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Judgment
M.M. Sundresh, J.—The second respondent herein was working as General Worker with the petitioner. A show cause notice was issued
against the second respondent by the petitioner on 21.10.1994 to show cause as to why action should not be taken against him for indulging in the
incident.
The case of the petitioner is that on 21.10.1994,at about 1.20 p.m, the second respondent has created a scene by pasting a typed wall poster at
the workmen cycle shed containing 8 full scape papers with malicious statement against the petitioner company. The further allegation is that the
second respondent made derogatory remarks in the said wall poster against officers and Directors of the company. In pursuant of the enquiry
conducted the petitioner dismissed the second respondent from service holding that the charges levelled against the second respondent have been
proved. The second respondent raised dispute before the first respondent and the first respondent has allowed the dispute raised by the second
respondent by ordering reinstatement of the second respondent with back wages. Challenging the said award of the labour Court the present writ
petition has been filed after reinstating the second respondent.
While conducting the enquiry three witnesses have been examined on behalf of the petitioner. Management witness No. 1 is sekar, who is said
to have seen the second respondent affixing the posters. However, he has not given any complaint. It is the further case of the first witness that the
contention in the posters are also against him and there was an earlier complaint given by him against the second respondent on 14.10.1994.
According to the said witness, he has seen the second respondent affixing the posters at 1.20 p.m.
M.W.2 is one V. Gangadharan, who has seen the content of the poster at 4 ''O'' clock in the evening. He also deposed to the effect that certain
statements were made in the said poster against him as well. He also says that there was some dispute between him and the second respondent.
According to M.W.2, V. Gangatharan, a complaint was given regarding the said incident on the next day, which was on 22.10.1994.
M.W.3 K. Jayaraman, is the security guard, who was incharge of the petitioner company at that point of time. In Ex.M6, he gave a complaint
through the security guard to the management on the date of occurrence, which was on 21.10.1994. He also deposed that he has read the content
and seen the second respondent affixing the poster.
The labour court has allowed the dispute in favour of the second respondent by holding that the first witness has not given any complaint and no
evidence has been let in about the fate of the earlier complaint given by the first witness. The Labour court also holds that there is dispute between
the second respondent and the first witness prior to the occurrence. Similarly, the labour court finds that there was dispute between the second
respondent and the second witness. In so far as the third witness is concerned the labour court found that he is an interested witness since he was
incharge of the company at that point of time.
The labour court has given findings that in view of the fact that the witnesses state that there are other independent witness available no
explanation has been given to the court, as to why the other independent witness have not been examined. The labour court also gave a finding that
there is discrepancy in the timing mentioned by the witness regarding the alleged occurrence. The labour court has found that the petitioner had not
marked the negative of the photographs. Apart from the same, the labour court has found that the affected persons have not given a complaint
namely, the first witness one Sekar.
In far as the second witness is concerned the labour court also found that regarding the past incident no complaint has been given by him.
Similarly, the labour court also found that the security officer to whom the third witness gave the complaint has not been examined. Therefore, in
the absence of corroboration of the evidences of three witnesses, their evidence cannot be accepted. The labour court has also further held that in
the absence of examination of senior officials it cannot be presumed that the reputation of the management was spoiled due to the acts of the
second respondent. Therefore, based upon the above said reasoning, the labour court has allowed the dispute raised by the second respondent.
The labour court has also observed that the third witness has not stated about the presence of other witnesses in the complaint. The learned
Counsel for the petitioner submit that the labour court has committed an error in exercising the power u/s 11A of the Industrial Disputes Act.
According to the learned Counsel without giving a finding about the decision taken by the petitioner, as perverse arbitrary and as well as based
upon no evidence, the labour court cannot substitute its views for the past enquiry.
The learned Counsel further submits that the reasoning given by the labour court for differing with the evidence of MW 1 to MW3 are not
proper, since, merely because M.W.1 and M.W.2 had some grievance against the third respondent their evidence cannot be rejected. He had
further submitted that the reasoning given regarding discrepancy of the timing actually is incorrect since what was mentioned by M.W.1 and
M.W.2 pertains to an earlier incident. The learned Counsel also submitted that mere non production of the negatives cannot be a ground to reject
the case of the petitioner. In view of the available other materials, the labour court ought to have dismissed the dispute.
In support of this contention the labour court has wrongly exercised the power u/s 11A of the Industrial Disputes Act. The learned Counsel for
the petitioner has relied on a decision reported in 2006 AIR Supreme Court 2730 and 2007 (3) L.L.N. 128.
The learned Counsel has also submitted that in any case the petitioner company being a sick industry the second respondent ordered
backwages, which is not proper even assuming that the writ petitioner is liable to be dismissed on merits. In support of the said contention, the
learned Counsel relied upon the judgment reported in (2009) 5 Supreme Court Cases 705.
Per contra, the counsel for the second respondent had submited that the labour court has come to the conclusion based upon the materials
available on record both oral and documentary. Therefore, such finding of the labour Court cannot be interfered with under Article 226 of the
constitution of India, being a finding arrived on facts. The learned Counsel further submit that the findings of the enquiry officer is not correct, since,
the labour court found that no reasonable man in the circumstances of this case would have accepted such findings.
The learned Counsel submits that even though other independent witnesses were available they have not been examined as against M.W.1 to
M.W.3. According to the counsel, there is no explanation as to why no action was taken against the same complaint made by M.W.1 and also no
explanation as to why M.W.2 has not given any complaint earlier. Therefore, the learned Counsel would submit under those circumstances, this
Court cannot interfere with the award of the Labour Court.
I have considered the submissions made the learned Counsel for the petitioner, as well as that of the second respondent in the presence case
on hand. The second respondent has been reinstated even before the filing of the writ petition on 23.01.2002. It is also not in dispute that after the
reinstatement the second respondent has voluntarily resigned from the petitioner and the resignation letter of the second respondent dated
1.12.2006 was also accepted by the petitioner on 02.12.2006. In pursuant of the said order all the attended benefits have been given to the
second respondent.
Therefore, the only question to consider is as to whether the second respondent is entitled to get the backwages are not Three witnesses have
been examined in order to substantiate the alleged occurrence committed by the second respondent on 21.10.1994. As observed by the labour
court M.W.1 and M.W.2 are the persons against whom statement were said to have been made through the posters by the second respondent.
There are also earlier complaint made against the second respondent for which no action has been taken by the petitioner. However, the second
witness has not made any complaint against the past occurrence.
It is also not in dispute that there were other witnesses who have seen the occurrence and who also said to have seen the posters. Therefore,
there is no explanation given by the petitioner for not examining the other witnesses. In so far as M.W.3 is concerned he is the security guard
incharge. He is also said to have given the complaint to the management through the security officer. The security officer Mr. Mariappan, has not
been examined and show cause notice has been issued on 21.10.94 itself. That is the reason, why the labour court has found that the non
examination of the security officer through whom the complaint was given is fatal to the case of the petitioner. Admittedly, the second witness gave
the complaint on the next day. There is also no explanation as to why the third witness has not stopped are prevented the second respondent from
indulging in the alleged act. Further, the labour court found that the officers have not been examined about the damages caused by the affixing of
the poster. The labour court also found that M.W.1 has not seen the contents of the wall paper.
The labour court has given findings based upon the material available and found that the reasoning of the enquiry officer as accepted by the
petitioner are not proper and infact such a findings of the labour court cannot be said to be against the provisions contained u/s 11A of the
Industrial Disputes Act.
No doubt the labour court has not held that the findings of the enquiry officer is not based upon no evidence and perverse but the labour court
has found that the findings are such that no reasonable man in the circumstances of the case would have given such a finding. Therefore, this Court
is of the opinion that the said findings given by the labour court on appreciation of the material available on record both oral and documentary
evidence cannot be interfered by this Court under Article 226 of the Constitution of India.
In so far as the issue the learned Counsel for the petitioner relied upon a decision reported in Divisional Controller, N.E.K.R.T.C. Vs. H.
Amaresh, . Divisional Controller, N.E.K.R.T.C. v. H. Amaresh. This Court is of the opinion that the said judgment is not applicable to the facts of
the present case. It has been held that once a domestic Tribunal based on evidence comes to a particular conclusion normally it is not open to the
Tribunal and Courts to substitute their subjective opinion in place of the one arrived at by the domestic Tribunal. Therefore, it may not be said that
in a case where the first respondent finds that the finding of the enquiry is not just and proper the same cannot be set aside.
Similarly in the judgment reported 2007 (3) LLN 128. The Hon''ble Supreme Court was pleased observation is as follows:
From the above decisions, it is clear that our legal system also has accepted the doctrine of proportionality. The question, however, is whether
in the facts and circumstances of the present case, the High Court was justified in invoking and applying the doctrine of proportionality. In our
judgment, the answer must be in the negative. Normally, when disciplinary proceedings have been initiated and finding of fact has been recorded in
such inquiry, it cannot be interfered with unless such finding is based on ""no evidence"" or is perverse, or is such that no reasonable man in the
circumstances of the case would have reached such finding. In the present case, four charges had been levelled against the workmen. An inquiry
was instituted and findings recorded that all the four charges were proved. The Labour Court considered the grievances of the workmen, negatived
all the contentions raised by them, held the inquiry to be in consonance with principles of natural justice and findings supported by evidence.
Keeping in view the charges proved, the Labour court, in our opinion, rightly held that the punishment imposed on workmen could not be said to
be harsh so as to interfere with it.
In our opinion, therefore, the High court was not right in exercising power of judicial review under Arts. 226/227 of the Constitution and
virtually substituting its own judgment for the judgment of the management and /or of the Labour Court. To us, the learned Counsel for the
appellant-bank is also right in submitting that apart from charges 1 and 2, charges 3 and 4 were ""extremely serious"" in nature and could not have
been underestimated or underrated by the High Court.
The said judgment would show that in a case where the findings of the enquiry officer is such that no reasonable man in the circumstances of
the case would have rejected the said findings then the said findings are liable to be setaside. What the first respondent has done in the present case
is that the findings of the enquiry officer are wrong and in support of the same the first respondent has given his reasoning from the same, it cannot
be considered that the first respondent has given his findings which are subjective in nature.
In so far as contention of the learned Counsel for the petitioner regarding the back wages are concerned, this Court is of opinion the said
contention merits consideration since it is not in dispute that the petitioner company is a sick company and no counter has been filed disputing the
said contention made in the affidavit filed in support of the petition.
In fact, it has been subsequently stated by the petitioner that for the past 10 years, the petitioner company is in poor financial position. It has
been further stated that as on the date of the filing of the affidavit which is on 18.12.01 the petitioner company has incurred a loss of Rs. 45 crores.
The petitioner was declared as a sick company under the Sick Industrial Companies Act 1985 and that is the reason for the second respondent to
take back and reinstated the second respondent in service in order to avoid the payment of the amount u/s 17b of the Industries Dispute Act.
In support of the contentions the learned relied upon the judgment rendered by the Apex Court reported P.V.K. Distillery Ltd. Vs. Mahendra
Ram, . The Hon''ble court Supreme Court such judgment has observed as follows:
In P.G.I of Medical Education and Research v. Raj Kmar 2 (2001) 2 SCC 54 : 2001 SCC (L&S) 365 this Court has held that: (SCC p. 58,
para 12)
Payment of back wages having a discretionary element involved in it has to be dealt with, in the facts and circumstances of each case and no
straitjacket formula can be evolved, though, however, there is statutory sanction to direct payment of back wages in its entirety.
The issue as raised in the matter of back wages has been dealt with by the Labour Court in the manner as above having regard to the facts and
circumstances of the matter in the issue, upon exercise of its discretion and obviously in a menner which cannot but be judicious in nature. There
exists an obligation on the part of the High Court to record in the judgment, the reasoning before however denouncing a judgment of an inferior
tribunal, in the absence of which, the judgment in our view cannot stand the scrutiny of otherwise being reasonable.
In Hindustan Motors Ltd. Vs. Tapan Kumar Bhattacharya and Another, this Court has stated that Section 11A as amended in 1971, is
couched in wide and comprehensive terms. It vests a wide discretion in the Tribunal in the matter of awarding proper punishment and also in the
matter of the terms and conditions on which reinstatement of the workman should be ordered. It necessarily follows that the Tribunal is duty-bound
to consider whether in the circumstances of the case, back wages have to be awarded and if so, to what extent. The Court then held that: (SCC
p.41b-c)
Industrial Tribunal and Division Bench of High Court erred in proceeding on the assumption that quashment of dismissal order should be followed
by reinstatement with full back wages as a matter of course.
...On consideration of the entire matter in the light of the observations referred to supra in the matter of awarding back wages, we are of the
view that in the context of the facts of this particular case including the vicissitudes of long-drawn litigation, it will serve the ends of justice if the
respondent is paid 50% of the back wages till the date of reinstatement(SCC p.45 para 6)
In U.P. State Brassware Corpn. Ltd. and Another Vs. Udai Narain Pandey, it is observed that: (SCC p.492, para 42)
A person is not entitled to get something only because it would be lawful to do so. If that principle is applied, the functions of an Industrial
Court shall lose much of their significance.
Although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result but now, with
the passage of time, a pragmatic view of the matter is being taken by the court realising that an industry may not be compelled to pay to the
workman for the period during which he apparently contributed loittle or nothing at all to it and/or for a period that was spent unproductively as a
result whereof the employer would be compelled to go back to a situated which prevailed many years ago, namely, when the workman was
retrenched.
In Haryana Urban Development Authority Vs. Om Pal, it is stated that: (SCC p.745, para 7)
...it is now also well settled that despite a wide discretionary power conferred upon the Industrial Courts unde Section 11A of the 1947 Act, the
relief of reinstatement with full back wages should not be granted automatically only because it would be lawful to do so. Grant of relief would
depend on the fact situation obtaining in each case. It will depend upon several factors, one of which would be as to whether the recruitment was
effected in terms of the statutory provisions operating in the field, if any.
In deciding the question, as to whether the employee should be recompensed with full back wages and other benefits until the date of
reinstatement, the tribunals and the courts have to be realistic albeit the ordinary rule of full back wages on reinstatement. Western India Match Co.
Ltd. Vs. The Third Industrial Tribunal, West Bengal and Others, .
In Hindustan Tin Works Pvt. Ltd. Vs. The Employees of Hindustan Tin Works Pvt. Ltd. and Others, this Court has held that: (SCC p.85,
para 9)
...The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid.
It, therefore, does not lay down a law in absolute terms to the effect that the right to claim back wages must necessarily follow an order declaring
that the termination of service is invalid in law.
In Surendra Kumar Verma and Others Vs. Central Government Industrial Tribunal-Cum-Labour Court, New Delhi and Another, this Court
has observed that: (SCC p.447, para 6)
...Plain common sense dictates that the removal of an order terminating the services of workmen must ordinarily lead to the reinstatement of the
services of the workmen. It is as if the order has never been, and so it must ordinarily lead to back wages too. But there may be exceptional
circumstances which make it impossible or wholly inequitable vis-a-vis the employer and workmen to direct reinstatement with full back wages.
For instance, the industry might have closed down or might be in severe financial doldrums; the workmen concerned might have secured better or
other employment elsewhere and so on. In such situations, there is a vestige of discretion left in the court to make appropriate consequential
orders. The court may deny the relief of reinstatement where reinstatement is impossible because the industry has closed down. The court may
deny the relief of award of full back wages where that would place an impossible burden on the employer. In such and other exceptional cases the
court mauy mould the relief....17
In Allahabad Jal Sansthan Vs. Daya Shankar Rai and Another, this Court has observed : (SCC p.128, para 6)
A law in absolute terms cannot be laid down as to in which cases, and under what circumstances, full back wages can be granted or denied.
The Labour Court and /or Industrial Tribunal before which industrial dispute has been raised, would be entitled to grant the relief having regard to
the facts and circumstances of each case. For the said purpose, several factors are required to be taken into consideration.
In Management of Madurantakam, Co-operative Sugar Mills Ltd. Vs. S. Viswanathan, the quantum of back wages was confined to 50%,
stating : (SCC p.198, para 19)
...It is an undisputed fact that the workman had since attained the age of superannuation and the question of reinstatement does not arise.
Because of the award, the respondent workman will be entitled to his retiral benefits like gratuity, etc. and accepting the statement of the learned
Senior Counsel for the appellant Mills that it is undergoing a financial crisis, on the facts of this case we think it appropriate that the full back wages
granted by the Labour Court be reduced to 50% of the back wages.
In the instant case, the notice had been issued limiting the question to the payment of 50% of the total back wages. This does not mean that the
respondent is not entitled to further relief. The point that his services were terminated in the year 1985 and since then the case is pending for the
last two decades in different courts also has no relevance, since he had approached the court within a reasonable time. It is not his fault that the
case is still pending before the court. These grounds could not be held against him for denying the relief of back wages otherwise he would suffer
double jeoparady of losing back wages and delay in getting the reinstatement for no fault of his. Therefore, it would have been more enlightening,
had the High Court reasoned out as to why the appellant should reinstate the respondent with full employment benefits and should pay full back
wages to him for nothing in return from him in terms of work, production, etc.
Giving a realistic approach to the matter and in spite of all these circumstances we are restricting ourselves to the question of 50% of the total
back wages.
Although services of the respondent have been terminated unjustifiably and illegally, it itself does not create a right of reinstatement with full
employment benefits and full back wages.
The notice was issued with a view that the appellant''s factory has been taken over by a new management altogether and by asking the
appellant to pay full back wages for the long interregnum would be unfair and unjust. The workman has not entered appearance to justify the
award passed by the Labour Court. Therefore, in our view, it would be unreasonable to put a huge burden on the appellant by directing it to
reinstate the respondent with continuity of service and with full back wages, because the appellant''s factory had been declared sick and remained
closed for many years and has been assigned to a new management led by its Chief Executive Director, Shri M.K.Pilania in order to
rehabilitate/reconstruct it.
In view of the above discussion, we are of the opinion that it would be fair and reasonable to direct the employer to deposit 50% of back
wages by way of arrears of back wages, instead of full wages award by the Labour Court.
The judgment referred to above is identical to the facts involved before the apex court. In view of the fact that the petitioner company is a sick
industry and also taking into consideration the fact that the second respondent has not worked with the petitioner company over the years and
taking into consideration of the subsequent development that the second respondent has been relieved with effect 2.12.06 by receiving all the
attendant benefits, this Court is of the opinion that it is a fit case where the award passed by the first respondent will have to be modified by
restricting the backwages upto 50% awarded by the first respondent. While making the said amount, the amount received by the first respondent
already in pursuant to Interim order passed by this Hon''ble court will have adjusted to the writ petition.
The writ petition is allowed to the extent indicated above. The balance of Rs. 50,000/- will be permitted to be taken by the second respondent
and same will also be adjusted from the amount due to the second respondent.