
8.1 Under the circumstances, the claim of the claimant would raise doubt inasmuch as it would be rare and exceptional case that a person was appointed by a Company without issuing appointment order.
8.2 However, when the learned Labour Court has based its finding on the documents which are not refuted by the company's witnesses and when any other document, which could establish that the Page 13 of 30 HC-NIC Page 13 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT claimant was employee of the travel agency, was not placed on record by the Company, there is no reason or justification for this Court to interfere with the findings of fact recorded by learned Labour Court.
9. The Learned Labour Court made reference of the deposition by the owner/proprietor of the travel agency. It is true that during his deposition the proprietor of travel agency accepted that the claimant was its employee and he also admitted that the Certificate (Exh59) is issued by him.
9.1 However, the said deposition does not help the company or does not render assistance to the case of the company inasmuch as in his deposition the proprietor of the travel agency (Khwaja Travels) has not specifically mentioned and stated that the claimant was its employee during the period from 1987 to 1991 or during any time in between 1987 to 1991.
Page 14 of 30
HC-NIC Page 14 of 30 Created On Sat Aug 12 13:33:58 IST 2017
C/SCA/17618/2006 JUDGMENT
9.2 On the contrary, the Certificate issued by the proprietor gives out that the claimant was engaged by the travel agency about 6 years after the claimant's alleged termination from the Company.
9.3 Thus, though it may be true that the claimant was employed by the travel agency, it cannot be inferred that the claimant was employed by the travel agency during the period between 1987 to 1991 and/ or during the period when the contract with the company (executed in January, 1988) was in operation.
9.4 It, thus, emerges that the Company failed to establish that the claimant was employee of the Agency during the period of operation of contract and the claimant was not employed by it at any time between 1987 to 1991 and that during the said period the claimant was deployed by the Agency. The certificate allegedly issued by the agency on which company placed reliance gives out Page 15 of 30 HC-NIC Page 15 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT that the claimant was employed/ engaged by the said Travel agency in 1997 (from January, 1997 to December, 1997) and thereby, belies Company's case.
9.5 For these reasons the findings recorded by the learned Labour Court holding , inter alia, that the claimant was employee of the Company, cannot be faulted.
10. Once the said findings by the learned Labour Court is accepted and it is found that the said conclusion by the learned Labour Court cannot be faulted then the only question which would survive for consideration is as to whether the company discontinued the service of the claimant in accordance with law.
11. On this count, it is relevant to note that it was not and it is not the case of the company that the service of the claimant was terminated after payment of retrenchment compensation.
Page 16 of 30
HC-NIC Page 16 of 30 Created On Sat Aug 12 13:33:58 IST 2017
C/SCA/17618/2006 JUDGMENT
11.1 Any ground for discontinuing the service of the claimant was neither pleaded nor proved. 11.2 Similarly, it was also not claimed or proved that procedure for terminating employee who worked with the Company for more than 12 months and also completed service of 240 days, was followed by the company.
12. Under the circumstances, the conclusion by learned Labour Court that the service of the claimant was terminated without following procedure cannot be faulted.
13. In this background, the question which arose for consideration and in light of the challenge raised by the company against the award is with regard to appropriate relief.
14. The learned Labour Court directed the company to reinstate the claimant with 25% backwages.
Page 17 of 30
HC-NIC Page 17 of 30 Created On Sat Aug 12 13:33:58 IST 2017
C/SCA/17618/2006 JUDGMENT
14.1 On examination of the award it has come out that the learned Labour Court did not take into consideration relevant factors for deciding the issue with regard to the claim for backwages. 14.2 In this context, it would be appropriate to refer to observation by Hon'ble 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 Page 18 of 30 HC-NIC Page 18 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 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 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 Page 19 of 30 HC-NIC Page 19 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 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 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 Page 20 of 30 HC-NIC Page 20 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 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 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)"
17. 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 Page 21 of 30 HC-NIC Page 21 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 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 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." 14.3 It would also be appropriate to refer to the observation by Hon'ble Apex Court in the decision in case of General Manager, Haryana Roadways vs. Rudhav Singh (2005) 5 SCC 591 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 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 Page 22 of 30 HC-NIC Page 22 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 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.
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 Page 23 of 30 HC-NIC Page 23 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 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." 14.4 It would be appropriate to also refer to the decision in case of U.P. SRTC vs. Mitthu Singh (2006) 7 SCC 180 wherein Hon'ble Apex Court Page 24 of 30 HC-NIC Page 24 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 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 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, Page 25 of 30 HC-NIC Page 25 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 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."
14.5 Thus, what emerges from the abovequoted observations by Hon'ble Apex Court is that the direction with regard to payment of backwages should not be passed mechanically and only Page 26 of 30 HC-NIC Page 26 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT 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.
15. Having regard to the above quoted observation by Hon'ble Apex Court, it appears that in present case learned Labour Court faile`1d to consider relevant aspects and committed error in deciding the issue with regard to backwages.
16. It is true that, ordinarily, when it is established that the service of the claimant was Page 27 of 30 HC-NIC Page 27 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT terminated in violation of the statutory provision then direction to reinstate the claimant should follow.
17. In present case, it is noticed that the total tenure of the claimant's service with the petitioner company was of about 3 ½ years. His service was discontinued in 1991 and the learned Labour Court rendered the award in January, 2006. Since April/ May, 2006 until now the company has paid last drawn wages to the claimant in accordance with Section 17B of the Act. From the record and from the submissions by learned advocate for the claimant it appears that the claimant has reached 55 years of age. It is also noticed from the award that the learned Labour Court did not grant continuity of service and learned Labour Court only awarded reinstatement and 25% backwages.
17.1 In this background, the Court is of the view that this petition can be decided and disposed of Page 28 of 30 HC-NIC Page 28 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT with some modification in the award. Therefore, following order is passed:
(a) The direction to reinstate the claimant is not disturbed.
(b) In light of the fact that even learned Labour Court has not awarded and granted continuity of service and also having regard to the facts and circumstances of the case, it is clarified that the respondent i.e. original claimant shall be reinstated as fresh employee, however, at the time of superannuation while calculating the claim/ benefit for gratuity, his past service prior to termination in December, 1991 shall be included (only for the purpose of calculating gratuity).
(c) In view of the above quoted observation by Hon'ble Apex Court with regard to claim for backwages and having regard to the fact that the claimant was experienced and qualified driver, he would not have remained unemployed during the interregnum and also having regard to the Certificate issued by the proprietor of the Page 29 of 30 HC-NIC Page 29 of 30 Created On Sat Aug 12 13:33:58 IST 2017 C/SCA/17618/2006 JUDGMENT travel agency that during the period between January, 1997 to December, 1997 the claimant worked with the said travel agency and thereafter, he left the job on his own accord, this Court is of the view that direction to pay 25% backwages deserves to be set aside.
Therefore, the said direction is set aside.
(d) With above modification in the award, the petition is partly allowed. The award is partly set aside and modified as mentioned above. Rule is made absolute to the aforesaid extent.
(K.M.THAKER, J.) saj Page 30 of 30 HC-NIC Page 30 of 30 Created On Sat Aug 12 13:33:58 IST 2017