Bombay High Court
Habibullah L. Khan vs M/S Formac Enginneing Limited on 10 July, 2023
Bench: N. J. Jamadar
2023:BHC-AS:19407
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Sayali Upasani
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.-4415 OF 2021
Habibullah L. Khan ...Petitioner
Vs.
M/s. Formac Engineering Ltd ...Respondent
WITH
WRIT PETITION NO.-5159 OF 2021
Shri. Shrikrishna Babaji Warang ...Petitioner
Vs.
M/s. Formac Engineering Ltd ...Respondent
WITH
WRIT PETITION NO.-4416 OF 2021
Dilip Ganpat More ...Petitioner
Vs.
M/s. Formac Engineering Ltd ...Respondent
WITH
WRIT PETITION NO.-4417 OF 2021
K. Ramachandra Suvarna ...Petitioner
Vs.
M/s. Formac Engineering Ltd ...Respondent
Mr. Ravindra B. Nair a/w Mr. C.M. Lokesh, for Petitioner.
Mr. Mahesh Shukla i/b Mr. Niraj Prajapati, for Respondent.
CORAM:- N. J. JAMADAR, J.
DATE:- 10th JULY, 2023.
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JUDGMENT:-
1) Rule. Rule made returnable forthwith and with the
consent of the learned Counsel for the parties heard finally.
2) The petitioners, who were the employees of the
respondent, have preferred these Petitions being aggrieved by
the awards passed in the respective References under the
Industrial Disputes Act, 1947 ("the Act, 1947"), whereby the
learned Presiding Officer, Labour Court at Mumbai answered
the References partly in the affirmative holding, inter alia, that
dismissal of the petitioners was illegal and bad in law and,
instead of directing reinstatement in service with full back
wages and continuity of service, awarded a lump sum
compensation of Rs.1,50,000/- only.
3) The facts in Writ Petition No.5159 of 2021, which is
considered as a representative case, can be stated in brief as
under:-
(a) The petitioner was employed as a Turner with the
respondent. The enterprise was afflicted with industrial unrest.
The Mazdoor Congress Union, of which the petitioner was a
member, had submitted a charter of demands. Respondent-
employer had resorted to lockout from 7 th December, 1993 to
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28th January, 1994. Mazdoor Congress Union had given a call
for strike with effect from 26th December, 1993.
(b) In the meanwhile, another Union, Bharatiya Kamgar
Karmachari Mahasangh (BKKM) entered the fray. The petitioner
alleged the respondent-employer to break the bargaining power
of the workmen made many a workmen to join BKKM.
Eventually in order to avoid the conflict, after the lockout was
lifted, Mazdoor Congress Union withdrew the strike call.
Industrial peace was thus restored.
(c) It was the claim of the petitioner that the respondent did
not allow members of Mazdoor Congress Union to resume duty.
Charge sheets leveling false accusations of alleged 'gherao' on
25th November, 1993 and reduction of production and, 'go slow'
agitation were served on the petitioner on 29 th January, 1994,
the petitioner came to be suspended. Eventually, by resorting to
a farce of enquiry the petitioner was dismissed from service with
effect from 29th October, 1998.
(d) Reference (IDA) No. 182 of 2006 was made by appropriate
government. By Part-I award dated 18 th April, 2017, the learned
Presiding Officer, Labour Court declared that the enquiry held
against the petitioner was not fair and proper and the findings
of the Inquiry Officer perverse.
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(e) Availing the liberty, the respondent led evidence to
substantiate the misconduct attributed to the petitioner, before
the Labour Court.
(f) After appraisal of the evidence and material on record, by
the impugned award dated 15th Mary, 2019, the learned
Presiding Officer returned the finding that the termination of
the petitioner was illegal. However, since the petitioner had
crossed the age of superannuation, instead of directing
reinstatement in service with full backwages, the learned
Presiding Officer was persuaded to award lump sum
compensation of Rs.1,50,000/-.
4) The facts in rest of the Petitions are almost identical with
change being that of the designation of workmen, the number of
years of service rendered by each of the workmen, before the
suspension and dismissal, and the dates of the award passed by
the Labour Court.
5) In Writ Petition No. 4415 of 2021, the petitioner was
suspended by an order dated 28th January, 1994. He came to be
dismissed on 21st October, 1998. Part-I award holding that the
enquiry was not fair and proper was passed on 18 th April, 2017
and the impugned award, on 15th May, 2019. The petitioner
attained the age of superannuation on 23rd June, 2012.
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6) In Writ Petition No. 4416 of 2021, the petitioner was
suspended on 28th January, 1994 and dismissed on 29th
October, 1998. The petitioner attained age of superannuation on
23rd June, 2018. Part-I award was passed on 27 th April, 2017
and the impugned award on 4th June, 2019.
7) In writ Petition No. 4417 of 2021, the petitioner was
suspended on 17th October, 1993 and dismissed on 29 th October,
1998. Part-I award was passed on 27th April, 2017 and the
impugned award on 25th June, 2019. The petitioner attained the
age of superannuation in the month of June, 2018.
8) Being aggrieved by quantum of compensation, in lieu of
reinstatement with full backwages, the petitioners have
preferred these Petitions. The amount awarded by the Labour
Court, according to the petitioners, is wholly inadequate and
does not compensate the petitioners for the trial and the
tribulations faced by the petitioners since their unjustified
suspension in the year 1993-1994. Despite having returned the
finding that the action of the employer was wholly unjustified,
the learned Presiding Officer refrained from awarding a just and
reasonable compensation.
9) I have heard Mr. Ravindra Nair, the learned Counsel for
the petitioners, and Mr. Mahesh Shukla, the learned Counsel for
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the respondent, at some length. The learned Counsel for the
parties took the Court through the pleadings before the Labour
Court, evidence led by the parties, impugned award and the
material on record.
10) Mr. Nair strenuously submitted that the learned Presiding
Officer, Labour Court, did not keep in view the principles which
govern the determination of quantum of compensation where
the Court decides to award of compensation in lieu of an order
of reinstatement and backwages. The length of service of the
workmen, the long period for which the workmen were deprived
of the employment, prolonged period of suspension without
payment of the subsistence allowance, patently false nature of
the accusation and the attendant circumstances were not at all
adverted to by the learned Presiding Officer.
11) Mr. Nair further submitted that the petitioner had
categorically asserted that since the date of dismissal they could
not get any employment despite diligent search and the
petitioners and their families were made to suffer financial crisis
and strive had to sustain themselves. In contrast the
respondent did not discharge the burden of establishing that
the workmen were gainfully employed. In this view of the matter,
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the award of a sum of Rs.1,50,000/- errs on the side of being
wholly inadequate recompense, urged Mr. Nair.
12) In opposition to this, Mr. Shukla would urge that the
learned Presiding Officer, Labour Court has taken into account
the evidence which indicated that the petitioners were gainfully
employed in the interregnum. Once such evidence was led, there
was no justification for claiming backwages and, resultantly, the
quantum of compensation in lieu of reinstatement and
backwages cannot be questioned. Mr. Shukla strenuously
submitted that in view of the admissions in the cross-
examination of each of the petitioners, the respondent was not
at all required to lead evidence aliendu in proof of the fact that
the petitioners were gainfully employed. Mr. Shukla further
submitted that, in any event, the determination of quantum of
compensation is not such that this Court would be justified in
exercising the writ jurisdiction.
13) There is not much controversy on facts. Employer-
employee relationship is incontestable. The factum of service of
charge sheets and consequent suspension of each of the
petitioners are not in dispute. Nor the fact that, post
disciplinary proceedings, each of the petitioners came to be
dismissed form service. The Labour Court found the enquiry not
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fair and legal. The findings of the Inquiry Officer were also found
to be perverse. Indisputably, the Part-I award has not been
challenged. Evidently, the endeavor of the employer to prove the
misconduct by adducing evidence before the Labour Court did
not succeed and categorical findings have been recorded that
the employer failed to bring home the charge to the petitioners.
Incontrovertibly, each of the petitioners attained the age of
superannuation before passing the impugned award.
14) In the backdrop of the aforesaid facts, the learned
Presiding Officer, Labour Court was well within his rights in
awarding compensation in lieu of reinstatement. It is the
quantum of compensation over which the parties are at issue.
The Labour Court proceeded on the premise that the last drawn
salary each of the petitioners was Rs.3,000/- per month and
thus a compensation of Rs.1,50,000/- was just and equitable.
15) Mr. Nair was justified in canvassing the submission that
the learned Presiding Officer, Labour Court did not advert to the
principles which govern the determination of the quantum of
compensation. Only the factors of the length of service and last
drawn wages of each of the petitioners, were taken into account.
16) It is trite whenever an order of termination of service is
declared illegal, reinstatement is not the inevitable consequence.
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A variety of factors came into play in the matter of determination
of the relief to be granted to workman who has been illegally
terminated. Normally an employee is entitled to be reinstated in
service where no other circumstance bears upon passing of
such order. On the aspect of backwages as well, the attendant
factors play a significant role. Those attendant factors include
the length of service, the nature of indictment, nature of the
proved misconduct, the financial position of the employer, the
continuity of the employer's enterprise as a running concern,
gainful employment of the employee, in the intervening period,
and the like. The nature of the finding recorded by the
Industrial adjudicator as regards the charge on the strenth on
which the employee's services were terminated also plays a
pivotal role.
17) It would be suffice to make a profitable reference to the
decision of Supreme Court in the case of Deepali Gundu
Surwase Vs. Kranti Junior Adhyapak Mahavidyalaya (D.ED) and
Others1 in which the propositions which bear upon the relief to
be granted to an employee who has been wrongfully terminated,
were illuminatingly postulated. They read as under:-
"...38. The propositions which can be culled out from
the aforementioned judgments are:
1 (2013) 10 SCC 324
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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 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.
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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 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)
Limited v. Employees7(supra).
38.7. The observation made in J.K. Synthetics Ltd. v.
K.P. Agrawal5 (supra) that on reinstatement the
employee/ workman cannot claim continuity of service
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as of right is contrary to the ratio of the judgments of
three Judge Benches referred to hereinabove and
cannot be treated as good law. This part of the
judgment is also against the very concept of
reinstatement of an employee/workman....."
18) On the aforesaid touchstone, reverting to the facts of the
case, first and foremost, it is of critical salience to note that the
Labour Court has recorded categorical findings that the
disciplinary proceedings against each of the petitioners was an
exercise to break the Union activity and amounted to
victimisation. Since the respondent-employer has not assailed
the impugned award, the aforesaid finding of the Labour Court
deserves to be taken into account as it stands.
19) The Labour Court found that none of the charges of
misconduct were proved by the employer. In such a situation,
the claim for full backwages gains credence as the action of the
employer can be termed to be wholly unjustifiable and an
instance of unwarranted exercise of managerial authority.
20) Secondly, in the evidence adduced by each of the
petitioners, there was a categorical statement that since the
date of dismissal the petitioner could not get gainful
employment despite making efforts. Ordinarily, in view of the
assertion that the workman was not gainfully employed, the onus
shifts on the employer to plead and lead cogent evident to prove
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that the workman was gainfully employed and was getting wages
comparable to the wages which the workman was drawing at
the time of termination.
21) In the case at hand no endeavor was made on behalf of
the respondent-employer to positively assert and establish that
the petitioners were gainfully employed. Instead the respondent
relied upon the purported admissions in the cross examination
of each of the petitioners especially to the effect that the
petitioners discharged the responsibility to maintain their
respective families and incurred expenses to maintain family.
For instance in the cross-examination of Mr. Shrikrishna Babaji
Warang, petitioner in Writ Petition No. 5159 of 2021, it was
elicited that he had incurred expenses of Rs.1,000/- to 1,200/-
per month towards maintaining the family. He further conceded
that he maintained his family doing some labour and
agriculture work and that he had agricultural land at his native
place. He admitted to have discharged his responsibility as the
head of his family. Mr. Habibullah L. Khan, the petitioner in
Writ Petition No. 4415 of 2021, also conceded that he had
discharged his responsibility as the head of the family and
incurred Rs.4,000/- to Rs.5,000/- towards the maintenance of
the family. He had withdrawn his Provident Fund, post
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termination. Mr. Dilip Ganpat More, the petitioner in Writ
Petition No. 4416 of 2021, also admitted that till his elder son
got employed, he incurred expenses of Rs.10,000/- towards
maintaining his family including educational expenses of the
children. Mr. K. Ramachandra Suvarna, the petitioner in Writ
Petition No. 4417 of 2021, also admitted to have incurred
expenses of Rs.10,000 to Rs.12,000/- per month for maintaining
his family. He went on to admit that as of the year 2019, a
Quality Controller normally earned Rs.30,000/- to Rs.35,000/-
as a salary.
22) Banking heavily upon the aforesaid admissions, Mr.
Shukla would urge that since each of the petitioners conceded
to have incurred expenses to maintain the family, the fact that
they were gainfully employed stands established beyond cavil. I
am afraid the evidence can not be appraised in such formal
manner. The totality of the circumstances, can not be lost sight
of. The fact that the petitioners, after being unjustifiably
deprived of the services, made effort to somehow sustain
themselves, cannot be equated with a secure gainful
employment with equivalent remuneration which the respective
petitioner was drawing at the time of termination. It would
amount putting a premium on the wrongful conduct on the part
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of the respondent-employer, to deny just and reasonable
compensation to the workman on the premise that the workman
admitted that he had the responsibility of the family and
incurred expenses to maintain the family.
23) In the case at hand, the learned Presiding Officer ought to
have taken into account the fact that the petitioners were placed
under suspension for four years before their services were
terminated. The petitioners continued to wage the legal battle
for vindication of their legitimate rights. By the time final award
could be passed, each of the petitioners had passed the age of
superannuation. Precious creative and productive years of the
life the petitioners, were lost in litigation.
24) Computation of compensation by merely taking into
account the last drawn salary by the petitioners, without
considering the benefits of wage revision, which the petitioners
would otherwise have had, over the period of two decades, may
not be justifiable. Though an element of guesswork in
determination of lump sum is inevitable, yet, in my view, in the
totality of the circumstances, a compensation of Rs.4,00,000/-
would be just and reasonable compensation. Hence, the
Petitions deserve to be allowed by modifying the impugned
award to the extent of the quantum of compensation.
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25) Hence, the following order.
-:ORDER:-
i) The Petitions stand partly allowed.
ii) The impugned award in each of the
Petitions stand modified as under:-
iii) The respondent do pay to each of the
petitioners a sum of Rs.4,00,000/- by way of
compensation in lieu of reinstatement and back
wages.
iv) If the amount of Rs.1,50,000/- in terms of
the impugned awards is already paid and/or
deposited, the balance amount be paid to the
respective petitioners within a period of one
month; if not the entire amount of Rs.4,00,000/-
be paid within the said period.
v) In default the amount shall carry interest
at the rate 9% p.a. till payment and/or
realisation.
vi) Rule made absolute to the aforesaid extent.
vii) No costs.
[N. J. JAMADAR, J.]
