1. By this petition under Article 227 of the Constitution of India, the petitioner has challenged the award dated 14.2.1994 passed by the learned Presiding Officer, Labour Court, Bharuch in Reference (LCV) No.465/1987 (LCB) No.185/1990.
2. The facts of the case are that the respondent was working as a driver in the office of the Deputy Executive Engineer, Command Area, Road Sub Division, Bharuch from 30.5.1983. With effect from 19.5.1986, his services were terminated. The respondent, therefore, filed a reference application under section 10(1)(c) of the Industrial Disputes Act, 1947 (hereinafter referred to as “the Act”), before the Labour Court, Bharuch, seeking reinstatement with back wages. In the said application, the respondent had stated that he had been engaged as a permanent employee with effect from 30.5.1983 on monthly wages of Rs.800/-. That he had discharged his duties sincerely and honestly and that the respondent, without assigning any reason, had terminated his services with effect from 19.5.1986. Accordingly, he had prayed for reinstatement with back wages from the date of termination of his services.
3. In response to the application made by the respondent, the petitioner filed a reply exhibit-8 stating that since there was a workload with the Sub Division Office, the respondent- workman had been engaged as a work-charge driver in the office of the Executive Engineer, Command Area, Roads Division, Bharuch. However, because the work had come to an end and the Sub Division was closed down, it was not possible to reinstate the respondent-workman. Accordingly, letters dated 15.12.1987 and 3.2.1988 had been given to the respondent-workman. The respondent had also produced a copy of the appointment order as well as the payments made to the respondent-workman and the details with regard to the number of days on which he had discharged his duties. It was further stated that the workman had been appointed as a work-charge driver on a totally ad hoc basis with a clear condition that his services could be terminated at any time without notice. Hence, there was no question of reinstating him. Along with the documents produced by the petitioner, an office order No.190 had also been produced whereby the respondent-workman had been appointed as a tanker driver in the year 1983 along with six other persons whose names had been called for from the Employment Exchange as well as the Social Welfare Officer, Bharuch. The said orders were effective only for a period of three months. Thereafter, another order dated 29.3.1984 was made appointing the respondent for eighty-nine days. Subsequently, by an office order No.148, the respondent was placed in the pay scale of Rs.260-6-308-EB-6- 326-8-35-EB-8-390-10-400 in the year 1984 on a monthly salary of Rs.260/- plus other allowances as per the Government norms. He was also given an letter appointing him on probation for a period of one year and was allotted to the Sub-Division Office. Thereafter, by an order dated 31.12.1985, the respondent was appointed for eighty-nine days on the aforesaid pay scale. Subsequently, by another order No.108/86, he was appointed for twenty-nine days on the same pay scale. The petitioner had also produced bills in respect of the payments made to the respondent-workman.
4. In the proceedings before the Labour Court, the respondent workman submitted his statement on oath stating that he was working as a driver on a monthly salary of Rs.800/- with effect from 30.5.1983 and that he was working as a permanent driver. That on 19.5.1986, without any reason, his service was orally terminated and in his place, a new person had been engaged. After termination of his service, he had made several attempts to seek employment elsewhere, but did not succeed. Hence, he had demanded reinstatement with full back wages. As against the statement on oath made by the respondent, on behalf of the petitioner, no evidence on oath, either written or oral, had been led before the Labour Court.
5. On the basis of the documentary evidence produced by the petitioner referred to hereinabove, the Labour Court observed that the respondent-workman had been appointed as a driver on a permanent post. In respect of the vacancy of such permanent post, names had been called for from the Employment Exchange as well as from the office of the Social Welfare Officer and thereafter, appointment had been made. Not only that, the appointment had been made in the grade of pay scale of Rs.260-400 along with all other allowances. Vide order No.148/1984, the respondent-workman had been appointed on probation for a period of one year. On the basis of such order produced by the petitioner, the Labour Court was of the view that the respondent had been employed on the post of driver on a permanent basis for which purpose physical fitness certificate of the District Civil Surgeon was required to be obtained. An affidavit was obtained from the respondent- workman to the effect that he would obtain a physical fitness certificate from the District Civil Surgeon and that he would pass the prescribed examination within the prescribed time limit etc. There was also a mention that he could be transferred at any place in the State of Gujarat. Considering the nature of conditions stipulated in the appointment order, the Labour Court was of the view that such conditions are normally imposed on permanent employees. As regards the condition that the appointment of the respondent was on a totally ad hoc basis on work-charge establishment and that his services could be terminated at any time without notice, the Labour Court was of the view that in terms of the Government Rules, whenever any person is appointed on a permanent post, initially he is appointed on an ad hoc basis, but that does not mean that he can, at any point of time, be orally terminated from service. After considering the evidence on record, the Labour Court found that in the present case, the respondent- workman had been appointed in the grade of pay scale of Rs.260-400 as a driver and that prior to his appointment, due procedure in accordance with law had been followed by the petitioner by calling for names from the Employment Exchange as well as from the office of the Social Welfare Officer and thereafter, the appointment had been made. The Labour Court found that the respondent-workman had worked for 240 days in a year and was, therefore, entitled to be reinstated on the post of driver, observing that the petitioner had, in its reply to the application, stated that the workman could be transferred to any place in Gujarat. The Labour Court observed that if the work at the place where the respondent-workman was appointed was closed down, he should also have been transferred to another place like the rest of staff who were working in the said Sub-Division, instead of which, his services had been terminated. It is in the light of the aforesaid findings recorded by it that the Labour Court held that the termination of the respondent – workman with effect from 19.5.1986 was illegal and set aside the same, and directed the petitioner to reinstate him to his original post with full back wages
6. Ms. Shruti Pathak, learned Assistant Government Pleader for the petitioner vehemently assailed the impugned order by submitting that the undertaking in which the respondent- workman was engaged as a driver had closed down, hence, there was no question of passing any order of reinstatement. In support of such submission, the learned Assistant Government Pleader placed reliance upon the decision of the apex court in the case of State of M.P. and others v. Arjunlal Rajak, (2006) 2 SCC 711.
6.1 Next it was submitted that the Labour Court for the purpose of arriving at a finding that the termination of the respondent-workman was illegal, had not framed any issue as to whether the workman had completed 240 days in service. It was further submitted that prior to deciding as to whether or not the termination of the respondent was legal, it was incumbent upon the Labour Court to first decide on the issue as to whether the petitioner department was an industry.
6.2 Insofar as non-leading of evidence before the Labour Court is concerned, the learned Assistant Government Pleader submitted that the Division in which the respondent-workman was posted was shut down and as such was not in existence, and hence, the department could not defend the reference which was pending before the Labour Court. It was urged that the petitioner be granted an opportunity to produce certain documentary evidence to defend its case before the Labour Court to establish that the respondent-workman is not entitled to be reinstated.
6.3 Lastly, it was urged that in any case, the Labour Court was not justified in directing payment of full back wages inasmuch as, for the said period, the respondent-workman had not worked with the petitioner, nor is it possible that he could have remained unemployed throughout the said period.
6.4 It was further submitted that the burden of proof as to completion of 240 days of continuous service lies on the aggrieved workman and that in the facts of the present case, the respondent-workman had failed to prove that he had worked for 240 days in a year. In support of such submission, the learned counsel placed reliance upon the decision of the Supreme Court in the case of Krishna Bhagya Jala Nigam Limited v. Mohammed Rafi, (2009) 11 SCC 522.
6.5 The learned counsel placed reliance upon the decision of the Supreme Court in the case of Senior Superintendent Telegraph (Traffic), Bhopal v. Santosh Kumar Seal and others, (2010) 6 SCC 773, wherein it was observed by the Supreme Court that it has been consistently held that relief by way of reinstatement with back wages is not automatic even if termination of an employee is found to be illegal or is in contravention of the prescribed procedure and that monetary compensation in lieu of reinstatement and back wages in cases of such nature may be appropriate. In view of the aforesaid legal position and the fact that the workmen were engaged as daily wagers about 25 years back and they had worked hardly for 2 or 3 years, the court held that relief of reinstatement and back wages to them could be said to be justified and instead monetary compensation would sub-serve the ends of justice. The court, accordingly, held that the compensation of Rs.40,000/- to each of the workmen shall meet the ends of justice. It was submitted that in the facts of the present case also, the order of reinstatement with back wages is required to be set aside by substituting the same by an order of lumpsum compensation if at all the court is not inclined to set aside the award.
7. Vehemently opposing the petition, Mr. P. H. Pathak, learned counsel for the respondent-workman submitted that there is no error of fact or law committed by the Labour Court which requires interference by this court in exercise of its extraordinary jurisdiction under Article 227 of the Constitution of India. It was submitted that the submission that the Command Area Roads Division had been closed down is not true, and that the work is still in existence and continues. Besides merely shifting of the office from one place to another would not result into non-availability of work. It was urged that no procedure in accordance with law was followed by the petitioner while terminating the services of the respondent- workman and that the principle of “Last come first go” was also not followed, inasmuch as, the juniors of the respondent- workman were continued in service. It was argued that though various contentions have been raised in the petition, no material in support thereof was produced before the Labour Court and as such, the petitioner cannot be permitted to raise new pleas for the first time before this court. In support of his submissions, the learned counsel placed reliance upon the decision of the Supreme Court in the case of Mohan Lal v. Management of M/s Bharat Electronic Ltd., (1981) 3 SCC 225, for the proposition that where the termination is illegal, a declaration follows that the workman concerned continues to be in service with all back wages and consequential benefits. It was submitted that under the circumstances, the Labour Court was fully justified in directing the reinstatement of the respondent-workman with full back wages
7.1 The learned counsel also placed reliance upon the decision of the Supreme Court in the case of Devinder Singh v. Municipal Council, Sanaur, (2011) 6 SCC 584, wherein the Supreme Court restored the award passed by the Labour Court for reinstatement of the appellant therein and also held that the workman would be entitled to wages for the period between the date of award and the date of actual reinstatement.
7.2 Reliance was also placed upon the decision of the Supreme Court in the case of Mohd. Yunus v. Mohd. Mustaqim and others, AIR 1984 SC 38, for the proposition that a mere wrong decision without anything more is not enough to attract the jurisdiction of the High Court under Article 227. The supervisory jurisdiction conferred on the High Courts under Article 227 of the Constitution is limited “to seeing that an inferior Court or Tribunal functions within the limits of its authority”, and not to correct an error apparent on the face of the record, much less an error of law. In exercising the supervisory power under Article 227, the High Court does not act as an Appellate Court or Tribunal. It will not review or re-weigh the evidence upon which the determination of the inferior court or tribunal purports to be based or to correct errors of law in the decision.
7.3 Reliance was also upon the decision of the Supreme Court in the case of Director, Fisheries Terminal Department v. Bhikubhai Meghajibhai Chavda, (2010) 1 SCC 47, wherein the employer failed to prove that the service of no junior employee was continued when the services of the workman were terminated. The court, accordingly, held that the procedure laid down under section 25-G of the Industrial Disputes Act had also not been followed and that the findings on facts by the Labour Court could not be termed as perverse and did not need any interference.
7.4 Mr. Pathak further submitted that the petitioner had not led any oral evidence before the Labour Court and had only filed a reply and that the statement made by the respondent- workman has not been challenged by the petitioner by way of cross-examination. Thus, the deposition of the respondent remains uncontroverted. Thus, the Labour Court upon appreciation of the evidence on record, having found as a matter of fact that the respondent-workman had completed 240 days in a calendar year and that his services were terminated without following due procedure in accordance with law, has, held that such termination was illegal, and as such there is no warrant for intervention by this court.
8. From the facts and contentions noted hereinabove, it emerges that the respondent-workman was employed as a driver in the establishment of the petitioner on a monthly salary of Rs.800/- with effect from 30.5.1983. It also appears that prior to such appointment, names were called for from the Employment Exchange as well as from the office of the Social Welfare Officer and after following due procedure, the respondent-workman had been appointed. During the course of his service with the petitioner, carious orders of appointment appear to have been passed, including the order No.148 made in the year 1984 appointing the respondent in the grade of Rs.260-400 on a monthly pay of Rs.260/- with all other allowances permissible to government employees and was issued an appointment appointing him on probation for a period of one year. The petitioner also produced various other orders appointing the respondent for specific periods before the Labour Court.
9. The respondent-workman had in his statement on oath had stated that he was working as a driver on a monthly salary of Rs.800/- and his services had been terminated with effect from 19.5.1986 without any written order and that in his place, new persons had been appointed. On behalf of the petitioner no evidence had been led before the Labour Court in controversion of the averments made on oath made by the respondent-workman. Thus, the say of the respondent that he had been appointed on a monthly pay of Rs.800/- with effect from 30.5.1983 and that his services had been terminated with effect from 19.5.1986 without following due procedure in accordance with law, and that his place, new persons had been appointed, stands uncontroverted. Under the circumstances, the evidence of the respondent having not been rebutted by the petitioner by leading any evidence on oath, the Labour Court was justified in placing reliance upon the deposition of the respondent-workman as well as the documentary evidence produced in record by the petitioner. As noted earlier, upon appreciation of the evidence on record, the Labour Court has found that the respondent-workman had been appointed by the petitioner by following due procedure in accordance with law and that his appointment was not a back-door entry. Moreover, on the basis of the documentary evidence produced by the petitioner, it was also found that the respondent- workman has completed 240 days in a calendar year.
10. Having regard to the fact that the petitioner had been appointed by following due procedure in accordance with law and had completed 240 days in a calendar year, as well as the fact that and his services had been orally terminated without following any procedure and in his place of the new persons had been appointed, no infirmity can be found in view taken by the Labour Court that the termination of the respondent- workman was in violation of the provisions of the Act and, therefore, illegal. The Labour Court was, therefore, justified in directing reinstatement of the respondent-workman.
11. As regards the contention that the establishment having been closed down, there is no question of reinstating the respondent-workman, in the facts of the present case, it appears that the petitioner has failed to lead any evidence before the Labour Court in support of its say that the establishment had been closed on account of which the services of the respondent were required to be terminated. On the contrary, the respondent has led evidence to show that the establishment still continues and that in his place, other persons have been employed, which has not been controverted by the petitioner by leading any evidence whatsoever. Additionally, as observed by the Labour Court, in the appointment order of the respondent-workman, it has been mentioned that he could be transferred anywhere in the State of Gujarat. Under the circumstances, the contention that the services of the respondent were required to be terminated on account of closure of the establishment does not merit acceptance.
12. As regards the contention that the burden of proof that he had worked for 240 days in a year lies upon the workman, it may be noted that the Labour Court has upon appreciation of the evidence on record, found as a matter of fact that the respondent had completed 240 days in a year. Under the circumstances, the said contention also does not merit acceptance.
13. The next question that arises for consideration is whether the Labour Court was justified in directing payment of full back wages to the respondent. At this juncture, reference may be made to the law laid down by the Supreme Court in this regard.
14. In Reetu Marbles v. Prabhakant Shukla, (2010) 2 SCC 70, the Supreme Court held that the principle that the payment of back wages has a discretionary element involved in it and has to be dealt with in the circumstances of each case and no straitjacket formula can be evolved. Payment of full back wages upon an order of termination being declared illegal cannot be granted mechanically. It does not automatically follow that reinstatement must be accompanied by payment of full back wages even for the period the workman remained out of service and contributed little or nothing to the industry.
15. In Senior Superintendent Telegraph (Traffic), Bhopal v. Santosh Kumar Seal, (supra) the Supreme Court held thus:
“9. In the last few years it has been consistently held by this Court that relief by way of reinstatement with back wages is not automatic even if termination of an employee is found to be illegal or is in contravention of the prescribed procedure and that monetary compensation in lieu of rein- statement and back wages in cases of such nature may be appropriate. (See U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey, (2006) 1 SCC 479, Uttaranchal Forest Devel-
opment Corpn. v. M.C. Joshi, (2007) 9 SCC 353, State of M.P.
v. Lalit Kumar Verma, (2007) 1 SCC 575, M.P. Admn. v. Trib- huban, (2007) 9 SCC 748, Sita Ram v. Moti Lal Nehru Farm- ers Training Institute, (2008) 5 SCC 75, Jaipur Development Authority v. Ramsahai, (2006) 11 SCC 684, GDA v. Ashok Ku- mar, (2008) 4 SCC 261 and Mahboob Deepak v. Nagar Pan- chayat, Gajraula, (2008) 1 SCC 575.) 10. In a recent judgment authored by one of us (R.M. Lodha, J.) in Jagbir Singh v. Haryana State Agriculture Mktg. Board, (2009) 15 SCC 327, the aforesaid decisions were no- ticed and it was stated: (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 ter- mination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily fol- low. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has con- sistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inap- propriate in a given fact situation even though the termina- tion 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 reinstate- ment 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 employ- ee.”
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 sub- serve the ends of justice. In our considered view, the com- pensation of Rs 40,000 to each of the workmen (Respond-
ents 1 to 14) shall meet the ends of justice. We order ac- cordingly. Such payment shall be made within 6 weeks from today, failing which the same shall carry interest at the rate of 9% per annum.”
16. In Gujarat Agricultural University v. All Gujarat Kamdar Karmachari Union, (2009) 15 SCC 335, the Supreme Court held that a just balance needs to be struck between the doctrine of “no work, no pay” and the recent trend that this doctrine is not absolute and cannot be applied as a rule of thumb. As per the doctrine of “no work, no pay”, if a person has worked, he must be paid and if he has not worked, he should not be paid. But there is another often repeated principle in service jurisprudence according to which if an employer has wrongly denied an employee his due then in that case the employee should be given full monetary benefits thereof. Of late, the courts have followed the principle that a person is not entitled to get something only because it would be lawful to do so. A relief of reinstatement and back wages in case of illegal retrenchment or termination under section 25-F is also not automatic.
17. In Jagbir Singh v. Haryana State Agricultural Mktg. Board, (2009) 15 SCC 327, the Supreme Court held thus:
“7. It is true that the earlier view of this Court articulated in many decisions reflected the legal position that if the ter- mination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily fol- low. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has con- sistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inap- propriate in a given fact situation even though the termina- tion of an employee is in contravention of the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice.
8. In U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey, (2006) 1 SCC 479 the question for consideration be- fore this Court was whether direction to pay back wages consequent upon a declaration that a workman has been re- trenched in violation of the provisions of Section 6-N of the U.P. Industrial Disputes Act, 1947 (equivalent to Section 25-F of “the 1947 Act”) as a rule was proper exercise of discre- tion. This Court considered a large number of cases and ob- served thus: (SCC pp. 491-92, paras 41-43 & 45) “41. The Industrial Courts while adjudicating on disputes between the management and the workmen, therefore, must take such decisions which would be in consonance with the purpose the law seeks to achieve. When justice is the buzzword in the matter of adjudication under the Indus- trial Disputes Act, it would be wholly improper on the part of the superior courts to make them apply the cold letter of the statutes to act mechanically. Rendition of justice would bring within its purview giving a person what is due to him and not what can be given to him in law.
42. A person is not entitled to get something only be- cause it would be lawful to do so. If that principle is applied, the functions of an Industrial Court shall lose much of their significance.
43. The changes brought about by the subsequent de- cisions of this Court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalisation, privatisation and outsourcing, is evident.
* * * 45. The Court, therefore, emphasised that while granting relief, application of mind on the part of the Industrial Court is imperative. Payment of full back wages, therefore, cannot be the natural consequence.”
9. This Court in Uttaranchal Forest Development Corpn. v.
M.C. Joshi, (2007) 9 SCC 353 held that relief of reinstate- ment with full back wages were not being granted automat- ically only because it would be lawful to do so and several factors have to be considered, few of them being as to whether the appointment of the workman had been made in terms of statute/rules and the delay in raising the industrial dispute. This Court granted compensation instead of rein- statement although there was violation of Section 6-N of the U.P. Industrial Disputes Act, 1947 (equivalent to Section 25-F of the 1947 Act). This is what this Court said: (SCC p. 356, para 9) “9. Although according to the learned counsel appearing on behalf of the appellant the Labour Court and the High Court committed an error in arriving at a finding that in ter- minating the services of the respondent, the provisions of Section 6-N of the U.P. Industrial Disputes Act were contra- vened, we will proceed on the basis that the said finding is correct. The question, however, would be as to whether in a situation of this nature, relief of reinstatement in services should have been granted. It is now well settled by reason of a catena of decisions of this Court that the relief of rein- statement with full back wages would not be granted auto- matically only because it would be lawful to do so. For the said purpose, several factors are required to be taken into consideration, one of them being as to whether such an ap- pointment had been made in terms of the statutory rules. Delay in raising an industrial dispute is also a relevant fact.”
10. In State of M.P. v. Lalit Kumar Verma, (2007) 1 SCC 575 this Court substituted the award of reinstatement by compensation. In yet another decision in M.P. Admn. v. Trib- huban, (2007) 9 SCC 748 this Court reversed the High Court's order directing reinstatement with full back wages and instead awarded compensation. It was opined: (SCC p. 755, paras 12-13) “12. In this case, the Industrial Court exercised its discre- tionary jurisdiction under Section 11-A of the Industrial Dis- putes Act. It merely directed the amount of compensation to which the respondent was entitled had the provisions of Section 25-F been complied with should be sufficient to meet the ends of justice. We are not suggesting that the High Court could not interfere with the said order, but the discretionary jurisdiction exercised by the Industrial Court, in our opinion, should have been taken into consideration for determination of the question as to what relief should be granted in the peculiar facts and circumstances of this case. Each case is required to be dealt with in the fact situation obtaining therein.
13. We, therefore, are of the opinion that keeping in view the peculiar facts and circumstances of this case and partic- ularly in view of the fact that the High Court had directed re- instatement with full back wages, we are of the opinion that interest of justice would be subserved if the appellant herein be directed to pay a sum of Rs 75,000 by way of compensa- tion to the respondent. This appeal is allowed to the afore- mentioned extent.”
11. In Sita Ram v. Moti Lal Nehru Farmers Training Insti- tute, (2008) 5 SCC 75 this Court considered the question as to whether the Labour Court was justified in awarding rein- statement of the appellants therein: (SCC p. 81, paras 21- 25) “21. The question, which, however, falls for our consider- ation is as to whether the Labour Court was justified in awarding reinstatement of the appellants in service.
22. Keeping in view the period during which the services were rendered by the respondent (sic appellants); the fact that the respondent had stopped its operation of bee farm- ing, and the services of the appellants were terminated in December 1996, we are of the opinion that it is not a fit case where the appellants could have been directed to be reinstated in service.
23. Indisputably, the Industrial Court, exercises a discre- tionary jurisdiction, but such discretion is required to be ex- ercised judiciously. Relevant factors therefor were required to be taken into consideration; the nature of appointment, the period of appointment, the availability of the job, etc. should weigh with the court for determination of such an is- sue.
24. This Court in a large number of decisions opined that payment of adequate amount of compensation in place of a direction to be reinstated in service in cases of this nature would subserve the ends of justice. (See Jaipur Development Authority v. Ramsahai, (2006) 11 SCC 684, M.P. Admn. v. Tribhuban and Uttaranchal Forest Development Corpn. v.
M.C. Joshi.)
25. Having regard to the facts and circumstances of this case, we are of the opinion that payment of a sum of Rs 1,00,000 to each of the appellants, would meet the ends of justice. This appeal is allowed to the aforementioned extent. In the facts and circumstances of this case, there shall be no order as to costs.”
12. In GDA v. Ashok Kumaf, 92008) 4 SCC 261 this Court again considered the question whether the Labour Court was justified in awarding the relief of reinstatement with full back wages in favour of the workman and held: (SCC pp. 264-65, paras 18-22) “18. The first respondent was admittedly appointed on a daily wage of Rs 17 per day. He worked for a bit more than two years. It has not been disputed before us that sanction of the State of U.P. was necessary for creation of posts. The contention of the appellant before the Labour Court that the post was not sanctioned after 31-3-1990 by the State was not denied or disputed. If there did not exist any post, in our opinion, the Labour Court should not have directed rein- statement of the first respondent in service.
19. A statutory authority is obligated to make recruit- ments only upon compliance with the equality clause con- tained in Articles 14 and 16 of the Constitution of India. Any appointment in violation of the said constitutional scheme as also the statutory recruitment rules, if any, would be void. These facts were required to be kept in mind by the Labour Court before passing an award of reinstatement.
20. Furthermore, public interest would not be subserved if after such a long lapse of time, the first respondent is dir- ected to be reinstated in service.
21. We are, therefore, of the opinion that the appellant should be directed to pay compensation to the first respond- ent in stead and in place of the relief of reinstatement in service.
22. Keeping in view the fact that the respondent worked for about six years as also the amount of daily wages which he had been getting, we are of the opinion that the interest of justice would be subserved if the appellant is directed to pay a sum of Rs 50,000 to the first respondent. The said sum should be paid to the respondent within eight weeks from date, failing which the same shall carry interest at the rate of 12% per annum. The appeal is allowed to the afore- said extent. However, in the facts and circumstances of this case, there shall be no order as to costs.”
13. In Mahboob Deepak v. Nagar Panchayat, Gajraula, (2008) 1 SCC 575 it was observed: (SCC pp. 577-78, paras 6-13) “6. Such termination of service, having regard to the fact that he had completed 240 days of work during a period of 12 months preceding the said date, required compliance with the provisions of Section 6-N of the U.P. Industrial Disputes Act. An order of retrenchment passed in violation of the said provision although can be set aside but as has been noticed by this Court in a large number of decisions, an award of reinstatement should not, however, be automat- ically passed.
7. The factors which are relevant for determining the same, inter alia, are:
(i) whether in making the appointment, the statutory rules, if any, had been complied with;
(ii) the period he had worked;
(iii) whether there existed any vacancy; and
(iv) whether he obtained some other employment on the date of termination or passing of the award.
8. The respondent is a local authority. The terms and con- ditions of employment of the employees are governed by a statute and statutory rules. No appointment can be made by a local authority without following the provisions of the re- cruitment rules. Any appointment made in violation of the said rules as also the constitutional scheme of equality as contained in Articles 14 and 16 of the Constitution of India would be a nullity.
9. Due to some exigency of work, although recruitment on daily wages or on an ad hoc basis was permissible, but by reason thereof an employee cannot claim any right to be permanently absorbed in service or made permanent in ab- sence of any statute or statutory rules. Merely because an employee has completed 240 days of work in a year preced- ing the date of retrenchment, the same would not mean that his services were liable to be regularised.
10. Applying the legal principles, as noticed hereinbefore, the relief granted in favour of the appellant by the Labour Court is wholly unsustainable. The same also appears to be somewhat unintelligible.
11. The High Court, on the other hand, did not consider the effect of non-compliance with the provisions of Section 6-N of the U.P. Industrial Disputes Act, 1947. The appellant was entitled to compensation, notice and notice pay.
12. It is now well settled by a catena of decisions of this Court that in a situation of this nature in stead and in place of directing reinstatement with full back wages, the work- men should be granted adequate monetary compensation. (See M.P. Admn. v. Tribhuban.)
13. In this view of the matter, we are of the opinion that as the appellant had worked only for a short period, the in- terest of justice will be subserved if the High Court's judg- ment is modified by directing payment of a sum of Rs 50,000 (Rupees fifty thousand only) by way of damages to the appellant by the respondent. Such payment should be made within eight weeks from this date, failing which the same will carry interest at the rate of 9% per annum.”
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 reinstate- ment 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.”
18. Examining the facts of the present case in the light of the principles enunciated in the above decisions, insofar as the contention that as the establishment on which the respondent had been employed has been closed down and the services of the respondent-workman have been terminated since long time, some lump sum amount is required to be paid to the respondent is concerned, the Supreme Court in the case of Senior Superintendent Telegraph (Traffic), Bhopal v. Santosh Kumar Seal (supra) on which reliance has been placed by the petitioner was dealing with a case where, the workmen had been employed as daily wagers and the termination had been made about 25 years prior thereto. In the facts of the present case, the respondent was appointed after following due procedure in accordance with law and was not a daily wager. Besides, the award of the Labour Court is made in the year 1994, whereas the termination is of the year 1986. Under the circumstances, the said decision would not be applicable to the facts of the present case.
19. Insofar a the grant of full back wages is concerned, in the present case, before the Labour Court, the respondent has not led any evidence to establish that he had remained unemployed from the time of his termination till the date of the award. Therefore, considering the fact that the services of the respondent had been terminated with effect from 19.5.1986 and the award of the Labour Court was delivered on 14.2.1994, it cannot be gainsaid that the respondent-workman would have obtained some sort of employment elsewhere. Besides, as held in the above decisions merely because the termination is held to be illegal does not automatically entitle the workman to the grant of full back wages. Under the circumstances the award passed by the Labour Court to the extent it has payment of full back wages requires to be interfered with. In the opinion of this court, following the approach adopted by the Supreme Court in various decisions the full back wages awarded by the Labour Court are required to be reduced to 50%.
20. In the light of the aforesaid discussion, the petition partly succeeds and is accordingly allowed to the following extent. The impugned award dated 14.2.1994 passed by the learned Presiding Officer, Labour Court, Bharuch in Reference (LCV) No.465/1987 (LCB) No.185/1990, to the extent the same holds that the respondent-workman is entitled to full back wages is hereby quashed and set aside. It is held and directed that the respondent-workman would be entitled to reinstatement in service with 50% of the back wages from the date of termination of his services. Rule is made absolute to the aforesaid extent, with no order as to costs.
parmar* [HARSHA DEVANI, J.]