Gujarat High Court
Kiran Motors Limited vs Sharma Alpesh B on 27 August, 2021
Bench: A. P. Thaker
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7327 of 2015
With
R/SPECIAL CIVIL APPLICATION NO. 7649 of 2015
With
R/SPECIAL CIVIL APPLICATION NO. 13337 of 2015
With
R/SPECIAL CIVIL APPLICATION NO. 13345 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE DR. JUSTICE A. P. THAKER Sd/-
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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KIRAN MOTORS LIMITED
Versus
SHARMA ALPESH B & 1 other(s)
================================================================
Appearance:
RC JANI AND ASSOCIATE(6436) for the Petitioner(s) No. 1
MR P C CHAUDHARI(5770) for the Respondent(s) No. 1
RULE SERVED(64) for the Respondent(s) No. 2
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CORAM:HONOURABLE DR. JUSTICE A. P. THAKER
Date : 27/08/2021
ORAL JUDGMENT
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
1. The Special Civil Application No.7327 of 2015 is preferred
by the Kiran Motors Limited against the impugned award dated
22.12.2014 passed by the Labour Court, Ahmedabad in
Reference T No. 1390 of 2004, whereby the Labour Court has
directed the petitioner to reinstate Sharma Alpesh Brahmedutt
with continuity of service and 25% back wages. Whereas, Special
Civil Application No.13345 of 2015 is preferred by Sharma Alpesh
Brahmedutt against the same impugned award whereby he has
prayed for 100% back wages instead of 25% back wages.
2. The Special Civil Application No.7649 of 2015 is preferred
by the Kiran Motors Limited against the impugned award dated
12.12.2014 passed by the Labour Court, Ahmedabad in
Reference T No. 1400 of 2004, whereby the Labour Court has
directed the petitioner to reinstate Panchal Prashantkumar
Rameshchandra with continuity of service and 10% back wages.
Whereas, Special Civil Application No.13337 of 2015 is preferred
by Panchal Prashantkumar Rameshchandra against the same
impugned award for enhancement of back wages from 10% to
100%.
3. Since all the petitions were tagged together, all the
petitions are being disposed of by this common judgment.
4. Heard Mr. R. C. Jani, learned counsel for the petitioner -
Kiran Motors Limited and Mr. P. C. Chaudhari, learned counsel for
the private respondents - workmen through video conferencing.
5. Mr. R. C. Jani, learned counsel for the petitioner - Kiran
Motors Limited has vehemently submitted that both the alleged
workmen were not the workers of the petitioner - firm, but, they
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
were contractor and self-employed and they were being paid the
amount through vouchers. According to him, the present
petitioner has produced various vouchers with different amounts
which shows that the private respondents were not the workmen
of the petitioner. He has submitted that if the private
respondents were the workmen, then, their cannot be any
difference in the amount paid to them. While inviting the
attention of the Court to the oral deposition of the party, he has
submitted that the private respondent - Alpeshkumar Sharma
has admitted therein that no any appointment letter was
produced on record. He has also submitted that there was
contract for labour work and, therefore, the private respondents
cannot be treated as workmen. While referring to the oral and
documentary evidence, he has submitted that the private
respondents have alleged that their services came to be
terminated. He has submitted that the Labour Court has not
taken into consideration the various aspects which have been
alleged by the present petitioner. According to him, the private
respondents were working as mechanic on contract basis. He has
submitted that the Labour Court has committed serious error of
facts and law in not considering the facts that the amount was
being paid to the private respondents by cash vouchers which
shows that the private respondents were not the workmen and,
there was no relationship of employer and employee between
the parties. He has submitted that the Labour Court has not
considered the fact which emerges from the cross-examination
of the private respondents. He has submitted that the amount
though the cash vouchers of every month is varied, which
suggests that the private respondents were not the workmen
and they were working on the contract basis. According to him,
though there was no adequate evidence produced by the private
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
respondents regarding the alleged breach of Sections 25-F, 25-G
and 25-H of the Industrial Disputes Act, 1947 (hereinafter be
referred to as the "I. D. Act."), the Labour Court has committed
an error in passing the impugned award. According to him, the
Labour Court has failed to consider the fact that the services of
the respondents cannot be regularized, but lump sum
compensation may be awarded to the respondents in view of the
decision of the Apex Court in the case of Senior
Superintendent Telegraph (Traffic) Bhopal Vs. Santosh
Kumar Seal, (2010) 6 SCC 773. On all these grounds, Mr. Jani,
learned counsel for the petitioner has urged to allow the
petitions filed by the Kiran Motors Limited and dismissed the
petitions filed by the private respondents. He has prayed to
quash and set aside the impugned award passed by the Labour
Court in respective matters.
6. Per contra, Mr. P. C. Chaudhari, learned counsel for the
private respondents has vehemently submitted that the
workmen were sent for training and in that letters, the
designations of the workmen have been shown. He has
submitted that there was training period mentioned in the said
letter which is produced at page No.50 in Special Civil
Application No.13345 of 2015 and at page No.45 in Special Civil
Application No.13337 of 2015. He has submitted that the alleged
vouchers were created after the training period. He has
submitted that the documents have been fabricated by the
employer. He has submitted that no contract document has been
produced by the employer nor any account of TDS has been
produced. While inviting the attention of the Court regarding the
certificate produced at page No.53 in Special Civil Application
No.13345 of 2015, he has submitted that this fact clearly shows
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
that the workmen were employee of the present petitioner. He
has submitted that the Labour Court has properly observed in
the award that there was relationship of employer and employee
between the parties. He has submitted that the Labour Court has
not committed any error of facts and law in passing the order of
reinstatement with continuity of service. However, according to
him, the Labour Court has committed serious error of facts and
law in not granting full back wages. He has submitted that the
back wages granted by the Labour Court is not sufficient. He has
submitted that it is not for the workmen to prove that they were
unemployed, but, it was for the management to produce the
evidence to show that the workmen are gainful employed with
other employer. According to him, if the employer wants to deny
back wages to the employee for his past time, then, it is for the
employer to specifically plead and prove that during the
interregnum period, the employee was gainful employee. He has
submitted that there is no such exercise has been carried out by
the employer and, therefore, the Labour Court ought not to have
reduced the back wages. While relying upon the decisions in the
case of Deepali Gundu Surwase Vs. Kranti Junior Adhyapak
Mahavidyalaya and others, (2013) 10 SCC 324 and Jasmer
Singh Vs. State of Haryana and another, (2015) 4 SCC
458, Mr.Chaudhari, learned counsel for the respondents has
vehemently submitted that the petitions filed by the employer be
dismissed and the petitions filed by the private respondents be
allowed.
7. In rejoinder, Mr. Jani, learned counsel for the petitioner has
submitted that the decisions relied upon by the learned counsel
for the private respondents are not applicable to the facts of the
present case. He has submitted that mere sending on training
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
does not give any right as to employment. He has submitted that
since the private respondents were not employed by the
petitioner herein, there is no question of any payment to ESI.
According to him, the private respondents have not produced
any documentary evidence as to their being employment of the
Kiran Motors Limited. He has prayed to pass the order in favour
of the petitioner by quashing and setting aside the impugned
award of reinstatement with continuity of service and the portion
of back wages. In regards to the point of non-production of
material as to tendering of TDS to the Government, Mr. Jani,
learned counsel has submitted that this issue is between the
Government and petitioner herein and the respondents have no
locus standi in this regard. According to him, merely on the basis
of non-production of those materials, the respondents cannot be
treated as of workers of the petitioner.
8. In the case of Senior Superintendent Telegraph
(Traffic) Bhopal (supra), the Apex Court, while referring it's
own decision in the case of Jagbir Singh v. Haryana State
Agriculture Marketing Board, (2009) 15 SCC 327, has observed in
para-10 as under:-
10. In a recent judgment authored by one of us
(R.M.Lodha,J.) in Jagbir Singh v. Haryana State Agriculture
Marketing Board, (2009) 15 SCC 327, the aforesaid
decisions were noticed and it was stated: (SCC pp. 330 &
335, paras 7 & 14)
"7. It is true that the earlier view of this Court
articulated in many decisions reflected the legal
position that if the termination of an employee
was found to be illegal, the relief of
reinstatement with full back wages would
ordinarily follow. However, in recent past, there
has been a shift in the legal position and in a
long line of cases, this Court has consistently
taken the view that relief by way of
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
reinstatement with back wages is not automatic
and may be wholly inappropriate in a given fact
situation even though the termination of an
employee is in contravention of the prescribed
procedure. Compensation instead of
reinstatement has been held to meet the ends of
justice.
14. It would be, thus, seen that by a catena of
decisions in recent time, this Court has clearly
laid down that an order of retrenchment passed
in violation of Section 25-F although may be set
aside but an award of reinstatement should not,
however, be automatically passed. The award of
reinstatement with full back wages in a case
where the workman has completed 240 days of
work in a year preceding the date of
termination, particularly, daily wagers has not
been found to be proper by this Court and
instead compensation has been awarded. This
Court has distinguished between a daily wager
who does not hold a post and a permanent
employee."
9. In the case of Jasmer Singh (supra), the Apex Court while
referring to its earlier decision in the case of Deepali Gundu
Surwas V. Kranti Junior Adhyapak Mahavidyalaya, (2013) 10 SCC
324 has observed in para-22 as under:-
22. The relevant paragraph of the decision is extracted
hereunder:
(Depali Gundu case, SCC p. 344, para 22)
22. The very idea of restoring an employee to the
position which he held before dismissal or
removal or termination of service implies that the
employee will be put in the same position in
which he would have been but for the illegal
action taken by the employer. The injury suffered
by a person, who is dismissed or removed or is
otherwise terminated from service cannot easily
be measured in terms of money. With the
passing of an order which has the effect of
severing the employer employee relationship,
the latter's source of income gets dried up. Not
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
only the concerned employee, but his entire
family suffers grave adversities. They are
deprived of the source of sustenance. The
children are deprived of nutritious food and all
opportunities of education and advancement in
life. At times, the family has to borrow from the
relatives and other acquaintance to avoid
starvation. These sufferings continue till the
competent adjudicatory forum decides on the
legality of the action taken by the employer. The
reinstatement of such an employee, which is
preceded by a finding of the competent
judicial/quasi judicial body or Court that the
action taken by the employer is ultra vires the
relevant statutory provisions or the principles of
natural justice, entitles the employee to claim full
back wages. If the employer wants to deny back
wages to the employee or contest his
entitlement to get consequential benefits, then it
is for him/her to specifically plead and prove that
during the intervening period the employee was
gainfully employed and was getting the same
emoluments. Denial of back wages to an
employee, who has suffered due to an illegal act
of the employer would amount to indirectly
punishing the concerned employee and
rewarding the employer by relieving him of the
obligation to pay back wages including the
emoluments.
10. Having considered the submissions made on behalf of both
the sides and the decisions cited at the Bar as well as materials
placed on record and the impugned award, it appears that the
private respondents have filed the reference alleging that their
services came to be terminated by the employer without
following due procedure under the I. D. Act. It also appears that
the private respondents have also filed their respective
statement of claim in the matters. The petitioner herein viz.
Kiran Motors Limited has filed it's written statement and has
contested the same. The main contention raised by the Kiran
Motors Limited is that the workmen were working on contract
basis and they were not employee of the firm and according to
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
the contract, they were being paid the amount through by cash
vouchers. It is also the stand taken by it that there is no
relationship of the employer and employee between the parties.
The other defence raised by the Kiran Motors Limited is that the
persons, who have filed the reference were self-employed
persons.
11. It appears from the record that the Labour Court has
considered the claim statement as well as written statement and
oral and documentary evidence led by both the sides and
ultimately, passed the order of reinstatement with continuity of
service and portion of the back wages as referred to
hereinabove. On perusal of the impugned award of the Labour
Court, it appears that while considering the oral evidence, the
Labour Court has come to the conclusion that considering the
nature of the work and the supervision and control by the
management over the work of the private respondents, there
was relationship between the employer and employee between
the parties. For arrival of such conclusion, the Labour Court has
also taken into consideration the letter, which relates to sending
the persons at Puna, wherein the names of the persons have
been shown which includes the names of the respondents as well
as their birth dates and designations thereof. It also appears
from the oral evidence that the witness has examined by the
Kiran Motors Limited and has specifically admitted that overall
control and supervision of the work of the private respondents
was with the Senior Officer of the petitioner. Not only that, but, it
also appears from the evidence that the tools were being
supplied by the petitioner to the private respondents herein. At
the same time, so far as the stand of the petitioner that the
private respondents were self-employed and on contract
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
between the parties is concerned, no any document to
substantiate this plea has been produced by the petitioner
herein. In absence of such documentary evidence and other
attending circumstances, the Labour Court has come to the
conclusion that there is relationship of employer and employee
between the parties. This conclusion of the Labour Court is in
consonance with the materials placed on record.
12. It is pertinent to note that it was for the petitioner to prove
the facts that the private respondents were self-employed and
were working as per the contract. But, in absence of production
of the copy of the contract and the specific averments made by
the respondents that they were workers, the version of the
workers is supported by attending circumstances. Further, it also
appears from the record that no notice was issued or notice pay
or retrenchment allowance was paid by the petitioner to the
private respondents. The present petitioner is heavily relied upon
the alleged cash vouchers, but, there is no other documents,
which are important, such copy of the contract and other
attending documents are not produced by the petitioner and
when there is documentary evidence to show that the private
respondents were sent for training and in that letter, the
designation of the workmen has been shown, which clearly
establishes the facts that the private respondents were the
workmen. Therefore, it was incumbent on the part of the present
petitioner to follow the legal provisions of the I. D. Act before
terminating the service of the respondents. Since, the petitioner
has not followed the provisions of Section 25-F of the I.D. Act, the
termination of the services of the respondents is not in
consonance with the provisions of the I. D. Act.
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
13. Further, it also appears from the impugned award passed
by the Labour Court in the case of Sharma Alpeshkumar that the
Labour Court has specifically observed that there is clear cut
breach of Section 25-F, 25-G and 25-H of the I. D. Act. Under
these circumstances, it is not only the case of breach of Section
25-F of the I. D. Act, but it is the case of breach of Section 25-G
and Section 25-H of the I.D. Act. Therefore, there is no question
of granting any compensation in lieu of reinstatement.
14. Now, so far as granting of back wages of 25% in the case of
Sharma Alpesh Brahmedutt and 10% in the case of Panchal
Prashantkumar Rameshchandra is concerned, the Labour Court
has observed in the award that they are mechanic and,
therefore, they might not have unemployed during the period
from their termination till passing of the impugned award. This
observation has been contested by Mr.Chaudhari, learned
counsel for the private respondents that the observation made
by the Labour Court in this regard is not based on sound
principle. He has vehemently submitted that when termination of
the service of the private respondents is held to be illegal, then,
the Labour Court ought to have granted 100% back wages.
According to him, the Labour Court has curtailed the back wages
on assumption that it cannot be believed that the workmen
being car mechanic, would have remained unemployed and
seated idol, that too, now a days, the user of the car is increased
day by day. According to him, the Labour Court has not given
any cogent and convincing reasons for curtailment of back
wages.
15. Now, so far as the issue of back wages is concerned, it is
well settled that the back wages could not be awarded by the
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
Court as of right to the workman consequent upon setting aside
his dismissal / termination order. In other word, the workman has
no right to claim back wages from the employer as of right only
because the Court has set aside his dismissal order in his favour
and directed reinstatement in service. The granting of back
wages is depending upon the facts and circumstances of each
case. There is no straitjacket formula for granting back wages in
case of setting aside of the order of dismissal or termination.
16. In the case of Sharma Alpesh Brahmedutt considering the
factual aspects of the case, the Labour Court has considered the
oral evidence of the workman wherein he has admitted that prior
to joining the petitioner, he was doing the car repairing work for
almost 6 to 7 years and was carrying out the said work as and
when called by the private parties. On perusal of the oral
evidence in the form of affidavit of Sharma Alpesh Brahmedutt,
copy of which is placed on record at page No.51, it appears that
he has not stated in his chief-examination regarding the fact that
after termination of his service, he was unemployed. In his cross-
examination, he has specifically admitted that after June 2004,
as and when somebody called him for car repairing, he was
doing so. He has also admitted that the customers were also
calling him from his residence for repairing of the car. Thus, the
factum of some sort of earning by the employee is established.
Therefore, the employee is not entitled to get 100% back wages.
Thus, considering the factual aspects of the case, the Labour
Court has not committed an error of facts and law in granting
back wages of 25%.
17. Now, so far as the workman Prashantkumar
Rameshchandra Panchal is concerned, on perusal of his oral
evidence, the copy of which is produced in Special Civil
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
Application No.13337 of 2015 at page No.34 onward, it appears
that he has specifically stated in his chief-examination that he
was earning Rs.400/- to Rs.500/- and his father was serving and
from that income, the family was being maintained. During his
cross-examination on behalf of the employer, it appears that he
has admitted that he has experience of car repairing work. The
employer itself has put a question to him that after 2004 he has
not served in any other company and he has not filed any
application for employment in any other company. This fact itself
suggests that the employer has admitted the fact that the
workman Prashantkumar Panchal was not gainful employee.
Under these circumstances, the observation of the Labour Court
in the case of Prashantkumar Panchal in granting back wages of
10% is concerned is not in consonance with the factual matrix.
The Labour Court has granted the back wages of 10% only on
presumption and assumption. When the workman has
specifically stated that he was earning Rs.400 to Rs.500 and that
fact has not been challenged by the employer, it means that his
income during the interregnum period was just Rs.400 to Rs.500
per month. Thus, the factum of some sort of income is
established. The employee i.e. Prashantkumar Rameshchandra
Panchal is not entitled to get 100% back wages. However, the
Labour Court has granted just 10% back wages to
Prashantkumar Rameshchandra Panchal is erroneous one. It
needs to be enhanced from 10% to 25%.
18. In view of the aforesaid discussions, the petitions filed by
the Kiran Motors Limited being Special Civil Application No.7327
of 2015 and Special Civil Application No.7649 of 2015 and
Special Civil Application No.13345 of 2015 filed by Alpeshkumar
Brahmedutt Sharma are liable to be dismissed. Whereas, Special
Civil Application No.13337 of 2015 filed by Prashankumar
C/SCA/7327/2015 JUDGMENT DATED: 27/08/2021
Rameshchandra Panchal needs to be partly allowed.
19. In view of the above, Special Civil Application No.7327 of
2015 and Special Civil Application No.7649 of 2015 filed by the
petitioner - Kiran Motors Limited as well as Special Civil
Application No.13345 of 2015 filed by Alpeshkumar Brahmedutt
Sharma are hereby dismissed. Rule is discharged in all these
three petitions. Interim relief, if any, stands vacated forthwith.
19.1 Special Civil Application No.13337 of 2015 filed by
Prashantkumar Rameshchandra Panchal is partly allowed. While
upholding the order of reinstatement with continuity of service,
the employer is directed to pay 25% back wages instead of 10%
back wages to Panchal Prashantkumar Rameshchandra. The
impugned award dated 12.12.2014 passed by the Labour Court,
Ahmedabad in Reference T. No. 1400 of 2004 is hereby modified
to the aforesaid extent.
19.2 The employer - Kiran Motors Limited is hereby directed to
comply with the aforesaid order and the award passed by the
Labour Court as expeditiously as possible, preferably, within a
period of two months from the date of receipt of the writ of this
order. The amount, if any, paid during the pendency of this
petition may be adjusted towards the amount payable to the
respective workmen.
20. Rule is made absolute to the aforesaid extent in Special
Civil Application No.13337 of 2015. Interim relief, if any, stands
vacated forthwith. No order as to costs.
Sd/-
(DR. A. P. THAKER, J)
V.R. PANCHAL
