REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4331 OF 2008
[Arising out of S.L.P. (C) No. 6853 of 2006]
RAJASTHAN LALIT KALA ACADEMY -- APPELLANT (S)
VERSUS
RADHEY SHYAM -- RESPONDENT (S)
JUDGMENT
D.K. JAIN, J.:
Leave granted.
2. The appellant-management has challenged in this appeal
the judgment and order dated 1st December, 2005, passed by
the High Court of Judicature for Rajasthan at Jaipur in D.B.
Special Appeal (Writ) No. 279 of 2001, dismissing the intra-
court appeal against the order of a learned Single Judge in
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S.B. Civil Writ Petition No.1895 of 1998. The learned Single
Judge had affirmed the award of the Labour Court in L.C.R.
No. 348 of 1985, directing reinstatement of the respondent-
workman with continuity of service and 25% back-wages from
the date of termination of his services to the date of award.
3. A few material facts leading to these proceedings, are as
follows:
The respondent was appointed on 7th June, 1980 on a
monthly salary of Rs.300/- to do the work of a Junior Clerk.
On 4th April, 1981 his services were terminated. On an
industrial dispute being raised, the Industrial Tribunal,
Jaipur, by an award dated 24th September, 1983, set aside the
order of termination and directed reinstatement of the
respondent with effect from 24th September, 1983 with 50%
back-wages. The respondent claims to have submitted his
joining report on the very next date of award. The award was
published under Section 17 of the Industrial Disputes Act,
1947 (for short `the Act’) on 17th April, 1984. The respondent
again submitted his joining report to the Secretary of the
appellant but was not taken back on duty.
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4. The validity of the award was questioned by preferring a
Civil Writ Petition No.1317 of 1984. During the pendency of
the writ petition, the High Court granted stay of the
direction in regard to payment of back-wages. However,
direction regarding reinstatement of the respondent was not
stayed. Yet the respondent was not taken back on duty.
Ultimately, the writ petition was dismissed.
5. Since the appellant did not permit the respondent to join
duty, the respondent took recourse to proceedings under
Section 29 of the Act against the appellant. According to
the respondent, he again reported for duty on 17th
November, 1984, but the appellant did not permit him to
join. Instead, vide order dated 31st January, 1985, the
appellant terminated the services of the respondent,
treating him to be in service with effect from 17th November,
1984.
6. The respondent raised an industrial dispute. The dispute
was referred to the Labour Court for adjudication, and was
registered as L.C.R. No.348 of 1985. The respondent also
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filed an application under Section 33C (2) of the Act for
computation of wages for the period from 24th September,
1983 to 17th November, 1984 the same was registered as
L.C.R. No. 438 of 1986.
7. Before the Labour Court, the stand of the appellant was
that the respondent was temporarily appointed on 7th June,
1980 for a period of three months to do the work of gallery
attendant; he had himself abandoned the work but rejoined
service pursuant to order in the writ petition and that his
services were terminated due to non requirement of his
services, after complying with the provisions of Section 25-F
of the Act by paying an amount of Rs.1800/- by means of a
demand draft. The plea of the respondent, on the other
hand, was that his services were terminated without service
of any notice, disclosing reasons for his retrenchment nor
any amount was paid to him in lieu of such notice.
8. On appraisal of evidence led by both the sides, the Labour
Court, by award dated 26th April, 1997, came to the
conclusion that the management had failed to adduce any
evidence in support of its plea that a demand draft in the
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sum of Rs.1800/- was given to the respondent in lieu of
notice in terms of Section 25-F of the Act. Thus, the Labour
Court found that in terminating the services of the
respondent, the appellant had failed to comply with the
statutory requirements and, therefore, order dated 31st
January, 1985 was arbitrary and illegal and had been
passed in a mala fide manner in order to victimize the
respondent. Accordingly, the Labour Court directed
reinstatement of the respondent with continuity in service
and payment of 25% back-wages from the date of
termination of services to the date of award. In the other
application for computation of wages (L.C.R. No. 438 of
1986), the Labour Court held that the respondent was
entitled to wages for the period from 4th September, 1983 to
17th November, 1984.
9. The award (in L.C.R. No. 348 of 1985) was challenged by
the appellant by preferring a writ petition in the Rajasthan
High Court. However, Labour Court’s award in L.C.R.
No.438 of 1986 was not challenged.
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10.The learned single Judge as well as the Division Bench
have dismissed the writ petition and the appeal filed by the
appellant against the award of the Labour Court. That is
how the appellant is before us.
11.We have heard learned counsel for the parties.
12. Learned counsel appearing on behalf of the appellant
submitted that in the light of the evidence on record, the
Labour Court as well as the High Court have committed an
error in arriving at a finding that in terminating the services
of the respondent, the appellant has contravened the
provision of Section 25-F of the Act. It was contended that
the courts below ignored cogent and credible evidence
which suggested that a demand draft in the sum of
Rs.1800/- was issued to the respondent and, therefore, the
finding regarding non compliance with the provision of
Section 25-F is erroneous and perverse. Learned counsel
also urged that since the respondent had not rendered any
services, the courts below erred in awarding back-wages to
the respondent and that too on the basis of salary
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equivalent to that of junior employee. Lastly, it was urged
that assuming that the appellant had failed to comply with
the provision of Section 25-F of the Act but having regard to
the fact that the services of the respondent had been
terminated over two decades ago, it would not be proper to
reinstate the respondent with back-wages and instead some
reasonable amount of compensation could be awarded to
him in lieu of his reinstatement. In support of the
proposition that award of back-wages is not necessary in
every case where the termination of service is held to be
violative of Section 25-F of the Act, reliance is placed on a
decision of this Court in General Manager, Haryana
Roadways Vs. Rudhan Singh1. Reference is also made to
the decisions of this Court in Central P&D Inst. Ltd. Vs.
Union of India & Anr.2; Haryana State Electronics
Development Corpn. Ltd. Vs. Mamni3 and Madhya
Pradesh Administration Vs. Tribhuban4, where lump
sum amounts had been awarded in lieu of reinstatement.
1
(2005) 5 SCC 591
2
(2005) 9 SCC 171
3
(2006) 9 SCC 434
4
(2007) 9 SCC 748
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13. Per contra, Mr. S.K. Keshote, learned senior counsel
appearing on behalf of the respondent, submitted that on
the basis of the material on record, all the courts have
returned a finding that the appellant had not only failed to
pay to the respondent any amount in lieu of notice in terms
of clause (a) of Section 25-F and compensation in terms of
clause (b) thereof, they had also committed unfair labour
practice by victimizing the respondent. The submission
was that these being pure findings of fact, this Court
should decline to interfere with the award of the Labour
Court, affirmed by the High Court. Learned counsel
asserted that having regard to the conduct of the appellant,
where they deliberately did not comply with the first award
despite the fact that the High Court had declined to stay the
direction with regard to reinstatement, no fault could be
found with the direction of the Labour Court regarding
reinstatement of the respondent with only 25% back-wages.
14. It is trite that in the event of retrenchment of a workman,
employed in any industry, continuously for not less than
one year under an employer, compliance with the
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provisions of Section 25-F of the Act, in particular clauses
(a) and (b) thereof is mandatory. A bare reading of Section
25-F of the Act shows that retrenchment within the
meaning of Section 2 (oo) of the Act, which admittedly is the
case here, must satisfy the following conditions:
(i) the workman is given one month’s notice – (a) in
writing (b) indicating the reasons for
retrenchment;
(ii)the retrenchment must take effect after the
expiry of the period of notice. i.e., one month or
else, the workman should be paid in lieu of such
notice, wages for the period of the notice:
(iii)at the time of retrenchment, the workman has
been paid compensation, equivalent to fifteen
days’ average pay for every completed year of
continuous service or any part thereof in excess
of six months; and
(iv)The notice in the prescribed manner is served on
the appropriate government or such authority as
may be specified.
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15. As noted above, the specific plea of the appellant-
management before the Labour Court was that services of
the respondent were terminated on 31st January, 1985 after
payment of Rs.1800/- by demand draft, in compliance with
the provision of Section 25-F of the Act. However, in the
award, the Labour Court has observed that the
management has not adduced any such evidence
wherefrom a conclusion could be drawn that the workman
had received the said amount of Rs.1800/-. It is pointed
out that neither any receipt, acknowledging receipt of draft
was produced nor the workman was cross-examined on this
aspect. Even the computation of compensation allegedly
paid was not correct. The labour court, thus, held that
payment of compensation in accordance with Section 25-F
of the Act was not proved. In the light of the pleadings and
undisputed documents available on record, we are
convinced that the finding of the Labour Court to the effect
that the appellant has failed to adduce any evidence in
support of their plea that an amount of Rs.1800/- had been
paid to the respondent, does not suffer from any perversity
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as pleaded by learned counsel for the appellant. Thus, it
cannot be said that the Labour Court or the High Court has
committed any illegality, warranting interference with the
said concurrent finding of fact. In that view of the matter,
we deem it unnecessary to examine the issue whether
termination of respondent’s services was by way of
victimisation and thus, the appellant was guilty of unfair
labour practice, as held by the Labour Court.
16.The question which now survives for consideration is
whether on facts in hand, relief of reinstatement with
continuity of service and 25% back-wages should have been
granted to the respondent?
17.Once the termination of service of an employee is held to
be illegal, the relief of reinstatement is ordinarily available
to the employee. But the relief of reinstatement with full
back-wages need not be granted automatically in every case
where the Labour Court/Industrial Tribunal records the
finding that the termination of services of a workman was in
violation of the provisions of the Act. For this purpose,
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several factors, like the manner and method of selection;
nature of appointment–ad hoc, daily-wage, temporary or
permanent etc., period for which the workman had worked
and the delay in raising industrial dispute, are required to
be taken into consideration.
18. On this aspect, in General Manager, Haryana Roadways
case (supra), a three-Judge Bench of this Court has
observed thus:
“There is no rule of thumb that in every
case where the Industrial Tribunal gives
a finding that the termination of service
was in violation of Section 25-F of the
Act, entire back wages should be
awarded. A 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
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
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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.”
19. It appears to us that in the present case there has not been
due application of mind either by the Labour Court or the
High Court on the question of reinstatement and payment
of 25% back-wages. The only ground on which
reinstatement and continuity of service has been ordered is
because the order of termination has been held to be
unlawful. Similarly, 25% back-wages have been awarded
for the reason that the services of the petitioner were
terminated with immediate effect but no specific reason as
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such has been assigned for the award of the said back-
wages. In our opinion, though, illegality of the order of
termination is one of the prime considerations for
determining the question and quantum of back-wages, but
it cannot be the sole criterion therefor. A host of other
factors, a few enumerated above, are required to be taken
into consideration before issuing directions in that behalf.
Therefore, the award of the Labour Court to that extent
cannot be sustained. However, we feel that at this distant
time, it would not be fair to the respondent-workman to
remit the matter back to the Labour Court or the High
Court for fresh consideration of the issue. In the light of
the observations referred to supra and having regard to the
nature and the period of services rendered by the
respondent and the fact that his services were terminated
initially on 4th April, 1981 and then on 31st January, 1985
and the vicissitudes of long-drawn litigation, the respondent
has undergone for over 27 years, interest of justice would
be met if instead and in place of direction for reinstatement
and back-wages–a sum Rs.3 lakhs is directed to be paid to
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the respondent by way of compensation. We direct
accordingly. The payment shall be made within eight
weeks from today, failing which it shall carry interest @ 9%
per annum from the date of this judgment till the date of
actual payment. We may note that in the affidavit, filed in
response to the query raised by the Court on 29th April,
2008, it is stated that if the present appeal is dismissed, the
appellant would be liable to pay to the respondent more
than Rs.8 lakhs. It goes without saying that the said
amount of compensation is over and above the amount, the
respondent is entitled to receive in terms of award dated
24th September, 1983, which has attained finality.
20.Resultantly, the appeal is allowed to the extent indicated
above. However, in the facts and circumstances of the
case, there shall be no order as to costs.
…………………………………………J.
(C. K. THAKKER)
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………………………………………….J.
( D.K. JAIN)
NEW DELHI;
JULY 11, 2008.
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