Madhya Pradesh High Court
The Chairman,Gwalior Vyapar Mela ... vs The Presiding Officer on 13 October, 2025
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1 WP. No. 6447 of 2012
IN THE HIGH COURT OF MADHYA PRADESH
AT G WA L I O R
BEFORE
HON'BLE SHRI JUSTICE ANAND SINGH BAHRAWAT
ON THE 13th OF OCTOBER, 2025
WRIT PETITION No. 6447 of 2012
THE CHAIRMAN, GWALIOR VYAPAR MELA PRADHIKARAN
AND ANOTHER
Versus
THE PRESIDING OFFICER AND ANOTHER
Appearance:
Shri Arun Dudawat - Advocate for petitioners.
None for respondents.
ORDER
This petition, under Article 226/227 of the Constitution is filed assailing
the order dated 25.03.2006 passed by respondent No.3 whereby he referred the
matter for adjudication to the Labour Court while invoking the provisions under
Section 10 of Industrial Disputes, Act, 1947 on a dispute as mentioned in the
schedule and award dated 26.03.2012 passed by Labour Court No.1 Gwalior
answering the reference in favour of workman by holding termination to be
unlawful and directed for reinstatement along with 20% back-wages.
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2. Learned counsel for the petitioner/employer had primarily raised two
pivotal grounds:-
(i) As the establishment of Gwalior Vyapar Mela Pradhikrana is
not an Industrial Establishment, therefore, no such dispute which
comes within the purview of 'Industrial Disputes' exists.
(ii) As in the establishment of Gwalior Vyapar Mela Pradhikaran,
no sanctioned vacant post of Clerk-cum- Computer Operator exists,
therefore, the impugned award thereby directing the reinstatement of
respondent No.1 is illegal and contrary to law.
3. Learned counsel for the petitioner while referring to the judgment rendered
by Hon'ble Apex Court in the case of State of Madhya Pradesh & Ors. Vs.
Somdutt Sharma reported in (2021) 12 SCC 53 submits that in the said
judgment the Hon'ble Court has held that since the Irrigation Department does
not carry on the manufacturing process, therefore, Irrigation Department will not
be an Industrial Establishment within the meaning of Section 25-L of Industrial
Disputes Act. In the light of the said judgment, the Gwalior Vyapar Mela
Prathikaran also will not be an Industrial Establishment within the meaning of
Section 25-L of Industrial Disputes Act.
4. The petitioner has denied that it falls under the definition of 'industry'
under the Industrial Disputes Act since it is not carrying out any activity, which
can be termed as manufacturing. The judgment of the Hon'ble Supreme Court in
Banglore Water Supply & Sewage Disposal Board Vs. Rajappa, reported as
AIR 1978 SC 548 is still the leading judgment on the point. The famous triple
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test laid down in the said judgment still holds the field. The three tests for
determining whether an establishment is an industry or not, are :
a) systematic activity
b) organized by cooperation between employer & employees
c) for the production and/or distribution of goods & services calculated to
satisfy human wants or wishes.
5. A systematic activity which is organized or arranged in a manner in which
the trade or business is generally organized or arranged, would be an industry,
despite the fact that it proceeds from charitable motives.
6. A service provided to the public which satisfies human wants would also
bring the establishment in the fold of 'industry'. By the said judgment, the
Hon'ble Supreme Court overruled its earlier judgment and held that Safdarjang
Hospital Delhi was an industry.
7. The Apex Court in the matter of Des Raj & ors. Vs. State of Punjab &
Ors. (1988) 2 SCC 537, while referring to various law developed at that time
including its judgment passed by seven judges bench in Banglore Water Supply
(supra) had dealt with the proposed amendment in the definition of 'Industry' as
defined u/S.2(j), vide amending Act 46 to 1982, had dismissed and held as
under:-
"....Then came the case of Bangalore Water Supply and Sewerage
Board v. A. Rajappa & Ors [1978] 2 SCC 213. This time the same point
was before a seven-Judge Bench of this Court. This judgment
undertood a review of the entire law. Krishna Iyer, J. spoke for himself,
Bhagwati and Desai, JJ. In paragraph 139 of the judgment it was
stated:
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"Banerjee (supra) amplified by Corporation of Nagpur (supra), in
effect met with its waterloo in Safdarjung (supra). But in this latter
case two voices could be herard and subsequent rulings zigzagged
and conflicted precisely because of this built-in ambivalence. It
behoves us, therefore, hopefully to abolish blurred edges, illumine
penumbral areas and overrule what we regard as wrong.
Hesistency, half-tones and hunting with the hounds and running
with the hare can claim heavy penalty in the shape of industrial
confusion, adjudicatory quandary and administrative perplexity at
a time when the nation is striving to promote employment through
diverse strategies which need, for their smooth fulfilment, less stress
and distress, more mutual understanding and trust based on a
dynamic rule of law which speaks clearly, firmly and humanely. If
the salt of law lose its savour of progressive certainty where with
small it be stalled? So we proceed to formulate the principles,
deducible from our discussion which are decisive, positively and
negatively, of the identity of industry under the Act. We speak, not
exhaustively, but to the extent covered by the debate at the bar and,
to that extent, authoritatively, until overruled by a larger bench or
superseded by the legislative branch."
"Industry as defined in section 2(j) and explained
in Banerjee (supra) has a wide import.
(a) Where (i) systematic activity, (ii) organised by cooperation
between employer and employee (the direct and substantial element
is chimerical) (iii) for the production and/or distribution of goods
and services calculated to satisfy human wants and wishes (not
spiritual or religious but inclusive of material things or services
geared to celestial bliss e.g. making, on a large scale prasad or
food), prima facie, there is an industry in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the
venture in the public, joint, private or other sector
(c) The true focus is functional and the decisive test is the nature of
the activity with special emphasis on the employer-employee
relations.
(d) If the organisation is a trade or business it does not cease to be
one because of philanthropy animating the undertaking.
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Although section 2(j) uses words of the widest amplitude in its two
limbs, their meaning cannot be magnified to over-reach itself.
Undertaking must suffer a contextual and associational shrinkage as
explained in Banerjee and in this judgment; so also, service, calling
and the like. This yields the inference that all organized activities
possessing the triple elements in I, although not trade or business, may
still be industry provided the nature of the activity, viz. the employer-
employee basis, bears resemblance to what we find in trade or
business. This takes into the fold of industry undertakings, callings and
services, adventures 'analogous to the carrying on of the trade or
business'. All features, other than the methodology of carrying on the
activity viz. in organizing the cooperation between employer and
employee, may be dissimilar. It does not matter, if on the employment
terms there is analogy.
Application of these guidelines should not stop short of their logical
reach by invocation of creeds, cults or inner sense of incongruity or
outer sense of motivation for or resultant of the economic operations.
The ideology of the Act being industrial peace, regulation and
resolution of industrial disputes between employer and workmen, the
range of this statutory ideology must inform the reach of the statutory
definition. Nothing less, nothing more.
(a) The consequences are (i) professions,
(ii) clubs, (iii) educational institutions, (h) cooperatives, (v) research
institutes, (vi) charitable projects and (vii) other kindred adventures, if
they fulfil the triple tests listed in I cannot be exempted from the scope
of section 2(j).
(b) A restricted category of professions, clubs, cooperatives and even
gurukulas and little research labs, may qualify for exemption if, in
simple ventures, substantial and, going by the dominant nature
criterion, substantively, no employees are entertained but in minimal
matters, marginal employees are hired without destroying the non-
employee character of the unit.
(c) If, in a pious or altruistic mission many employ themselves, free or
for small honoraria or like return, mainly drawn by sharing in the
purpose or case, such as lawyers volunteering to run a free legal
services clinic or doctors serving in their spare hours in a free medical
centre or ashramites working at the bidding of the holiness, divinity or
like central personality, and the services are supplied free or at nominal
cost and those who serve are not engaged for remuneration or on the
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basis of master and servant relationship, then, the institution is not an
industry even if stray servants, manual or technical, are hired. Such
eleemosynary or like undertakings alone are exempt-not other
generosity, compassion, developmental passion or project.
The dominant nature test:
(a) Where a complex of activities, some of which qualify for
exemption others not, involves employees on the total undertaking,
some of whom are not workmen as in the University of Delhi v.Ram
Nath, [1964] 2 SCR 703 or A some departments are not productive
of goods and services if isolated, even then, the predominant nature
of the services and the integrated nature of the departments as
explained in the Corporation of Nagpur, will be the true test. The
whole undertaking will be industry although those who are not
workmen by definition may not benefit by the status.
(b) Notwithstanding the previous clauses, sovereign functions, strictly
understood, (alone) qualify for exemption, not the welfare activities or
economic adventures undertaken by government or statutory bodies.
(c) Even in departments discharging sovereign functions, if there are
units which are industries and they are substantially severable, then
they can be considered to come within section 2(j).
(d) Constitutional and competently enacted legislative provisions may
well remove from the scope of the Act categories which otherwise may
be covered thereby."
Beg, CJ., wrote a separate judgment and prefaced it by saying:
"I am in general agreement with the line of thinking adopted and
the conclusions reached by my learned brother Krishna Iyer."
In paragraph 149 of the judgment, the learned Chief Justice observed:
"In his heroic efforts, my learned brother Krishna Iyer, if I may say
so with great respect, has not discarded the tests of industry
formulated in the past. Indeed, he has actually restored the
tests laid down by this Court in D.N. Banerjee's case, and, after
that, in Corporation of the City of Nagpur v. Its Employees,
and State of Bombay v. The Hospital Mazdoor Sabha to their
pristine glory."
The learned Chief Justice again stated:
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"Each of us is likely to have a subjective notion about industry. For
objectivity, we have to look first to the words used in the statutory
provision defining industry in an attempt to find the meaning. If that
meaning is clear, we need proceed no further. But, the trouble here
is that the words found there do not yield a meaning so readily.
They refer to what employers or workers may do as parts of their
ordinary avocation or business in life .. "
"Thus, in order to draw the circle of industry, to use the expression
of my learned brother Iyer, we do not find even the term workman
illuminating. The definition only enables us to see that certain
classes of persons employed in the service of the State are excluded
from the purview of industrial dispute which the Act seeks to
provide for in the interests of industrial peace and harmony between
the employers and employees so that the welfare of the nation is
secured. The result is that we have then to turn to the preamble to
find the object of the Act itself, to the legislative history of the Act,
and to the socio-economic ethos and aspirations and needs of the
times in which the Act was passed."
After quoting the definition of industry, the learned Chief Justice
proceeded to say in paragraph 158 of the judgment:
"It seems to me that the definition was not meant to provide more
than a guide. It raises doubts as to what could be meant by the
calling of employers even if business, trade, undertaking or
manufacture could be found capable of being more clearly
delineated. It is clear that there is no mention here of any profit
motive. Obviously, the work manufacture of employers could not be
interpreted literally. It merely means a process of manufacture in
which the employers may be engaged. It is, however, evident that
the term employer necessarily postulates employees without whom
there can be no employers ...... "
In paragraph 165 of the judgment, the learned Chief Justice added: G
"I have contended myself with a very brief and hurried outline of my
line of thinking partly because I am in agreement with the conclusions
of my learned brother Krishna Iyer and I also endorse his reasoning
almost wholly, but even more because the opinion I have dictated just
now must be given today if I have to deliver it at all. From tomorrow I
cease to have any authority as a Judge to deliver it. Therefore, I have
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really no time to discuss the large number of cases cited before us,
including those what are known as sovereign functions."
Chandrachud, J., as he then was, on behalf of himself Jaswant Singh
and Tulzapurkar, JJ. added a note by saying:
"We are in respectful agreement with the view expressed by Krishna
Iyer, J. that the appeal should be dismissed. We will give our
reasons later indicating the area of concurrence and divergence,
(underlining is ours) if any, on the various points in controversy on
which our learned Brother has dwelt."
On 7th of April, the reasonings were delivered by Chief Justice
Chandrachud for himself as by then Jaswant Singh, J. delivered a
separate set of reasonings for himself and Tulzapurkar, J. The learned
Chief Justice (because by then he had assumed that office) referred to
several authorities and tests and in paragraph 181 of the judgment
stated:
"........ These refinements are, with respect, are not warranted by the
words of the definition, apart from the consideration that in practice
they make the application of the definition to concrete cases
dependent upon a factual assessment so highly subjective as to lead
to confusion and uncertainty in the understanding of the true legal
position. Granting that the language of the definition is so wide that
some limitation ought to be read into it, one must step at a point
beyond which the definition will skid into a domain too rarefied to
be realistic. Whether the cooperation between the employer and the
employee is the proximate cause of the ultimate product and bears
direct nexus with it is a test which is almost impossible of
application with any degree of assurance or certitude. It will be as
much true to say that the solicitor's assistant, managing clerk,
librarian and the typist do not directly contribute to the intellectual
end product which is a creation of his personal professional skill as
that, without their active assistance and cooperation it will be
impossible for him to function effectively. The unhappy state of
affairs in which the law is marooned will continue to baffle the
skilled professional and his A employees alike as also the Judge
who has to perform the unenviable task of sitting in judgment over
the directness of the cooperation between the employer and the
employee, until such time as the legislature decides to manifest its
intention by the use of clear and indubious language. Besides the
fact that this Court has so held in National Union of Commercial
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Employees v. M.R. Meher, lndustrial Tribunal, Bombay, [1962]
Supp. 3 SCR 157 the legislature will find a plausible case for
exempting the learned and liberal professions of lawyers, solicitors,
doctors, engineers, chartered accountants and the like from the
operation of industrial laws. But until that happens, I consider that
in the present state of the law it is difficult by judicial interpretation
to create exemptions in favour of any particular class."
The remaining two learned Judges added their separate opinion and in
the concluding part stated:
"In view of the difficulty experienced by all of us in defining the true
denotation of the term industry and divergence of opinion in regard
thereto-as has been the case with this Bench also- we think, it is
high time that the Legislature steps in with a comprehensive bill to
clear up the fog and remove the doubts and set at rest once for all
the controversy which crops up from time to time in relation to the
meaning of the aforesaid term rendering it necessary for larger
Benches of this Court to be constituted which are driven to the
necessity of evolving a working formula to cover particular cases."
The ultimate position available from the seven-Judge Bench decision,
therefore, is that while three learned Judges delivered their view
through Krishna Iyer, J., Beg CJ spoke somewhat differently, yet agreed
with the conclusion reached by Krishna Iyer J. Chandrachud, CJ. also
agreed with the majority while the remaining two learned Judges
looked for legislative clarification to meet the situation.
8. Perhaps keeping in view the observations of the learned Judges
constituting the seven-Judge Bench, the definition of industry as
occurring in section 2(j) of the Act was amended by Act 46 of 1982.
Though almost six years have elapsed since the amendment came on
to the Statute Book, it has not been enforced yet. Bare Acts and
Commentaries on the Industrial Disputes Act have, however, brought in
the new definition by deleting the old one with a note that the new
provision has yet to come into force. This situation has further added to
the confusion.
13. The Administrative Report of the facts found by the High Court in
the instant case have attempted to draw out certain special features.
The legal position has been indicated in the earlier part of our
judgment. On the tests, as already laid down in the judgments, we do
not think these facts found in this case can take out the Irrigation
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Department outside the purview of the definition of 'industry'. We have
already referred to the Dominant Nature test evolved by Krishna Iyer, J.
The main functions of the Irrigation Department where subjected to the
Dominant Nature test clearly come within the ambit of industry. We
have not been able to gather as to why even six years after the
amendment has been brought to the definition of industry in section
2(j) of the Act the same has not been brought into force. This Court on
more than one occasion has indicated that the position should be
clarified by an appropriate amendment and when keeping in view the
opinion of this Court, the law was sought to be amended, it
is appropriate that the same should be brought into force as such or
with such further alterations as may be considered necessary, and the
legislative view of the matter is made known and the confusion in the
field is cleared up.
14. For the reasons we have indicated above, these appeals succeed.
We make it clear that in the event of the definition of industry being
changed either by enforcement of the new definition of industry or by
any other legislative change, it would always be open to the aggrieved
Irrigation Department to raise the issue again and the present decision
would not stand in the way of such an attempt in view of the altered
situation. The appeals are allowed without costs"
8. In the case on hand, the petitioner has led no evidence to show that the
establishment i.e. the petitioner where the respondent was working did not fall
under the definition of Section 2(j) of Industrial Disputes Act, in order to claim
exemption from the all-encompassing definition of industry as defined under the
said section. Thus, the first ground raised by the petitioner is not tenable and
therefore, the same is rejected.
9. With regard to the second ground, it is submitted by the counsel for the
petitioner that as the appointment of the respondent was as daily wager on stop
gap arrangement and the respondent was appointed for the preparation of trade
fair which is organized every year and in compliance of provisions of Section
17B of Industrial Disputes Act, the petitioner is paying wages to the respondent
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and also since there is no sanctioned vacant post, the order of reinstatement
passed by the Labour Court, No.1 Gwalior is bad in law.
10. The aforesaid argument raised on behalf of the petitioner has no force, as it
is established by cogent reasoning by learned Labour Court that the respondent
had worked for more than 240 days in a calendar year, which could not be
rebutted by the petitioner, thus, employer-employee relationship is existed
between the two, thus, the order of Labour court cannot be said to be bad.
11. Another issue raised by counsel for the petitioner that whether the
respondent who had worked from October, 2000 till August, 2004, is entitled for
reinstatement or could be given monetary compensation in lieu thereof.
12. So far as the above question of reinstatement with back wages with
compensation of 20% amount is concerned, the Supreme Court in the matter
of Bharat Sanchar Nigam Limited Vs. Bhurumal reported in (2014) 7 SCC
177 has held as under:-
"33. It is clear from the reading of the aforesaid judgments that the ordinary
principle of grant of reinstatement with full back wages, when the termination is
found to be illegal is not applied mechanically in all cases. While that may be a
position where services of a regular/permanent workman are terminated illegally
and/or mala fide and/or by way of victimisation, unfair labour practice, etc.
However, when it comes to the case of termination of a daily-wage worker and
where the termination is found illegal because of a procedural defect, namely, in
violation of Section 25-F of the Industrial Disputes Act, this Court is consistent
in taking the view that in such cases reinstatement with back wages is not
automatic and instead the workman should be given monetary compensation
which will meet the ends of justice. Rationale for shifting in this direction is
obvious."
13. The Supreme Court in the case of Hari Nandan Prasad Vs. Food Corporation of
India, reported in (2014) 7 SCC 190 has held as under:-
''19. The following passages from the said judgment would reflect the
earlier decisions of this Court on the question of reinstatement: (BSNL case,
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SCC pp. 187-88, paras 29-30) "29. The learned counsel for the appellant
referred to two judgments wherein this Court granted compensation instead of
reinstatement. In BSNL v. Man Singh, this Court has held that when the
termination is set aside because of violation of Section 25-F of the Industrial
Disputes Act, it is not necessary that relief of reinstatement be also given as a
matter of right. In Incharge Officer v. Shankar Shetty, it was held that those
cases where the workman had worked on daily-wage basis, and worked
merely for a period of 240 days or 2 to 3 years and where the termination had
taken place many years ago, the recent trend was to grant compensation in
lieu of reinstatement.
30. In this judgment of Shankar Shetty, this trend was reiterated by
referring to various judgments, as is clear from the following discussion:
(SCC pp. 127-28, paras 2-4) '2. Should an order of reinstatement
automatically follow in a case where the engagement of a dailywager has
been brought to an end in violation of Section 25-F of the Industrial Disputes
Act, 1947 (for short "the ID Act")? The course of thedecisions of this Court in
recent years has been uniform on the above question.
3. In Jagbir Singh v. Haryana State Agriculture Mktg. Board, delivering
the judgment of this Court, one of us (R.M. Lodha, J.) noticed some of the
recent decisions of this Court, namely, U.P. State Brassware Corpn. Ltd. v.
Uday Narain Pandey, Uttaranchal Forest Development Corpn. v. M.C.
Joshi, State of M.P. v. Lalit Kumar Verma, M.P. Admn. v. Tribhuban, Sita Ram
v. Moti Lal Nehru Farmers Training Institute, Jaipur Development Authority
v. Ramsahai, GDA v. Ashok Kumar and Mahboob Deepak v. Nagar
Panchayat, Gajraula and stated as follows: (Jagbir Singh case, 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 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,
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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."
4. Jagbir Singh has been applied very recently in Telegraph Deptt. v.
Santosh Kumar Seal, wherein this Court stated: (SCC p. 777, para 11)
11. In view of the aforesaid legal position and the fact that the workmen
were engaged as dailywagers about 25 years back and they worked hardly for
2 or 3 years, relief of reinstatement and back wages to them cannot be said to
be justified and instead monetary compensation would subserve the ends of
justice.'"
****
21. We make it clear that reference to Umadevi, in the aforesaid
discussion is in a situation where the dispute referred pertained to termination
alone. Going by the principles carved out above, had it been a case where the
issue is limited only to the validity of termination, Appellant 1 would not be
entitled to reinstatement...........''
14. The Supreme Court in the matter of O.P. Bhandari Vs. Indian Tourism Development
Corporation Limited & Others reported in (1986) 4 SCC 337 has held as under :-
"6. Time is now ripe to turn to the next question as to whether it is obligatory to
direct reinstatement when the concerned regulation is found to be void. In the
sphere of employer employee relations in public sector undertakings, to
which Article 12 of the Constitution of India is attracted, it cannot be posited that
reinstatement must invariably follow as a consequence of holding that an order of
termination of service of an employee is void. No doubt in regard to "blue collar"
workmen and "white collar" employees other than those belonging to the
managerial or similar high level cadre, reinstatement would be a rule, and
compensation in lieu thereof a rare exception. Insofar as the high level managerial
cadre is concerned, the matter deserves to be viewed from an altogether different
perspective -- a larger perspective which must take into account the demands of
National Interest and the resultant compulsion to ensure the success of the public
sector in its competitive co-existence with the private sector. The public sector can
never fulfil its life aim or successfully vie with the private sector if it is not
managed by capable and efficient personnel with unimpeachable integrity and the
requisite vision, who enjoy the fullest confidence of the "policy-makers" of such
undertakings. Then and then only can the public sector undertaking achieve the
goals of (1) maximum production for the benefit of the community, (2) social
justice for workers, consumers and the people, and (3) reasonable return on the
public funds invested in the undertaking.
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7. It is in public interest that such undertakings or their Boards of Directors are
not compelled and obliged to entrust their managements to personnel in whom, on
reasonable grounds, they have no trust or faith and with whom they are in a bona
fide manner unable to function harmoniously as a team working arm-in-arm with
success in the aforesaid three- dimensional sense as their common goal. These
factors have to be taken into account by the court at the time of passing the
consequential order, for the court has full discretion in the matter of granting
relief, and the court can sculpture the relief to suit the needs of the matter at hand.
The court, if satisfied that ends of justice so demand, can certainly direct that the
employer shall have the option not to reinstate provided the employer pays
reasonable compensation as indicated by the court."
15. In the case of Deepali Gundu Surwase Vs. Kranti Junior Adhyapak
Mahavidyalaya and others, (2013) 10 SCC 324 and U.P. State Brassware
Corpn. Ltd. Vs. Uday Narayan Pandey, (2006) 1 SCC 479 the Apex Court has
given guidance regarding reinstatement. The Apex Court in the case of Deepali
Kundu Surwase (supra) clarified that reinstatement with back wages would not
be automatic, it differs from case to case and culled out some propositions which
are 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
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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-Aof 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 226or 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.
NEUTRAL CITATION NO. 2025:MPHC-GWL:25650
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-àvis 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
Private Limited v. Employees.
38.7. The observation made in J.K. Synthetics Ltd. v. K.P.
Agrawal(supra) that on reinstatement the employee/workman cannot
claim continuity of service 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."
16. The work of respondent was found to be of temporary in nature and the
order of termination does not indicate any unfair labour practice, therefore, it is
proper to grant monetary compensation instead of reinstatement.
17. Learned counsel for petitioner submitted that similar controversy has been
resolved by identical petition bearing WP. No.439/2016 (Gwalior Vyapar Mela
v. Jitendra Singh) decided by Co-ordinate Bench of this Court vide order dated
4.3.2025 and Writ Appeal bearing WA. No.964/2025 (Jitendra Singh Gurjar v.
NEUTRAL CITATION NO. 2025:MPHC-GWL:25650
Gwalior Vyapar Mela Pradhikaran & Ors.) preferred thereagainst has been
dismissed by the Division Bench of this Court vide order dated 30.4.2025.
18. On the last date of listing i.e. on 14/08/2025, no-one appeared for
respondent No.2, therefore, this Court had directed the office/Registry to issue
SPC to respondent No.2. However, despite issuance of SPC, no-one is appearing
for respondent No.2, today.
19. In view of above, the impugned order dated 26.03.2012 passed by Labour
Court No.1, Gwalior in COC:33/A/I.D.Act/06 (reference) is modified and in
place of reinstatement, it is directed that the respondent shall be entitled to
monetary compensation of Rs.2,00,000/-(Rupees Two Lacs only).
20. With the aforesaid, this petition stands disposed of.
(ANAND SINGH BAHRAWAT)
pd JUDGE
