REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7249 OF 2008
(Arising out of SLP (C) No. 13112 of 2007)
M.D., BALASAHEB DESAI
SAHAKARI S.K. LTD. ...
APPELLANT
Versus
KASHINATH GANAPATI KAMBALE ... RESPONDENT
JUDGMENT
S.B. SINHA, J.
1. Leave granted.
2. Appellant herein is a Cooperative Society. It runs a sugar factory.
Respondent was appointed as a peon in July 1974. On or about 1.12.1983, a
show cause notice was issued seeking an explanation from him as regards
some alleged misconduct on his part. He was placed under suspension. A
charge sheet dated 29.12.1983 was issued against him, inter alia, in respect
of the following charges:
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“(i) Late attendance between 2.7.1983 to
20.12.1983 on 16 occasions.
(ii) Absence without leave between 6.10.1983
to 22.12.1983 for 20 days.
(iii) Leaving the place of work without
permission and without seeking leave and
attempt to obtain wages between 23rd to 30th
November, 1983.
(iv) Leaving premises without permission and
leave between 2.12.1983 to 20.12.1983 on 6
occasions.
(v) Signing the muster without remaining
present and attempting to seek wages
between 16.9.1983 to 16.11.1983 for 9 days.
(vi) Signing the muster for showing presence on
1.12.1983 on next day.
(vii) Disobeying order of Shri Mahadik regarding
storage of water on 12.12.1983, refusing to
deliver letter as directed by Shri Chavan
clerk on 19.12.1983 not attending the office
on 14.12.1983 though asked to attend for
the purpose of audit.”
3. A departmental proceeding was held in which he was found guilty of
the said charges. He was dismissed from services by the appellant by an
order dated 5.7.1984.
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Respondent filed an Application under Sections 78 of the Bombay
Industrial Relations Act, 1946 before the Labour Court, Sangli praying for
his reinstatement with continuity of service and full back wages, which was
registered as B.I.R. No. 16 of 1984.
4. A preliminary issue as regards validity or otherwise of the said
disciplinary proceeding, which appears to have been decided against the
respondent, had been framed.
Apart from the said preliminary issue, the Labour Court framed the
following issues:
“1. Whether the applicant proves that the
opponent terminated him from service
illegally and wrongfully?
2. Whether the enquiry conducted by the
opponent against the applicant is legal
proper and valid?
3. Whether the termination of the employment
is a grossly disproportionate punishment?
4. Whether the applicant is entitled to
reinstatement, continuity of service and full
back wages?
5. Appellant examined some witnesses to establish that the respondent
had been running a footwear shop under the name and style of Amol
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Footwear. The Labour Court did not place any reliance thereupon holding
that the appellant had not produced any licence on record to show that the
respondent was running the said shop.
The Labour Court, while holding that the respondent had been found
guilty of committing the misconduct, passed an award of reinstatement with
continuity of service with 50% back-wages on the premise that the
punishment of termination from service was disproportionate to the charges
of misconduct leveled against him.
6. An appeal preferred thereagainst by the appellant was dismissed. On
the question as to whether the respondent was gainfully employed or not,
the Appellate Authority while holding that the provisions of Shops and
Establishments Act were not applicable at Patan where the said footwear
shop was being run, opined that the Labour Court was correct in denying
50% of back wages on the premise that the respondent had been carrying on
the said business to meet his both ends. It was held:
“Moreover, the Respondent has produced
reasonable evidence to show special circumstances
which may justify denial of 50% of back wages.
In these circumstances, I find no reason to allow
full back wages to original petitioner in his appeal.
Consequently, I hold that the labour court was
correct in awarding 50% back wages.”
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7. A writ petition filed by the appellant was dismissed by a learned
single judge of the Bombay High Court stating:
“…..The Labour Court, in exercise of its
jurisdiction under this Section, has concluded that
the punishment imposed was disproportionate.
Both, the Labour Court and the Industrial Court
were of the opinion that a lesser punishment of
forfeiture of part of the back wages was the
punishment which was adequate. Both the courts
below have exercised their discretion fairly and
judiciously.
9. In my view, therefore, there is no need to
interfere with the orders of the Courts below.”
8. By reason of the impugned judgment, an intra court appeal preferred
by the appellant has been dismissed.
Hence this Appeal by special leave.
9. A notice was issued by this Court only on the quantum of back
wages.
10. Mr. Shivaji M. Jadhav, learned counsel appearing on behalf of the
appellant would submit that the Industrial Court as also the High Court
committed a serious error in granting reinstatement with continuity of
service and half back wages in favour of the respondent by wrongly placing
the onus of proof on the appellant. Leaned counsel would contend that it is
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now well settled that back wages ought not to be automatically granted and
keeping in view of the fact that the services of the respondent were
terminated in the year 1984 and the award of the labour court having been
rendered in the year 1991, the grant of 50% back wages was wholly
unjustified.
11. Mr. Vinay Navare, learned counsel appearing on behalf of the
respondent, on the other hand, would support the impugned judgments
contending that in terms of the provisions of the Industrial Employment
Standing Orders Act, 1946 only a fine could be imposed on the respondent
for his alleged unauthorized absence. Our attention was further drawn to
the fact that while passing the order of termination, records of past service
of the respondent had not been taken into consideration.
12. Charges against the respondent as noticed hereinbefore were serious
in nature. During the period between July 1983 and December 1983, he not
only absented himself from work without leave but also had been reporting
to the work place late and leaving factory premises without permission
early. He was also found guilty of indiscipline.
It is now well settled by a catena of decisions of this Court that
having regard to the principles contained in Section 106 of the Indian
Evidence Act the burden of proof to show that the workman was not
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gainfully employed is not on the employer. In this case, the burden of proof
had wrongly been placed upon the appellant.
13. This Court in U.P. State Brassware Corpn. Ltd. vs. Uday Narain
Pandey [(2006) 1 SCC 479] held:
61. 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.
62. In Kendriya Vidyalaya Sangathan v. S.C.
Sharma [(2005) 2 SCC 363], this Court held:
(SCC p. 366, para 16)“…When 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 vs. Daya
Shankar Rai [(2005) 5 SCC 124], para 6}”
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14. Furthermore, some materials had been brought on record to show that
the respondent was gainfully employed. The evidence adduced on behalf of
the appellant in that behalf, in our opinion, had not been considered on its
proper perspective. The Industrial Court while holding that no licence is
necessary to run a footwear shop in a small town committed a serious
illegality in arriving at his finding that the respondent must have been doing
so, to meet his both ends. It may be correct that a person cannot afford to
remain unemployed for a long time but for arriving at a conclusion that the
respondent was gainfully employed or not, a large number of factors are
required to be taken into consideration.
15. Indisputably, the labour court while exercising its jurisdiction under
Section 11A of the Industrial Disputes Act was entitled to consider as to
whether the punishment awarded is wholly disproportionate to the
delinquent employee or not but it is well known that the discretion vested in
it must be exercised in a judicious manner. The Labour Court ordinarily
should not interfere with the discretion exercised by the employer unless the
same is found to be inconsistent with the provisions of a statute or otherwise
perverse or unjust. It may be true that in terms of the Model Standing Order
framed under the Industrial Employment Standing Orders Act, 1946,
ordinarily fine for wrongful absence was to be imposed but in this regard
the number of occasions on which the workman had remained on
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unauthorized absence was also required to be taken into consideration. In
this case, apart from remaining unauthorizedly absent without leave, the
respondent had been charged with indiscipline at the work place. He not
only was found guilty of remaining unauthorizedly absent but also guilty of
misbehaviour with his superiors, leaving place of work early without
permission and without leave, signing the muster for showing presence
although he was absent.
16. Forfeiture of 50% back wages, in our opinion, thus, was not an
adequate punishment. In a case of this nature, he should have been awarded
some punishment in lieu of the order of dismissal and furthermore the
question as to whether the respondent was entitled to the full back wages or
not should have been considered on the basis of the materials brought on
record by the parties.
17. We may notice that in U.P. SRTC vs. Mitthu Singh [(2006) 7 SCC
180], this Court has held:
“12. Since limited notice was issued with regard
to payment of back wages, we do not enter into the
larger question whether the action of terminating
the services of the respondent was legal, proper
and in consonance with law. But we are fully
satisfied that in the facts and circumstances of the
case, back wages should not have been awarded to
the respondent workman. In several cases, this
Court has held that payment of back wages is a
10discretionary power which has to be exercised by a
court/tribunal keeping in view the facts in their
entirety and neither straitjacket formula can be
evolved nor a rule of universal application can be
laid down in such cases.”
18. We are, therefore, of the opinion that in this case, no back-wages
should have been awarded in favour of the respondent.
We have been, however, informed by the Bar that a sum of
Rs.60,000/- has already been paid to the respondent. It is, therefore,
directed that any amount paid to the respondent, if any, shall not be
recovered.
19. For the aforementioned reasons, the impugned judgment of the High
Court is modified to the aforementioned extent. The appeal is allowed in
part. There shall, however, be no order as to costs.
……………………………….J.
[S.B. Sinha]
……………………………….J.
[Cyriac Joseph]
New Delhi;
December 12, 2008
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