Dy. Executive Engineer (Mechanical), Magadalla Port Development Scheme vs Sukhabhai Gandabhai and Others

Learned Advocate Ms. Sejal K. Mandavia appearing on behalf of the petitioner and learned Advocate Mr. D. M. Thakker appearing on behalf of the respondents. Rule Mr. D. M. Thakker learned Advocate on behalf of respondents waives the service of rule with the consent of both the learned Advocates, the matter has been taken up for final hearing today. In the present petition, the award passed by the Labour Court, Surat in Reference Nos. 247, 248 and 265 of 1985 dated 30th September, 1998 has been challenged wherein, the Labour Court, Surat has granted reinstatement with continuity of service with full backwages of interim period. The respondents were appointed as Seaman in the year 1980 and remained in service upto 6th August, 1983 and their service were terminated on 6th August, 1983. The said termination orders were challenged by the respondents-workman before the Labour Court, Surat in Reference Nos. 247, 248 and 265 of 1985. The statement of claim was filed by the respondent workman and reply was submitted by the petitioner. The contention of the petitioner was that they were appointed on probation period and their probation period was not found satisfactory and they remained negligent and also remained absent without prior permission and they were not found fit for the post. Both the parties have produced documentary evidence on record and also submitted written arguments. Before the Labour Court, the contention was raised by the petitioner that respondents were working on probation for specific period, their work was not found satisfactory and by afflux of time, their service were terminated and respondents were daily rated employees and such termination cannot be considered to retrenchment and S. 2(oo)(bb) is applicable and, therefore, S. 25-F is not applicable. The contention of petitioner has been examined by the Labour Court and the Labour Court has come to the conclusion that service of respondents workmen were terminated on 6th August, 1983. After completion of probation period, the respondents were remained in service because respondents have completed more than three years continuous service and, therefore, neither their service were extended on probation and nor they were made permanent. Therefore, respondents-workmen were continued in service after completion of probationary period and, therefore, their service were not terminated by aflux of time as per terms and conditions of probation order and the Labour Court has also considered that service of respondents were terminated because of allegation, misconduct and stigma without holding departmental inquiry against the respondents. Therefore, the Labour Court has set aside the termination order and granted full backwages as gainful employment has not been found to be proved by the petitioner. The reasons given by the Labour Court in paragraph 8 of the award that service of respondents-workmen were not terminated in terms of order of probation and, therefore, S. 2(oo)(bb) is not applicable in the present case but, respondents remained in service after completion of probation period more than three years and service of respondents-workmen were terminated because of misconduct, stigma and allegation without holding any departmental inquiry against the respondents-workmen.

Ms. Mandavia submitted that the Labour Court has committed gross error not to appreciate the contention raised by the petitioner. She cited the decision of the Apex Court reported in Life Insurance Corporation of India and Another Vs. Raghavendra Seshagiri Rao Kulkarni, . She also submitted that in present case the termination was on 6th August, 1983 and dispute was raised in the year of 1985 after the period of two years even though, the Labour Court has granted full backwages from date of termination. She also submitted that the reference was pending before the Labour Court in all twelve years and petitioner is a public body and State authority has to bear the burden of full backwages which ultimately the sufferer is public exchequer. Therefore, she submitted that the award of granting full backwages is required to be interfered and Mr. D. M. Thakker appearing on behalf of respondents-workmen have not seriously objected the contention of petitioner.

The contention of learned Advocate for the petitioner relied upon the decision of the Apex Court reported in Life Insurance Corporation of India and Another Vs. Raghavendra Seshagiri Rao Kulkarni, to the effect that Life Insurance Corporation of India v. Raghavendra Seshagiri Rao Kulkarni wherein, it is observed that termination of probationer in terms of appointment letter does not amount to retrenchment. But, recently the said question has been examined by the Apex Court in case of Dipti Prakash Banerjee v. Satyendra Nath Bose National Centre for Basic Sciences, Calcutta, reported in 1999 SCC 596 : (1999 Lab IC 1114) wherein, it is observed by the Apex Court that it is true that the Supreme Court in some of the cases has held that termination order is not punitive where employer has been given suitable warning or has been advised to improve himself or where he has been given a long rope by way of extension of probation. However, in all such cases there were simple order of termination which did not contain any words amount to stigma. On the other hand, there is a stigma in the impugned order which cannot be ignored because, it will have effect on the appellant''s future. Stigma need not be contained in termination order but, may also be contained in an order or proceeding referred to in termination order or in an Annexure thereto and would vitiate the termination order. Similarly, in case of V. P. Ahuja v. State of Punjab, reported in 2000 AIR SCW 792 : (2000 Lab IC 1022), the Apex Court has observed that a probationer, or temporary servant, is also entitled to certain protection and his service cannot be arbitrarily, nor can those service be terminated in a punitive manner without complying with the principle of natural justice. The termination order founded on the ground that the probationer had failed in the performance of his duties administratively and technically. Ex facie, is stigmatic. Such an order which, on the face of it, is stigmatic, could not have been passed without holding a regular inquiry and giving an opportunity of hearing to the probationer. Plea that, probationer cannot claim any right on post as his services could be terminated at any time during the period of probation without any notice, as set out in the appointment letter, cannot be contenanced. Thereafter, the recently the Apex Court in case of Narsingh Pal v. Union of India, reported in 2000 AIR SCW 1141 : (2000 Lab IC 1377) has observed in relying upon the decision of the Apex Court in Gujarat Steel Tubes Ltd. and Others Vs. Gujarat Steel Tubes Mazdoor Sabha and Others, . The relevant observation of paragraph 53 is as under :

"Masters and servants cannot be permitted to play hide and seek with the law of dismissals and the plain and proper criteria are not be misdirected by terminological cover-ups or by appeal to psychic processes but must be grounded on the substantive reason for the order, whether disclosed or undisclosed. The Court will find out from other proceedings or documents connected with the formal order of termination what the true ground for the termination is. If, thus scrutinised, the order has a punitive flavour in cause or consequence, it is a dismissal. If it falls short of this test, it cannot be called a punishment. To put it slightly differently, a termination effected because the matter is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, is a dismissal, even if he had the right in law to terminate with an innocent order under the standing order or otherwise. Whether, in such a case the grounds are recorded in a different proceeding from the formal order does not detract from its nature. Nor the fact that, after being satisfied of the guilt, the master abandons the inquiry and to proceeds to terminate. Given an alleged misconduct and alive nexus between it and the termination of service the conclusion a dismissal. Even if full benefit as on simple termination are given and none injurious terminology is used.

Applying the above principles, the order in the instant, case, cannot be treated to be a simple order of retrenchment. It was an order passed by way of the punishment and, therefore, was an order of dismissal which having been passed without holding a regular departmental inquiry, be sustained."

The decision cited by Ms. Mandavia cannot be applicable to the facts of the present case because, in the present case the probation period was six months from date of joining in the year 1980 but, respondents-workmen remain in service upto 6th August, 1983, meanwhile their services were neither extended nor terminated. The Labour Court has set aside the termination on the ground of misconduct without holding departmental inquiry therefore, question of retrenchment does not arise and service of respondent was not terminated as per terms of order of probation.

In view of above three decisions of the Apex Court in case of Dipti Prakash Banerjee (1999 Lab IC 1114), V. P. Ahuja (2000 Lab IC 1022) and Narsingh Pal (2000 Lab IC 1377), the view taken by the Labour Court is legal, valid and proper. The finding recorded by the Labour Court that service of respondent has been terminated on the ground of misconduct and stigma without holding departmental inquiry is rightly set aside by the Labour Court and, therefore, the order of the Labour Court setting aside the termination and directing the reinstatement with continuity of service cannot required any interference by this Court.

Now question is required to be examined so far as relating to the question of granting full backwages of interim period as directed by the Labour Court. In the present case the termination was dated 6th August, 1983. The reference made in the year of 1985 and date of award is 30th September, 1998. The net result is that the respondents who have worked about three years service with the petitioner, are entitled the salary of 16 years without worked in between. Whether in such circumstances, the full backwages can be granted or not. The reference is pending before the Labour Court for final decision upto twelve years. Petitioner is a public body and State authority. Respondents were not a permanent workman. Considering these all aspects in such, cases, the, Apex Court has considered similar situation in case of H.M.T. Limited v. Labour Court, Ernakulam, reported in (1994) 2 CLR 22. The Apex Court has observed that we don''t find that any error has been committed by the High Court in upholding the award of the Labour Court reinstating the workmen. However, we find that the dismissal of the workmen were on July 30, 1979 and till date more than 14 years have elapsed. It is not accepted that no party should suffer on account of the delay in the decision by the Court. Taking all facts into consideration, we are of the view that it would meet the ends of justice in the present case if instead of full backwages, the workmen concerned are given 60% backwages till they are reinstated. Similarly, recently such question has been examined by the Apex Court in the case of Management Of MCD Vs. Prem Chand Gupta and Another, . The Apex Court has observed that the reason for not granting full backwages from the date of his termination i.e. 29th April, 1966 till the actual reinstatement pursuant to the present order can now be indicated. Firstly, for no fault of the contesting parties, the litigation has lingered for more than 3 decades. To saddle the appellant-Corporation and its Exchequer which is meant for public benefit with full backwages for the entire period would be too harsh to the appellant-Corporation. There is delay in disposal of cases in the Courts, that has created this unfortunate situation for both the sides. The respondent-workman is also not at fault as he was clamouring for justice for all these years. However, this delay in Courts proceedings for no fault of either sides, permits us not to burden the appellant-Corporation being a public body, with full backwages for the entire period of respondent-workman unemployment especially when no fault of either side actual work could not be taken from the respondents-workmen by the appellant-Corporation. It is true that the respondents-workmen was always willing to work but he could not be permitted to work so long as the termination order stood against them. All these factors together point in the direction of not saddling the appellant-Corporation, a public body with the burden of entire full backwages to be granted to the respondents-workmen after the passage of 33 years since their order of termination. The second reason is that the respondents-workmen for all these years could not have remained totally unemployed though there is not clear evidence that they were gainfully employed and were so well off that they should be denied complete backwages but keeping in view the fact that for all these long years fortunately fact that for all these long years fortunately the respondents-workmen had survived and has still 2 more years to reach the age of superannuation as we are told that not granting to them full backwages on the peculiar facts and circumstances of this case, would meet the end of justice. The appellant-Corporation shall reinstate the respondent-workman with continuity of service within 8 weeks from today and still also pay 50% backwages from the date of termination till their actual reinstatement in service of the appellant-Corporation with continuity of service.

In light of the observations made by the Apex Court in two above referred cases, in the present case the termination of respondents-workmen was 6th August, 1983, they completed more than 3 years service. They were not a permanent employee. He raised dispute against the termination after the period of 2 years. The petitioner is a public body and State authority. The 12 years period has been passed in taking decision by the Labour Court in reference. Considering all these aspects and observations made by the Apex Court, if the backwages for the period from the date of termination to date of reference is not granted to the respondents-workmen because of inaction on the part of the respondent-workmen not to raise dispute immediately after the termination, therefore respondents-workmen are not entitled to backwages from the date of termination i.e. 6th August, 1983 to the date of reference and respondents-workmen are entitled to 60% backwages from the date of reference to 30th September, 1998, date of award and full backwages from the date of award till the date of actual reinstatement. If such direction will be given in respect to the backwages of interim period, which will meet the ends of justice between the parties.

Therefore, the award passed by the Labour Court, Surat in Reference Nos. 247, 248 and 265 of 1985 dated 30th September, 1998 is modified qua backwages as under confirming the direction of granting reinstatement with continuity of service.

The respondents-workmen are not entitled for any backwages from the date of termination 6th August, 1983 to date of reference and entitled to 60% backwages from the date of reference till the date of award 30th September, 1998 and full wages from date of award 30th September, 1998 till the date of actual reinstatement. Therefore, the award of granting full backwages by the Labour Court is modified as above.

Therefore, present petition is partly allowed. Rule made absolute to that extent and it is directed to the petitioner to reinstate the respondents-workmen with continuity of service with all consequential benefits as if, respondents-workmen were deemed to be in service throughout within a period of six weeks from the date of receiving the certified copy of this order. It is further directed that the petitioner to pay 60% backwages to the respondents-workmen from the date of reference till the date of award i.e. 30th September, 1998 and it is further directed to pay full wages to the respondents-workmen from the date of award i.e. 30th September, 1998 till the date of actual reinstatement within a period of eight weeks from the date of receiving certified copy of this order. It is further declared that respondents-workmen are not entitled for any amount of backwages from the date of termination i.e. 6th August, 1983 till the date of reference.

In view of the aforesaid observation and direction, the present petition is partly allowed. Rule made absolute to that extent. No order as to costs.

Petition partly allowed.