In Deshraj Gupta vs. Industrial Tribunal (supra) also reported in 1991 (1) SCC
249, an order of dismissal was found to have been passed without proper enquiry, but the
order of dismissal was affirmed by the Industrial Tribunal after holding an enquiry. The
Supreme Court held that dismissal could not relate back to the illegal order of the
management and the dismissed employee would be entitled to salary for the period
between the date of dismissal and the date of the award affirming the dismissal.
In U.P. S.R.T.C. Ltd. vs. Sarada Prasad Mishra & Anr. (supra) the Supreme
Court held that no precise formula could be adopted nor any "cast iron rule" laid down
with regard to payment of back wages. Payment of back wages was a discretionary power
which had to be exercised keeping in view the facts and circumstances of each case. The
approach of the Court ought not be rigid or mechanical, but flexible and realistic. In that
case Supreme Court allowed 50% back wages from the date of his award till his
reinstatement.
In Gujarat Steel Tubes & Anr. Vs. Gujarat Steel Tubes Mazdoor Sabha & Ors.
(supra) also reported in 1980 (2) SCC 593, the majority of the Judges of the Supreme
Court held that, ordinarily a workman whose services had illegally been terminated would
be entitled to full back wages, except to the extent he was gainfully employed. The
discretion to deny reinstatement or pare down the quantum of back wages was absent
except for exceptional reasons. The mandate of Article 43A had to be kept in view.
"It is true that when a reinstatement is ordered in appeal or review,
the authorities can pass specific order regarding the pay and allowances to be
paid to the government servant for the period of his absence from duty
preceding the dismissal, removal or compulsory retirement, as the case may be.
This is an enabling provision and the authorities can consider the relevant facts
as to whether the employee should be denied the salary for the period he was
kept under suspension preceding the removal, dismissal or compulsory
retirement. The counsel for the appellant has placed reliance on the decision of
the Constitution Bench of this Court in Managing Director, ECIL v. B.
Karunakar where this Court held that the question whether the employee would
be entitled to the back wages and other benefits from the date of his dismissal
to the date of his reinstatement, if ultimately ordered, should invariably be left
to be decided by the authority concerned according to law, after the culmination
of the proceeding and depending on the final outcome. If the employee succeeds
in the fresh enquiry and is directed to be reinstated, the authority should be at
liberty to decide according to law how it will treat the period from the date of
dismissal till the reinstatement and to what benefits, if any, and the extent of
the benefits, he will be entitled. The reinstatement made as a result of the
setting aside of the enquiry for failure to furnish the report, should be treated
as a reinstatement for the purpose of holding the fresh enquiry from the stage of
furnishing the report and no more, where such fresh inquiry is held.
In M.L. Benjolkar vs. State of M.P. (supra), cited by Mr. Bera, the Supreme
Court held that full back wages was no longer a natural corollary to an order of
reinstatement. Rather, grant and quantum of back wages would depend on several factors
and the Court would have to weigh the pros and cons of each case and take a pragmatic
view. The Supreme Court refused to interfere with the order of the High Court reducing
the back wages awarded to 50%.