M/S Radhey Lal Pradeep Kumar & Anr. vs Sh. Shyam Lal & Anr.
2010 Latest Caselaw 3015 Del

           *IN THE HIGH COURT OF DELHI AT NEW DELHI


                                             Date of decision: 1st July, 2010


+                            W.P.(C) No.5796/2001

%

M/S RADHEY LAL PRADEEP
KUMAR & ANR.                             .... PETITIONERS
                 Through: Mr. Harvinder Singh, Advocate

                                    Versus
SH. SHYAM LAL & ANR.                    ..... RESPONDENTS
                  Through: Mr. Som Dutt Sharma, Advocate

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may
         be allowed to see the judgment?                      NO

2.       To be referred to the reporter or not?               NO

3.       Whether the judgment should be reported              NO
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner employer by this writ petition impugns the award

dated 5th November, 1999 of the Labour Court on the following

reference:

"Whether the services of Sh. Shyam Lal have been terminated illegally and / or unjustifiably and if so, to what relief is he entitled and what directions are necessary in this respect?"

The Labour Court observed that though the industrial dispute was

raised by the respondent no.1 workman after 20 years of his alleged

removal, but held that, since no limitation is prescribed for raising a

dispute and further since there was satisfactory explanation for the delay

in raising the dispute, the reference could not be decided against the

respondent no.1 workman on that ground. The Labour court further held

that the petitioner employer had failed to prove that the respondent

workman had left the service of his own; axiomatically, the termination

being without compliance of Section 25F of the I.D. Act was held illegal

and unjustified. However, for the reason of i) the petitioner employer

firm having been closed down and ii) the respondent workman having

been shown to be in employment elsewhere for sometime after reference

of the industrial dispute and iii) for the reason of the criminal

prosecution of the respondent workman at the instance of the petitioner

employer and the complaints by the respondent workman against the

petitioner employer with the Income Tax authorities, the relief of

reinstatement was not considered to be the appropriate relief. The Labour

Court awarded Rs.1,00,000/- as lumpsum compensation to the

respondent workman.

2. The respondent workman has not challenged the award. The

petitioner employer aggrieved therefrom preferred the present petition.

Vide ex parte order dated 20th September, 2001, while issuing notice of

the petition, the operation of the award was stayed subject to the

petitioner employer depositing Rs.50,000/- with the Registrar of this

Court. Subsequently, on 5th March, 2002, it was informed that the said

sum of Rs.50,000/- had been deposited by the petitioner employer. On

2nd September, 2004, Rule was issued in the petition and the sum of

Rs.50,000/- directed to be kept in fixed deposit and the interim order in

terms of the above made absolute till the disposal of the petition. As per

records, the sum of Rs.50,000/- had a maturity value of Rs.71,000/- as on

1st October, 2009.

3. The counsel for the petitioner employer has at the outset

contended that the reference ought to have been decided against the

respondent workman and in favour of the petitioner employer for the

reason of the long delay of 20 years by the respondent workman in

raising the dispute. The Labour court has held the delay to have been

explained for the reason of the petitioner employer having initiated

criminal prosecution of the respondent workman and in which the

respondent workman was acquitted approximately two years prior to

raising the dispute. This was held to be sufficient explanation for the

delay in raising the dispute.

4. The counsel for the petitioner employer has contended that the

Labour Court has failed to appreciate that the criminal prosecution had

nothing to do with the termination. It is contended that it is not the case

that the petitioner employer had terminated the services of the

respondent workman for the reason of embezzlement of monies for

which the respondent workman was prosecuted; in fact, the criminal

complaint of embezzlement was filed much after the cessation of

services of the respondent workman and only when the said

embezzlement was discovered after the respondent workman had left the

employment. It is thus contended that the respondent workman had no

reason to await the outcome of the criminal prosecution before raising

the industrial dispute and the two were separate and the pendency of the

said criminal prosecution had no connection with the dispute, if any, qua

termination. Reliance in this regard is placed on:

(i) N.S. Bhatnagar Vs. Indian Tourism Development Corporation

2008 (118) FLR 719, where a Single Judge of this Court upheld

the award against the workman for the reason of being stale and

preferred 27 years after suspension of the workman; the plea of the

workman that he was advised to await outcome of criminal trial

was held to be not acceptable.

(ii) Krishi Utpadan Mandi Samiti Vs. Pahal Singh 2007 (113) FLR

818 (SC), holding that the Labour Court is under an obligation to

consider whether any relief, if at all, could be granted in favour of

the workman in view of the delay (in that case of 18 years) and

that delay defeats equity.

(iii) Balbir Singh Vs. Punjab Roadways 2001 I LLJ 476 laying down

that there is no general principle that in industrial dispute delay is

not to be taken as a ground for denying relief to the workman. In

this case, relief was denied to the workman for the reason of delay

of sixteen years in raising the dispute.

5. Per contra, the counsel for the respondent workman relies on:

(i) Ajaib Singh Vs. The Sirhind Co-operative Marketing-

cum-Processing Service Society Ltd. AIR 1999 SC 1351

laying down that the provisions of the Limitation Act, 1963

do not apply to Industrial Adjudicators under the Industrial

Disputes Act. In this case, the delay was of 7 years and the

Supreme Court held that for the reason of delay, in

appropriate cases, the relief may be moulded by declining to

grant back wages to the workman till the date he raised the

demand.

(ii) The Nedungadi Bank Ltd. Vs. K.P. Madhavankutty AIR

2000 SC 839, laying down that law does not prescribe any

time limit for the appropriate Government to exercise its

powers under Section 10 of the Act. I may however notice

that the Supreme Court after observing so has held that a

dispute which is stale could not be the subject matter of

reference under Section 10 of the Act. The question

whether a dispute is stale or not was held to depend on the

facts and circumstances of the case. In that case, the delay

was of 7 years and the reference was held to be bad.

(iii) Sapan Kumar Pandit Vs. U.P. State Electricity Board AIR

2001 SC 2562, laying down that when the government

chooses to refer the dispute for adjudication, the reference

could not be quashed merely on the ground of delay, though

long delay could be considered by the adjudicating

authorities while moulding the relief.

6. What follows from the aforesaid judgments is that delay is

certainly a factor to be countenanced in adjudication of the industrial

dispute. Though Sapan Kumar Pandit (supra) holds that once a

reference has been made, it could not be quashed for the reason of delay

and the counsel for the respondent workman contends that the challenge

if any by the petitioner employer on the ground of delay should have

been to the reference, as in The Nedungadi Bank Ltd. (supra) but I am

unable to agree with the said contention. If the Court lays it down as a

general rule that the challenge, if any, on account of delay should be by

impugning the order of the appropriate Government of reference and the

employer would not be entitled to impugn the award on the ground of

delay / laches even if a defence before the industrial adjudicator, for the

reason of having not challenged the order of reference, the same is likely

to delay considerably the adjudication by the Industrial Adjudicator; then

writ petitions challenging the reference orders would be preferred and

the proceedings before the Industrial Adjudicator in the reference would

remain stayed / pending judicial review of the reference order. It is not

appropriate for the Courts to take a view which is likely to delay

adjudication of the industrial disputes. It is more practicable that once a

reference has been made, the dispute is adjudicated and the challenge, if

any, to the reference on the ground of delay and / or to the award, being

made on all grounds after the award has been published, rather than at

the intermittent stage. I therefore hold that the petitioner employer in the

present case is entitled to contend as it is found to have done before the

Labour Court also, that the respondent workman is not entitled to any

relief merely for the reason of delay of 20 years in raising the dispute.

7. Faced with the aforesaid, the counsel for the respondent

workman contends that this Court in the exercise of writ jurisdiction

ought not to interfere with the finding of the Labour Court of the

respondent workman owing to the criminal prosecution (supra) being

justified in raising the dispute after delay of 20 years. Reliance in this

regard is placed on Sadhu Ram Vs. Delhi Transport Corporation AIR

1984 SC 1467 holding that the question of jurisdictional facts decided by

the Labour Court and which it is competent to decide are not open to

judicial review and on M/s Little Sons & Company Vs. Amar Nath 1978

LAB I.C. 430 (Punjab & Haryana) to the effect that the High Court in

exercise of jurisdiction under Article 226 of the Constitution does not

normally upset the findings of fact recorded by the Tribunals and the

writ of certiorari can be issued only for correcting the errors of law

which are apparent on the face of the record. Reliance in this regard is

also placed on Indian Overseas Bank Vs. I.O.B. Staff Canteen

Workers' Union IV (1999) SLT 540 laying down that the findings of

fact recorded by a fact finding authority duly constituted for the purpose,

ordinarily should be considered to have become final and cannot be

disturbed for the mere reason of having been based on material or

evidence not sufficient or credible in the opinion of the Writ Court.

8. Per contra, the counsel for the petitioner employer in this respect

draws attention to Seema Ghosh Vs. Tata Iron & Steel Company (2006)

7 SCC 722 where it was held that an award passed without regard to

Supreme Court decision on the point in issue is liable to be interfered

with and it was held that misplaced sympathy for the workman cannot

come in the way of the High Court interfering with the award.

9. Though on first blush, the reason accepted by the Labour Court, as

explaining the delay, appears to be a plausible reason, not requiring

interference by this Court but a perusal of the statement of claim of the

respondent workman before the Labour Court shows that it was his case

that he was employed with the petitioner employer as a Munim with

effect from July, 1963 at a salary of Rs.120/- per month and was not

allowed to join duty with effect from July 1964; that the petitioner

employer did not reinstate him from August, 1964 to November, 1964

but kept on assuring that he would be reinstated; that in the end of 1964

he made complaints against the petitioner employer to the Income Tax

department and when the petitioner employer came to know of it, they

refused to reinstate him and lodged a false complaint of embezzlement

against him, to save their own skin from the Income Tax department.

10. I find that the respondent workman has subsequently attempted to

change his case and attempted to argue that his removal in July, 1964

was also for the false charge of embezzlement against him. However,

the respondent workman cannot be permitted to so change the facts. His

categorical case in his first pleading is that approximately 5/6 months

after his removal and during which time assurances of reinstatement are

claimed to have been given, he made complaint against the petitioner

employer and the petitioner employer thereafter by way of retaliation

lodged a false prosecution of embezzlement against him. From the first

pleading of the respondent workman, it is clear that the charge of

embezzlement against him was not the basis of his termination and the

charge of embezzlement was made by the petitioner employer only to

save their skin in the complaints to the Income Tax authorities made by

the respondent workman against the petitioner employer.

11. A perusal of the aforesaid statement of claim lays credence to the

argument of the counsel for the petitioner employer that the criminal

prosecution in which the respondent workman was acquitted in 1982 was

no reason for him to, in 1984, raise an industrial dispute belatedly qua

his termination in July, 1964. The Labour Court has also held the

termination of the respondent workman to be bad only for the reason of

non compliance of Section 25F and not for the reason of the respondent

workman having been dismissed on the ground of embezzlement without

any inquiry.

12. It was further the case of the respondent workman in his statement

of claim before the Labour Court that even after initiation of criminal

prosecution against him, the petitioner employer was assuring him that

he would be taken on job after the decision in the criminal prosecution

and only when the petitioner employer refused to take him back inspite

of his acquittal he raised the dispute. The respondent workman

appearing as his own witness before the Labour Court also deposed to

the same effect. The witness of the petitioner employer denied the said

claim of the respondent workman (the counsel for the respondent

workman though challenges the said statement of the petitioner‟s witness

on the ground of his not being involved in the business at the relevant

time) (I am however not inclined to accept the said objection because

when a dispute is raised after a long delay, the concerned witness cannot

be expected to be around or available for evidence). The fact remains

that not a single letter is proved to have been written by the respondent

workman to the petitioner employer after cessation of his employment in

July, 1964, asking the petitioner employer to give him work or to allow

him to rejoin, neither till the initiation of the criminal prosecution against

him nor thereafter and not till shortly before raising the dispute in 1984.

13. One thing is clear in the present case; the respondent workman

was not a helpless person. According to him, his services had been

terminated in July, 1964; towards the end of 1964, instead of raising an

industrial dispute, he chose to make complaints to the Income Tax

department and the Home Minister against the petitioner employer. He

has in his cross examination also admitted to be possessed of agricultural

land and living off it. All this shows that the respondent workman was

aware of his legal rights and the weaknesses, if any, of the petitioner

employer and instead of raising an industrial dispute or seeking his

reinstatement, opted to complain about the petitioner employer to the

Income Tax department. His termination according to him also was not

for the reason of embezzlement for which he was prosecuted and has

been held by the Labour Court also to be bad only for non compliance

with Section 25F. In the circumstances, the reason given for delay i.e. of

criminal prosecution is extraneous and irrelevant. The termination now

held to be bad for the reason of non compliance of Section 25F could

have been held bad for the same reason irrespective of the outcome of

the criminal prosecution. The Labour Court got swayed by the said

prosecution even though it had nothing to do with the industrial dispute.

14. Else, the law as enunciated from the judgments aforesaid is that

long delay is a ground for declining relief and / or for dismissing the

reference. The respondent workman appears to be fully aware of the

same and sought to explain away the same by pleading the assurances

meted out to him. Though the Labour Court has not given any finding

thereon but this Court finds the said explanation also to be contrary to

ordinary human conduct and unbelievable. It is highly unlikely that the

petitioner employer would have meted out any such assurance of

reinstatement to the respondent workman especially after the respondent

workman had lodged complaints against the petitioner employer with the

Income Tax department and the Home Minister and after he was being

prosecuted for embezzling the funds of the petitioner employer. In these

circumstances, it also cannot be believed that the assurances, even if any

given, would have been believed by the respondent workman. Else,

there is no other explanation for the delay and in the facts of the case, the

delay makes the dispute a stale one and reference bad and the claim of

the respondent workman liable to be dismissed on this ground alone. The

Labour court has also held that a workman should not "unnecessarily"

delay the raising of the dispute. In the present case, the delay is found to

be "unnecessary" and the reason given by the Labour Court for

condoning / overlooking the same found to be extraneous.

15. Next contention of the counsel for the petitioner employer is that

the Labour Court erroneously rejected its case of the respondent

workman having left the services of its own. The petitioner employer

had sought to prove the same from the evidence led by the respondent

workman in the criminal prosecution where it was so contended. It was

the case of the respondent workman that he could not be prosecuted for

embezzlement for the reason of his having left the employment of the

petitioner employer and settled his accounts. The petitioner employer

sought to prove the same by filing the copies of the record of the

criminal prosecution and which was collectively given Mark „A‟ by the

Labour Court. The Labour Court however held that the petitioner

employer has failed to get the original documents proved and exhibited

before the Labour Court and the copies of the record of the Criminal

Court on which Mark „A‟ had been put could not be looked into. It is the

case of the petitioner employer that it had tried its best to summon the

record of the Criminal Court but which was not found and that the

technicalities of exhibiting and proving the documents as per the Indian

Evidence Act, 1872 do not apply to the Labour Court. Reliance in this

regard was placed on Food Corporation of India Workers Union Vs.

Food Corporation of India JT 1996 (6) SC 724. The same argument

has been urged before this Court also. Though there is merit in the said

contention of the counsel for the petitioner employer but the petitioner

employer before this Court also has not filed even the photocopies of the

evidence in the criminal prosecution. This Court is therefore unable to

even fathom the evidence, if any, in the criminal prosecution, and in the

absence of the same, the finding of the Labour Court in this regard

cannot be interfered with.

16. The counsels have addressed at length on the compensation

awarded, with the counsel for the petitioner employer contending that

considering the fact that i) the respondent workman had admittedly

worked for the petitioner employer for one year only and ii) at a salary of

Rs.120/- p.m. and iii) the business of the petitioner employer firm had

been found to be closed down and iv) it having been established that the

respondent no.1 workman was employed at least for some time after the

reference of the dispute, the compensation of Rs.1,00,000/- without

giving any reason is unsustainable, and the counsel for the respondent

workman contending again that the same cannot be interfered with in the

writ jurisdiction. The counsel for the respondent workman in this regard

also relies on the judgment dated 12th March, 2010 of the Supreme Court

in Krishan Singh Vs. Executive Engineer, Haryana State Agricultural

Marketing Board Civil Appeal No.2335/2010. Per contra, the counsel

for the petitioner employer relies on Krishi Utpadan Mandi Samiti

(supra) where the factor of the workman having worked for a short

period was held to be relevant, on State of M.P. Vs. Arjunlal Rajak

(2006) 2 SCC 711 where compensation of Rs.10,000/- only was awarded

for the reason of the production unit in which the workman was working

having closed down, on Indiana Engineering Works (Bombay) Pvt.

Ltd. Vs. The Presiding Officer 1996 (72) FLR 150 (Bom) where it was

held that a workman found gainfully employed is not entitled to any

amount towards back wages and also on Kendriya Vidyalaya Sangathan

Vs. S.C. Sharma (2005) 2 SCC 363 laying down that the initial burden is

on the employee to show that he is not gainfully employed and it is only

thereafter that the employer can bring on record material to rebut the

claim of the employee. In the present case, the petitioner employer

examined a witness who deposed that the respondent workman worked

with him from 6th January, 1986 to 21st July, 1988 at a salary of Rs.1200-

1300 per month. This part is not disputed by the respondent workman

also. It is urged by the counsel for the petitioner employer that the

respondent workman having concealed such employment also, is not

entitled to any relief.

17. As far as the plea of the petitioner employer of the firm in which

the respondent workman was employed having closed down in 1964

itself is concerned, it is the case of the respondent workman that though

employed in one firm, he was also doing the work of the other firm

carrying on business from the same premises and there were common

partners in the two firms and the other firm continues to be in business.

Again no finding in this regard has been given by the Labour Court.

18. This Court at the time of hearing expressly enquired from the

counsels as to the measure of damages, even if to be awarded, in lieu of

reinstatement and back wages. The counsel for the petitioner employer

contended that the principle of mitigation in the Indian Contract Act,

1872 would apply; that the measure should be confined to the time

within which the employee is likely to get alternate employment; that

even in Voluntary Retirement Schemes not more than 6 to 7 years wages

subject to maximum of Rs.5,00,000/- are given; that the formula of

Section 25F of 15 days wages for each year‟s employment should be

followed.

19. I find that a Single Judge of this Court in Autocentre Workshop

Vs. Delhi Administration 125 (2005) DLT 675 has held that

compensation in lieu of reinstatement has to reflect two factors i.e. (a)

the amount payable as back wages and (b) the amount payable in lieu of

reinstatement which may be denied due to myriad factors. Another

Single Judge in On-Dot Couriers and Cargo Ltd. Vs. Anand Singh

Rawat 165 (2009) DLT 89, from the various judgments cited therein

concluded, that compensation equivalent to 3.33 years‟ salary (including

allowances as admissible) on the basis of last pay and allowances would

be a reasonable amount to award in lieu of reinstatement.

20. The Labour Court in the present case has not given any basis for

the compensation of Rs.1,00,000 /- awarded to the respondent no.1

workman. Though there could be no hard and fast rule for arriving at the

amount of compensation but the Industrial Adjudicator is expected to at

least spell out the factors which had weighed in his mind in arriving at

the compensation awarded. That has not been done in the present case.

Going by the formula of 3.33 years‟ salary also, the respondent no.1

workman who admittedly at the time of termination was drawing

Rs.120/- per month, would not be entitled to the compensation of

Rs.1,00,000/- particularly when owing to delay, back wages were not to

be granted. The award of compensation of Rs.1,00,000/- in the present

case is also thus found to be such which is liable for interference under

Article 226 of the Constitution. Had the Industrial Adjudicator given

any basis for arriving at the said compensation, and had the Court not

found the same to be totally extraneous, it could have been urged that the

Court should not impose its own view over that of the Industrial

Adjudicator inasmuch as there is bound to be a certain amount of

discretion in awarding the compensation. However, when there are no

reasons or basis given and when the compensation is found to be at the

whim and fancy and ipse dixit of the Industrial Adjudicator and with

which the Court does not agree, this Court would be entitled to interfere.

The Industrial Adjudicator appears to have lost sight of the fact that the

termination was in 1964 and the delay of 20 years in raising the dispute

was attributable to the respondent workman. The measure of

compensation thus had to be as per the rates / wages prevailing in 1964

and could not have been as per the prices of 1984 and by which the

Industrial Adjudicator appears to have been guided.

21. However, since this Court has found the dispute raised to be stale

and the reference to be bad and the claim of the respondent workman to

be barred by principle of laches, there is no need for this Court to

compute the compensation to which the respondent workman would

have been entitled to.

22. The writ petition therefore succeeds. The award of the Labour

Court impugned in this petition is set aside / quashed. The dispute raised

by the respondent workman is found to be stale and barred by laches and

the respondent workman found not entitled to any relief. The petitioner

employer has become entitled to refund of the sum of Rs.50,000/-

deposited as aforesaid in this Court together with the interest accrued

thereon. However, to provide sufficient time to the respondent workman

to appeal and / or to, if found entitled, obtain stay of such release, the

Registry is directed to release the said amount to the petitioner employer

only after 16th August, 2010.

The writ petition is disposed of. No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) 1st July, 2010 gsr