JEETUBHA KHANSANGI JADEJA versus KUTCHH DISTRICT PANCHAYAT on 23 September 2022

Conclusion

1. Leave granted. With consent, learned counsels for the partiesGwere heard finally. This appeal is directed against an order of the GujaratHigh Court[1].

2. Aggrieved by the termination from employment, the appellantraised an industrial dispute which was referred to the Labour Court, Bhuj, Kutchh District of Gujarat. The appellant was appointed as aWatchman on 05.10.1992 by the respondent society (hereafter referredto as “the management”), and lastly, he was working as a watchman at theShirai Dam at the Beraja Village of Mundra Taluk, Gujarat, with therespondent. After rendering continuous employment, he was terminatedfrom the services on 30.12.2002 for no cause, without notice and withoutfollowing the procedure prescribed by the Industrial Disputes Act, 1947.His request for reinstatement was negated; consequently, the industrialdispute.

3. The management disputed the claim on the basis that the appellantworked in a purely temporary basis and could not claim the benefit ofSection 25B of the Industrial Disputes Act,1947 as he had not workedfor a continuous period of 240 days in any given year. However, hisemployment as a workman since 1992 was not denied.

4. Before the Labour Court, the parties led evidence - oral anddocumentary. A copy of the muster roll maintained by the managementwas called for. In the evidence, the appellant deposed that themanagement did not maintain any seniority list nor was it published andthat employees junior to him were retained while he was unfairlyterminated from service. The respondent management contended thatthe entire muster roll records was not available as it was destroyedduring a natural calamity; they could produce the documents for theyears 1994-98. After considering the pleadings and the materials onrecord, the Labour Court, by Award dated 31.08.2010, held that theappellant’s termination was illegal and directed his reinstatement withcontinuity but without backwages.

5. The management challenged the award, mainly contending thatthe appellant workman was not entitled to the benefits of the IndustrialDisputes Act. The learned Single judge of the Gujarat High Court endorsedthe findings of the Labour Court, affirming the Award, and directed theappellant’s reinstatement. The management, however, appealed to theDivision Bench. Initially, the Division Bench rejected the appeal; themanagement approached this court by special leave petition. This courtremitted the matter for fresh consideration.

6. By the impugned order, the Division Bench noticed the findingsof the single judge that workmen junior to the appellant had been retainedin service despite which his services were terminated and that the A

B

C

D

E

F

G

H

Amanagement had not maintained proper records. In spite of these facts,the Division Bench set aside the direction to reinstate the appellantworkman and instead awarded lumpsum compensation of ` 1 lakh.

7. The appellant contends that the Labour Court and the learnedsingle Judge concurrently ruled that sufficient material had been broughtBon record to show that 63 labourers were working with the respondentmanagement, many of whom were junior to the appellant. It was pointedout that the workman appellant had moved the Labour Court to directthe management to produce all relevant service particulars of itsemployees’ muster roll, pay register, and bonus register. An appropriatedirection was issued in this regard. Since the management did not produceCthe entire records, the Labour Court drew an adverse inference andbased on available material concluded that the termination was illegal. Inthese circumstances, all the findings were endorsed by the High Court;the substitution of the order of reinstatement amounted to a miscarriageof justice. It was submitted that the appellant had been unfairly kept outDof employment, despite the fact that the award was made in 2010, andthe single judge endorsed it in 2011. The management unjustifiably draggedthe matter for one more decade, which resulted in denial of backwagesto him in a very harsh manner. It was further submitted that the denial ofreinstatement to the appellant, by the impugned order, which did notdisturb the findings of the labour court and the single judge, is not basedEon any reasoning or norm but has resulted in unfairness.

8. Learned counsel for the respondent/management argued thatthis Court should not interfere with the impugned judgment since theDivision Bench acted correctly in law in not upholding the reinstatement.It was submitted that the petitioner had been out of employment for overF20 years and in the circumstances, directing reinstatement was not inthe interest of justice.

9. The record indicates that both the Labour Court and the learnedSingle Judge elaborately considered the depositions of the parties aswell as the evidence on the record. In fact, the appellant workman hadGapplied under the RTI Act, eliciting relevant documents to substantiatehis claim that employees junior to him, were retained in the service. Themanagement was unable to refute the material on record. On the otherhand, it claimed the inability to produce the relevant documents, i.e., themuster roll for the later period of the appellant’s service. Concededly,Hthe appellant had worked for over 10 years. In the absence of precise details as to the so-called periods when the appellant had not beenemployed – as alleged by the management, both the Labour Court andthe learned Single Judge concluded that his claim for having continuouslyworked within the meaning of Section 25B of the Industrial DisputesAct stood proved. Furthermore, the workman had deposed thatemployees junior to him were retained in the service, contrary to Section25G of the Industrial Disputes Act.

10. This Court discerns no material to establish the propositionput forth by the appellant. In the circumstances, given the fact that thedirection of the Labour Court was only to reinstate but not pay backwages,the Division Bench’s substitution of that relief is not based on any knownprinciple. In the present case, the Labour Court had rendered its awardon 31.08.2010; the learned Single Judge rejected the management’s writpetition on 04.05.2011. The management’s appeal was, in the firstinstance, rejected on 16.01.2014; however, it approached this Court byfiling special leave petition, which was allowed on 29.04.2016. It wasthereafter – 5 years later, that the impugned judgment was delivered.Having regard to these factors, the Court is of the opinion that theappellant workman could not have been made to suffer on account ofthe management’s obdurate attempt to have the relief set aside.Furthermore, the Division Bench’s impugned judgment has not interferedwith the factual findings. Therefore, the direction to substitute the reliefof reinstatement with one for lumpsum payment was not warranted inthe circumstances of this case.

11. This court, in a three-judge Bench decision, in Hindustan TinWorks (P) Ltd.v. Employees of M/s Hindustan Tin Works Pvt. Ltd.And Others[2]when retrenchment of services of 56 employees due tonon-availability of the raw material necessary for utilisation of full installedcapacity by the employer, was held to be illegal, held that:

“‘9. It is no more open to debate that in the field of industrialjurisprudence a declaration can be given that the terminationof service is bad and the workman continues to be in service.The spectre of common law doctrine that contract of personalservice cannot be specifically enforced or the doctrine ofmitigation of damages does not haunt in this branch of law.The relief of reinstatement with continuity of service can begranted where termination of service is found to be invalid. It 2 (1979) 2 SCC 80

A

B

C

D

E

F

G

H

A

2 (1979) 2 SCC 80

A

B

C

D

E

F

G

H

A

would mean that the employer has taken away illegally theright to work of the workman contrary to the relevant law orin breach of contract and simultaneously deprived theworkman of his earnings. If thus the employer is found to bein the wrong as a result of which the workman is directed tobe reinstated, the employer could not shirk his responsibilityof paying the wages which the workman has been deprivedof by the illegal or invalid action of the employer. Speakingrealistically, where termination of service is questioned asinvalid or illegal and the workman has to go through thegamut of litigation, his capacity to sustain himself throughoutthe protracted litigation is itself such an awesome factor thathe may not survive to see the day when relief is granted. Moreso in our system where the law’s proverbial delay has becomestupefying. If after such a protracted time and energyconsuming litigation during which period the workman justsustains himself, ultimately he is to be told that though he willbe reinstated, he will be denied the back wages which wouldbe due to him, the workman would be subjected to a sort ofpenalty for no fault of his and it is wholly undeserved.Ordinarily, therefore, a workman whose service has beenillegally terminated would be entitled to full back wages exceptto the extent he was gainfully employed during the enforcedidleness. That is the normal rule. Any other view would be apremium on the unwarranted litigative activity of the employer.If the employer terminates the service illegally and thetermination is motivated as in this case viz. to resist theworkmen’s demand for revision of wages, the termination maywell amount to unfair labour practice. In such circumstancesreinstatement being the normal rule, it should be followedwith full back wages.”

B

C

D

E

F

12. In a more recent decision, Deepali Gundu Surwase v. KrantiJunior Adhyapak Mahavidyalaya and Others,[3]this court highlightedGthe need to adopt a restitutionary approach, when a court has to considerwhether to reinstate an employee and if so, the extent to which backwagesis to be ordered. The court observed:

H3 (2013) 10 SCC 324

JEETUBHA KHANSANGI JADEJA v. KUTCHH DISTRICTPANCHAYAT [S. RAVINDRA BHAT, J.]

“22. The very idea of restoring an employee to the positionwhich he held before dismissal or removal or termination ofservice implies that the employee will be put in the sameposition in which he would have been but for the illegal actiontaken by the employer. The injury suffered by a person, whois dismissed or removed or is otherwise terminated from servicecannot easily be measured in terms of money. With the passingof an order which has the effect of severing the employer-employee relationship, the latter’s source of income gets driedup. Not only the employee concerned, but his entire familysuffers grave adversities. They are deprived of the source ofsustenance. The children are deprived of nutritious food andall opportunities of education and advancement in life. Attimes, the family has to borrow from the relatives and otheracquaintance to avoid starvation. These sufferings continuetill the competent adjudicatory forum decides on the legalityof the action taken by the employer. The reinstatement of suchan employee, which is preceded by a finding of the competentjudicial/quasi-judicial body or court that the action taken bythe employer is ultra vires the relevant statutory provisions orthe principles of natural justice, entitles the employee to claimfull back wages. If the employer wants to deny back wages tothe employee or contest his entitlement to get consequentialbenefits, then it is for him/her to specifically plead and provethat during the intervening period the employee was gainfullyemployed and was getting the same emoluments. The denialof back wages to an employee, who has suffered due to anillegal act of the employer would amount to indirectlypunishing the employee concerned and rewarding theemployer by relieving him of the obligation to pay back wagesincluding the emoluments.”

13. In Bharat Sanchar Nigam Limited v. Bhurumal,[4]on theother hand, the discretion of the court in directing reinstatement withbackwages in the event of a retrenchment being declared illegal, wasdescribed in the following terms:

“33. It is clear from the reading of the aforesaid judgmentsthat the ordinary principle of grant of reinstatement with full 4 2014 (7) SCC 177

AB

CD

EF

G

A

B

C

D

E

F

G

H

back wages, when the termination is found to be illegal isnot applied mechanically in all cases. While that may be aposition where services of a regular/permanent workman areterminated illegally and/or mala fide and/or by way ofvictimisation, unfair labour practice, etc. However, when itcomes to the case of termination of a daily-wage worker andwhere the termination is found illegal because of a proceduraldefect, namely, in violation of Section 25-F of the IndustrialDisputes Act, this Court is consistent in taking the view thatin such cases reinstatement with back wages is not automaticand instead the workman should be given monetarycompensation which will meet the ends of justice. Rationalefor shifting in this direction is obvious.

34. The reasons for denying the relief of reinstatement in suchcases are obvious. It is trite law that when the termination isfound to be illegal because of non-payment of retrenchmentcompensation and notice pay as mandatorily required underSection 25-F of the Industrial Disputes Act, even afterreinstatement, it is always open to the management to terminatethe services of that employee by paying him the retrenchmentcompensation. Since such a workman was working on daily-wage basis and even after he is reinstated, he has no right toseek regularisation [see State of Karnataka v. Umadevi (3)[(2006) 4 SCC 1]. Thus when he cannot claim regularisationand he has no right to continue even as a daily-wage worker,no useful purpose is going to be served in reinstating such aworkman and he can be given monetary compensation by theCourt itself inasmuch as if he is terminated again afterreinstatement, he would receive monetary compensation onlyin the form of retrenchment compensation and notice pay. Insuch a situation, giving the relief of reinstatement, that tooafter a long gap, would not serve any purpose.

35. We would, however, like to add a caveat here. There maybe cases where termination of a daily-wage worker is foundto be illegal on the ground that it was resorted to as unfairlabour practice or in violation of the principle of last comefirst go viz. while retrenching such a worker daily wagejuniors to him were retained. There may also be a situation JEETUBHA KHANSANGI JADEJA v. KUTCHH DISTRICTPANCHAYAT [S. RAVINDRA BHAT, J.]

AB

that persons junior to him were regularised under some policybut the workman concerned terminated. In suchcircumstances, the terminated worker should not be deniedreinstatement unless there are some other weighty reasons foradopting the course of grant of compensation instead ofreinstatement. In such cases, reinstatement should be the ruleand only in exceptional cases for the reasons stated to be inwriting, such a relief can be denied.”

14. In the present case, this court finds no perversity orunreasonableness on the part of the Labour Court and the single judge indirecting the appellant’s reinstatement. Had the respondent managementchosen to accept the verdict, the appellant would have been spared theagony of waiting for more than 10 years. In such circumstances, thedenial of backwages, has resulted in punishing him, although the delay isattributable to the judicial process. However, the respondent managementcannot be absolved of the primary responsibility in its litigative proclivity.In these circumstances, the appellant shall be entitled to backwages fora period of two years immediately preceding, i.e., from 01.01.2020 to01.01.2022.

C

D

15. In light of the above discussion, the impugned judgment ishereby set aside. The appellant workman shall be reinstated in theservices of the respondent within six weeks from today. He shall also beEentitled to backwages for a period of two years immediately preceding,i.e., from 01.01.2020 to 01.01.2022. The direction of the Labour Courtand the learned Single Judge for continuity of service is also restored.The respondent management is directed to pay the backwages as directedby this court, at current rates, within 6 weeks from today. Hence, theFappeal is allowed in above terms, with no order as to costs.

E

Divya Pandey

(Assisted by : Deepak Panwar, LCRA)

Appeal allowed.

G

H