Full Judgment Text
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CASE NO.:
Appeal (civil) 7304 of 2005
PETITIONER:
U.P. State Brassware Corpn. Ltd. & Anr.
RESPONDENT:
Udai Narain Pandey
DATE OF JUDGMENT: 08/12/2005
BENCH:
S.B. Sinha & P.K. Balasubramanyan
JUDGMENT:
JUDGMENT
[Arising out of S.L.P. (C) No. 14945 of 2004]
S.B. Sinha, J :
Leave granted.
Whether direction to pay backwages consequent upon a declaration
that a workman has been retrenched in violation of the provisions of Section
6-N of the U.P. Industrial Disputes Act, 1947 (equivalent to Section 25F of
the Industrial Disputes Act, 1947) as a rule is in question in this appeal
which arises out of a judgment and order dated 6.2.2004 passed by a
Division Bench of the High Court of Judicature at Allahabad in Civil Misc.
Writ Petition No. 23890 of 1992 dismissing the appeal preferred by the
Appellant herein arising out of a judgment and order dated 8th July, 1992.
The Appellant is an undertaking of the State of Uttar Pradesh. The
Respondent herein was appointed on 23rd July, 1984 in a project known as
Project Peetal Basti by the Appellant for looking after the construction of
building, cement loading and unloading. He worked in the said project from
23.7.1984 till 8.1.1987. He was thereafter appointed in Non-Ferrous Rolling
Mill. By an order dated 12/13.2.1987, the competent authority of the Non-
Ferrous Mill of the Appellant passed the following order:
"Following two persons are hereby accorded
approval for appointment in Non-Ferrous Rolling
Mill on minimum daily wages for the period w.e.f.
date indicated against their name till 31-3-1987.
Sl No. Name Date
1. Sh. Hori Lal 7-1-1987
2. Sh. Uday Narain Pandey 8-1-1987"
The services of the Respondent were terminated on the expiry of his
tenure. An industrial dispute having been raised, the appropriate
government by an order dated 14.9.1998 referred the following dispute for
adjudication by the Presiding Officer, Labour Court, Uttar Pradesh:
"Whether the employer’s decision to terminate the
Workman Sh. Uday Narain son of Pateshwari
Pandey w.e.f. 1-4-87 was illegal and improper? If
yes whether the concerned workman is entitled to
the benefit of retrenchment and other benefit?"
The Project Officer of the Appellant-Corporation appears to have
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granted a certificate showing the number of days on which the Respondent
performed his duties.
The Labour Court in its award dated 31.10.1991 came to the finding
that the Respondent worked for more than 240 days in each year of 1985-
1986. It was directed:
"Therefore, I reached to the decision that the
employer should reinstate the concerned workman
Uday Narain Pandey son of Sh. Pateshwari Pandey
w.e.f. the date of retrenchment i.e. 1-4-87 and he
should be paid entire backwage with any other
allowances w.e.f. same date within 30 days from
the date of this order together with Rs. 50/-
towards cost of litigation to Sh. Uday Narain
Pandey. I decide accordingly in this Industrial
Dispute."
The Appellant herein filed a writ petition before the Allahabad High
Court in May, 1992 which was marked as Civil Misc. Writ Petition No.
23890 of 1992 inter alia contending that as the Respondent had not rendered
service continuously for a period of 240 days during the period of 12
calendar months immediately before his retrenchment uninterruptedly, he
was not a workman within the meaning of Section 2(z) of the U.P. Industrial
Disputes Act. It was further contended that the appointment of the
Respondent was on contractual basis for a fixed tenure which came to an end
automatically as stipulated in the aforementioned order dated 12/13.2.1987.
An application was filed by the Respondent herein under the Payment
of Wages Act wherein an award was passed. The said order was also
questioned by the Appellant by filing a writ application before the High
Court and by an order dated 12.8.1993, the High Court directed it to pay a
sum of rupees ten thousand to the Respondent. Pursuant to or in furtherance
of the said order, the Respondent is said to have been paid wages upto
February, 1996. By reason of the impugned order dated 6.2.2004, the writ
petition was dismissed holding:
"Having heard the learned counsel for the
Petitioners and having perused the record, I am of
the opinion that the aforesaid findings recorded by
the Labour Court cannot be said to be perverse.
The learned senior counsel then contended that the
Petitioner No. 1 i.e. U.P. State Brassware
Corporation Ltd. has been closed down. Be that as
it may, the position of the Respondent workman
would be the same as that all the similar
employees and this cannot be a ground to set aside
the award of the Labour Court."
Ms. Rachana Srivastava, learned counsel appearing on behalf of the
Appellant would bring to our notice that the Appellant’s industries have
been lying closed since 26.3.1993 and in that view of the matter, the Labour
Court as also the High Court committed a serious error in passing the
impugned judgment. The appointment of the Respondent, the learned
counsel would contend, being a contractual one for a fixed period, Section 6-
N of the U.P. Industrial Disputes Act would have no application.
Relying on or on the basis of the principle of ’no work no pay’, it was
urged that for the period the Respondent did not work, he was not entitled to
any wages and as such the grant of back wages by the Labour Court as also
by the High Court is wholly illegal, particularly, in view of the fact that no
statement was made in his written statement filed before the Labour Court
that he was not employed with any other concern. In any event, the
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Respondent was also not interested in a job. In support of the
aforementioned contention, reliance has been placed on Kendriya Vidyalaya
Sangathan and Another v. S.C. Sharma, (2005) 2 SCC 363 and Allahabad
Jal Sansthan v. Daya Shankar Rai and Another, (2005) 5 SCC 124.
Mr. Bharat Sangal, learned counsel appearing on behalf of the
Respondent, on the other hand, would submit that Section 2 (oo)(bb) of the
Industrial Disputes Act, 1947 applies to the workmen working in the State of
Uttar Pradesh as there does not exist any such provision in the U.P.
Industrial Disputes Act. It was conceded that in view of the fact that
establishment of the Appellant was sold out on 26.3.1993, the Respondent
may not be entitled to an order of reinstatement with full back wages but
having regard to the fact that his services were wrongly terminated with
effect from 1.4.1987, he would be entitled to back wages for the entire
period from 1.4.1987 till 26.3.1993 besides the amount of compensation as
envisaged under the U.P. Industrial Disputes Act.
Payment of back wages, Mr. Sangal would urge, is automatic
consequent upon a declaration that the order of termination is unsustainable
for any reason whatsoever and in particular when it is found to be in
violation of the provisions of Section 6-N of the U.P. Industrial Disputes
Act.
It is not in dispute that the Respondent was appointed on daily wages.
He on his own showing was appointed in a project work to look after the
construction of building.
The construction of the building, the learned Labour Court noticed,
came to an end in the year 1988. The reference by the appropriate
government pursuant to an industrial dispute raised by the Respondent was
made in the year 1990.
A decision had been taken to close down the establishment of the
Appellant as far back on 17.11.1990 wherefor a Government Order, GO No.
395/18 Niryat-3151/90 dated 17.11.1990 was issued. In its rejoinder
affidavit filed before the High Court, it was contended that the said GO was
implemented substantially and all the employees including the regular
employees save and except some skeleton staff for winding up were
retrenched. The Non Ferrous Mill of the Appellant was sold on 26.3.1993.
The Labour Court in its impugned award has not arrived at any
finding that the order of appointment dated 8.1.1987 whereby the
Respondent was appointed afresh in the Non Ferrous Rolling Mill was by
way of unfair labour practice. It is, however, true that the Appellant relying
on or on the basis of the aforementioned order dated 12/13.2.1987 in terms
whereof the Respondent’s services were approved for appointment in the
said mill on minimum daily wages for the period 8.1.1987 till 31.3.1987
terminated his services without giving any notice or paying salary of one
month in lieu thereof. No compensation in terms of Section 6-N of the U.P.
Industrial Disputes Act was also paid.
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.
It is not disputed that the Respondent did not plead that he after his
purported retrenchment was wholly unemployed.
Section 6-N of the U.P. Industrial Disputes Act provides for service of
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one month notice as also payment of compensation to be computed in the
manner laid down therein. Proviso to clause (a) of the said provision,
however, excludes the requirement of giving such notice in the event the
appointment was for a fixed tenure.
Section 25B(2)(a) of the Industrial Disputes Act raises a legal fiction
that if a workman has actually worked under the employer continuously for
a period of more than 240 days during a period of twelve calendar months
preceding the date with reference to which calculation is to be made,
although he is not in continuous service, he shall be deemed to be in
continuous service under an employer for a period of one year.
The Labour Court although passed its award relying on or on the basis
of the certificate issued by the Appellant, it did not hold that during the
preceding 12 months, namely, for the period 1st April, 1986 to 31st March,
1987 the workman had completed 240 days of service. Unfortunately,
neither the Labour Court nor the High Court considered this aspect of the
matter in right perspective.
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 6-N of the U.P.
Industrial Disputes Act.
Section 2(oo)(bb) of the Central Act as inserted by Industrial Disputes
Amendment Act, 1984 is as under:
"2. Definitions.\027In this Act, unless there is
anything repugnant in the subject or context,\027
*
(oo) ’retrenchment’ means the termination by the
employer of the service of a workman for any
reason whatsoever, otherwise than as a punishment
inflicted by way of disciplinary action, but does
not include\027
(a) *
(b) *
(bb) termination of the service of the workman as a
result of the non-renewal of the contract of
employment between the employer and the
workman concerned on its expiry or of such
contract being terminated under a stipulation in
that behalf contained therein;"
However, a similar provision has not been enacted in the U.P.
Industrial Disputes Act.
The contention of the Appellant, as noticed hereinbefore, was that the
Respondent having been appointed for a fixed period was not entitled to any
compensation under the provisions of Section 6-N of the U.P. Industrial
Disputes Act. But, in this connection our attention has been drawn to a 2-
Judge Bench decision of this Court in Uttar Pradesh State Sugar Corporation
Ltd. v. Om Prakash Upadhyay [2002 (1) LLJ 241: (2002) 10 SCC 89]
wherein it was held that in view of Section 31(1) of Industrial Disputes
(Amendment and Miscellaneous Provisions) Act, 1956, the provisions of
Section 2(oo)(bb) of the Central Industrial Disputes Act would not be
applicable. In that view of the matter, although no notice was required to be
service in view of the proviso to Clause (a) of Section 6-N of the U.P.
Industrial Disputes Act, compensation therefor as provided for in Clause (b)
was payable. But, it is not necessary for us to go into the correctness or
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otherwise of the said decision as it is not disputed that before the provisions
of Section 6-N of the U.P. Industrial Disputes Act can be invoked, the
concerned workman must work at least for 240 days during a period of
twelve calendar months preceding the date with reference to which
calculation is to be made.
However, as the question as regard termination of service of the
Respondent by the Appellant is not in issue, we would proceed on the basis
that the services of the Respondent were terminated in violation of Section
6-N of the U.P. Industrial Disputes Act. The primary question, as noticed by
us herein before, is as to whether even in such a situation the Respondent
would be entitled to the entire back wages.
Before adverting to the said question in a bit more detail, let us
consider the decisions relied upon by Mr. Sangal.
In Hindustan Tin Works Pvt. Ltd. v. Employees of Hindustan Tin
Works Pvt. Ltd. [(1979) 1 SCR 563], this court merely held that the relief of
reinstatement with continuity of service can be granted where termination of
service is found to be invalid. It, therefore, does not lay down a law in
absolute terms to the effect that right to claim back wages must necessarily
follow an order declaring that the termination of service is invalid in law.
In Hindustan Tin Works (supra) notice for retrenchment was issued
inter alia for non-availability of raw material to utilize the full installed
capacity, power shedding limiting the working of the unit to 5 days a week
and the mounting loss which were found to be factually incorrect. The real
reason for issuing such a notice was held to be "the annoyance felt by the
management consequent upon the refusal of the workmen to agree to the
terms of settlement contained in the draft dated 5th April, 1974".
Laws proverbial delay, it was urged therein, is a matter which should
be kept in view having regard to the fact situation obtaining in each case and
the conduct of the parties. Such a contention was raised on the ground that
the company was suffering losses. The court analysed factual matrix
obtaining therein to the effect that a sum of Rs. 2,80,000/- was required to be
paid by way of back wages and an offer was made by way of settlement to
pay 50% of the back wages observing:
"Now, undoubtedly the appellant appears to have
turned the corner. The industrial unit is looking up.
It has started making profits. The workmen have
already been reinstated and, therefore, they have
started earning their wages. It may, however, be
recalled that the appellant has still not cleared its
accumulated loss. Keeping in view all the facts and
circumstances of this case it would be appropriate
to award 75% of the back wages to the workmen to
be paid in two equal instalments."
It will, therefore, be seen that this Court itself, having regard to the
factual matrix obtaining in the said case, directed payment of 75% of the
back wages and that too in two equal instalments.
In Management of Panitole Tea Estate v. The Workmen [(1971) 3
SCR 774], a two-judge bench of this Court while considering the question as
regard grant of relief or reinstatement, observed:
"The general rule of reinstatement in the absence
of special circumstances was also recognised in the
case of Workmen of Assam Match Co. Ltd. v.
Presiding Officer, Labour Court, Assam and has
again been affirmed recently in Tulsidas Paul v.
Second Labour Court, W.B. In Tulsidas Paul it has
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been emphasised that no hard and fast rule as to
which circumstances would establish an exception
to the general rule could be laid down and the
Tribunal must in each case decide the question in a
spirit of fairness and justice in keeping with the
objectives of industrial adjudication."
In Surendra Kumar Verma v. Central Government Industrial Tribunal-
cum-Labour Court, New Delhi & Anr. [(1981) 1 SCR 789], this Court
refused to go into the question as to whether termination of services of a
workman in violation of the provisions of Section 25F is void ab initio or
merely invalid or inoperative on the premise that semantic luxuries are
misplaced in the interpretation of ’bread and butter’ statutes. In that context,
Chinnappa Reddy, J. observed:
"\005Plain common sense dictates that the removal
of an order terminating the services of workmen
must ordinarily lead to the reinstatement of the
services of the workmen. It is as if the order has
never been, and so it must ordinarily lead to back
wages too. But there may be exceptional
circumstances which make it impossible or wholly
inequitable vis-‘-vis the employer and workmen to
direct reinstatement with full back wages. For
instance, the industry might have closed down or
might be in severe financial doldrums; the
workmen concerned might have secured better or
other employment elsewhere and so on. In such
situations, there is a vestige of discretion left in the
court to make appropriate consequential orders.
The court may deny the relief of reinstatement
where reinstatement is impossible because the
industry has closed down. The court may deny the
relief of award of full back wages where that
would place an impossible burden on the
employer. In such and other exceptional cases the
court may mould the relief, but, ordinarily the
relief to be awarded must be reinstatement with
full back wages. That relief must be awarded
where no special impediment in the way of
awarding the relief is clearly shown. True,
occasional hardship may be caused to an employer
but we must remember that, more often than not,
comparatively far greater hardship is certain to be
caused to the workmen if the relief is denied than
to the employer if the relief is granted."
Yet again, no law in absolute terms had been laid down therein. The
court proceeded on the basis that there may be situations where grant of full
back wages would be inequitable. In the fact situation obtaining therein, the
court, however was of the opinion that there was no impediment in the way
of awarding the relief. It is interesting to note that Pathak, J., as His
Lordship then was, however was of the view:
"Ordinarily, a workman who has been retrenched
in contravention of the law is entitled to
reinstatement with full back wages and that
principle yields only where the justice of the case
in the light of the particular facts indicates the
desirability of a different relief."
The expression ’ordinarily’ must be understood given its due
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meaning. A useful reference in this behalf may be made to a 4-Judge Bench
decision of this Court in Jasbhai Motibhai Desai v. Roshan Kumar, Haji
Bashir Ahmed and Others [(1976) 1 SCC 671] wherein it has been held:
"35. The expression "ordinarily" indicates that this
is not a cast-iron rule. It is flexible enough to take
in those cases where the applicant has been
prejudicially affected by an act or omission of an
authority, even though he has no proprietary or
even a fiduciary interest in the subject-matter. That
apart, in exceptional cases even a stranger or a
person who was not a party to the proceedings
before the authority, but has a substantial and
genuine interest in the subject-matter of the
proceedings will be covered by this rule. The
principles enunciated in the English cases noticed
above, are not inconsistent with it."
In J.N. Srivastava v. Union of India and Another [(1998) 9 SCC 559]
again no law has been laid down in the fact situation obtaining therein. The
court held that the workmen had all along been ready and willing to work,
the plea of ’no work no pay’ as prayed for should not be applied.
We may notice that in M.D., U.P. Warehousing Corpn. v. Vijay
Narayan Vajpayee [(1980) 3 SCC 459] and Jitendra Singh Rathor v. Shri
Baidyanath Ayurved Bhawan Ltd. although an observation had been made to
the effect that in a case where a breach of the provisions of Section 25-F has
taken place, the workmen cannot be denied back wages to any extent, no
law, which may be considered to be binding precedent has been laid down
therein.
In P.G.I. of Medical Education & Research, Chandigarh v. Raj Kumar
[(2001) 2 SCC 54], Banerjee, J., on the other hand, was of the opinion:
"The learned counsel appearing for the
respondents, however, placed strong reliance on a
later decision of this Court in PGI of M.E. &
Research Chandigarh v. Vinod Krishan Sharma
wherein this Court directed payment of balance of
60% of the back wages to the respondent within a
specified period of time. It may well be noted that
the decision in Soma case has been noticed by this
Court in Vinod Sharma case wherein this Court
apropos the decision in Soma case observed:
"A mere look at the said judgment shows
that it was rendered in the peculiar facts and
circumstances of the case. It is, therefore,
obvious that the said decision which centred
round its own facts cannot be a precedent in the
present case which is based on its own facts."
We also record our concurrence with the
observations made therein.
Payment of back wages having a discretionary
element involved in it has to be dealt with, in the
facts and circumstances of each case and no
straight-jacket formula can be evolved, though,
however, there is statutory sanction to direct
payment of back wages in its entirety. As regards
the decision of this Court in Hindustan Tin Works
(P) Ltd. be it noted that though broad guidelines,
as regards payment of back wages, have been laid
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down by this Court but having regard to the
peculiar facts of the matter, this Court directed
payment of 75% back wages only."
The decisions of this Court strongly relied upon by Mr. Sangal,
therefore, do not speak in one voice that the industrial court or for that
matter the High Court or this Court would not have any discretionary role to
play in the matter of moulding the relief. If a judgment is rendered merely
having regard to the fact situation obtaining therein, the same, in our
opinion, could not be a declaration of law within the meaning of Article 141
of the Constitution of India.
It is one thing to say that the court interprets a provision of a statute
and lays down a law, but it is another thing to say that the courts although
exercise plenary jurisdiction will have no discretionary power at all in the
matter of moulding the relief or otherwise give any such reliefs, as the
parties may be found to be entitled to in equity and justice. If that be so, the
court’s function as court of justice would be totally impaired. Discretionary
jurisdiction in a court need not be conferred always by a statute.
Order VII, Rule 7 of the Code of Civil Procedure confers power upon
the court to mould relief in a given situation. The provisions of the Code of
Civil Procedure are applicable to the proceedings under the Industrial
Disputes Act. Section 11-A of the Industrial Disputes Act empowers the
Labour Court, Tribunal and National Tribunal to give appropriate relief in
case of discharge or dismissal of workmen.
The meaning of the word ’discharge’ is somewhat vague. In this case,
we have noticed that one of the contentions of the Appellant was that the
services of the Respondent had been terminated in terms of its order dated
12/13.2.1987 whereby and whereunder the services of the Respondent herein
was approved till 31.3.1987.
The Industrial Disputes Act was principally established for the
purpose of pre-empting industrial tensions, providing the mechanics of
dispute-resolutions and setting up the necessary infrastructure so that the
energies of partners in production may not be dissipated in counter-
productive battles and assurance of industrial justice may create a climate of
goodwill. [See LIC v. D.J. Bahadur, (1981) 1 SCC 315]
Industrial Courts while adjudicating on disputes between the
management and the workmen, therefore, must take such decisions which
would be in consonance with the purpose the law seeks to achieve. When
justice is the buzzword in the matter of adjudication under the Industrial
Disputes Act, it would be wholly improper on the part of the superior courts
to make them apply the cold letter of the statutes to act mechanically.
Rendition of justice would bring within its purview giving a person what is
due to him and not what can be given to him in law.
A person is not entitled to get something only because it would be
lawful to do so. If that principle is applied, the functions of an industrial
court shall lose much of its significance.
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.
In Hindustan Motors Ltd. v. Tapan Kumar Bhattacharya and Another
[(2002) 6 SCC 41], this Court noticed Raj Kumar (supra) and Hindustan Tin
Works (supra) but held:
"As already noted, there was no application of
mind to the question of back wages by the Labour
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Court. There was no pleading or evidence
whatsoever on the aspect whether the respondent
was employed elsewhere during this long
interregnum. Instead of remitting the matter to the
Labour Court or the High Court for fresh
consideration at this distance of time, we feel that
the issue relating to payment of back wages should
be settled finally. On consideration of the entire
matter in the light of the observations referred to
supra in the matter of awarding back wages, we are
of the view that in the context of the facts of this
particular case including the vicissitudes of long-
drawn litigation, it will serve the ends of justice if
the respondent is paid 50% of the back wages till
the date of reinstatement..."
The Court, therefore, emphasized that while granting relief application
of mind on the part of the industrial court is imperative. Payment of full
back wages, therefore, cannot be the natural consequence.
To the same extent are the decisions of this Court in Indian Railway
Construction Co. Ltd. v. Ajay Kumar [(2003) 4 SCC 579] and M.P. State
Electricity Board v. Jarina Bee (Smt.) [(2003) 6 SCC 141].
The said decisions have recently been considered and followed in U.P.
State Textile Corpn. Ltd. v. P.C. Chaturvedi and Others [(2005) 8 SCC 211].
Lahoti, J., as the learned Chief Justice then was, in S.M. Nilajkar and
Others v. Telecom District Manager, Karnataka [(2003) 4 SCC 27] opined:
"The fact remains that there was delay, though not
a fatal one, in initiating proceedings calculating the
time between the date of termination and initiation
of proceedings before the Industrial Tribunal-cum-
Labour Court. The employee cannot be blamed for
the delay. The learned Single Judge has denied the
relief of back wages while directing the appellants
to be reinstated. That appears to be a just and
reasonable order\005"
In Rattan Singh v. Union of India [(1997) 11 SCC 396], the Court
directed payment of a consolidated sum of Rs. 25,000/- in lieu of back
wages and reinstatement having regard to the time lag between the date of
termination and the date of order.
In Ruby General Insurance Co. Ltd. v. Chopra (P.P.) [(1969) 3 SCC
653] and Hindustan Steels Ltd. v. A.K. Roy [(1969) 3 SCC 513], this Court
held that before granting reinstatement, the court must weight all the facts
and exercise discretion whether to grant reinstatement or to award
compensation.
The said decisions were, however, distinguished in Mohan Lal v.
Management of M/s. Bharat Electronics Ltd. [(1981) 3 SCC 225]. Desai, J.
was of the opinion:
"17\005But there is a catena of decisions which rule
that where the termination is illegal especially
where there is an ineffective order of retrenchment,
there is neither termination nor cessation of service
and a declaration follows that the workman
concerned continues to be in service with all
consequential benefits. No case is made out for
departure from this normally accepted approach of
the courts in the field of social justice and we do
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not propose to depart in this case."
In Allahabad Jal Sansthan v. Daya Shankar Rai and Another [(2005)
5 SCC 124], in which one of us was a party, this Court had taken into
consideration most of the decisions relied upon by Mr. Sangal and observed:
"A law in absolute terms cannot be laid down as to
in which cases, and under what circumstances, full
back wages can be granted or denied. The Labour
Court and/or Industrial Tribunal before which
industrial dispute has been raised, would be
entitled to grant the relief having regard to the
facts and circumstances of each case. For the said
purpose, several factors are required to be taken
into consideration. It is not in dispute that
Respondent 1 herein was appointed on an ad hoc
basis; his services were terminated on the ground
of a policy decision, as far back as on 24-1-1987.
Respondent 1 had filed a written statement
wherein he had not raised any plea that he had
been sitting idle or had not obtained any other
employment in the interregnum. The learned
counsel for the appellant, in our opinion, is correct
in submitting that a pleading to that effect in the
written statement by the workman was necessary.
Not only no such pleading was raised, even in his
evidence, the workman did not say that he
continued to remain unemployed. In the instant
case, the respondent herein had been reinstated
from 27-2-2001."
It was further 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 realised
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."
Yet again in General Manager, Haryana Roadways v. Rudhan Singh
[JT 2005 (6) SC 137 : (2005) 5 SCC 591], a 3-Judge Bench of this Court in a
case where the workman had worked for a short period which was less than
a year and having regard to his educational qualification, etc. denied back
wages although the termination of service was held to have been made in
violation of Section 25F of the Industrial Disputes Act, 1947 stating:
"\005A 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
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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."
In A.P. State Road Transport Corporation and Others v. Abdul
Kareem [(2005) 6 SCC 36] while the Labour Court directed reinstatement
with continuity of service of the Respondent but without back wages, this
Court denied even the continuity of service.
A Division Bench of this Court In M.L. Binjolkar v. State of Madhya
Pradesh [JT 2005 (6) SC 461 : (2005) 6 SCC 224], referring to a large
number of decisions, held:
"7\005 The earlier view was that whenever there is
interference with the order of termination or
retirement, full back wages were the natural
corollary. It has been laid down in the cases noted
above that it would depend upon several factors
and the Court has to weigh the pros and cons of
each case and to take a pragmatic view\005"
In Management of Madurantakam Coop. Sugar Mills Ltd. v. S.
Viswanathan [(2005) 3 SCC 193], quantum of back wages was confined to
50% stating:
"19\005 It is an undisputed fact that the workman
had since attained the age of superannuation and
the question of reinstatement does not arise.
Because of the award, the respondent workman
will be entitled to his retiral benefits like gratuity,
etc. and accepting the statement of the learned
Senior Counsel for the appellant Mills that it is
undergoing a financial crisis, on the facts of this
case we think it appropriate that the full back
wages granted by the Labour Court be reduced to
50% of the back wages\005"
In State of U.P. and Others v. Ram Bachan Tripathi [(2005) 6 SCC
496], this Court denied the service benefits for the period the employee
remained absent.
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In Rajasthan State Road Transport Corpn. and Others v. Shyam Bihari
Lal Gupta [(2005) 7 SCC 406], it was observed:
"3. According to the learned counsel for the
appellant Corporation, the decree is absolutely
silent so far as the back wages are concerned. The
decree in essence contains only a declaratory relief
without any consequential payment for monetary
benefits. That being so, the executing court and the
High Court were not justified in granting the relief
sought for. Learned counsel for the respondent on
the other hand submitted that when the decree
clearly indicated that the termination was illegal
non est, as a natural corollary, the plaintiff was
entitled to the back wages."
In the instant case, we have noticed hereinbefore that the
establishment of the Appellant wherein the Respondent could be directed to
be reinstated had been sold on 26.3.1993. In that view of the matter, Section
6O of the U.P. Industrial Disputes Act would apply in terms whereof
compensation will be payable in the same manner as if he was retrenched
under Section 6N thereof.
It is not in dispute that the Respondent did not raise any plea in his
written statement that he was not gainfully employed during the said period.
It is now well-settled by various decisions of this Court that although earlier
this Court insisted that it was for the employer to raise the aforementioned
plea but having regard to the provisions of Section 106 of the Indian
Evidence Act or the provisions analogous thereto, such a plea should be
raised by the workman.
In Kendriya Vidyalaya Sangathan (supra), this Court held:
"\005When the question of determining the
entitlement of a person to back wages is
concerned, the employee has to show that he was
not gainfully employed. The initial burden is on
him. After and if he places materials in that regard,
the employer can bring on record materials to rebut
the claim. In the instant case, the respondent had
neither pleaded nor placed any material in that
regard."
[See also Allahabad Jal Sansthan (supra), para 6]
The only question is whether the Respondent would be entitled to
back wages from the date of his termination of service till the
aforementioned date. The decision to close down the establishment by the
State of Uttar Pradesh like other public sector organizations had been taken
as far back on 17.11.1990 wherefor a GO had been issued. It had further
been averred, which has been noticed hereinbefore, that the said GO has
substantially been implemented. In this view of the matter, we are of the
opinion that interest of justice would be subserved if the back wages payable
to the Respondent for the period 1.4.1987 to 26.3.1993 is confined to 25% of
the total back wages payable during the said period.
The judgments and orders of the Labour Court and the High Court are
set aside and it is directed that the Respondent herein shall be entitled to
25% back wages of the total back wages payable during the aforesaid period
and compensation payable in terms of Section 6-N of the U.P. Industrial
Disputes Act. If, however, any sum has been paid by the Appellant herein,
the same shall be adjusted from the amount payable in terms of this
judgment.
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For the reasons aforementioned, the appeal is allowed in part and to
the extent mentioned hereinbefore. However, there shall be no order as to
costs.