PRADEEP S/O RAJKUMAR JAIN versus MANGANESE ORE (INDIA) LIMITED & ORS. on 10 December 2021

(1) Leave granted.

(2) The appellant is a qualified Chartered Accountant. He wasappointed as Manager (Finance) by order dated 22.10.1997. Thereafter,he was posted in 2005 at the Balaghat Mines as the Deputy Chief(Finance). In certain circumstances, which were on account of the death A

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Aof his father, he had to report late for work on three days. He wasserved with a show cause and it was followed up by yet another showcause. It was replied to. He came to be suspended on 05.10.2007. Hewas served with a charge memo on 27.10.2007. Thereafter, he wasdismissed on 12.08.2008. The appeal carried by him was dismissed. Hefiled a writ petition. The writ petition filed was partly allowed by theBDivision Bench and this has resulted in the present appeal.

(3) The controversy lies in a very narrow compass. While theDivision Bench has ordered reinstatement of the appellant, the Courthas denied him the benefit of backwages. In other words, this Court iscalled upon to decide whether there is justification to deny backwagesCto the appellant.

(4) We have heard learned counsel for the appellant and learnedcounsel for the respondent.

(5) The respondent is, undoubtedly, State under Article 12 of theDConstitution. The contention of the appellant is that the appellant as aChartered Accountant has been victimised. There was no justificationat all in law, or in facts in launching the disciplinary proceedings againstthe appellant and it has been so held by the High Court as well in theimpugned order. The High Court, however, has proceeded to take theview that the appellant is not entitled to backwages. The reason given isEas follows ‘specially when the appellant has not worked during the saidperiod’.

(6) Learned counsel for the respondent would oppose the appealby pointing out that the burden lay with the employee, if the appellantwished to show that he had not worked during the period that he wasFkept out of the employment. The appellant’s counsel joins issue with thisproposition. He points out that judgments of this Court establish theprinciple that all that is required is that the workman/appellant must pleadthat he had not worked during the period when he was kept out ofemployment by illegal termination. In this regard, the appellant drewGsupport from a large body of case law. In particular, he drew our attentionto the judgment of this Court in Deepali Gundu Surwase v. KrantiJunior Adhyapak Mahavidyalaya (D.Ed.) & Ors. (2013) 10 SCC324. The Bench of two learned Judges in the said case has, after reviewingof case law which included survey of two earlier three Judges Benchesof this Court, concluded as follows:H

“38. The propositions which can be culled out from theaforementioned judgments are:

38.1. In cases of wrongful termination of service, reinstatementwith continuity of service and back wages is the normal rule.

38.2. The aforesaid rule is subject to the rider that while decidingthe issue of back wages, the adjudicating authority or the courtmay take into consideration the length of service of the employee/workman, the nature of misconduct, if any, found proved againstthe employee/workman, the financial condition of the employerand similar other factors.

38.3. Ordinarily, an employee or workman whose services areterminated and who is desirous of getting back wages is requiredto either plead or at least make a statement before the adjudicatingauthority or the court of first instance that he/she was not gainfullyemployed or was employed on lesser wages. If the employer wantsto avoid payment of full back wages, then it has to plead and alsolead cogent evidence to prove that the employee/workman wasgainfully employed and was getting wages equal to the wages he/she was drawing prior to the termination of service. This is sobecause it is settled law that the burden of proof of the existenceof a particular fact lies on the person who makes a positiveaverment about its existence. It is always easier to prove a positivefact than to prove a negative fact. Therefore, once the employeeshows that he was not employed, the onus lies on the employer tospecifically plead and prove that the employee was gainfullyemployed and was getting the same or substantially similaremoluments.

38.4. The cases in which the Labour Court/Industrial Tribunalexercises power under Section 11-A of the Industrial DisputesAct, 1947 and finds that even though the enquiry held against theemployee/workman is consistent with the rules of natural justiceand/or certified standing orders, if any, but holds that the punishmentwas disproportionate to the misconduct found proved, then it willhave the discretion not to award full back wages. However, if theLabour Court/Industrial Tribunal finds that the employee orworkman is not at all guilty of any misconduct or that the employerhad foisted a false charge, then there will be ample justificationfor award of full back wages.

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A38.5. The cases in which the competent court or tribunal findsthat the employer has acted in gross violation of the statutoryprovisions and/or the principles of natural justice or is guilty ofvictimising the employee or workman, then the court or tribunalconcerned will be fully justified in directing payment of full backwages. In such cases, the superior courts should not exerciseBpower under Article 226 or 136 of the Constitution and interferewith the award passed by the Labour Court, etc. merely becausethere is a possibility of forming a different opinion on the entitlementof the employee/workman to get full back wages or the employer’sobligation to pay the same. The courts must always keep in viewCthat in the cases of wrongful/illegal termination of service, thewrongdoer is the employer and the sufferer is the employee/workman and there is no justification to give a premium to theemployer of his wrongdoings by relieving him of the burden topay to the employee/workman his dues in the form of full backwages.

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38.6. In a number of cases, the superior courts have interferedwith the award of the primary adjudicatory authority on the premisethat finalisation of litigation has taken long time ignoring that inmajority of cases the parties are not responsible for such delays.Lack of infrastructure and manpower is the principal cause fordelay in the disposal of cases. For this the litigants cannot beblamed or penalised. It would amount to grave injustice to anemployee or workman if he is denied back wages simply becausethere is long lapse of time between the termination of his serviceand finality given to the order of reinstatement. The courts should E

Fbear in mind that in most of these cases, the employer is in anadvantageous position vis-à-vis the employee or workman. Hecan avail the services of best legal brain for prolonging the agonyof the sufferer i.e. the employee or workman, who can ill-affordthe luxury of spending money on a lawyer with certain amount offame. Therefore, in such cases it would be prudent to adopt theGcourse suggested in Hindustan Tin Works (P) Ltd. v. Employees[(1979) 2 SCC 80 : 1979 SCC (L&S) 53] .

38.7. The observation made in J.K. Synthetics Ltd. v. K.P.Agrawal [(2007) 2 SCC 433 : (2007) 1 SCC (L&S) 651] that onreinstatement the employee/workman cannot claim continuity of H

service as of right is contrary to the ratio of the judgments ofthree-Judge Benches [Hindustan Tin Works (P) Ltd. v.Employees, (1979) 2 SCC 80 : 1979 SCC (L&S) 53] , [SurendraKumar Verma v. Central Govt. Industrial Tribunal-cum-LabourCourt, (1980) 4 SCC 443 : 1981 SCC (L&S) 16] referred tohereinabove and cannot be treated as good law. This part of thejudgment is also against the very concept of reinstatement of anemployee/workman.

“42. In the result, the appeal is allowed, the impugned order [KrantiJunior Adhyapak Mahavidyalaya v. State of Maharashtra,(2012) 1 Mah LJ 370] is set aside and the order passed by theTribunal is restored. The management shall pay full back wagesto the appellant within four months from the date of receipt ofcopy of this order failing which it shall have to pay interest at therate of 9% per annum from the date of the appellant’s suspensiontill the date of actual reinstatement. It is also made clear that inthe event of non-compliance with this order, the management shallmake itself liable to be punished under the Contempt of CourtsAct, 1971.”

(7) Learned counsel for the respondent, on the other hand, soughtsupport from another line of decisions which represent the later viewadopted by this Court in Talwara Cooperative Credit and ServiceSociety Ltd. v. Sushil Kumar (2008) 9 SCC 486. He also sought supportfrom the judgment in Rajasthan State Road Transport Corporation,Jaipur v. Phool Chand (Dead) Through Legal Representatives (2018)18 SCC 299.

(8) Learned counsel for the appellant on being faced with this lineof decisions, would, in the first place, point out that this Court in TalwaraCooperative Credit and Service Society Ltd. (supra) has adverted toSection 106 of the Evidence Act and therefore, the burden lay on theemployee for which reference was made to an earlier judgment and hewould point out that, in fact, in the earlier judgment, there is no referenceto Section 106 of the Evidence Act.

(9) We notice that it is true that in Talwara Cooperative Creditand Service Society Ltd. (supra), this Court has held inter alia:

“13. This Court in a large number of cases noticed the paradigmshift in the matter of burden of proof as regards gainful employment AB

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Aon the part of the employer holding that having regard to theprovisions contained in Section 106 of the Evidence Act, the burdenwould be on the workman. The burden, however, is a negativeone. If only the same is discharged by the workman, the onus ofproof would shift on to the employer to show that the employeeconcerned was in fact gainfully employed. In Surinder KumarB[(2006) 5 SCC 173 : 2006 SCC (L&S) 967] , this Court held :(SCC p. 177, paras 12-14)

“12. The Labour Court and the High Court also proceededwrongly on the premise that the burden of proof to establish non-completion of 240 days of work within a period of twelve monthsCpreceding the termination, was on the management. The burdenwas on the workman. (See U.P. State Brassware Corpn. Ltd. v.Uday Narain Pandey [(2006) 1 SCC 479 : 2006 SCC (L&S)250 : JT (2005) 10 SC 344] and State of M.P. v. Arjunlal Rajak[(2006) 2 SCC 711 : 2006 SCC (L&S) 429].)

D13. Equally well settled is the principle that the burden of proof,having regard to the principles analogous to Section 106 of theEvidence Act that he was not gainfully employed, was on theworkman. (See RBI v. S. Mani [(2005) 5 SCC 100 : 2005 SCC(L&S) 609].)

E14. It is also a trite law that only because some documents havenot been produced by the management, an adverse inferencewould not be drawn against the management. (See S. Mani[(2005) 5 SCC 100 : 2005 SCC (L&S) 609].)””

In fact, the said judgment has made reference to the judgmentFreported in Manager R.B.I. Bangalore v. S. Mani & Ors. (2005) 05SCC 100 for what is stated in para 13.

(10) We do not find, in fact, any reference to Section 106 of theEvidence Act being made in Manager R.B.I. Bangalore (supra). It istrue, however, that in the judgment reported in Municipal CouncilGSujanpur v. Surinder Kumar (2006) 5 SCC 173, there is a referencemade to Section 106 of the Evidence Act and in the manner in which itis stated in paragraph 13 it is quoted also in Talwara Cooperative Creditand Service Society Ltd. (supra).

There is an earlier judgment of this Court rendered by a Bench ofHthree learned Judges which is reported in Shambhu Nath Goyal v. Bank of Baroda and Others (1983) 4 SCC 491 which has dealt with theissue in the following words:

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The management is thus seen to have been taking stepsperiodically to see that the dispute is not disposed of at an earlydate one way or the other. The blame for not framing an issue onthe question whether or not the workman was gainfully employedin the intervening period cannot be laid on the Tribunal alone. Itwas equally the duty of the management to have got that issueframed by the Tribunal and adduce the necessary evidence unlessthe object was to rake up that question at some later stage to thedisadvantage of the workman as in fact it has been done. Themanagement appears to have come forward with the grievancefor the first time only in the High Court. There is no material onrecord to show that the workman was gainfully employedanywhere. The management has not furnished any particulars inthis regard even before this Court after such a long lapse of time.The workman could have been asked to furnish the necessaryinformation at the earliest stage. The management has not resortedto that course. The workman was not expected to prove thenegative. In these circumstances, we do not think that it would bein the interest of justice to prolong any further the agony of theworkman whose power to endure the suffering of being out ofemployment for such a long time and to oppose the managementBank, a nationalised undertaking with all the money power at itsdisposal in this prolonged litigation is very limited by allowing theBank to have the advantage belatedly sought in the applicationdated February 8, 1979 in an industrial dispute which arose soearly as in 1965.

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It is, undoubtedly, true when the question arises as to whether thebackwages is to be given and as to what is to be the extent of backwages,these are matters which will depend on the facts of the case as noted inDeepali Gundu Surwase (supra). In a case where it is found that theemployee was not at all at fault and yet, he was visited with illegal A

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Atermination or termination which is actually activised by malice, it maybe unfair to deny him the fruits of the employment which he would haveenjoyed but for the illegal / malafide termination. The effort of the Courtmust be to then to restore the status quo in the manner which isappropriate in the facts of each case. The nature of the charges, theexact reason for the termination as evaluated and, of course, the questionBas to whether the employee was gainfully employed would be matterswhich will enter into the consideration by the Court.

(11) As far as the present case is concerned, the reason given bythe High Court in the impugned order for denying backwages clearlydoes not appeal to us. According to the appellant, the appellant has indeedCstated that he was not working. The case of the respondent is that hewas a Chartered Accountant and that he was indeed earning. The learnedcounsel for the appellant does not deny that the appelant was indeedearning some amount from doing accountancy related work and he hadfiled returns under the Income Tax Act. This means as things standDbefore us, it is a case where the appellant must be treated as not havingbeen without any income at all during the period. He was earning. Wehave also, however, noticed that there was hardly any worthwhile reasonfor the respondent to terminate the services. The impugned order itselfshows that there was no basis for termination of the services of theappellant. When the appellant was qualified and particularly, when theEappellant also has a case that all this was done for the reason that he hadtaken up certain issues relating to the manner in which the affairs of therespondent was being run, we would think that the High Court was inerror in not making appropriate order relating to backwages.

(12) As regards the quantum of backwages, there are conflictingFclaims. According to the respondent, if what is described as performanceallowance is not added, 100 per cent of the backwages which the appellantwould be entitled to would be in the region of about Rs.66 lakhs. Theappellant’s claim is for over Rs.3 crores. However, he would, after gettinginstructions from his client state that the appellant may be given a sumGof Rs.1.5 crores. He, particularly, points out that this is without takinginto consideration the benefits of notional promotion.

We are not delving more into this issue as it is stated that litigationrelating to right to notational promotion is pending consideration beforethe High Court.

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(13) On a conspectus of all facts and circumstances, we are ofthe view that the interest of justice would be sufficiently served if wedirect the appellant be paid a total sum of Rs.80 lakhs as the backwagesfor the entire period for which the termination operated. Accordingly,the appeal is partly allowed. The impugned order is modified and wedirect the respondent to pay a sum of Rs.80 lakhs to the appellant withina period of six weeks from today.

No orders as to costs.

Bibhuti Bhushan Bose

Appeal partly allowed.

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