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State Bank Of India, Zonal Office, ... vs Ram Chandra Dubey And Others

High Court Of Judicature at Allahabad|05 April, 1999

JUDGMENT / ORDER

JUDGMENT O. P. Garg, J.
1. An Interesting and important question of law, that has been canvassed in the present writ petition under Article 226 of the Constitution of India, is whether the reinstatement of workmen without a specific order for the payment of back wages would necessarily mean rejection of the claim for such wages. To understand the background in which the controversy has come to be raised, it Is necessary to narrate certain facts.
2. Twenty-six workmen, Including the respondent Nos. 1 to 23 were employed by the petitioner-Bank between 4th May, 1961 and November, 1962. The services of all the 26 employees were terminated on 16.8.1969. An Industrial dispute was raised and the Central Government by its notification dated 21.6.1985 referred the following dispute for adjudication to the Central Government Industrial Tribunal-cum-Labour Court, Kanpur:
"Whether the action of State Bank of India In relation to their Gorakhpur Branch in terminating the services of Sri Ram Chandra Dubey and 25 other employees of the Bank, (as mentioned in Annexure) is Justified? If not to what relief are the workmen concerned entitled?"
A reference came to be registered as in dustrial Dispute No. 255 of 1985. Both the parties canvassed their points of view before the Tribunal. An award dated 4.2.1987, a copy of which is Annexure-1 to the writ petition, was made. After elaborate discussion of the facts and the rival contentions of the parties, it was concluded :
"19. That in any view of the matter the services of the workmen could not have been terminated. Consequently I hold that the action of the management of State Bank of in dia in relation to their Gorakhpur Branch in terminating the services of Sri Ram Chandra Dubey and 25 other employees of the Bank as mentioned in the Annexure is not Justified.
20. The result is that all the workmen mentioned in the Annexure to the reference order are entitled to be reinstated in service w.e.f. 16.8.69."
The petitioner challenged the validity of the award before this Court by filing a writ petition, being Civil Misc. Writ No. 9901 of 1987. An interim order staying the operation of the award was passed subject to the condition that all the workmen are reinstated. The workmen in whose favour the award was made were reinstated on 4.2.1987. By order dated 9.1.1997, a copy of which is Annexure-2 to the writ petition. Civil Misc. Writ Petition No. 9901 of 1987 was dismissed by this Court as it was found that the award in question does not suffer from any error of law. A passing reference was made to the question, which is the subject-matter of challenge in the present petition that the workmen who have been reinstated in service, are not entitled to past wages as 'the award on the point is absolutely silent. This question was not gone into in the said writ petition primarily on the ground that there was no challenge against the award on the said ground. Out of 26, workmen, who were reinstated, respondent Nos. 1 to 23 moved three separate applications under Section 33C(2) of the industrial Disputes Act. 1947 (hereinafter referred to as 'the Act') for computation of the amount of back wages on the basis of the award. All these three applications (L.C.A. Nos. 335. 336 and 340 of 1997 have been decided by the impugned order dated 11.9.1998, a copy of which is Annexure-7 to the writ petition. Back wages for the period 16.8.1969 as per details given in the Annexure appended to the order, were computed.
3. The petitioner-Bank has challenged the impugned order dated 19.11.1998 mainly on the ground that in the absence of any direction in the award regarding payment of back wages, the question of that claim being entertained under Section 33C(2) of the Act did not arise and, therefore, the applications moved by the respondent-workmen were not maintainable in law ; that though the workmen have been reinstated w.e.f. 16.8.1969 impliedly granting continuity in service, workmen do not, as a matter of right, become automatically entitled to back wages in full or in part ; that in the absence of the specific order, back wages could not be awarded to the respondent-workmen and in any case, the amount as calculated by the respondent No. 24-Central Government in distrial Tribunal-cum-Labour Court. Kanpur Nagar (hereinafter referred to as 'the Tribunal'), without taking into consideration the evidence of the petitioner-Bank is wrong and excessive. On the above grounds, it is prayed that the impugned order dated 19.11.1998. Annexure-7 to the writ petition be quashed.
4. Sri H. N. Singh, appearing on behalf of respondent Nos. 1 to 23 stated that since the Impugned order is challenged purely on legal matrix, he would not file any counter-affidavit and the writ petition be decided finally at this stage.
5. Heard Sri S. N. Varma, learned senior advocate, assisted by Sri Navin Sinha, learned counsel for the petitioner-Bank and Sri H. N. Singh, on behalf of the respondent workmen.
6. It is an indubitable fact that the award dated 4.2.1987 is totally silent with regard to the payment or non-payment of the back wages though the respondent workmen have been directed to be reinstated w.e.f. 16.8.1969 on which date, their services were terminated. When a workman is reinstated, then on some occasions, some difference of opinion arises regarding the past facilities, wages, leave, Bonus, etc., which are not specifically decreed or awarded by the order by which the workman is reinstated, in the absence of a specific direction, one way or the other, a vex question to make payment of the back wages arises. Whether a workman is entitled to such wages would depend on the meaning and consequence of the order of reinstatement, in the case of wrongful dismissal/termination, reinstatement is the normal relief, which should be granted to the aggrieved workman and this can only be departed from in extraordinary case because the establishment is closed, or the post is abolished or there is bitterness or lack of confidence between the parties or the worker is on the verge of retirement or is old or in firm so as to incapable of discharging his duties. Taking into consideration the material on record, the Tribunal came to the conclusion that reinstatement of the respondent-workmen was the appropriate relief which could be allowed to them. Accordingly, an award for reinstatement was made and the order of reinstatement has further been affirmed by this Court in Civil Misc. Writ Petition No. 9901 of 1987. The order of reinstatement passed in favour of the respondent workmen, therefore, is beyond the pale of challenge.
7. Sri S. N. Varma, learned senior advocate, appearing on behalf of the petitioner-Bank urged that in the absence of specific direction for the payment of back wages, the respondent-workmen were not at all entitled to claim such wages. in support of his contention that a mere order of reinstatement would not necessarily mean reinstatement with back wages, reliance was placed on the decision of the Bombay High Court in the case of Maneck Gopal Divekar v. M/s. Phoenis Mills Ltd. and another, 1988 Lab 1C 629. in which it was observed that an order of reinstatement cannot be construed as an order of reinstatement with back wages. The term 'reinstatement' has to be read with the necessary limitations by which itis governed, such as the reinstatement with or without back wages or reasonable compensation in lieu thereof, it was further observed in the said case that normally when a relief of reinstatement is granted, it is coupled with the order of back wages whether full, half or otherwise, unless there are compelling circumstances in the case for not granting back wages. But the order has to specifically mention granting of back wages when reinstatement is granted otherwise it would necessarily mean reinstatement without back wages in the opinion of learned single Judge of Bombay High Court, it would not be correct to say that an order of reinstatement without back wages does not exist. If an order of reinstatement is to be construed as an order of reinstatement with full back wages there was no necessity for the Legislature to make provisions of four alternatives in granting the relief to a dismissed or discharged workman. With reference to the provisions of Section 30(1)(b) of Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practice Act, which provided for four alternative reliefs, namely, (I) payment of reasonable compensation or (ii) reinstatement (iii) reinstatement with or without back wages, or (iv) payment of reasonable compensation in lieu of back wages, in the case of dismissal, discharge or termination of services, it was observed that when the relief of 'reinstatement simplicitor' is granted it means relief of reinstatement and nothing more and certainly not the back wages along with it. The view taken in the aforesaid case proceeded on the reasoning that if there are four alternatives available to the in dustrial Tribunal or the Labour Court in granting the relief to the complainant and when any one of them is granted, it would necessarily mean rejection of the other three in view of the specific four alternatives provided in the Maharashtra Act, the various observations made in Maneck Copal's case (supra) are to be confined to the facts of that case only. The observations made therein are not of universal application so that they may be transplanted in all the given situations which may arise beyond the purview of the provisions of Maharashtra Act.
8. On behalf of the petitioner, reference was also made to a decision dated 13.11.1995 of learned single Judge of this Court in Gorakhpur Kshetrtya Gramin Bank Mohaddipur. Gorakhpur v. Ram Kripal Nag Banshi, Second Appeal No. 40 of 1995, in that case, the order granting the full back wages by the civil court was challenged, it was urged that where the suit was merely for reinstatement and not for recovery of arrears of salary, the arrears of salary could not be granted without recording a finding that the employee was not gainfully employed. Relying upon the decision in Slate of U. P, and others v. Atal Behari Snastri. (1993) 66 FLR 855 and Depot Manager, Andhra Pradesh State Road Transport Corporation, Hanumakonda v, Venkateshwarulu and another. AIR 1995 SC 258. it was observed that where an employee who was suspended pending departmental enquiry for a criminal charge and an order of reinstatement is passed, he is not automatically entitled to full salary. The order passed by the 1st appellate court was modified in the Second Appeal with the clarification that the plaintiff-employee shall stand restored to his position as it existed Immediately before the order of removal from service was passed, meaning thereby, he was entitled to the subsistence allowance which he was getting during the period of suspension prior to the order of removal. The decision in the Second Appeal, referred to above, which has been heavily relied upon by the learned counsel for the petitioner-Bank is of no help and assistance in the present case for one simple reason that the respondent-workmen Nos. 1 to 23 were immediately before their termination on 16.8.1969 working and getting the salary of the post which they were manning.
9. It is true that the payment of back wages depends on various Imponderables and variable factors. Back wages may not be granted depending upon the finding on the question of gainful employment or otherwise during the period of enforced Idleness, it has been held in a catena of decisions that it is for the employer to establish that the workman was gainfully employed during the period he remained out of job or that there existed certain circumstances which debarred the workman from claiming payment of back wages. Nothing of the kind has been shown in the case of present 23 respondent-workmen.
10. Law is clear on the point that normally reinstatement should carry a direction for payment of back wages. Ordinarily reinstatement contemplates back wages, in a case where reinstatement simplicitor has been ordered without a specific order for the payment of back wages, the question is as to whether such an order of reinstatement Implies direction for payment of back wages also. To answer this question, one has to consider the meaning of the expression 'reinstatement'.
'Reinstatement' results in replacing a person in a position from which he resigned or was dismissed ; it means restoration of the status quo ante the resignation or dismissal, as the case may be. The word 're' when used as a prefix normally means 'again' or 'back'. Reinstatement ordinarily means restoration of ex-employee to his original post and putting him into the position he would have been If he would have continued in service all along and he is therefore, entitled to all back pay allowances and other privileges. The word 'reinstatement' means that the employee is put back in the same position as if he has not been dismissed. The above meaning of the word reinstatement has been explained by Venkatramalya in "Law Lexicon and Legal Maxim' as well as in Words and Phrases Vol. IV, pages 524-525 (Rowland Borrows). This expression was also considered and given the same meaning in Deshbandhu Cinema v. I. T., 1969 (1) LLJ-138 (Patna High Court) and Vihar Talkies v. I. T., (1969) I LLJ 145 (Patna High Court). The effect of reinstatement, therefore, is that it effaces the order of dismissal or termination for all practical purposes and if the order of dismissal/termination is set aside, the employee is restored back to the position and status which he was occupying and enjoying just before the order of dismissal or termination was passed. The order of reinstatement wipes off the stigmatic order of dismissal or termination. Reinstatement implies as if the order of dismissal/termination was never passed. When an order of reinstatement is made, two distinct consequences follow : (1) the worker is reinstated and the contract of service is restored and (2) from the date he is entitled to wages as he was entitled to prior to the date of dismissal/termination and the employee continues to be in service uninterrupted by the offending order. Though in the case of S. V. Mittoo v. L. C., (1973) 2 APLJ 374, it was held that on reinstatement a worker is not automatically entitled to get wages for the entire period, in another case of Andhra Scientific Co. v. L.C., 1971 Lab 1C 513, it was observed that the effect of an award of reinstatement is to restore the employee to his former position and status, it implies that on reinstatement, he should get his full back wages reduced to the extent of the income earned by him elsewhere. Even though the workman has not been in actual service from the date of his termination till the order of termination was set aside, he must be deemed to have remained in service once the order of termination is set aside. This point came to be considered with all specificity by the Apex Court in Af/S. Hindustan Tin Works (P.) ltd, v. Employees of M/s. Hindustan Tin Works (P.) Ltd., AIR 1979 SC 75, The relevant observations which are of far reaching consequence and have a direct bearing on the controversy in hand, may be extracted as below :
"The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid, it would mean that the employer has taken away illegally the right to work of the workman contrary to the relevant law or in breach of contract and simultaneously deprived the workman of his earnings. If thus the employer is found to be in the wrong as a result of which the workman is directed to be reinstated, the employer could not shirk his responsibility of paying the wages which the workman has been deprived of by the illegal or invalid action of the employer. Speaking realistically, where termination of service is questioned as in valid or illegal and the workman has to go through the gamut of litigation, his capacity to sustain himself throughout the protracted litigation is itself such an awesome factor that he may not survive to see the day when relief is granted. More so in our system where the law's proverbial delay has become stupefying. If after such a protracted time and energy consuming litigation during which period the workman just sustains himself, ultimately he is to be told that though he will be reinstated, he will be denied the back wages which would be due to him, the workman would be subjected to a sort of penalty for no fault of his and it is wholly undeserved. Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced Idleness. This is the normal rule. Any other view would be a premium on the unwarranted Alterative activity of the employer. If the employer terminates the service illegally and the termination is motivated as in this case viz.. to resist the workman's demand for revision of wages, the termination may well amount to unfair labour practice, in such circumstances, reinstatement being the normal rule, It should be followed with full back wages. Articles 41 and 43 of the Constitution would insist us in reaching a just conclusion in this respect."
11. in S. M. Sanjad v. Baroda Municipal Corporation, 1965 (50) FLR 81, the workmen were held entitled to the full back wages unless the same could be denied on some relevant grounds, in Union of india v. Sri Babu Kam Lalla, AIR 1988 SC 344, the Apex Court took the view that since the order of termination of the workman was rightly held to be a nullity, he was entitled to be paid salary on the footing that he had always continued in service and the void order was never in existence in the eye of law.
had been denied specifically and the relief of continuity of service had not been denied in any terms except that along with the relief of reinstatement, the word 'continuity' had not been mentioned, It was held that once the relief of reinstatement is granted, the continuity of service is the direct consequence rather inherent in the relief of this nature. When the relief of reinstatement is granted and the continuity of service is not specifically denied the party has to be relegated to the same position as was held by it at the time of termination. It was further observed that when the order of termination has been found to be void, the workman holds the relief of reinstatement with no mention of specific denial of continuity of service, the concerned workman has to be relegated to the position which was obtained at the time of termination of his/her services and there is no question of denying the continuity of service for the period for which the services have been interrupted on account of an unlawful and void order. As regards the question of back wages, it was observed that it is dependent on variable factor of gainful employment during the period of idleness and, therefore, in a given case the relief of back wages cannot be granted depending upon the question of gainful employment or otherwise during the period the party remained out of employment.
12. From the analysis of various decisions, particularly the decision of the Apex Court in the case of M/s. Hindustan Tin Works (P.) Ltd. (supra), it can easily be spelt out that the claim for back wages is implicit, in regal part, and necessary in separable concomitant of the order of reinstatement. The thrust of all the decisions is that ordinarily a workman, whose services have been illegally terminated, would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness, it is the normal rule in Labour Jurisprudence, if the order of termination is void being contrary to the provisions of the Constitution of in dia or mandatory provisions of law in such a case, the employee must be deemed to have continued in service without break and is entitled to salary throughout, it would not make any difference if an order for the payment of back wages has not specifically been passed. On the reinstatement, even though simplicitor, the normal rule of payment of back wages has to be applied unless it is proved that the workman has engaged himself in some gainful employment or there existed any other circumstance to deprive him of the said benefit. The normal rule can be departed from only when the employer objecting to the payment of back wages establishes the circumstances necessitating the departure from the well embedded normal rule, which has in course of time, ripened into law in the instant case, there is no attempt, or even a faint suggestion on the part of the petitioner-Bank to reflect the circumstances to neutralize the normal rule. Undoubtedly the continuity of service of respondent Nos. 1 to 23 has been maintained by making the order of reinstatement w.e.f. 16.8.1969, in the absence of any circumstance to neutralize the normal rule that reinstatement is coupled with the relief of back wages, the respondent Nos. 1 to 23 are entitled to back wages, i.e., for the period 16.8.1969 to 3.2.1987. The impugned order dated 19th November. 1998, therefore, does not suffer from any Illegality or irregularity insofar as it reaches the conclusion that the respondent workmen are entitled to back wages.
13. Now it is time to consider the legal question whether an order for the payment of back wages in the circumstances could be passed by the respondent No. 24 on applications under Section 33C(2) of the Act. Sri S. N. Varma, learned senior advocate and counsel for the petitioner-Bank urged that it is settled law that the proceeding under Section 33C(2) of the Act is in the nature of execution proceedings by which an existing right in favour of an employee under a settlement or award or under the statute can be executed and since no such right of full back wages had accrued in favour of the respondent workmen in terms of the award, which is silent on the question of payment of back wages, the applications under Section 33C(2) of the Act were not maintainable. This submission is nothing but a subterfuge and an attempt to hair-spilt the controversy. A firm finding has been recorded by the respondent No. 4, which has also found approval of this Court that the award cannot be interpreted to mean that the back wages were not implied in the relief of reinstatement, it has been held that the award dated 4.2.1987 by which the reinstatement was ordered, embraced within its ambit the claim for full back wages even though it was silent on the point. Applications under Section 33C(2) of the Act moved by the workmen before the respondent No. 24 were essentially for the purpose of computation of back wages. The respondent No. 24 has not determined any new right in favour of the workmen, it has simply computed the back wages on the basis of the award of reinstatement which conferred a right for claim of back wages on the respondent-workmen.
14. Sri Varma, learned counsel for the petitioner-Bank also urged that the mathematical calculation of the back wages arrived at by the respondent No. 24 has suffered certain in accuracies and on a proper calculation and proof of certain facts, there would arise a wide gap in the amount, which is actually payable to the respondent-workmen and which has been awarded by the respondent No. 24. A pointed reference was made to the observation of the respondent No. 24 in the impugned order that the evidence of Vinod Kumar Agarwal, Deputy Manager, M.W. 1, was not taken in to consideration and the version of the Management was not found to be worth consideration as the claim of the respondent-workmen was not specifically denied in the written statement. Sri H. N. Singh, learned counsel for the respondent-workmen has no objection if in view of the alleged yawning discrepancy recalculation of the back wages is made, It is not possible for this Court to undertake this exercise in the writ jurisdiction.
15. On legal matrix, the writ petition falls and is accordingly dismissed. The respondent No. 24 however, is directed to give a fresh look to the calculation of the back wages payable to the respondent Nos. 1 to 23 and recalculate them in the light of the material, which may be placed before it by the petitioner Bank as well as the respondent workmen. This exercise shall be concluded by the respondent No. 24 within a period of one month from the date a certified copy of this judgment and order is produced by either of the parties. If there are any mistakes in the calculations, they shall be rectified and intimated to the parties. The parties shall bear their own costs. Let certified copy of this judgment and order be supplied to the learned counsel for the parties on payment of usual charges within 72 hours.
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Title

State Bank Of India, Zonal Office, ... vs Ram Chandra Dubey And Others

Court

High Court Of Judicature at Allahabad

JudgmentDate
05 April, 1999
Judges
  • O Garg