Rajeetram B. Upadhyay vs R.K. Films and Studios Pvt. Ltd.

M.S. Sonak, J.—The challenge in both these petitions is to the judgment and award dated 12.9.2007 passed by the 6th Labour Court, Mumbai in Reference (IDA) No. 665 of 2000. the operative part of which reads as under: "(1) Reference is answered partly in affirmative.

(2) The first party company is directed to pay an amount of Rs. 1,00,000 (Rupees One Lakh only) to the second party workman Rajeetram B. Upadhyay, as a compensation in lieu of reinstatement in the service.

(3) The first party company is also directed to pay 50% wages to the workman as per his last drawn payment from 29.9.2000 till the date of this award.

(4) The first party company is directed to deposit the above said entire amount in the court on or before 30.11.2007, without fail.

(5) Parties to bear their own costs.

(6) Copy of this award be sent to the government, accordingly."

The Writ Petition No. 995 of 2008 has been preferred by the employer R.K. Film & Studios, as against the portion of award which declares that the termination of services of the workman were neither legal nor proper and directs payment of back-wages to the extent of 50 per cent and an amount of Rs. 1 lac by way of compensation in lieu of reinstatement The Writ Petition No. 177 of 2008 has been preferred by the workman, as against the portion of the award which denies him reinstatement with full back-wages and continuity of service.

The facts and circumstances in which the aforesaid challenges arise are that the workman was employed as a watchman with the employer since the year 1983, until termination of his services with effect from 29th September, 2000 on the alleged ground that he misbehaved with Mr. Rajiv Kapoor, the Director of the employer at the security outpost. Admittedly there was neither any letter of termination issued, nor was such termination preceded by any domestic inquiry. At one stage the employer took up the defence that they had not terminated the services of the workman but it is the workman who had abandoned the services without any reasonable cause. The workman raised an industrial dispute which was admitted in conciliation. In the conciliation proceedings, the employer reiterated that there was no termination and even offered to permit the workman to resume duties subject to the employers'' right to conduct a domestic inquiry into the misconduct of the workman. Upon the workman reporting for duties, however, he was not permitted to join duties. On one occasion the workman even reported for duties along with the local policeman. However, with no success. Ultimately, the conciliation proceedings ended in a failure and a reference was made to the Labour Court, in which the aforesaid award dated 12th September, 2007 came to be made (hereafter referred to as "the impugned award").

Mr. Hegde, the learned counsel for the employer, in support of his petition, has made the following submissions:--

"(I) There is material on record which establishes that the workman abandoned his services w.e.f. 27th September, 2000. Inasmuch as such material has been overlooked, the impugned award is vitiated by perversity and unreasonableness;

(II) In any case, there is material on record which suggests that the employer did make efforts to serve the charge-sheet upon the workman, which the workman refused to accept in such circumstances, it is submitted that the employer cannot be faulted for terminating the services of the workman, without conduct of any domestic inquiry;

(III) In any event, consequent upon the employer leading evidence before the labour court, there is ample material on record which establishes that the workman had indeed committed a serious misconduct of dereliction of duties and hurling abuses at Mr. Rajiv Kapoor, the Director of the employer on 27th September, 2000 between 12 to 12.30 p.m. As such, the termination of services was both legal as well as justified;

(IV) The Labour Court, in passing the impugned award has allied the test of proof beyond reasonable doubt, when in fact the correct test to be applied in the course of proceedings before the Labour Court is the test of preponderance of probability. Application of such incorrect test vitiates the impugned award;

(V) There is clear perversity in the matter of appreciation of evidence by the Labour Court. Adverse inference has been unduly drawn against Shri Rajiv Kapoor for not setting out the precise nature of abuses hurled by the workman against him;

(VI) The Labour Court has failed to appreciate the legal trend with regard to award of back-wages, which undergone a sea change. The burden now, is almost entirely upon the workman to establish that despite making efforts to secure gainful employment, he has not been successful in obtaining the same. By ignoring such legal position, the Labour Court has grossly erred in awarding back-wages to the extent of 50 per cent and compensation in lieu of reinstatement to the extent of Rs. 1 lac."

Mr. Thorat, the learned counsel for the workman, apart from countering the aforesaid submissions of Mr. Hegde, made the following submissions in support of the workman''s writ petition:--

"(I) The employer has adopted contradictory stance. On one hand, it was the case of the employer that the workman has abandoned the services. On the other hand it is the case of the employer that the workman''s services were terminated for a justifiable cause. Ultimately, the employer has failed to establish either of the contradictory positions. In such circumstances, the labour court was obliged to award the workman reinstatement with full back-wages and continuity of service;

(II) The Labour Court, having come to conclusion that no misconduct was established as against the workman, could not have, on the basis of mere suspicion declined the workman relief of reinstatement with full back-wages and continuity of service. Such an approach, amounts to offer of a premium to the employer for its unlawful and unjustified act. Similarly, this amounts to penalizing the workman, even after concluding that the workman had committed no misconduct whatsoever;

(III) The onus lie upon the employer to establish that the workman was indeed gainfully employed. The workman had stepped into the box and discharged onus; if any, upon the workman to establish that he was not gainfully employed. Inasmuch as this aspect has been ignored, the impugned award deserves to be interfered with in the petition of the workman."

Both the parties placed reliance on certain decisions, which shall be- referred in the course of this common judgment and order.

Having heard the learned counsel for the respective parties and perused the material on record, I now proceed to evaluate the submissions with a view to disposing of these petitions.

On the first aspect of abandonment of service by the workman, there is absolutely no material to sustain such a plea. In the first place, the employer has not at all been categorical in its stance. When charged with a failure to hold a domestic inquiry, the employer has fallen back upon the position that there has been no termination but rather abandonment of service by the workman. Severally, in the course of conciliation proceedings, the employer did offer the workman, an opportunity to resume services, with liberty to hold a domestic inquiry into the misconduct as alleged, However, the material on record makes it clear that such offer was far from bona fide. The workman did report for duties but was not permitted to actually rejoin the same. The deposition of Sukdev Barappa, API, Chembur Police Station, who was summoned to depose before the Labour Court, makes the position clear that the workman did report for duties, but was prevented from resuming duties by the employer. In such circumstances, there is absolutely no merit in the first contention of Mr. Hegde, in the context of abandonment of services by the workman.

On the aspect of service of charge-sheet upon the workman, the material on record is unsatisfactory and inconclusive. The burden of establishing service upon the workman, is undoubtedly upon the employer. In any case, even if the material on record is held to be sufficient, the same has to be appreciated in the light of the subsequent circumstance, where, in pursuance of the employer''s offer, the workman did make attempt to resume duties, but was prevented from doing so by the employer. Nothing prevented the employer from honouring its offer and thereafter conducting a proper domestic inquiry to bring home the charge of misconduct against the workman. In these circumstances, there is no force in the second submission of Mr. Hegde.

Insofar as the third contention of Mr. Hegde is concerned, the same has to be examined with a caveat. Ordinarily, findings of fact recorded by a Labour Court are immune from challenge, unless they are perverse in the sense based upon no material on record. The findings of fact can also be interfered where relevant evidence has been ignored or where incorrect principle as to appreciation of evidence has been applied. However, one thing is certain and that is, that this court, exercising its extraordinary jurisdiction under Article 226 of the Constitution of India, will not sit in appeal or in an appellate jurisdiction over the findings recorded by a Labour Court.

Mr. Hegde, to a certain extent is right in his criticism that no adverse inference could have been drawn against Mr. Rajiv Kapoor, when he declined to quote the exact wording of the abuses, that may have been hurled against him by the workman. Apart from the circumstance there is no requirement for such precise quotation, Mr. Wisha Remchand Mehta, the production controller, who claims presence at the time of the incident, has in his deposition quoted precise nature of abuse. But as observed by the Labour Court, that by itself is not sufficient to bring home the charge of either insubordination or commission of acts subversive of discipline. There did appear to be several pitfalls in the testimony of both Mr. Rajiv Kapoor and Mr. Wisha Remchand Mehta. Besides, there is material on record that there were other security watchmen at the gate and further that a crowd gathered at the time of the alleged incident. If this be so, at least some independent witnesses could have been examined by the employer to bring home the charge. Ultimately the burden of establishing the charge is upon the employer. There does not appear to be an contemporaneous record of the incident, at least none has been produced on record. There is no consistency in the version of the witnesses. In these circumstances, applying the restrictive parameters of judicial review, this court cannot seriously fault the appreciation of evidence by the Labour Court and conclude that the findings of fact as recorded are either vitiated by perversity or the exclusion of relevant evidence.

Mr. Hegde, placed extensive reliance upon the decisions of the Supreme Court in the case of Union of India (UOI) Vs. Sardar Bahadur, and State of Haryana and Another Vs. Rattan Singh, in support of his submissions that in a domestic inquiry or before a Labour Court, sophisticated rules of evidence do not apply and material on record has to be assessed by applying the test of preponderance of probability. Obviously, this is too settled a proposition to need any authority for its application. However, in the facts of the present case, it would not be proper to suggest that the Labour Court has applied any other test. Based upon preponderance of probability itself, the Labour Court has concluded that the employer has failed to bring home the charge of misconduct against the workman. No fault can, therefore, be found with the approach of the Labour Court, on this count.

Mr. Hegde, then placed reliance upon the decision in the case of Senior Superintendent Telegraph (Traffic) Bhopal Vs. Santosh Kumar Seal and Others, , Chief Administrator, Housing Board Haryana Vs. Diwan Chand, , Prem Chand Sharma Vs. Gannon Dunkerley and Co. Ltd., ; Kendriya Vidyalaya Sangathan and Another Vs. S.C. Sharma, ; U.P. State Brassware Corpn. Ltd. and Another Vs. Udai Narain Pandey, and Allahabad Jal Sansthan Vs. Daya Shankar Rai and Another, , to contend that even where termination of service is found to be illegal, the relief of reinstatement with back-wages is not to be automatically granted.

In the present case, as noted earlier, relief of reinstatement has in fact been declined by the Labour Court. The Labour Court, though has recorded a finding that misconduct was not proved against the workman, has nevertheless given credence to the deposition of Mr. Rajiv Kapoor and Mr. Mehta, to suggest that some incident took place on 27.9.2000 at the security gate. The version of the workman is that Mr. Rajiv Kapoor hurled abuses at him, though Mr. Rajiv Kapoor and Mr. Mehta have deposed otherwise. Mr. Rajiv Kapoor, however, has deposed that the workman complained that he was being made to work like a machine. In the light of the same, the Labour Court in exercise of its discretionary powers under section 11A of the Industrial Disputes Act, came to the conclusion that it would not be in the interest of justice, if the workman is granted the relief of reinstatement. Accordingly the relief of reinstatement came to be denied to the workman. In these circumstances, there is hardly any cause for the employer to complain. The approach of the Labour Court has in fact been conservative and perhaps even more conservative than what is advocated by the various decisions, upon which reliance came to be placed by Mr. Hegde.

Even if the employer were to be successful in proving the charge of misconduct against the workman, it is to be noted that the charge in the present case was basically hurling of abuses at Mr. Rajiv Kapoor, the Director of the employer. There is material on record that the workman had discharged 17 long years of blemishless service prior to the alleged incident. There is evidence emanating from Mr. Rajiv Kapoor himself that the workman was complaining of being made to work like a machine. Such circumstances would have to be taken into consideration, particularly in the matter of exercise of discretion under section 11A of the said Act and in the context of proportionality of the penalty. If blemishless service of 17 years is taken into consideration along with the context in which the misconduct is alleged to have taken place, surely penalty of dismissal from service would appear shockingly disproportionate.

In the case of Rama Kant Misra Vs. The State of Uttar Pradesh and Others, , the Supreme Court in somewhat similar circumstances observed thus;

"8. What has happened here. The appellant was employed since 1957. The alleged misconduct consisting of use of indiscreet or abusive or threatening language occurred on November 18, 1971, meaning thereby that he had put in 14 years of service. Appellant was Secretary of the Workmen''s Union. The respondent management has not shown that there was any blameworthy conduct of the appellant during the period of 14 years'' service he rendered prior to the date of misconduct and the misconduct consists of language indiscreet, improper or disclosing a threatening posture. When it is said that language discloses a threatening posture it is the subjective conclusion of the person who hears the language because voice modulation of each person in the society differs and indiscreet, improper, abusive language may show lack of culture but merely the use of such language on one occasion unconnected with any subsequent positive action and not preceded by any blameworthy conduct cannot permit an extreme penalty of dismissal from service. Therefore, we are satisfied that the order of dismissal was not justified in the facts and circumstances of the case and the Court must interfere. Unfortunately, the Labour Court has completely misdirected itself by looking at the dates contrary to record and has landed itself in an unsustainable order. Therefore, we are required to interfere.

What ought to be the proper punishment in this case? In our opinion, in such a situation withholding of two increments with future effect will be more than adequate punishment for such a low-paid employee".

In the case of Ved Prakash Gupta Vs. Delton Cable India (P) Ltd., , the Supreme Court observed that the conduct of the management in awarding the extreme penalty of dismissal for a flimsy charge of abuse of some worker or officer of the management by the appellant within the premises of the factory was shockingly disproportionate. The termination of the appellant''s service was declared invalid and unsustainable in law, and he was directed reinstatement with full back-wages and other benefits including continuity of service.

In the case of Ram Kishan Vs. Union of India and others, , the Supreme Court ruled that where a constable was dismissed on the charge of abusing his superior but the nature of abusive language was not stated, punishment of dismissal was held to be harsh, and disproportionate. The Supreme Court in paragraph 11 observed thus;

"11. It is next to be seen whether imposition of the punishment of dismissal from service is proportionate to the gravity of the imputation. When abusive language is used by anybody against a superior, it must be understood in the environment in which that person is situated and the circumstances surrounding the event that led to the use of abusive language. No strait-jacket formula could be evolved in adjudging whether the abusive language in the given circumstances would warrant dismissal from service. Each case has to be considered on its own facts. What was the nature of the abusive language used by the appellant was not stated."

Therefore, even if this court were to accept the submissions of Mr. Hegde and come to a conclusion that the charges against the workman were proved, it would be extremely difficult to uphold the action of the employer in imposing the extreme penalty of dismissal from service, particularly in the context of the workman having put in 17 years of blemishless service prior to this solitary instance.

As a corollary to the aforesaid, normally the matter might require a remand to the Labour Court to consider the circumstance as to whether the relief of reinstatement ought to be granted to the workman. However, it is to be noted that the termination in this case has taken effect on 27th September, 2000, and a period of almost 14 years has elapsed since the date of such termination. Further, the approach of the Labour Court in the matter of denial of reinstatement cannot be said to be totally perverse or unreasonable, as to warrant interference at least at this length of time. The Labour Court has observed that some incident of abuses and counter abuses cannot be ruled out. In such circumstances, reinstatement cannot be the best option. Accordingly whilst denying the relief of reinstatement, the Labour Court has proceeded to award compensation of Rs. 1 lac in lieu of reinstatement. This corresponds to wages for a period of approximately three years, if the workman''s salary is regarded as Rs. 3,753 per month at the stage where his services came to be terminated. This amount does appear to be on the lower side.

In my opinion, if the totality of the facts and circumstances are taken into consideration, then it is appropriate if certain additional compensation is awarded to the workman by way of compensation in lieu of reinstatement. As noted earlier, ordinarily in a matter of this type there was no reason to deny reinstatement to the workman. However, the discretion under section 11A of the said Act has been exercised by the Labour Court and at this point of time, it cannot be in the interest of either parties to disturb this exercise of discretion. In the event reinstatement were to have been granted to the workman, then, on the basis of material on record it is reasonable to proceed on the basis that the workman would have discharged services for at least a period of 10 to 15 more years. During this period, the workman would have been entitled to some revision in pay scales. Besides, the workman has also suffered greatly on account of his illegal and unjustified termination. Taking into consideration all these circumstances in their totality, it is just fit and proper, if in addition to the amount of Rs. 1 lac as compensation in lieu of reinstatement a further amount of Rs. 1 lac is awarded to the workman, towards compensation in lieu of reinstatement.

In determining compensation in lieu of reinstatement, it shall have to be noted that the very idea of reinstatement implies reinstatement or the re-establishment to the former condition, from which a person may have been removed. In this context, it would be useful to refer to the decision of the Supreme Court in the case of Deepali Gundu Surwase Vs. Kranti Junior Adhyapak Mahavidyalaya (D. Ed.) and Others, , wherein at paragraph 22 it is observed thus:

"22. The very idea of restoring an employee to the position which he held before dismissal or removal or termination of service implies that the employee will be put in the same position in which he would have been but for the illegal action taken by the employer. The injury suffered by a person, who is dismissed or removed or is otherwise terminated from service cannot easily be measured in terms of money. With the passing of an order which has the effect of severing the employer-employee relationship, the latter''s source of income gets dried up. Not only the employee concerned, but his entire family suffers grave adversities. They are deprived of the source of sustenance. The children are deprived of nutritious food and all opportunities of education and advancement in life. At times, the family has to borrow from the relatives and other acquaintance to avoid starvation. These sufferings continue till the competent adjudicatory forum decides on the legality of the action taken by the employer. The reinstatement of such an employee, which is preceded by a finding of the competent judicial/quasi-judicial body or court that the action taken by the employer is ultra vires the relevant statutory provisions or the principles of natural justice, entitles the employee to claim full back-wages. If the employer wants to deny back-wages to the employee or contest his entitlement to get consequential benefits, then it is for him/her to specifically plead and prove that during the intervening period the employee was gainfully employed and was getting the same emoluments. The denial of back-wages to an employee, who has suffered due to an illegal act of the employer would amount to indirectly punishing the employee concerned and rewarding the employer by relieving him of the obligation to pay back-wages including the emoluments".

On the aspect of back-wages, the Labour Court has awarded back-wages to the extent of 50 per cent. The evidence on record, is by no means quite clinching on the aspect of the issue of gainful employment by the workman. In making the award, the labour court has obviously gone by the principles laid down in the decisions to which reference has been made in paragraph 13 of this judgment and order. There is no perversity or unreasonableness in the approach of the Labour Court. Ultimately, the Labour Court has undertaken a balancing exercise. The substantial enhancement in compensation in lieu of reinstatement, to a certain extent would mitigate the grievance of the workman, in the matter of denial of back-wages to the extent of 50 per cent. Therefore, taking into consideration the totality of the circumstances, there is no reason to interfere with the award made by the Labour Court, insofar as the aspect of back-wages is concerned.

In the result, Writ Petition No. 995 of 2008 is liable to be dismissed and the same is hereby dismissed. Insofar as Writ Petition No. 177 of 2008 is concerned, the impugned award is interfered with to the extent of substituting the amount of compensation in lieu of reinstatement from Rs. 1 lac to Rs. 2 lacs. Rule is made absolute only to the aforesaid extent in Writ Petition No. 177 of 2008.

The interim order made on 28.4.2008 record that the employer shall deposit in this court an amount of Rs. 3,57,000. The record at least prima facie indicates that an amount of only Rs. 2,57,000, has been deposited by the employer on 23.5.2008. As per the impugned award, now modified by this judgment and order, the employer is, therefore, required to pay an additional amount of Rs. 1 lac to the workman. Accordingly, the employer is directed to deposit in this Court a further amount of Rs. 2 lacs within a period of four weeks from today. Upon this amount of Rs. 2 lacs, the employer is directed to deposit interest @9% per annum from 28.5.2008.

The Registry is directed to pay to the workman i.e. Mr. Rajeetram B. Upadhyay, an amount of Rs. 2,57,000 along with interest, if any, as may have been accrued thereon, within a period of two weeks from today, Further upon deposit of the amount of Rs. 2 lacs along with interest as directed by this judgment and order, the Registry is directed to pay the said amount to the workman i.e. Rajeetram B. Upadhyay. With the aforesaid directions, both the writ petitions are disposed of.