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Secretary vs Bhaba Sundar Dalai And .... Opp. Parties
2026 Latest Caselaw 2503 Ori

Citation : 2026 Latest Caselaw 2503 Ori
Judgement Date : 17 March, 2026

[Cites 25, Cited by 0]

Orissa High Court

Secretary vs Bhaba Sundar Dalai And .... Opp. Parties on 17 March, 2026

Author: Chittaranjan Dash
Bench: B. P. Routray, Chittaranjan Dash
      IN THE HIGH COURT OF ORISSA AT CUTTACK
                        W.P.(C) No.8128 of 2019


  Secretary,     Berhampur ....                                   Petitioner
  Cooperative Central Bank
  Ltd., Berhmapur, Ganjam
                                            Mr. Yasobant Das, Sr. Advocate

                                     -versus-

  Bhaba Sundar Dalai and ....                                   Opp. Parties
  Others
                                                  Mr. S. Mishra, Advocate
                                             For O.P. Nos. 1 to 6-Workmen

                                CORAM:
      THE HON'BLE MR. JUSTICE B. P. ROUTRAY
  THE HON'BLE MR. JUSTICE CHITTARANJAN DASH

                       Date of Judgment: 17.03.2026

Chittaranjan Dash, J.

1. By means of the present Writ Petition, the Petitioner- Management calls in question the legality and propriety of the Award dated 26.09.2018 passed by the learned Presiding Officer, Industrial Tribunal, Bhubaneswar in I.D. Case No.19 of 2015, whereby the learned Tribunal, while answering the reference in favour of the Opposite Party-Workmen, directed the Petitioner- Management to reinstate the concerned workmen in its establishment and further directed payment of 20% of the back wages to them.

2. The background facts, in brief, are that the Berhampur Cooperative Central Bank Ltd., the Petitioner-Management, is a registered Central Cooperative Society under the Odisha Cooperative Societies Act, 1962. In order to augment its deposits, the Bank introduced a Daily Deposit Scheme pursuant to a Resolution dated 17.03.1998, and for the purpose of mobilising deposits engaged certain Commission Agents/Daily Deposit Agents. In pursuance thereof, 26 Daily Deposit Agents were engaged in different branches of the Bank, including Opp. Parties- Workmen, who are the Opposite Parties in the present Writ Petition, and agreements were executed with them at the time of their engagement. Subsequently, the Registrar, Cooperative Societies, Odisha, by communication dated 03.02.2004 bearing Letter No.1812, directed all Cooperative Banks and Urban Cooperative Banks not to engage new agents under the Daily Deposit Scheme and further directed that no new Daily Deposit Accounts be opened, save and except after verification of the existing accounts and subject to prior approval of the Registrar. The said direction was reiterated by the Registrar vide Letter No.2074 dated 05.08.2014, instructing all Managers and Branch Managers of Cooperative Banks not to open Daily Deposit Accounts and to implement the earlier directions issued on 03.02.2004 in their true spirit. The aforesaid directions were also published in Odia daily newspapers. In view of the losses allegedly sustained under the Daily Deposit Scheme, the Managing Committee of the Bank, by Resolution dated 07.11.2014, resolved not to continue the services of the Daily Deposit Agents and consequently, by Letter No.4696 dated

17.01.2015, the Branch Managers were informed regarding the closure of the said Scheme.

Aggrieved thereby, the Opposite Party-Workmen initially approached this Court in W.P.(C) No.20517 of 2014, which was disposed of by order dated 05.08.2014 directing the competent authority to consider the representation of the Opposite Parties. Upon rejection of their representation, the Opposite Parties once again approached this Court in W.P.(C) No.2389 of 2015. Pursuant to the liberty granted therein, the Opp. Parties-Workmen invoked the jurisdiction of the Industrial Tribunal, Bhubaneswar by filing an application under Section 2-A(2) of the Industrial Disputes Act, 1947, contending that the action of the Petitioner-Management in discontinuing their engagement was illegal and unjustified and seeking appropriate relief. The Petitioner-Management, upon notice, entered appearance and contested the claim, whereafter both Parties adduced oral as well as documentary evidence before the learned Tribunal. Upon consideration of the materials on record, the learned Industrial Tribunal, Bhubaneswar passed the Award dated 26.09.2018 in I.D. Case No.19 of 2015, directing reinstatement of the Opp. Parties-Workmen in the establishment of the Petitioner- Management with 20% back wages.

Being aggrieved by the said Award, particularly the direction for reinstatement with partial back wages, the Petitioner- Management has instituted the present W.P.(C) No.8128 of 2019 contending, inter alia, that the Award is illegal and perverse; that the Daily Deposit Scheme itself having been discontinued and the posts having ceased to exist, the direction for reinstatement is incapable of implementation; that the proceedings before the

Tribunal were not maintainable; and further that no employer- employee relationship existed between the Petitioner-Management and the Opposite Parties, thereby rendering the impugned Award liable for interference by this Court.

3. Mr. Yasobant Das, learned Senior Counsel appearing for the Petitioner-Management, assailed the impugned Award contending that the learned Tribunal committed a manifest error in directing reinstatement of the Opp Party-Workmen, inasmuch as the Daily Deposit Scheme under which the Opposite Parties were engaged had already been discontinued by the Bank pursuant to the directions issued by the Registrar, Cooperative Societies and the subsequent resolution of the Managing Committee. It was urged that once the Scheme itself stood closed and the very basis of engagement ceased to exist, the direction for reinstatement becomes incapable of implementation in law. It was further contended that the engagement of the Opposite Parties was purely contractual in nature as commission agents under specific agreements and that no relationship of employer and employee existed between the Petitioner-Management and the Opposite Parties. According to learned Senior Counsel, the learned Tribunal failed to appreciate the said aspect and erroneously proceeded to treat the Opposite Parties as workmen under the Industrial Disputes Act, 1947. It was also submitted that the Tribunal travelled beyond the scope of the dispute and granted a relief which is otherwise impermissible in law when the post itself stands abolished. In support of the aforesaid contentions, reliance has been placed on the decisions in Municipal Council, Sujanpur vs. Surinder Kumar, (2006) 5 SCC 173; Assistant Engineer, Rajasthan State Agriculture Marketing

Board, Sub-Division, Kota vs. Mohan Lal, Civil Appeal No.6795 of 2013; and K.V. Anil Mithra & Anr. vs. Sree Sankaracharya University of Sanskrit & Anr., (2022) 17 SCC 505.

4. Per contra, Mr. Mishra, learned counsel appearing for the Opp. Parties-Workmen, vehemently contended that the nature of engagement of the Opposite Parties with the Petitioner- Management stands settled in view of the authoritative pronouncement of the Hon‟ble Supreme Court in Indian Banks Association vs. Workmen of Syndicate Bank & Ors., AIR 2001 SC 946, wherein it has been held that deposit collectors performing similar duties would fall within the ambit of "workmen" under the Industrial Disputes Act, 1947 and that the commission earned by them constitutes wages dependent on productivity. It was thus submitted that the aforesaid issue having already been settled by the Hon‟ble Apex Court, the same requires no further re-examination in the present proceeding. Learned counsel also urged that the Petitioner-Management, having failed to comply with the mandatory requirement of Section 17-B of the Industrial Disputes Act, 1947, is disentitled from assailing the Award on merits before this Court.

5. During the course of hearing of the present Writ Petition, although submissions had been advanced on the merits of the dispute including the question relating to the existence of an employer-employee relationship between the Petitioner- Management and the Opp. Parties-Workmen, the learned counsel appearing for the respective Parties ultimately confined their arguments to the limited issue concerning the nature of relief to be granted in the facts of the present case. More particularly, the

submissions were centred on the question as to the quantum of compensation payable in lieu of reinstatement of the Opposite Parties-Workmen, having regard to the admitted position that the Daily Deposit Scheme, under which they had been engaged as Commission Agents, has since been discontinued and the posts in question have consequently ceased to exist. In that context, learned counsel for both Parties placed reliance upon several decisions of the Hon‟ble Supreme Court, as mentioned above, in support of their respective submissions regarding the principles governing the grant and determination of compensation in substitution of reinstatement.

6. Having heard the learned counsel for the respective Parties and upon perusal of the materials available on record, this Court, before adverting to the issues in controversy, considers it appropriate to observe that it is well settled that the writ courts exercise only a limited supervisory jurisdiction under Articles 226 and 227 of the Constitution of India while examining awards passed by the Labour Court or Industrial Tribunal. The scope of such jurisdiction is confined to examining the legality, procedural propriety and jurisdictional correctness of the award and does not ordinarily extend to re-appreciation of evidence or substitution of findings of fact recorded by the adjudicating authority. Interference is thus warranted only where the award is shown to suffer from patent illegality, perversity, violation of the principles of natural justice, or jurisdictional error.

7. In the present case, admittedly no such ground has been urged by either of the Parties to demonstrate that the impugned Award suffers from any apparent illegality on the face of the record. The materials reveal that both the Petitioner-Management and the

Opp. Parties-Workmen had led evidence before the learned Tribunal and the learned Tribunal, upon appreciation of the same, recorded its findings on the issues framed for its determination, including the question as to whether the refusal of employment to the Opp. Parties-Workmen consequent upon closure of the Daily Deposit Scheme was justified. This Court, while exercising jurisdiction under Article 227 of the Constitution of India, though empowered to examine the correctness of the findings of the Tribunal within the contours of Article 226, cannot sit in appeal to re-evaluate the evidence and arrive at a different conclusion unless the findings are shown to be perverse. In the case at hand, no material has been brought to the notice of this Court warranting interference with the findings recorded by the learned Tribunal, save and except the limited question as to whether, in the peculiar facts of the case, the Opp. Parties-Workmen ought to be awarded monetary compensation in lieu of the direction of reinstatement.

8. Insofar as the issue relating to the grant of monetary compensation in lieu of reinstatement is concerned, this Court has been taken through several decisions of the Hon‟ble Supreme Court cited by the learned counsel appearing for the respective Parties. Having regard to the rival submissions advanced, this Court finds it appropriate to refer to certain authoritative pronouncements of the Hon‟ble Apex Court which lay down the governing principles in such matters.

9. The Hon‟ble Supreme Court in the case of Hari Nandan Prasad and Anr. vs. Employer I/R to Management of Food Corporation of India and another, 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, 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 daily- wager 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 the decisions 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, 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 daily-

wagers 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.""

10. Furthermore, in the matter of Maharashtra State Road Transport Corporation vs. Mahadeo Krishna Naik, 2025 INSC 218, the Hon‟ble Supreme Court, while examining the principles governing grant of back wages and appropriate relief in industrial adjudication, observed that though reinstatement with back wages may ordinarily follow when termination is found to be illegal, the courts may, in appropriate cases, direct payment of lump sum compensation instead of reinstatement where such course would better serve the interests of both the employee and the employer. The relevant paragraphs are reproduced as under:

"44. There is one other aspect that would fall for consideration of the court. In certain decisions, noticed in Deepali Gundu Surwase (supra), it has been opined that whether or not an employee has been gainfully employed is within his special knowledge and having regard to Section 106 of the Evidence Act, 1872, the burden of proof is on him. What is required of an employee in such a case? He has to plead in his statement of claim or any subsequent pleading before the industrial tribunal/labour court that he has not been gainfully employed and that the award of reinstatement may also grant him back wages. If the employee pleads that he was not gainfully employed, he cannot possibly prove such negative fact by adducing positive evidence. In the absence of any contra-material on record, his version has to be accepted. Reference in this connection may be made to Section 17- B of the Industrial Disputes Act, 1947, which confers a right on an employee to seek "full wages last drawn"

from the employer while the challenge of the employer to an award directing reinstatement in a higher court remains pending. There too, what is required is a statement on affidavit regarding non-employment and with such statement on record, the ball is in the court of the employer to satisfy the court why relief under such section ought not to be granted by invoking the proviso to the section. We see no reason why a similar approach may not be adopted. After the employee pleads his non- employment and if the employer asserts that the

employee was gainfully employed between the dates of termination and proposed reinstatement, the onus of proof would shift to the employer to prove such assertion having regard to the cardinal principle that „he who asserts must prove‟. Law, though, seems to be well settled that if the employer by reason of its illegal act deprives any of its employees from discharging his work and the termination is ultimately held to be bad in law, such employee has a legitimate and valid claim to be restored with all that he would have received but for being illegally kept away from work. This is based on the principle that although the employee was willing to perform work, it was the employer who did not accept work from him and, therefore, if the employer‟s action is held to be illegal and bad, such employer cannot escape from suffering the consequences. However, it is elementary but requires to be restated that while grant of full back wages is the normal rule, an exceptional case with sufficient proof has to be set up by the employer to escape the burden of bearing back wages.

45. We hasten to add that the courts may be confronted with cases where grant of lumpsum compensation, instead of reinstatement with back wages, could be the more appropriate remedy. The courts may, in such cases, providing justification for its approach direct such lumpsum compensation to be paid keeping in mind the interest of the employee as well as the employer."

11. Upon consideration of the principles laid down in the aforesaid decisions of the Hon‟ble Supreme Court, we draw the conclusion that where termination of service is found to be illegal or unjustified under the Industrial Disputes Act, 1947, the aggrieved workman is entitled to appropriate relief intended to restore him to the position which he would have occupied but for such illegality. Ordinarily, such relief may take the form of reinstatement with consequential benefits including back wages. However, the law as crystallised by the Hon‟ble Apex Court equally recognises that reinstatement is not an automatic or invariable consequence in

every case where termination is set aside. The Court, while moulding the relief, must have due regard to the nature of engagement, the length of service, the passage of time since termination, and the practical feasibility of reinstatement, particularly in situations where the very post or scheme under which the workman was engaged has ceased to exist. In such circumstances, the ends of justice may be adequately met by directing payment of reasonable lump sum compensation in lieu of reinstatement, thereby balancing the interests of both the workman and the employer.

12. In the case at hand, it is the stand of the Petitioner- Management that the Scheme under which the Opp. Parties- Workmen had been engaged was discontinued on the ground that the Daily Deposit Scheme was no longer profitable and that the audit of the Bank had revealed instances of misappropriation of funds. However, it is not the case of the Petitioner-Management that any such misconduct was attributed to any particular member of the Opp. Parties-Workmen. The decision of the Petitioner-Management was ultimately to discontinue the Scheme and abolish the posts of Commission Agents on the ground of loss of confidence and the financial unviability of the Scheme. In such circumstances, when the very Scheme under which the Opposite Parties-Workmen were engaged is no longer in existence and the posts themselves have ceased to exist, the question of directing reinstatement of the Opposite Parties-Workmen does not arise.

13. In this context, it is apposite to recall the observations of the Hon‟ble Supreme Court in Surendra Kumar Verma Etc vs. The

Central Government Industrial Tribunal Cum-Labour Court, reported in AIR 1981 SC 422, as under:

"We do not propose to refer to the cases arising under section 33 and 33A of the Industrial Disputes Act or to cases arising out of references under sections 10 and 10A of the Industrial Disputes Act. Nor do we propose to engage ourselves in the unfruitful task of answering the question whether the termination of the services of a workman in violation of the provisions of S. 25F is void ab initio or merely invalid and inoperative, even if it is possible to discover some razor‟s edge distinction between the Latin „Void ab initio‟ and the Anglo-Saxon „invalid and inoperative‟. Semantic luxuries are misplaced in the interpretation of „bread and butter‟ statutes. Welfare statutes must, of necessity, receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the Court is not to make inroads by making etymological excursions. „Void ab initio‟. „invalid and inoperative‟ or call it what you will, the workmen and the employer are primarily concerned with the consequence of striking down the order of termination of the services of the workmen. Plain common sense dictates that the removal of an order terminating the services of workmen must ordinarily lead to the reinstatement of the services of the workmen. It is as if the order has never been and so it must ordinarily lead to back wages too. But there may be exceptional circumstances which make it impossible or wholly inequitable vis-a-vis the employer and workmen to direct reinstatement with full back wages. For instance, the industry might have closed down or might be in severe financial doldrums: the workmen concerned might have secured better or other employment elsewhere and so on. In such situations, there is a vestige of discretion left in the Court to make appropriate consequential orders. The Court may deny the relief of reinstatement where reinstatement is impossible because the industry has closed down. The Court may deny the relief of award of full back wages where that would place an impossible burden on the employer. In such and other exceptional cases the Court may mould the relief, but, ordinarily the relief to be awarded must be reinstatement

with full back wages. That relief must be awarded where no special impediment in the way of awarding the relief is clearly shown. True, occasional hardship may be caused to an employer but we must remember that, more often than not comparatively far greater hardship is certain to be caused to the workmen if the relief is denied than to the employer if the relief is granted."

14. The Hon‟ble Supreme Court in the aforesaid decision has observed that semantic distinctions regarding the nature of invalidity of termination are of little consequence, for what essentially matters is the consequence of setting aside an order of termination, which ordinarily would lead to reinstatement with back wages. At the same time, the Hon‟ble Supreme Court clarified that there may exist exceptional circumstances where reinstatement with full back wages would be either impossible or inequitable; for instance where the industry has closed down, where the employer is in serious financial distress, or where other circumstances render reinstatement impracticable. In such situations, the Court retains a residual discretion to mould the relief in an appropriate manner.

15. The Scheme under which the Opp. Parties-Workmen were engaged has admittedly been discontinued and the posts themselves have ceased to exist. In such circumstances, directing reinstatement would neither be practicable nor capable of effective implementation. Consequently, the principles of equity, justice and good conscience necessarily come into play while determining the appropriate relief, and the grant of monetary compensation in lieu of reinstatement would be the course that would meet the ends of justice. It is also pertinent to note that there is no material placed before this Court, nor any specific finding recorded by the learned Tribunal, to indicate that the Opp. Parties-Workmen were gainfully

employed during the period they remained out of employment. Significantly, no such plea has been specifically advanced by the Petitioner-Management either.

Further, the nature and extent of relief in such matters is guided not only by judicial precedents but also by the statutory framework of the Industrial Disputes Act, 1947, particularly Section 11-A, which confers wide powers upon the Labour Court or Industrial Tribunal to examine the evidence and, where the termination or discharge is found to be unjustified, to modify the punishment and grant appropriate relief. The exercise of such power is intended to ensure that the remedy granted adequately protects the workman‟s right to livelihood and dignity, while at the same time balancing the practical realities of the employer‟s establishment.

16. In the given facts and circumstances, reinstatement of the Opp. Parties-Workmen is rendered impracticable in view of the closure of the Daily Deposit Scheme and the consequent abolition of the posts under which they were engaged. Moreover, the materials on record also reflect an apparent erosion of mutual confidence between the Petitioner-Management and the Opp. Parties-Workmen, which further militates against the feasibility of reinstatement.

17. It is also brought to the notice of this Court that while computing the liability of the Petitioner-Management under Section 17-B of the Industrial Disputes Act, a sum of ₹10,00,000/- and thereafter a further sum of ₹25,00,000/- have already been deposited before the Registry of this Court. Out of the said amount,

a sum of ₹10,000/- each has since been disbursed in favour of the Opp. Parties-Workmen. Thus, a substantial portion of the monetary liability towards wages during the pendency of the writ proceedings has already been discharged by the Petitioner-Management.

18. Having regard to the fact that the Petitioner-Management is otherwise under statutory obligation to comply with the provisions of Section 17-B of the Industrial Disputes Act, and keeping in view the overall financial status of the Cooperative Bank as well as the circumstances leading to closure of the Scheme in the year 2015, this Court is of the considered view that the ends of justice would be adequately met by awarding lump-sum monetary compensation in lieu of reinstatement. Accordingly, this Court deems it appropriate to award a sum of ₹10,00,000/- (Rupees Ten Lakhs only) to each of the Opposite Parties-Workmen towards full and final settlement in lieu of reinstatement and back wages.

19. The amounts already deposited by the Petitioner- Management before this Court in compliance with Section 17-B of the Industrial Disputes Act shall form part of the aforesaid compensation and shall be disbursed proportionately in favour of the Opp. Parties-Workmen upon proper identification by the learned counsel appearing on their behalf. Since a total amount of ₹35,00,000/- has already been deposited before this Court, the Petitioner-Management shall deposit the balance amount of ₹25,00,000/- (Rupees Twenty-Five Lakhs only) within a period of three months from the date of this order, which shall thereafter be disbursed proportionately among the Opposite Parties-Workmen.

20. In the event of failure on the part of the Petitioner- Management to deposit the aforesaid amount within the stipulated period, the unpaid amount shall carry interest @ 1% for the first month after expiry of the stipulated period and @ 2% per month thereafter until full payment is made.

21. In view of the foregoing discussions and reasons assigned hereinabove, the impugned Award dated 26.09.2018 passed by the learned Presiding Officer, Industrial Tribunal, Bhubaneswar in I.D. Case No.19 of 2015, stands modified to the extent that the direction for reinstatement of the Opp. Parties-Workmen is substituted by an award of lump sum compensation as indicated above. The compensation so determined shall be treated as full and final settlement of all claims of the Opp. Parties-Workmen arising out of the industrial dispute, including reinstatement and back wages.

22. Accordingly, the present Writ Petition is disposed of with the aforesaid modification.

(Chittaranjan Dash) Judge

(B.P. Routray) Judge

AKPradhan

Signed by: ANANTA KUMAR PRADHAN Designation: Senior Stenographer Reason: Authentication Location: HIGH COURT OF ORISSA Date: 18-Mar-2026 10:34:32

 
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