Bombay High Court

S. K. International vs Ashok Tanaji Tambe on 1 December, 2023

Author: N.J.Jamadar

Bench: N.J.Jamadar

2023:BHC-OS:14078

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                         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                            ORDINARY ORIGINAL CIVIL JURISDICTION
                               WRIT PETITION (L) NO.809 OF 2023

            1.      M/s. S.K.International
                    a Partnership Firm registered
                    under the Partnership Act, 1932,
                    having their address at S.K.House,
                    94-A, Avvalbaug, D.S.P.Road,
                    Dadar (E), Mumbai - 400 014.

            2.      Chirag Kenia
                    Partner in M/s. S.K.International,
                    having his address at S.K.House,
                    94-A, Avvalbaug, D.S.P.Road,
                    Dadar (E), Mumbai - 400 014.                 ...      Petitioners

                    versus

            1.      Ashok Tanaji Tambe
                    having his address at Sahakar
                    Nagar, Mohone, Room No.1568,
                    Taluka Kalyan, Dist. Thane - 421 102

            2.      Assistant Commissioner of Labour,
                    Mumbai, Kamgar Bhavan, 4th floor,
                    C-20, E Block, Opp. Reserve Bank,
                    BKC, Bandra (E), Mumbai - 400 051.           ...      Respondents

            Mr. Ashish Kamat, Sr. Advocate with Ms. Simantini Mohite, Mr. Nirav Shroff i/by
            Mr. Nirav Shroff, for Petitioners.
            Mr. Omkar Paranjape, for Respondent No.1.

                                 CORAM:        N.J.JAMADAR, J.

                                 RESERVED ON               : 31 JULY 2023
                                 PRONOUNCED ON             : 1 DECEMBER 2023




            SSP                                                      1/31
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JUDGMENT :

1. Rule. Rule made returnable forthwith. With the consent of the learned

Counsel for the parties, heard finally.

2. This petition assails the legality, propriety and correctness of an Award

passed by the learned Presiding Officer, Labour Court at Mumbai in Reference (IDA)

No.32 of 2020 dated 12 July 2022, whereby the Reference was answered in the

affirmative and the Petitioner No.1 - first party employer, was directed to reinstate the

Respondent - second party employee in service with continuity of service and full

back wages w.e.f. 24 April 2019.

3. Shorn of superfluities, the background facts leading to this petition can

be stated as under :

3.1 The Petitioner No.1 is a partnership firm. It provides a complete range

of lifecycle services, IT infrastructure services, implementation and consulting

services to its clients. Petitioner No.2 is a partner of Petitioner No.1.

3.2 Respondent No.1 was employed as an Engineer - Technical Support by

the Petitioner No.1 under an appointment letter dated 6 May 2014. In terms of the

letter of appointment, Respondent No.1 was deputed to the site of the Petitioner

No.1's client Barclays Bank LLP (Barclays Bank).

3.3 The Petitioners assert, the Respondent No.1 was to work at Barclays

Bank to manage data mainly to install, move, add and change the server, hardware,

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break fix, asset management and inventory management etc., through the team of

employees supplied by the Barclays Bank and the Petitioners. The Respondent No.1

was called back from the work site of Barclays Bank with effect from 16 April 2019 and

was asked to sit in the office of the Petitioners until the next assignment on account of

moral misconduct on the part of the Respondent No.1. Asserting that the Respondent

No.1 was relieved at his instance, the Petitioners issued reliving order dated 24 April

2019, and, thereby purported to terminate the services of the Respondent No.1 with

effect from 23 April 2019.

3.4 Alleging unfair labour practice and victimization, the Respondent No.1

initially called upon the Petitioners as well as M/s. Barclays Bank to reinstate him in

service with continuity of service and consequential benefits, including the arrears of

wages.

3.5 As the Petitioners vide Reply dated 20 June 2019 contested the claim of

the Respondent No.1 for reinstatement in service, the Respondent No.1 raised an

industrial dispute. Thereupon, the Deputy Commissioner of Labour made a

Reference under Section 12(5) of the Industrial Disputes Act, 1947 (the Act of 1947) to

the Labour Court to decide the dispute about the alleged illegal termination of the

services of the Respondent No.1 and his entitlement for reinstatement in service with

continuity of service and full backwages with effect from 24 April 2019.

3.6 The Respondent No.1 filed a statement of claim and sought, inter alia,

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reinstatement in service with continuity of service and full backwages. The Petitioner

No.1 filed written statement and resisted the claim of the employee. The learned

Presiding Officer, Labour Court, recorded the evidence of the employee and Ms.

Shraddha Helinge, Executive HR, on behalf of the Petitioners-employer.

3.7 After appraisal of the pleadings, evidence adduced and documents

tendered for her perusal, the learned Presiding Officer was persuaded to answer the

Reference in the affirmative holding, inter alia, that the Respondent No.1 - Second

party was a workman within the meaning of Section 2(s) of the Act, 1947; that the

services of the Respondent No.1 were illegally terminated by the first party-employer

and the Respondent No.1 was, thus, entitled for reinstatement in service with

continuity of service and full backwages with effect from 24 April 2019.

3.8 Being aggrieved by and dissatisfied with the impugned Award, the

Petitioners - employer have invoked the writ jurisdiction.

4. I have heard Mr. Kamat, learned Senior Advocate appearing for the

Petitioners - employer and Mr. Omkar Paranjape, learned Counsel for the Respondent

No.1 at some length. With the assistance of the learned Counsel for the parties, I have

also perused the pleadings and the material on record.

5. Mr. Kamat advanced three fold submissions. First, the learned Presiding

Officer, Labour Court, recorded an erroneous finding that the applicant was a

workman within the meaning of Section 2(s) of the Act, 1947. In the face of the

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material on record, especially the nature of the duties performed by the Respondent

No.1 and, particularly, the manner in which the Respondent No.1 fared in the cross-

examination, coupled with the salary drawn by the Respondent No.1, which was

beyond the threshold of Rs.10,000/-, the Labour Court could not have returned a

finding that the Respondent No.1 was a workman.

6. Secondly, the Labour Court committed a manifest error in law in

granting reinstatement in service, though there was no prayer for reinstatement. In

the absence of such a specific prayer, the Labour Court could not have directed

reinstatement in service on the premise that reinstatement was a necessary corollary

of the declaration that the services of the Respondent No.1 were illegally terminated,

which finding is also legally unsustainable, urged Mr. Kamat.

7. Thirdly, the learned Presiding Officer, Labour Court was not at all

justified in awarding full back wages in the absence of pleading and proof that the

Respondent No.1 was not gainfully employed since the termination of his services. In

fact, the Respondent No.1 had refused to place on record the statements of his bank

accounts, which would have revealed that the Respondent No.1 was gainfully

employed and had sumptuous earning, and, therefore, it was incumbent upon the

Labour Court to draw an adverse inference against the Respondent No.1. The learned

Presiding Officer, Labour Court did not properly appreciate the aspect of burden of

establishing that the workman was not gainfully employed, submitted Mr. Kamat.

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8. To lend support to these submissions, Mr. Kamat placed reliance on the

decisions of the Supreme Court in the cases of Gopal Krishnaji Ketkar V/s.

Mohamed Haji Latif & Ors.1 and Talwara Cooperative Credit and Service Society

Ltd. V/s. Sushil Kumar2

9. In opposition to this, Mr. Paranjape, learned Counsel for Respondent

No.1 submitted that the impugned order is well merited and does not warrant any

interference in exercise of extra ordinary writ jurisdiction. Joining the issue, point by

point, Mr. Paranjape submitted that the learned Presiding Officer, Labour Court

correctly appreciated the nature of the pre-dominant duty discharged by the

Respondent No.1; Engineer - Technical Support, being a part of the technical work

performed by the Respondent No.1, with no element of any supervisory or

administrative duty. Therefore, the challenge to the impugned Award on the score of

the Respondent No.1 not being a workman, is wholly unsustainable.

10. Mr. Paranjape laid emphasis on the fact that the employer took three

diverse stands regarding the termination of the services of the Respondent No.1,

which are apparently contradictory. Evidently, the termination was not preceded by

any inquiry of whatsoever nature. Even the cause of the termination was not made

explicitly clear. Termination being in wholly arbitrary exercise of the employer's

authority and breach of the fundamental principles of natural justice, was rightly

1 AIR 1968 SC 1413 2 (2008) 9 SCC 486

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declared to be illegal by the Labour Court. The challenge to the impugned award on

the ground that the reinstatement could not have been ordered as there was no final

prayer for reinstatement, is too technical to be countenanced, urged Mr. Paranjape.

11. Thirdly, Mr. Paranjape countered the submission of Mr. Kamat that

there was no pleading and proof on the point that the Respondent No.1 had not been

gainfully employed since the termination. Inviting attention of the Court to the

averments in the statement of claim and the affidavit in lieu of examination in chief of

the Respondent No.1, Mr. Paranjape would urge that the Respondent No.1 had

specifically asserted that he had not been gainfully employed after the termination of

his services.

12. To buttress the submission that full backwages is the norm where the

termination is found to be wholly illegal, Mr. Paranjape placed reliance on the

decisions of the Supreme Court in the cases of Kendriya Vidyalaya Sangathan and

Anr. V/s. S.C.Sharma3 and Jayantibhai Raojibhai Patel V/s. Municipal Council,

Narkhed and Ors.4 and Jeetubha Khansangji Jadeja V/s. Kutchh District

Panchayat5.

13. To begin with, there is not much controversy over facts as regards the

employment and termination of the services of Respondent No.1. Under an offer

letter dated 6 May 2014, the Respondent No.1 was offered a position of "Engineer -

3 (2005) 2 SCC 363 4 (2019) 17 SC 184 5 Civil Appeal No.6890 of 2022 dt. 23 Sept. 2022.

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Technical Support". The Respondent No.1 was to be primarily responsible for

attending service calls onsite for customers of the Petitioners and any other job

assigned from time to time. He was to get fixed emolument of Rs.22,000/- per month.

Upon the Respondent No.1 accepting the offer letter, an appointment letter came to be

issued on 9 May 2014, under which the Respondent No.1 came to be appointed as an

Engineer - Technical Support, subject to the terms and conditions incorporated

therein. Respondent No.1 came to be confirmed in service vide confirmation Letter

dated 9 May 2015. There is not much controversy over the fact that the Respondent

No.1 was posted at M/s. Barclays Bank. The Respondent No.1 came to be relieved

under the Relieving Order dated 24 April 2019. It was, inter alia, contended that the

Respondent No.1 had been terminated on the ground of moral turpitude with effect

from 23 April 2019. It is not the case of the Petitioners that the termination was

preceded by any disciplinary inquiry.

14. It is trite law that even where the services of an employee are terminated

by the employer without resorting to a disciplinary inquiry, when a termination is

challenged before the Labour Court/ Industrial Tribunal, the employer has a right to

justify the termination by establishing misconduct before the Court/Tribunal. In the

instant case, the Labour Court found that the employer had not made a serious

endeavour to justify the termination by adducing evidence in support thereof before

the Labour Court.

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15. Before adverting to consider the legality and correctness of this finding,

it may be appropriate to deal with the preliminary challenge to the award on the

ground that the Respondent No.1 was not a workman within the meaning of Section

2(s) of the Act, 1947. An endeavour was made on behalf of the Petitioners to draw

home the point that the Respondent No.1 was not a workman as he was discharging

supervisory functions. The learned Presiding Officer, Labour Court, was not

persuaded to accede to this contention. The learned Presiding Officer was of the view

that the designation of the post was not decisive. The employer failed to adduce any

evidence to show that the Respondent No.1 was discharging supervisory functions,

neither the Respondent No.1 supervised the work of any other employee, nor the

Respondent No.1 was vested with any independent decision making power. Whether

the aforesaid approach of the learned Presiding Officer, Labour Court is justifiable ?

16. In the written statement, adverting to the nature of the duty entrusted to

the Respondent No.1, the employer contended that the Respondent No.1 was to

manage data through the team of employees supplied by the employer and, therefore,

the Respondent No.1 did not fall within the definition of workman under Section 2(s)

of the Act. I am afraid, the nature of the nomenclature of the post and the description

of the duties by the employer are of determinitive significance.

17. On the aspect of determination of status of workmen, within the

meaning of Section 2(s) of the ID Act, 1947, the legal position is fairly crystalized.

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Such determination must be based on the appreciation of the nature of the duties

performed by the employee. Nomenclature of the post, which the employee holds, is

not of decisive significance. The description of the nature of the duties also does not

furnish a surer foundation for determination. Use of grandstanding expressions and

management jargon to describe otherwise ordinary and normal functions, is not

uncommon. It is, therefore, necessary to correctly appreciate the nature of the core

duties discharged by a person whose status is questioned.

18. Section 2(s) of the ID Act, 1947 defines the expression workman to mean

any person employed in any industry to do any manual, unskilled, skilled, technical,

operational, clerical or supervisory work for hire or reward. In the case of H.R.

Adyanthaya and ors. vs. Sandoz (India) Ltd.6, the Constitution Bench of the

Supreme Court enunciated that to be qualified to be workman under Section 2(s), the

person must be employed to do the work which falls in any of the specified categories,

manual, unskilled, skilled, technical, operational, clerical or supervisory. To put it in

other words, it is not enough that a person is not covered by any of the four exceptions

to the definition. It is also fairly well settled that the burden is on the person, who

asserts the status of the workman under Section 2(s) to establish with reference to the

dominant nature of his duties that the work which the said person performs falls

within one of the specified categories under Section 2(s) of the Act, 1947.

6 (1994) 5 Supreme Court Cases 737.

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19. In the case of Burmah Shell Oil Storage and Distribution Company

of India Ltd. V/s. The Burmah Shell Management Staff Association and Ors. 7

(supra) the Supreme Court adverted to a situation where an employee is entrusted to

discharge multifarious duties. In such cases, the Supreme Court held, it would be

necessary to determine under which classification the employee will fall for the

purpose of finding out whether he does not go out of the definition of "workman"

under the exceptions. The principle is now well settled that for this purpose, a

workman must be held to be employed to do that work which is the work he is required

to do, even though he may be incidentally doing other types of work. The Supreme

Court referred to its earlier decision in the case of Ananda Bazar Patrika (P) Ltd.

Vs. Workmen8, where the principle was enunciated as under:

"3. The question whether a person is employed in a supervisory capacity or on clerical work, in our opinion, depends upon whether the main and principal duties carried out by him are those of a supervisory character, or of a nature carried out by a clerk. If a person is mainly doing supervisory work, but, incidentally or for a fraction of the time, also does some clerical work, it would have to be held that he is employed in supervisory capacity; and, conversely, if the main work done is of clerical nature, the mere act that some supervisory duties are also carried out incidentally or as a small fraction of the work done by him will not convert his employment as a clerk into one in supervisory capacity. ...."

(emphasis supplied)

7 1970 (II) LLJ 590 8 1970(3) SCC 248.

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20. In the case of Arkal Govind Raj Rao vs. CIBA Geigy and India Ltd. 9,

another three-judge Bench of the Supreme Court re-exposited the principle in the

following words :

"6. where an employee has multifarious duties and a question is raised whether he is a workman or someone other than a workman the Court must find out what are the primary and basic duties of the person concerned and if he is incidentally asked to do some other work, may not necessarily be in tune with the basic duties, these additional duties cannot change the character and status of the person concerned. In other words, the dominant purpose of employment must be taken into consideration and the gloss of some additional duties must be rejected while determining the status and character of the person. ......"

21. A useful reference in this context can also be made to a decision of the

Supreme Court in the case of S.K.Maini V/s. M/s. Carona Sahu Company Ltd.

and Anr.10 wherein it was enunciated that when an employee is employed to do the

types of work enumerated in the definition of workman under Section 2(s), there is

hardly any difficulty in treating him as a workman under the appropriate classification

but in the complexity of industrial or commercial organisations quite a large number of

employees are often required to do more than one kind of work. In such cases, it

becomes necessary to determine under which classification the employee will fall for

the purpose of deciding whether he comes within the definition of workman or goes

9 (1985) 3 SCC 371.

10 (1994) 3 SCC 510

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out of it. In this connection, reference may be made to the decision of this Court in

Burmah Shell Oil Storage (supra). In All India Reserve Bank Employees' Assn.

V/s. Reserve Bank of India11, it has been held by this Court that the word 'supervise'

and its derivatives are not words of precise import and must often be construed in the

light of context, for unless controlled, they cover an easily simple oversight and

direction as manual work coupled with the power of inspection and superintendence

of the manual work of others. It has been rightly contended by both the learned

counsel that the designation of an employee is not of much importance and what is

important is the nature of duties being performed by the employee. The determinative

factor is the main duties of the employee concerned and not some works incidentally

done. In other words, what is, in substance, the work which employee does or what in

substance he is employed to do. Viewed from this angle, if the employee is mainly

doing supervisory work but incidentally or for a fraction of time also does some

manual or clerical work, the employee should be held to be doing supervisory works.

Conversely, if the main work is of manual, clerical or of technical nature, the mere fact

that some supervisory or other work is also done by the employee incidentally or only

a small fraction of working time is devoted to some supervisory works, the employee

will come within the purview of 'workman' as defined in Section 2(s) of the Industrial

Disputes Act.

11 AIR 1966 SC 305

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22. The aforesaid enunciation indicates that it is the dominant nature of

work or duties which determines the status and not the incidental work, which an

employee may be called upon to perform. Herein lies the task before the industrial

adjudicator or Court to decipher the dominant nature of duties and remove the gloss.

Often the industrial adjudicator and Court come across a verbose and labyrinth

description of the duties. Still an effort is warranted to remove the gloss and find out

the dominant nature of the duties.

23. Reverting to the facts of the case, it is pertinent to note that from the

evidence adduced by Smt. Shraddha Helinge, the employer's witness, it becomes

abundantly clear that the Respondent No.1 was deputed at M/s. Barclays Bank to

provide technical support in order to maintain uninterrupted services at the said Bank.

If any technical issue arose, the Respondent No.1 would try to resolve the same and, if

required, would seek assistance of a technical team to be deputed to resolve the issue

by the employer. Once the team was deputed by the employer to resolve the issue, the

Respondent No.1 would issue a completion certificate.

24. It would be contextually relevant to note that in the cross-examination of

the Respondent No.1 also, an endeavour was made to elicit that the Respondent No.1

was posted at the site of M/s. Barclays Bank on behalf of the employer. He used to

intimate M/s. Barclays Bank about the completion of work by the team sent by the

employer and sign the service report of the team sent by the employer to the Barclays

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Bank.

25. The aforesaid nature of the duty, unmistakably indicates that the

Respondent No.1 neither supervised the work of other employees nor the machines.

The Respondent No.1 was posted as a Technical Support man at M/s. Barclays Bank.

Whenever a technical issue arose, the Respondent No.1 would try to resolve it by

himself and if it could not be resolved by the Respondent No.1, a team would be sent

by the employer to rectify the defect. I find it rather difficult to accede to the

submission on behalf of the Petitioners that the aforesaid nature of the duties involved

any supervisory work. In fact, there did not seem to be any semblance of supervisory

or administrative duty discharged by the Respondent No.1. On the contrary, the

material on record leads to an inexorable inference that the Respondent No.1 rendered

technical skilled services, pure and simple. The duties discharged by the Respondent

No.1, thus, squarely fall within the definition of the workman under Section 2(s) of the

Act, 1947.

26. The mere fact that the Respondent No.1 was to sign the service report or

give intimation about the completion of the work by the team sent by the employer to

M/s. Barclays Bank, would not change the pre-dominant nature of the duties of the

Respondent No.1. The learned Member, Labour Court, thus, committed no error in

returning a finding that the Respondent No.1 was a workman within the meaning of

Section 2(s) of the Act, 1947.

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27. On the aspect of the nature of the termination, Mr. Paranjape, learned

Counsel for the Respondent No.1 was within his rights in canvassing a submission that

the stand of the employer was inconsistent, in the least. As noted above, in the

relieving letter, it was contended that the services of the Respondent No.1 were

terminated on account of moral conduct. Relieving letter does not divulge the nature

of the misconduct which constituted moral turpitude. In Reply to the notice

addressed by the Respondent No.1, it was contended that the employer had not

received any written communication about the moral conduct of the Respondent No.1.

On the contrary, a stand was taken that the Respondent No.1 was relieved from the

employment as the Respondent No.1 had expressed his desire not to continue in the

employment as new assignment for the Respondent No.1 was not available with the

employer.

28. In the written statement filed in the Reference, it was contended that the

Respondent No.1 was called back from the work site at Barclays Bank with effect from

16 April 2019 and was asked to sit in the office of the employer till the other client was

available and, at his instance, Respondent No.1 was relieved from the employment.

Conspicuous by its absence is the positive stand of the employer that the services of

the Respondent No.1 were terminated on moral ground. Interestingly, in the affidavit

of evidence of Smt. Shraddha Helinge, an endeavour was made to assert that the

employer was constrained to withdraw the Respondent No.1 from M/s. Barclays Bank

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due to inappropriate behaviour at the work place. In the cross-examination, Smt.

Shraddha Helinge attempted to wriggle out of the situation by asserting that the

director of the employer had got a call from the Manager of Barclays Bank about the

alleged incident of misbehaviour of the Respondent No.1 with a female employee at

the Barclays Bank.

29. Evidently, the defence of the employer on the aspect of the ground of

termination of the services wavered from one end to another. The learned Presiding

Officer, Labour Court, was justified in observing that no serious endeavour was made

by the employer to justify the termination by adducing evidence in proof of the

alleged misconduct before the Labour Court.

30. When services of an employee are terminated on moral ground, without

divulging the nature of the alleged misconduct, the termination is plainly stigmatic. It

operates to the prejudice of the employee for future employment as well. It was,

therefore, incumbent upon the employer to either hold appropriate disciplinary

enquiry to establish the misconduct or adduce evidence aliendu before the Labour

Court to justify the termination on the ground of such misconduct. In the absence

thereof, the termination of the services of the Respondent No.1 without holding a

disciplinary inquiry and in breach of the mandate contained in Section 25-F of the Act,

1947, can only be said to be wholly illegal. No fault can, thus, be found with the

finding of the Labour Court that the termination of the services of the Respondent

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No.1 was illegal.

31. The submission of Mr. Kamat that the Labour Court could not have

ordered reinstatement in service of the Respondent No.1 as there was no final prayer

of reinstatement in the statement of claim, is required to be stated to be repelled. The

Respondent No.1 had, infact, prayed for reinstatement by way of an interim relief

[relief clause (a)]. The submission that there was no specific final relief of

reinstatement in service, is too technical to be countenanced. Evidently, the Reference

was made assailing the alleged illegal termination and seeking reinstatement in service

with backwages and continuity of service. For that matter, the residuary relief clause

(f ) in the statement of claim is elastic enough to subsume in its fold the prayer for

reinstatement.

30. This propels me to the thrust of the submission of Mr. Kamat that the

learned Presiding Officer, Labour Court, was not at all justified in awarding full

backwages in the face of the refusal of the Respondent No.1 to place on record the

copies of the extracts of the accounts maintained by the Respondent No.1 with ICICI

Bank and Bank of Baroda, which warranted drawing of an adverse inference against

the Respondent No.1.

31. Mr. Kamat would urge that it was incumbent upon the workman to

establish that he was not gainfully employed. The claim of the Respondent No.1 that

he was not gainfully employed did not stand the test of truth during the course of the

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cross-examination. Before adverting to consider the issue as to whether the Labour

Court ought to have drawn an adverse inference against the Respondent No.1, it may

be appropriate to notice the position in law as regards the grant of backwages where

the termination of the services of the workman is found to be illegal and the burden

which rests on the workman to claim the backwages. A twin inquiry is warranted. (1)

Whether the workman is entitled to backwages ? (2) If so, the extent thereof.

32. In the case of Hindustan Tin Works (P) Ltd. V/s. Employees12 a three

Judge Bench of the Supreme Court postulated the criteria for grant of backwages

where the termination has been held to be illegal. It was, inter alia, observed that : "It

is no more open to debate that in the field of industrial jurisprudence a declaration can

be given that the termination of service is bad and the workman continues to be in

service.......If thus the employer is found to be in the wrong as a result of which the

workman is directed to be reinstated, the employer could not shrik his responsibility of

paying the wages which the workman has been deprived of by the illegal or invalid

action of the employer. Speaking realistically, where termination of service is

questioned as invalid or illegal and the workman has to go through the gamut of

litigation, his capacity to sustain himself through out the protracted litigation is itself

such an awesome factor that he may not survive to see the day when relief is granted.

More so in our system where the law's proverbial delay has become stupefying. If

12 (1979) 2 SCC 80

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after such a protracted time and energy consuming litigation during which period the

workman just sustains himself, ultimately he is to be told that though he will be

reinstated, he will be denied the backwages which would be due to him, the workman

would be subjected to a sort of penalty for no fault of his and it is wholly undeserved.

Ordinarily, therefore, a workman whose service has been illegally terminated would be

entitled to full back wages except to the extent he was gainfully employed during the

enforced idleness. That is the normal rule. Any other view would be a premium on

the unwarranted litigative activity of the employer. If the employer terminates the

service illegally and the termination is motivated as in this case viz. to resist the

workmen's demand for revision of wages, the termination may well amount to unfair

labour practice. In such circumstances reinstatement being the normal rule, it should

be followed with full backwages....."

33. In the said case, in para 11, the Supreme Court indicated the

circumstances wherein there can be a departure from the normal rule of full

backwages. It was observed as under :

"11. In the very nature of things there cannot be a straitjacket formula for awarding relief of back wages. All relevant consideration will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent

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and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice, according to law and not humour. It is not to be arbitrary, vague and fanciful but legal and regular (see Susannah Sharp V/s. Wakefield 13)"

34. In the case of Surendra Kumar Verma V/s. Central Govt. Industrial

Tribunal - cum Labour Court14 the principle was reiterated in the following words :

"6............Plain common sense dictates that the removal of an order terminating the services of workmen must ordinary 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-a-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 backwages 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 the 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 for greater hardship is certain to be caused to the workmen if the relief is denied than to the employer if the

13 1891 AC 173 (HL) 14 (1980) 4 SCC 443

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relief is granted."

35. It must be, however, noted that there has been a perceptible shift in the

approach of the Court in the matter of grant of full backwages as a matter of course,

the moment the order of termination is declared to be illegal. Courts have increasingly

delved into the attendant circumstances, peculiar to both industrial establishments as

well as the workman and the reasons which weighed with the Court in declaring the

termination to be illegal; what is the nature and gravity of the misconduct proved or

whether the order of termination is set aside for breach of the procedural requirements

in the matter of statutory compliances or in holding the disciplinary inquiry.

36. In the case of Talwara Cooperative Credit and Service Society Ltd.

(Supra), on which reliance was placed by Mr. Kamat, the Supreme Court held that

the grant of relief of reinstatement, it is trite, is not automatic. The grant of backwages

is also not automatic. For the purpose of grant of backwages, one of the relevant

factors would indisputably be as to whether the workman has been able to discharge

the burden that he had not been gainfully employed after the termination of his

services. The Supreme Court, inter alia, observed as under :

"This Court in a large number of cases noticed the paradigm shift in the matter of burden of proof as regards gainful employment on the part of the employer holding that having regard to the provisions contained in Section 106 of the Indian Evidence Act, the burden would be on the workman. The burden, however, is a negative one. If only the same is discharged by the

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workman, the onus of proof would shift on to the employer to show that the concerned employee was in fact gainfully employed."

37. In the case of Deepali Gundu Surwase V/s. Kranti Junior Adhyapak

Mahavidyalaya and Ors. 15 the Supreme Court culled out the principles which ought

to govern the exercise of discretion in the matter of grant of backwages, as under :

"38.The propositions which can be culled out from the aforementioned judgments are:

38.1 In cases of wrongful termination of service, reinstatement with continuity of service and back wages is the normal rule.

38.2 The aforesaid rule is subject to the rider that while deciding the issue of back wages, the adjudicating authority or the Court may take into consideration the length of service of the employee/workman, the nature of misconduct, if any, found proved against the employee/workman, the financial condition of the employer and similar other factors.

38.3 Ordinarily, an employee or workman whose services are terminated and who is desirous of getting back wages is required to either plead or at least make a statement before the adjudicating authority or the Court of first instance that he/she was not gainfully employed or was employed on lesser wages. If the employer wants to avoid payment of full back wages, then it has to plead and also lead cogent evidence to prove that the employee/workman was gainfully employed and was getting wages equal to the wages he/she was drawing prior to the termination of service.

This is so because it is settled law that the burden of proof of the existence of a particular fact lies on the person who makes a positive averments about its existence. It is always easier to prove a positive fact than to prove a negative fact. Therefore, once the employee shows that he was not employed, the onus lies on the employer to specifically plead and prove that

15 (2013) 10 SCC 324

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the employee was gainfully employed and was getting the same or substantially similar emoluments.

38.4. The cases in which the Labour Court/Industrial Tribunal exercises power under Section 11-A of the Industrial Disputes Act, 1947 and finds that even though the enquiry held against the employee/workman is consistent with the rules of natural justice and / or certified standing orders, if any, but holds that the punishment was disproportionate to the misconduct found proved, then it will have the discretion not to award full back wages. However, if the Labour Court/Industrial Tribunal finds that the employee or workman is not at all guilty of any misconduct or that the employer had foisted a false charge, then there will be ample justification for award of full back wages.

38.5 The cases in which the competent Court or Tribunal finds that the employer has acted in gross violation of the statutory provisions and/or the principles of natural justice or is guilty of victimizing the employee or workman, then the concerned Court or Tribunal will be fully justified in directing payment of full back wages. In such cases, the superior Courts should not exercise power under Article 226 or 136 of the Constitution and interfere with the award passed by the Labour Court, etc., merely because there is a possibility of forming a different opinion on the entitlement of the employee/workman to get full back wages or the employer's obligation to pay the same. The Courts must always be kept in view that in the cases of wrongful / illegal termination of service, the wrongdoer is the employer and sufferer is the employee/workman and there is no justification to give premium to the employer of his wrongdoings by relieving him of the burden to pay to the employee/workman his dues in the form of full back wages.

38.6 In a number of cases, the superior Courts have interfered with the award of the primary adjudicatory authority on the premise that finalization of litigation has taken long time ignoring that in majority of cases the parties are not responsible for such delays. Lack of infrastructure and manpower is the principal cause for delay in the disposal of cases. For

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this the litigants cannot be blamed or penalised. It would amount to grave injustice to an employee or workman if he is denied back wages simply because there is long lapse of time between the termination of his service and finality given to the order of reinstatement. The Courts should bear in mind that in most of these cases, the employer is in an advantageous position vis-à-vis the employee or workman. He can avail the services of best legal brain for prolonging the agony of the sufferer, i.e., the employee or workman, who can ill afford the luxury of spending money on a lawyer with certain amount of fame. Therefore, in such cases it would be prudent to adopt the course suggested in Hindustan Tin Works (P) Ltd. (supra)".

38. All these pronouncements were followed by the Supreme Court in the

case of Jayantibhai Raojibhai Patel (supra), on which reliance was placed by Mr.

Paranjape.

39. A useful reference can also be made to the decision of the Supreme

Court in the case of Pradeep s/o Rajkumar Jain V/s. Managanese Ore (India) Ltd.

and Ors.16 wherein the Supreme Court after referring to the decisions of Hindustan

Tin Works (P) Ltd. (supra), Deepali Gundu Surwase (supra) and Talwara Co-

operative Credit and Services Society Ltd. (supra), enunciated the law as under :

"12. It is, undoubtedly, true when the question arises as to whether the backwages is to be given and as to what is to be the extent of backwages, these are matters which will depend on the facts of the case as noted in Deepali Gundu Surwase (supra). In a case where it is found that the employee was not at all at fault and yet, he was visited with illegal termination or termination which is actually activised by malice, it may be unfair to deny him the fruits of the employment which he would have

16 (2022) 3 SCC 683

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enjoyed but for the illegal / malafide termination. The effort of the Court must be to then to restore the status quo in the manner which is appropriate in the facts of each case. The nature of the charges, the exact reason for the termination as evaluated and, of course, the question as to whether the employee was gainfully employed would be matters which will enter into the consideration by the Court.

40. The legal position which emerges is that in case of wrongful termination

of services, reinstatement with continuity of service and backwages is a normal

measure of restitution. However, this is not an immutable rule of law. Departure from

the said rule can be made upon consideration of all the factors which influence the

exercise of discretion, like the length of service rendered by the employee before the

termination, nature of the misconduct alleged and proved, the peculiar circumstances

of the employer bearing upon its capacity to bear the burden of payment of backwages;

whether the industrial establishment has been closed down or in financial doldrums,

and whether, in the intervening period, the employee has been gainfully employed.

The nature of the termination also assumes salience. If the termination appeared to be

malafide or wholly unjustified, without there being an ounce of fault on the part of the

employee, denial of backwages would put premium on the illegality on the part of the

employer. The nature of the employment also deserves to be taken into account. Was

it of permanent nature or casual one. If an employer could resort to again terminate

the employee by complying with the statutory requirement, the order of reinstatement

with full backwages may not suit the purpose.

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41. Reverting to the facts of the case, as noted above, the cause of

termination of the Respondent No.1 by the Petitioners wavered from one end to

another. Though the relieving order recorded that the services of the Respondent

No.1 were terminated on moral ground, yet the employer shied away from establishing

the misconduct on the said count. In the absence of an enquiry in conformity with the

rudimentary principles of natural justice, the employer cannot obviate the charge of

arbitrary action. As noted above, no endeavour was made to establish the misconduct

before the Industrial Adjudicator. In the totality of the circumstances, the termination

of the Respondent No.1 on the purported moral ground, which casts a stigma for

future employment, without a semblance of effort to establish such misconduct can

only be termed to be arbitrary and an act of victimization, justifying the reinstatement

in service with backwages.

42. A profitable reference can be made to the judgment of the Supreme

Court in the case of the the Workmen of M/s. Firestone Tyre and Rubber Co. of

India (Pvt.) Ltd. V/s. The Management and Ors., 17 wherein the Supreme Court

was anxious to clarify that it did not intend to lay down that there was no obligation to

hold an enquiry before dismissing the workman. The observations in paragraph 53

read as under :

"53. We have indicated the changes effected in the law by section 11 A. We should not be understood as laying down that there is no obligation 17 (1973) 1 SCC 813

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whatsoever on the part of an employer to hold an enquiry before passing an order of discharge or dismissal. This Court has consistently been holding that an employer is expected to hold a proper enquiry according to the Standing Orders and principles of natural justice. It has also been emphasised that such an enquiry should not be an empty formality. If a proper enquiry is conducted by an employer and a correct finding arrived at regarding the misconduct, the Tribunal, even though it has now power to differ from the conclusions arrived at by the management, will have to give very cogent reasons for not accepting the view of the employer. Further by holding a proper enquiry, the employer will also escape the charge of having acted arbitrarily or mala fide. It cannot be over emphasised that conducting of a proper and valid enquiry by an employer will conduce to harmonious and healthy relationship between him and the workman and it will serve the cause of industrial peace. Further it will also enable, an employer to persuade the Tribunal to accept the enquiry as proper and the finding also as correct." (emphasis supplied)

43. The aforesaid enunciation of law would indicate that normally an order

of dismissal on the ground of misconduct ought to be preceded by an enquiry. Such

an enquiry also saves the employer of the charge of arbitrary or malafide action.

Conversely, if the dismissal is not preceded by domestic enquiry, the employer has to

surmount the challenge of action being arbitrary and malafide. The Petitioners could

not surmount the said challenge, in this case.

44. Undoubtedly, the workman has to demonstrate that he was not gainfully

employed. In the statement of claim, the Respondent No.1 affirmed that after the

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termination, the Respondent No.1 had not been able to secure any employment

despite the best efforts. He had no other source of livelihood, and, therefore, claimed

reinstatement with full backwages. In the affidavit of evidence also, the Respondent

No.1 affirmed that he could not secure employment despite best efforts and has been

surviving on the earnings of the relatives and friends.

45. Conversely, it is not the case of the employer that the Respondent No.1

has been working with a particular employer. Emphasis was, however, laid on the

refusal of the Respondent No.1 to place on record the extracts of his bank accounts.

An endeavour was made to show that had those bank accounts been produced, they

would have revealed the income which the Respondent No.1 had been earning.

46. Mr. Kamat placed a strong reliance on the exposition of law in the case

of Gopal Krishnaji Ketkar (supra), wherein the Supreme Court held that even if

the burden of proof does not lie on a party the court may draw an adverse

inference if he withholds important documents in his possession which can throw

light on the facts in issue. It is not a sound practice for those desiring to rely upon a

certain state of affairs to withhold from the court the best evidence which is in

their possession which could throw light upon the issues in controversy and to

rely upon the abstract doctrine of onus of proof.

47. Indeed, the Respondent No.1 expressed his inability to place on record

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of the Court the bank statements since April 2019. However, I am afraid, this

circumstance may not in itself justify drawing of an inference to the effect that the

Respondent No.1 has been gainfully employed. As noted above, the Respondent No.1

has discharged the initial burden. It was for the employer to demonstrate that the

Respondent No.1 was gainfully employed. There is no positive assertion that the

Respondent No.1 has been working with a particular employer. Refusal to place on

record copies of the bank statements during the course of cross-examination, in an

unguarded moment, without anything more, may not sustain adverse inference.

48. This propels me to the core question as to whether award of full

backwages is justifiable. Respondent No.1 has rendered five years service before he

was terminated. Respondent No.1 was confirmed in service vide order dated 9 May

2015. It is not the case that the Respondent No.1 was a casual worker. Secondly, the

employer does not claim any disabling factor which bears upon its capacity to pay the

backwages. It is not the claim that the work which the Respondent No.1 was

discharging is not available. Thirdly, the Respondent No.1 has been out of

employment for more than four years also deserves to be taken into account.

Indisputably, the Respondent No.1 has not rendered services albeit on account of the

illegal termination. The said period almost matches the period for which the

Respondent No.1 had rendered the services.

49. In the totality of the circumstances, in my considered view,

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reinstatement with 70% backwages computed at the last drawn wages would balance

the equities and meet the justice of the case. I am, therefore, persuaded to modify the

impugned award only to the extent of grant of full backwages.

50. Hence, the following order :

ORDER

(i) The Petition stands partly allowed.

(ii) The impugned Award stands modified as under :

(a) Direction to reinstate the Respondent No.1 in service with

continuity of service with effect from 24 April 2019 stands confirmed.

(b) The Petitioners-employer do pay 70% of the backwages computed

at the last drawn wages with effect from 24 April 2019, instead of full backwages

ordered by the Labour Court, within a period of two months from today.

(c) In the event of default in payment of backwages within the said

period, the amount of backwages shall carry interest @ 9% .a. from the date it fell due.