Karnataka High Court
The Management Of vs G C Odusmath on 13 December, 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF DECEMBER, 2024
PRESENT
THE HON'BLE MRS. JUSTICE ANU SIVARAMAN
AND
THE HON'BLE MR. JUSTICE UMESH M ADIGA
WRIT APPEAL NO. 677 OF 2022 (L-TER)
C/W.
WRIT APPEAL NO. 681 OF 2022 (L-RES),
WRIT APPEAL NO. 683 OF 2022 (L-TER),
WRIT APPEAL NO. 685 OF 2022 (L-TER)
IN WRIT APPEAL NO. 677 OF 2022:
BETWEEN:
THE MANAGEMENT OF
M/S. COTTON CORPORATION OF INDIA LTD.
No.7, ORIENT POWER PRESS COMPOUND
LALBAGH ROAD, BENGALURU-560 027
NOW REP. BY ITS BRANCH MANAGER
W.B. PLAZA, 3RD FLOOR
NEW COTTON MARKET
HUBLI-580 028
...APPELLANT
(BY SRI. RADHAKRISHNA HOLLA A., ADVOCATE)
AND:
K.M. VIJAYANANDA
S/O K.M. HALIAL
AGED ABOUT 67 YEARS
C/O S.T. THIMMAIAH
SAPATAGIRI NILAYA
16TH CROSS, S.I. EXTENSION
TUMAKURU-572 103
...RESPONDENT
(BY SRI. K.B. NARAYANASWAMY, ADVOCATE FOR RESPONDENT)
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THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT, 1961, PRAYING TO SET ASIDE THE ORDER
DATED 21.06.2022 PASSED IN W.P.No.62927 OF 2011 AND
ALLOW THE WRIT PETITION IN THE INTEREST OF JUSTICE.
IN WRIT APPEAL NO. 681 OF 2022:
BETWEEN:
THE MANAGEMENT OF
M/S. COTTON CORPORATION OF INDIA LTD.
No.7, ORIENT POWER PRESS COMPOUND
LALBAGH ROAD, BENGALURU-560 027
SINCE ITS IS CLOSED NOW
BANGALORE UNIT SHIRFTED TO
COTTON CORPORATION OF INDIA LTD.
W.B. PLAZA, 3RD FLOOR
OPP. NORTH TRAFFIC POLICE STATION
NEW COTTON MARKET, HUBLI-580 028
REP. BY ITS BRANCH MANAGER
...APPELLANT
(BY SRI. RADHAKRISHNA HOLLA A., ADVOCATE)
AND:
G.C. ODUSMATH
S/O CHANNABASAIAH
AGED ABOUT 70 YERS
MAHALAXMI GINNING
AND PRESSING FACTORY
GADAG-582 101
...RESPONDENT
(BY SRI. K.B. NARAYANASWAMY, ADVOCATE FOR RESPONDENT)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT, PRAYING TO SET ASIDE THE ORDER DATED
21.06.2022 PASSED IN THE WP No.37745/2011 AND DISMISS
THE WRIT PETITION IN THE INTEREST OF JUSTICE.
IN WRIT APPEAL NO. 683 OF 2022:
BETWEEN:
THE MANAGEMENT OF
M/S. COTTON CORPORTATION OF INDIA LTD
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No.7, ORIENT POWER PRESS COMPOUND
LALBAGH ROAD, BENGALURU-560 027
NOW REP BY ITS BRANCH MANGER
WB PLAZA, 3RD FLOOR
NEW COTTON MARKET
HUBLI-580 028
...APPELLANT
(BY SRI. RADHAKRISHNA HOLLA A., ADVOCATE)
AND:
G.C. ODUSMATH
S/O CHANANBASAIAH
AGED 67 YEARS
C/O SARASWATHI BOOK DEPOT
BUS STAND ROAD
GAJENDRAGAD-582 114
GADAG DISTRICT
...RESPONDENT
(BY SRI. K.B. NARAYANASWAMY, ADVOCATE FOR RESPONDENT)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT, PRAYING TO SET ASIDE THE ORDER DATED
21.06.2022 PASSED IN THE WP No.62928/2011 AND ALLOW THE
WRIT PETITION IN THE INTEREST OF JUSTICE.
IN WRIT APPEAL NO. 685 OF 2022:
BETWEEN:
THE MANAGEMENT OF
M/S. COTTON CORPORATION OF INDIA LTD.
No.7, ORIENT POWER PRESS COMPOUND
LALBAGH ROAD, BENGALURU-560 027
SINCE IT IS CLOSED NOW BENGALURU
UNIT SHIFTED TO COTTON CORPORATION OF INDIA LTD.
W.B. PLAZA, 3RD FLOOR
NEW COTTON MARKET, HUBLI-580 028
REP BY ITS BRANCH MANAGER
...APPELLANT
(BY SRI. RADHAKRISHNA HOLLA A., ADVOCATE)
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AND:
K.M. VIJAYANANDA
S/O K.M. HALAIAH
AGED ABOUT 67 YEARS
'APRAMEYA', 7TH CROSS
ASHOK NAGAR
TUMAKURU-572 103
...RESPONDENT
(BY SRI. K.B. NARAYANASWAMY, ADVOCATE FOR RESPONDENT)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT, PRAYING TO SET ASIDE THE ORDER DATED
21.06.2022 PASSED IN WP No.37744/2011 AND DISMISS THE
WRIT PETITION IN THE INTEREST OF JUSTICE.
THESE WRIT APPEALS HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 22.10.2024 AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, ANU SIVARAMAN
J., PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN
and
HON'BLE MR. JUSTICE UMESH M ADIGA
CAV JUDGMENT
(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN) These Writ Appeals are filed by the Management challenging the Orders dated 21.06.2022 passed by the learned Single Judge in Writ Petitions No.62927/2011 and 62928/2011 (filed by Management) and 37745/2011 and 37744/2011 (filed by employees). All the writ petitions arose from the Award of the Labour Court, Bengaluru dated 20.10.2010.
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2. For the sake of convenience, the parties and the documents are being referred as arrayed and produced in W.A.No.677/2022.
3. We have heard Shri. Radhakrishna Holla, learned counsel appearing for the appellant-Management and Shri. K.B. Narayanaswamy, learned counsel appearing for the respondents - employees.
4. It is submitted by the learned counsel appearing for the appellant in W.A.No.677/2022 that the workmen who are involved in these appeals were initially appointed in the year 1986, as a Junior-Cotton Purchaser by the appellant company and posted to Bellary, where they were assigned to manage the Bellary Ginning Factory in Hulkundi. Following a fire accident that year, the appellant constituted a three-member Committee to investigate the incident. This Committee recorded statements from several employees, including the respondent, on 08.05.1986 and 09.05.1986 at a hotel where Committee members were staying. Subsequently, on 24.07.1986, a charge was framed against the workmen, alleging that they had solicited and collected
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6 Rs.5,000/- from one V.B. Patil, Senior Cotton Purchase Officer and Rs.1,500/- from Cotton Growers through persons employed for weighing cotton in APMC yard. After an enquiry, the charges were found proved and the workmen were dismissed from service on 02.06.1987.
5. It is submitted that the workmen appealed against the dismissal before the appellate authority, the same were rejected. Then, the respondent - employee (K.M.Vijayananda) herein, had approached this Court by filing W.P.No.7974/1988 which was disposed of on 27.05.1988 on the ground that the respondents could pursue their remedies under the Industrial Disputes Act, 1947 (hereinafter referred to as the 'Act' for short). Consequently, the respondents filed a petition before the Regional Labour Commissioner on 30.05.1988, which was subsequently transferred to the State Labour Commissioner. On 17.09.1988, the State Labour Commissioner issued an endorsement by advising the respondents to approach the Labour Court under Section 10(4-A) of the Act. Accordingly, they filed a claim under Section 10(4-A) read with Section 2-
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7 A of the Act, seeking reinstatement and the matter was registered as I.D.No.377/1988. The appellant contested the jurisdiction, but the Labour Court affirmed that the State Government was the appropriate authority to adjudicate the case. The appellant challenged the order of the Labour Court in W.P.No.28462-63/1993 which was dismissed by Order dated 19.09.1995. The said order was challenged in W.A.No.4435-38/1995 and the same was dismissed by Judgment dated 25.03.1998.
6. It is further submitted that the respondents' claim in I.D. No.377/1988 was filed beyond six months and the Labour Court had no jurisdiction to adjudicate the case, prompting the respondents to withdraw the dispute with permission to raise it afresh. They subsequently, initiated a new dispute with the Conciliation Officer on 19.08.2005. Following unsuccessful conciliation efforts, the dispute was referred to the Labour Court and registered as Ref.No.22/2006. On 27.12.2008, the Labour Court held that the enquiry was fair and proper. The respondent challenged the finding of the Labour Court in W.P.No.720/2009, which
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8 was dismissed on 06.08.2009, "allowing him the liberty to contest it at a later stage".
7. It is also submitted that the Labour Court passed an award dated 20.10.2010, for reinstatement of the respondent with continuity of service and 50% back wages from 16.03.2006 and imposed a penalty withholding of five annual increments. The appellant challenged this award in W.P.No.62927/2011, wherein this Court, by its order dated 21.06.2022, found the Labour Court's penalty of withholding increments unjustified, awarding the respondent full back wages from the date of dismissal i.e., from 02.06.1987 to the date of award i.e., 20.10.2010. Aggrieved by the order of the learned Single Judge, the appellant is before this Court.
8. It is contended by the learned counsel appearing for the appellant in W.A.No.677/2022 that the respondents were removed from service on 02.06.1987 following a serious charge of bribery. The present proceedings were initiated under Ref.No.22/2006, resulting in a delay of 19 years in raising the dispute. The award which grants
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9 backwages has effectively imposed an undue burden on the appellant, despite the extensive lapse of time since the respondents' initial removal from service.
9. It is contended that awarding full back wages to the respondents from 02.06.1987 to 16.03.2006, is unjustified. The decision of the Labour Court to deny back wages until 16.03.2006 and to reinstate the respondents with 50% back wages thereafter was challenged in W.P.No.37744/2011. The Labour Court had found the enquiry against the respondents to be fair and proper, and the respondents had admitted the charge. The learned Single Judge, however, erroneously over-looked these facts and instead granted full relief to the respondents without considering the limited question of victimization, which was the only issue requiring adjudication.
10. It is further contended that the learned Single Judge, disregarded the fact that the respondents received subsistence allowance of Rs.1,35,333/- (W.A.No.677/2022) and Rs.1,49,589/- (W.A.No.681/2022), respectively from 15.04.1995 to 30.11.2005 and yet awarded full back wages.
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10 The said order was passed without application of mind and disregards that finding in labour matters are based on preponderance of probabilities, not the criminal standard of proof. Additionally, the learned Single Judge improperly questioned the absence of Shri V.B. Patil, Senior Cotton Purchase Officer, who alleged to have paid bribe money to the respondents, was not examined as a witness in enquiry by the management and he was testified as a defense witness and denied the charge. It is also contended that the employees had a hand in the fire accident at the factory and to cover up misconduct of the employees in purchasing lower quality cotton, the fire accident was resorted to pointing out that there was a possible collusion between Shri V.B.Patil and the respondents to hush up his misdeeds by paying bribe amount Rs.5000/-.
11. It is contended that the findings of the Labour Court reached after thorough assessment of evidence, should not be re-evaluated in proceedings under Articles 226 and 227 of the Constitution of India unless they are perverse, contrary to law or contain an error apparent on
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11 the face of the record. The learned Single Judge's re- appreciation of evidence amounts to acting as an Appellate Authority. Furthermore, binding precedents of the Apex Court were not considered by the learned Single Judge, rendering the impugned order erroneous and liable to be set aside.
12. In support of the above contentions, the following decisions are relied on:-
• U.P. State Road Transport Corporation v. Suresh Chand Sharma reported in (2010) 6 SCC 555];
• In U.P. State Road Transport Corporation v. Vinod Kumar reported in (2008) 1 SCC 115; and • Divisional Controller, N.E.K.R.T.C v. H. Amaresh reported in (2006) 6 SCC 187].
13. It is contended by the learned counsel appearing for the workmen had clearly denied the charges and had repudiated the statement allegedly given by them specifically stating that their signatures had been obtained without permitting them to read the contents. During the domestic enquiry, the appellant did not present V.B. Patil as a witness, despite his material testimony. The respondent,
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12 however, called V.B. Patil as a witness and was testified that the respondent had neither demanded nor accepted any money. Nonetheless, based on a confession letter obtained under duress, the Enquiry Officer found the respondent guilty of the charges. Pursuant to the finding of the Enquiry Officer, the appellant passed an order of removal from service on 02.06.1987.
14. It is contended that aggrieved by the removal, the respondents filed a claim before III Additional Labour Court in Bengaluru, invoking Section 2-A read with Section 10(4-A) (Karnataka Amendment) of the Industrial Disputes Act, seeking reinstatement and attendant benefits. However, the Court initially deemed the claim not maintainable, holding that the Central Government was the appropriate authority, not the State Government. Subsequently, the State Government referred the dispute back to the Labour Court. On 20.10.2010, the Court adjudicated the matter, addressing the issue of delay of 17 years raised by the appellant. The Labour Court found the delay justifiable, noting that the respondents had pursued their rights
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13 through an incorrect legal provision but within the same judicial forum.
15. It is also contended that the enquiry revealed that the respondents had retracted their initial statements, allegedly obtained under duress. The appellant failed to produce any evidence to substantiate the charges. The Labour Court found that the removal was unwarranted and directed that the respondent be penalized with a withholding of five increments and awarded partial back wages.
16. It is submitted that the findings of the learned Single Judge were fully justified since the Management had utterly failed to prove the charges in the enquiry and no penalty could have been imposed at all relying on findings which are supported by no evidence. It is further contended that since the enquiry and the dismissal was totally vitiated, full backwages was liable to be paid to the employees.
17. In support of the above contentions, the following decisions are relied on:-
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• Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (D.ED.) and others, reported in (2013) 10 SCC 324;
• Union of India v. Sardar Bahadur reported in (1972) 4 SCC 618;
• Roop Singh Negi v. Punjab National Bank and others reported in (2009) 2 SCC 570;
• Amar Chakravarthy and others v. Maruti Suzuki India Limited reported in (2010) 14 SCC 471; • Hardwari Lal v. State of U.P. and others reported in (1999) 8 SCC 582; and • K.V.S. Ram v. Bangalore Metropolitan Transport Corporation reported in AIR 2015 SC 998.
18. Having considered the contentions advanced, we have to decide whether the judgment of the learned Single Judge is liable to be interfered with. For a proper consideration on this point, we find that the following issues arise for consideration:-
(i) Was the Industrial Dispute raised belatedly, so as to deny relief to the workmen as contended by the Management?
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(ii) Was the finding of the Labour Court that the enquiry was fair and proper, sustainable?
(iii) Was the finding of the Labour Court that the punishment of termination of service was unjustified supported by materials and reasoning?
(iv) Could the Labour Court have imposed the lesser punishment of withholding of five annual increments with cumulative effect?
(v) Were backwages liable to be paid to the workmen and if so, what was the quantum?
19. On the question of delay in initiating the proceedings, the findings of the Labour Court are as follows:-
"12. On careful perusal of the previous proceedings it can be seen that first party, first of all wrongly approached the Regional Labour Commissioner (Central) Bangalore. Thereafter again first party wrongly approached the II Addl. Labour Court under Sec. 10(4-A) of the ID Act. It appears that because of first party approaching wrong forums and filing claim petition under wrong provision of law there is abnormal delay on the part of the first party. It appears that first party though made sincere efforts about challenging the dismissal order but before the wrong forum. It appears that first party might not have been properly given advise about the amended provision of
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law, therefore the delay is caused. For these reasons it appears that first party is justified in raising the dispute after lapse of 17 years. Hence I answer this issue in the affirmative."
20. The learned Single Judge has also considered the question of delay and had agreed with the finding of the Labour Court that the delay was on account of approaching the wrong forum and that it stood explained. Having considered the contentions advanced and the decisions relied on, we find no grounds to differ from the findings. This is more so in view of the fact that the workmen had been agitating their case since the first order of punishment. The Apex Court in S.M. Nilajkar and others v. Telecom District Manager, Karnataka reported in (2003) 4 SCC 27, and Raghubir Singh v. General Manager, Haryana Roadways, Hissar reported in (2014) 10 SCC 301, has held that the delay, by itself, cannot be a ground to deny relief to workmen, who had no other means of securing redressal for their grievances. The question of delay, if any, in initiating the proceedings can be taken into account while considering the question of backwages. The Apex Court has
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17 clearly held that the Labour Court may be justified in molding relief where it finds that there was a delay in raising the dispute. In the instant case, we find that the reasons for the delay were substantially explained. In the above circumstances, we find no ground to differ from the findings of the Labour Court and the learned Single Judge on the question of delay.
21. We proceed to consider the issue on propriety of the enquiry and the punishment which could be awarded (issues No.2, 3 and 4). We notice that the charges raised against the respondent in W.A.No.677/2022 were as follows:
"1. That Sri. K.M. Vijayananda, Jr. Cotton Purchaser, Gadag, while on tour to Bellary centre during 1985- 86 and working as factory Incharge of Bellary Cotton Ginning Factory, Hulkundi, has received unlawful money from the centre incharge and growers thus violated Rule 4 (I), (II), (III) and Rule 5 (II), (V) and (XVI) of CI(CDA) Rules of 1975.
2. that Sri. Vijayananda, JCP, Gadag Centre, while on tour to Bellary during 1985-86 has been kept as factory incharge of Bellary Cotton Industry Ginning Factory, Hulkundi. He was also asked to attend weighment of kapas docras at the factory submarket yard. He has demanded and collected
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Rs.5,000/- from growers through a temporary weighman of APMC Factory. Thus, Sri.Vijayananda committed misconduct under Rule No.4 (I), (II), (III) Rule No.5(II), (V) and (XVI) of CCI (CDA), 1975.
The charges against the respondent in W.A.No.677/2022 (K.M. Vijayananda) and respondent in W.A.No.681/2022 (G.C. Odusmath), were almost identical.
22. The workmen were said to have given a statement before the three member committee which was formed to enquire into the fire accident. The said statement was produced before the Labour Court as M23 and M24(a). It was on the basis of the statement so made before the committee that the charge memo was issued to the employees. In their first reply to the charge memo, the employees repudiated their statement. Their contention was that the committee members had prepared a statement and required the employees to sign the same without disclosing the contents. Therefore it is clear that the alleged statement was repudiated at the first possible opportunity. The burden was then on the management to prove the allegations made in the memo of charges. The employee who is alleged to
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19 have paid the bribe had been examined on the side of the workman and he had denied having paid any money. Therefore, the charges were held to be proved in the enquiry only on a repudiated statement and on services and conjunctions.
23. In the above view of the matter, we find that even though the Labour Court had held that procedure in the conduct of the enquiry was proper, the further question with regard to perversity in the findings had been clearly left open. The correctness of the finding that the enquiry was fair and proper was also open for a consideration by the decision of this Court in W.P.No.720/2009. In the instant case, the finding of guilt entered by the Enquiry Officer was supported by no evidence. We are therefore of the opinion that the finding of the Labour Court that the termination of service of the workmen was unjustified, is liable to be accepted. However, since the findings in the enquiry were found to be totally unsupported, the imposition of a lesser penalty on the basis of the enquiry report would also be unjustified.
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24. The learned Single Judge in the judgment in W.P.No.37745/2011 has clearly stated as follows:-
"I may venture to say that the Court has totally erred in relying upon the Confession Letter since the so-called Confession Letter could not have been used as an incriminating document in that the first party had denied the same as voluntarily given by him. The controverted confession has been credence and the evidence of Sri.V.B.Patil has been completely overlooked. Hence, I have no hesitation in holding that there is no basis for imposition of punishment i.e., withholding 5 annual increments with cumulative effect. Therefore, the finding to that effect needs to be set aside."
We are of the opinion that the learned Single Judge was therefore fully justified in setting aside the imposition of the lesser penalty by the Labour Court. Issues No.2 and 3 are answered accordingly.
25. The question of backwages is to be decided on a case to case basis taking note of the materials on record. In Deepali Gundu Surwase's case (supra), the Apex Court has clearly held that where the entire exercise leading to imposition of penalty of termination of service is found to be illegal, then, reinstatement should result in payment of consequential benefits and continuity of service as well. In
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21 Roop Singh Negi's case (supra), it was held that a confession, having been repudiated by the employee, could not be relied on to find the employee guilty as charged and that in such cases, award of full backwages would be justified. In Amar Chakravarthy and others's case (supra), it was held that the preliminary onus to prove the charges is on the employer and when a workman is dismissed in an enquiry where the charges are not proved, reinstatement with consequential benefits should be the result.
26. Having considered the contentions advanced on either side, we notice that the Labour Court had come to the conclusion that the dispute raised after considerably long period of delay is maintainable in the specific facts and circumstances of the case in question. However, it is clear that the Labour Court had also considered the delay in approaching the Court while limiting the backwages to 50%. The termination of service in the instant case was in the year 1987. Till the year 1998, the workmen were admittedly before the Labour Court and this Court either seeking relief
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22 or defending cases filed by the Management. The dispute was raised in 2005 and was taken cognizance of, only in the year 2006. The award was passed on 20.10.2010. It is the specific case of the Management that from 15.04.1995 to 30.11.2005, subsistence allowance had been paid to the employees.
27. In the light of the materials on record, we are of the opinion that the finding of the Labour Court that the backwages have to be limited to 50% appears to be just and correct in the facts of the case. Even in case the enquiry was found to be illegal and the termination was unjustifiable, the question of backwages has to be decided taking note of all attendant circumstances including the delay, if any, in initiating the proceedings. In the instant case, there is no explanation why fresh conciliation proceedings were not initiated by the workmen till 2005 after the writ appeal was dismissed on 25.03.1998. It is contended that substantial amounts had been paid to the workmen by the management for the period from 15.04.1995 to 30.11.2005.
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28. We therefore answer issue No.4 as follows:-
The employees would be entitled to backwages but the same would have to be limited to 50% backwages from 16.03.2006 till date of reinstatement or date of retirement, whichever is earlier.
29. In the result:-
(i) The appeals are partly allowed.
(ii) The finding of the learned Single Judge with regard to award of full backwages is set aside.
(iii) The award dated 20.10.2010 of the III Additional Labour Court, Bengaluru, only insofar as it relates to reinstatement and 50% of backwages from 16.03.2006 (W.A.No.677/2022 and W.A.No.683/2022) and from 27.03.2006 (W.A.No.681/2022 and W.A.No.685/2022), is upheld.
(iv) The judgment of the learned Single Judge shall stand upheld in all other respects i.e., the finding of the learned Single Judge that the Management had not proved the charges and that no punishment could be imposed, are upheld.
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Pending IAs, if any, in all the writ appeals shall stand disposed of.
Sd/-
(ANU SIVARAMAN) JUDGE Sd/-
(UMESH M ADIGA) JUDGE cp*