Back wages cannot be denied after reinstatement without specific reasons.

Gnanasekar, a cashier with the Bank, was suspended over alleged misappropriation of ₹1,16,317 and dismissed after a domestic enquiry.

The Labour Court found the charge unproved and ordered reinstatement with 40% back wages.

On the Bank’s writ petition, the Single Judge retained reinstatement and continuity of service but set aside back wages, while allowing terminal benefits with interest.

Gnanasekar appealed against the denial of back wages.

In a separate appeal by the Bank, the Division Bench had addressed reinstatement and terminal benefits; the present appeal concerned the back-wage issue.

The Bank stated that it had paid ₹68,202.75 under Section 17B of the Industrial Disputes Act, 1947.

1. Whether the Single Judge was justified in setting aside the Labour Court’s award of 40% back wages.

2. Whether the Bank should be directed to pay the back-wage award after deducting the amount already paid under Section 17B of the Industrial Disputes Act, 1947.

The Court stated that where an order of suspension or termination is set aside and reinstatement is ordered, back wages should not be denied without specific reasons.

It also considered Section 17B of the Industrial Disputes Act, 1947, as the basis for the payment already made to Gnanasekar, which was to be deducted from the amount payable.

The judgment cites no precedents; it refers to the Tamil Nadu Co-operative Societies Act, 1983 only in noting that the Bank had not initiated recovery proceedings concerning the alleged misappropriation.

The Labour Court had found the misappropriation charge unproved, and the Bank had not pursued recovery proceedings or produced supporting material such as account statements or depositor evidence.

The Division Bench therefore considered the allegation, and the employee’s statement during the domestic enquiry, insufficient grounds for the Single Judge to deny all back wages.

It also noted that the Labour Court had fixed back wages at 40% after considering the Co-operative Society’s financial position, and found no acceptable reason for setting that award aside.

The Court directed that the amount already paid under Section 17B be deducted.

It directed the Bank to pay the award amount, less the sum already paid under Section 17B, preferably within four months of receiving a copy of the order.

No costs were awarded.