THE MANAGEMENT OF REGIONAL CHIEF ENGINEER P.H.E.D. RANCHI versus THEIR WORKMEN REP. BY DISTRICT SECRETARY on 20 September 2018

[2018] 11 S.C.R. 759

THE MANAGEMENT OF REGIONAL CHIEF ENGINEERP.H.E.D. RANCHI

v.

THEIR WORKMEN REP. BY DISTRICT SECRETARY

(Civil Appeal No. 9832 of 2018)

SEPTEMBER 20, 2018

[ABHAY MANOHAR SAPRE AND S. ABDUL NAZEER, JJ.]

Labour Laws:

Back wages – When can be claimed – Courts below awardedfull back wages directing reinstatement of the workmen – Held: Aworkman has no right to claim back wages if he has been reinstated– It is necessary for the workman to plead and prove that he wasnot gainfully employed – Employer is also entitled to prove otherwise– However, initial burden is on the workman – Direction of courtsbelow to award full back wages has caused prejudice to the employer– In exercise of jurisdiction u/Art. 142 of the Constitution, in theinterest of justice, 50% of total back wages is awarded – Evidence– Burden to prove – Constitution of India – Art. 142 – IndustrialDisputes Act, 1947 – s. 25F.

Partly allowing the appeal, the Court

HELD: 1. A workman has no right to claim back wagesfrom his employer as of right only because the Court has setaside his dismissal order in his favour and directed hisreinstatement in service. It is necessary for the workman in suchcases to plead and prove with the aid of evidence that after hisdismissal from the service, he was not gainfully employedanywhere and had no earning to maintain himself or/and his family.The employer is also entitled to prove it otherwise against theemployee, namely, that the employee was gainfully employedduring the relevant period and hence not entitled to claim anyback wages. Initial burden is, however, on the employee. [Paras11 and 12] [762-G-H; 763-A-B]

2. The Court may decline to award the back wages in itsentirety whereas in some cases, it may award partial depending

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Aupon the facts of each case by exercising its judicial discretion inthe light of the facts and evidence. [Para 13] [763-B]

3. The Court is required to keep in consideration severalfactors, and then to record a finding as to whether it is a fit casefor award of the back wages and, if so, to what extent. In theBpresent case neither the Labour Court and nor the High Courtkept in consideration the principles of law. Similarly, no party tothe proceedings either pleaded or adduced any evidence to provethe material facts required for award of the back wages enablingthe Court to award the back wages. [Paras 14 and 15] [763-E-G]

C4. Direction of the Courts below awarding full back wagesto the workman has caused prejudice to the appellant (employer).In exercise of powers under Article 142 of the Constitution ofIndia for doing substantial justice to the parties concerned, itwould be just and proper and in the interest of justice to award tothese 37 workmen 50% of the total back wages. [Paras 18, 19Dand 20] [764-C-E]

M.P. State Electricity Board v. Jarina Bee(Smt.) (2003)6 SCC 141 : [2003] 1 Suppl. SCR 535; G.M. HaryanaRoadways v. Rudhan Singh (2005) 5 SCC 591 : [2005]1 Suppl. SCR 569; U.P. State Brassware CorporationEv. Uday Narain Pandey (2006) 1 SCC 479 : [2005] 5Suppl. SCR 609; J.K. Synthetics Ltd. v. K.P. Agrawal &Anr. (2007) 2 SCC 433 : [2007] 2 SCR 60, MetropolitanTransport Corporation v. V. Venkatesan (2009) 9 SCC601 : [2009] 12 SCR 583; Jagbir Singh v. HaryanaFState Agriculture Marketing Board & Anr. (2009) 15SCC 327) : [2009] 10 SCR 908; Deepali GunduSurwase v. Kranti Junior Adhyapak Mahavidyalaya(D.Ed.) & Ors. (2013) 10 SCC 324 : [2013] 9 SCR 1 –relied on.

Case Law Reference

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9832of 2018

From the Judgment and Order dated 02.02.2017 of the HighCourt of Jharkhand at Ranchi in L.P.A. No. 484 of 2008

Atulesh Kumar, Adv. for the appellant.

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Abhijeet Sinha, Adv. for the respondent.

The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J. 1. Leave granted.

2. This appeal is directed against the final judgment and orderdated 02.02.2017 of the High Court of Jharkhand at Ranchi in L.P.A.No.484 of 2008 whereby the Division Bench of the High Court dismissedthe appeal filed by the appellant herein and upheld the order dated08.07.2008 passed by the Single Judge of the High Court in W.P.(L)No.3962 of 2006.

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3. Few facts need to be mentioned hereinbelow for the disposalof the appeal, which involves a short issue.

4. The short question, which arises for consideration in this appeal,is whether the Courts below, namely, the High Court and the LabourCourt were justified in awarding full back wages to the 37 workmenrepresented by Workmen Union after setting aside their dismissal orderholding it to be bad in law being in contravention of Section 25-F of theIndustrial Disputes Act, 1947 (hereinafter referred to as “I.D. Act”)and, in consequence, directing reinstatement of these workmen in servicesof the appellant in their Public Health and Engineering Department(PHED).

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5. The appellant is the Department of the State of Jharkhand[Public Health and Engineering Department (PHED)] whereas therespondent is the Workmen Union representing the interest of theworkmen working in the Public Health and Engineering Department(PHED).

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A6. The State made a reference under Section 10 of the I.D. Actto the Labour Court, Ranchi at the instance of the respondent-Union todecide the following dispute:

“Whether the dismissal and non absorption of 37 acting dailywages Hastrashid employees as mentioned in schedule “K”Bin work charged establishment by Public Health Engg.Division, East Ranchi (Department of PHED, Jharkhand)is lawful. If not, what other reliefs their employees areentitled to?”

7. By award dated 29.06.2005, the Labour Court (Annex.P-1)Canswered the reference in respondent- Union’s favour and directed re-instatement of 37 workmen with payment of full back wages in ReferenceCase No.6 of 2002.

8. The appellant (employer), felt aggrieved by the award of theLabour Court, filed writ petition in the High Court of Jharkhand. TheDSingle Judge of the High Court, by order dated 08.07.2008, dismissedthe writ petition filed by the appellant and affirmed the award passed bythe Labour Court.

9. Being aggrieved by the order of the Single Judge, the appellantfiled intra court appeal. By impugned order, the Division Bench of theEHigh Court dismissed the appeal and upheld the order of the Single Judge,which gave rise to filing of this appeal by way of special leave by theappellant-employer in this Court.

10. Having heard the learned counsel for the parties and on perusalof the record of the case, we are inclined to allow the appeal in part andwhile modifying the impugned order award 50% back wages to theFworkmen in place of full wages.

11. In our considered opinion, the Courts below completely failedto see that the back wages could not be awarded by the Court as of rightto the workman consequent upon setting aside of his dismissal/terminationorder. In other words, a workman has no right to claim back wages fromGhis employer as of right only because the Court has set aside his dismissalorder in his favour and directed his reinstatement in service.

12. It is necessary for the workman in such cases to plead andprove with the aid of evidence that after his dismissal from the service,he was not gainfully employed anywhere and had no earning to maintainH

himself or/and his family. The employer is also entitled to prove itotherwise against the employee, namely, that the employee was gainfullyemployed during the relevant period and hence not entitled to claim anyback wages. Initial burden is, however, on the employee.

13. In some cases, the Court may decline to award the back wagesin its entirety whereas in some cases, it may award partial dependingupon the facts of each case by exercising its judicial discretion in thelight of the facts and evidence. The questions, how the back wages isrequired to be decided, what are the factors to be taken into considerationawarding back wages, on whom the initial burden lies etc. wereelaborately discussed in several cases by this Court wherein the law onthese questions has been settled. Indeed, it is no longer res integra.These cases are, M.P. State Electricity Board vs. Jarina Bee(Smt.),(2003) 6 SCC 141, G.M. Haryana Roadways vs. Rudhan Singh,(2005) 5 SCC 591, U.P. State Brassware Corporation vs. UdayNarain Pandey, (2006) 1 SCC 479, J.K. Synthetics Ltd. vs. K.P.Agrawal & Anr., (2007) 2 SCC 433, Metropolitan TransportCorporation vs. V. Venkatesan, (2009) 9 SCC 601, Jagbir Singh vs.Haryana State Agriculture Marketing Board & Anr., (2009) 15 SCC327) and Deepali Gundu Surwase vs. Kranti Junior AdhyapakMahavidyalaya(D.Ed.) & Ors., (2013) 10 SCC 324.

14. The Court is, therefore, required to keep in considerationseveral factors, which are set out in the aforementioned cases, and thento record a finding as to whether it is a fit case for award of the backwages and, if so, to what extent.

15. Coming now to the facts of the case at hand, we find thatneither the Labour Court and nor the High Court kept in considerationthe aforesaid principles of law. Similarly, no party to the proceedingseither pleaded or adduced any evidence to prove the material factsrequired for award of the back wages enabling the Court to award theback wages.

16. On the other hand, we find that the Labour Court in one linesimply directed the appellant (employer) to pay full back wages for along period to 37 workmen while directing their reinstatement in service.

17. We, however, find that the High Court in para 9 of the orderplaced reliance on the decision of this Court in Deepali Gundu Surwase(supra) for holding that the question of back wages is covered by this A

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Adecision. In our view, the High Court erred in so observing. It shouldhave seen that in the case of Deepali Gundu Surwase (supra) itself,this Court referred decisions, which we have mentioned in para 13 aboveand then in para 38 of Deepali Gundu Surwase, this Court culled outthe ratio of all the cited cases. Thereafter, this Court in Deepali GunduSurwase’ case granted relief to the concerned workers on the factsBinvolved in that case. In our opinion, the High Court did not apply theratio of the decision in Deepali Gundu Surwase (supra) to the facts ofthis case properly and only quoted one para of the judgment in DeepaliGundu Surwase(supra) which contained general observations. Thoseobservations had to be read in juxtaposition with para 38 which culledCout the ratio of all the case law on the subject.

18. We cannot, therefore, concur with such direction of the Courtsbelow awarding full back wages to the workman which, in our opinion,has certainly caused prejudice to the appellant (employer).

19. However, having regard to the facts and circumstances of theDcase, we consider it just and proper and in the interest of justice toaward to these 37 workmen 50% of the total back wages.

20. This we award to the workmen in exercise of our powersunder Article 142 of the Constitution of India for doing substantial justiceto the parties concerned having reiterated the legal principles whichEgovern the question of award of back wages.

21. In the light of the foregoing discussion, the appeal succeedsand is allowed in part. Impugned order is modified to the extent indicatedabove.

22. Let the amount be worked out and paid by the appellant to theFrespondent-workmen after proper verification within three months fromthe date of this judgment.

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Kalpana K. Tripathy

Appeal partly allowed.

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