JEETUBHA KHANSANGJI JADEJA VERSUS KUTCHH DISTRICT PANCHAYAT

JEETUBHA KHANSANGJI JADEJA VERSUS KUTCHH DISTRICT PANCHAYAT Case

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.6890 OF 2022

[@ SPECIAL LEAVE PETITION (CIVIL) NO. 8393 OF 2022]

JEETUBHA KHANSANGJI JADEJA ...APPELLANT(S)

VERSUS

KUTCHH DISTRICT PANCHAYAT ...RESPONDENT(S)

J U D G M E N T

S. RAVINDRA BHAT, J.

1. Leave granted. With consent, learned counsels for the parties were heard

finally. This appeal is directed against an order of the Gujarat High Court1

.

2. Aggrieved by the termination from employment, the appellant raised an

industrial dispute which was referred to the Labour Court, Bhuj, Kutchh District

of Gujarat. The appellant was appointed as a Watchman on 05.10.1992 by the

respondent society (hereafter referred to as “the management”), and lastly, he

1 Dated 05.07.2021 in LPA No.896/2011 in Special Civil Application No. 5620/2011.

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was working as a watchman at the Shirai Dam at the Beraja Village of Mundra

Taluk, Gujarat, with the respondent. After rendering continuous employment, he

was terminated from the services on 30.12.2002 for no cause, without notice and

without following the procedure prescribed by the Industrial Disputes Act, 1947.

His request for reinstatement was negated; consequently, the industrial dispute.

3. The management disputed the claim on the basis that the appellant worked

in a purely temporary basis and could not claim the benefit of Section 25B of the

Industrial Disputes Act,1947 as he had not worked for a continuous period of

240 days in any given year. However, his employment as a workman since 1992

was not denied.

4. Before the Labour Court, the parties led evidence - oral and documentary.

A copy of the muster roll maintained by the management was called for. In the

evidence, the appellant deposed that the management did not maintain any

seniority list nor was it published and that employees junior to him were

retained while he was unfairly terminated from service. The respondent

management contended that the entire muster roll records was not available as it

was destroyed during a natural calamity; they could produce the documents for

the years 1994-98. After considering the pleadings and the materials on record,

the Labour Court, by Award dated 31.08.2010, held that the appellant’s

termination was illegal and directed his reinstatement with continuity but

without backwages.

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5. The management challenged the award, mainly contending that the

appellant workman was not entitled to the benefits of the Industrial Disputes

Act. The learned Single judge of the Gujarat High Court endorsed the findings

of the Labour Court, affirming the Award, and directed the appellant’s

reinstatement. The management, however, appealed to the Division Bench.

Initially, the Division Bench rejected the appeal; the management approached

this court by special leave petition. This court remitted the matter for fresh

consideration.

6. By the impugned order, the Division Bench noticed the findings of the

single judge that workmen junior to the appellant had been retained in service

despite which his services were terminated and that the management had not

maintained proper records. In spite of these facts, the Division Bench set aside

the direction to reinstate the appellant workman and instead awarded lumpsum

compensation of 1 lakh. ₹

7. The appellant contends that the Labour Court and the learned single Judge

concurrently ruled that sufficient material had been brought on record to show

that 63 labourers were working with the respondent management, many of

whom were junior to the appellant. It was pointed out that the workman

appellant had moved the Labour Court to direct the management to produce all

relevant service particulars of its employees’ muster roll, pay register, and bonus

register. An appropriate direction was issued in this regard. Since the

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management did not produce the entire records, the Labour Court drew an

adverse inference and based on available material concluded that the termination

was illegal. In these circumstances, all the findings were endorsed by the High

Court; the substitution of the order of reinstatement amounted to a miscarriage

of justice. It was submitted that the appellant had been unfairly kept out of

employment, despite the fact that the award was made in 2010, and the single

judge endorsed it in 2011. The management unjustifiably dragged the matter for

one more decade, which resulted in denial of backwages to him in a very harsh

manner. It was further submitted that the denial of reinstatement to the appellant,

by the impugned order, which did not disturb the findings of the labour court

and the single judge, is not based on any reasoning or norm but has resulted in

unfairness.

8. Learned counsel for the respondent/management argued that this Court

should not interfere with the impugned judgment since the Division Bench acted

correctly in law in not upholding the reinstatement. It was submitted that the

petitioner had been out of employment for over 20 years and in the

circumstances, directing reinstatement was not in the interest of justice.

9. The record indicates that both the Labour Court and the learned Single

Judge elaborately considered the depositions of the parties as well as the

evidence on the record. In fact, the appellant workman had applied under the

RTI Act, eliciting relevant documents to substantiate his claim that employees

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junior to him, were retained in the service. The management was unable to

refute the material on record. On the other hand, it claimed the inability to

produce the relevant documents, i.e., the muster roll for the later period of the

appellant’s service. Concededly, the appellant had worked for over 10 years. In

the absence of precise details as to the so-called periods when the appellant had

not been employed – as alleged by the management, both the Labour Court and

the learned Single Judge concluded that his claim for having continuously

worked within the meaning of Section 25B of the Industrial Disputes Act stood

proved. Furthermore, the workman had deposed that employees junior to him

were retained in the service, contrary to Section 25G of the Industrial Disputes

Act.

10. This Court discerns no material to establish the proposition put forth by

the appellant. In the circumstances, given the fact that the direction of the

Labour Court was only to reinstate but not pay backwages, the Division Bench’s

substitution of that relief is not based on any known principle. In the present

case, the Labour Court had rendered its award on 31.08.2010; the learned Single

Judge rejected the management’s writ petition on 04.05.2011. The

management’s appeal was, in the first instance, rejected on 16.01.2014;

however, it approached this Court by filing special leave petition, which was

allowed on 29.04.2016. It was thereafter – 5 years later, that the impugned

judgment was delivered. Having regard to these factors, the Court is of the

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opinion that the appellant workman could not have been made to suffer on

account of the management’s obdurate attempt to have the relief set aside.

Furthermore, the Division Bench’s impugned judgment has not interfered with

the factual findings. Therefore, the direction to substitute the relief of

reinstatement with one for lumpsum payment was not warranted in the

circumstances of this case.

11. This court, in a three-judge Bench decision, in Hindustan Tin Works (P)

Ltd.v. Employees of M/s Hindustan Tin Works Pvt. Ltd. And Others 2

 when

retrenchment of services of 56 employees due to non-availability of the raw

material necessary for utilisation of full installed capacity by the employer, was

held to be illegal, held that:

“‘9. It is no more open to debate that in the field of industrial

jurisprudence a declaration can be given that the termination

of service is bad and the workman continues to be in service.

The spectre of common law doctrine that contract of personal

service cannot be specifically enforced or the doctrine of

mitigation of damages does not haunt in this branch of

law. The relief of reinstatement with continuity of service can

be granted where termination of service is found to be invalid.

It would mean that the employer has taken away illegally the

right to work of the workman contrary to the relevant law or in

breach of contract and simultaneously deprived the workman

of his earnings. If thus the employer is found to be in the wrong

as a result of which the workman is directed to be reinstated,

the employer could not shirk his responsibility of paying the

wages which the workman has been deprived of by the illegal

or invalid action of the employer. Speaking realistically, where

termination of service is questioned as invalid or illegal and

the workman has to go through the gamut of litigation, his

capacity to sustain himself throughout the protracted litigation

is itself such an awesome factor that he may not survive to see

the day when relief is granted. More so in our system where the

law's proverbial delay has become stupefying. If after such a

2 (1979) 2 SCC 80

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protracted time and energy consuming litigation during which

period the workman just sustains himself, ultimately he is to be

told that though he will be reinstated, he will be denied the

back wages which would be due to him, the workman would be

subjected to a sort of penalty for no fault of his and it is wholly

undeserved. Ordinarily, therefore, a workman whose service

has been illegally terminated would be entitled to full back

wages except to the extent he was gainfully employed during

the enforced idleness. That is the normal rule. Any other view

would be a premium on the unwarranted litigative activity of

the employer. If the employer terminates the service illegally

and the termination is motivated as in this case viz. to resist the

workmen's demand for revision of wages, the termination may

well amount to unfair labour practice. In such circumstances

reinstatement being the normal rule, it should be followed with

full back wages.”

12. In a more recent decision, Deepali Gundu Surwase v. Kranti Junior

Adhyapak Mahavidyalaya and Others,3

 this court highlighted the need to adopt a

restitutionary approach, when a court has to consider whether to reinstate an

employee and if so, the extent to which backwages is to be ordered. The court

observed:

“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 employeremployee 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

3 (2013) 10 SCC 324

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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.”

13. In Bharat Sanchar Nigam Limited v. Bhurumal,4

 on the other hand, the

discretion of the court in directing reinstatement with backwages in the event

of a retrenchment being declared illegal, was described in the following terms:

“33. It is clear from the reading of the aforesaid judgments that

the ordinary principle of grant of reinstatement with full back

wages, when the termination is found to be illegal is

not applied mechanically in all cases. While that may be a

position where services of a regular/permanent workman are

terminated illegally and/or mala fide and/or by way of

victimisation, unfair labour practice, etc. However, when it

comes to the case of termination of a daily-wage worker and

where the termination is found illegal because of a procedural

defect, namely, in violation of Section 25-F of the Industrial

Disputes Act, this Court is consistent in taking the view that in

such cases reinstatement with back wages is not automatic and

instead the workman should be given monetary compensation

which will meet the ends of justice. Rationale for shifting in this

direction is obvious.

34. The reasons for denying the relief of reinstatement in such

cases are obvious. It is trite law that when the termination is

found to be illegal because of non-payment of retrenchment

compensation and notice pay as mandatorily required under

Section 25-F of the Industrial Disputes Act, even after

reinstatement, it is always open to the management to

terminate the services of that employee by paying him the

retrenchment compensation. Since such a workman was

4 2014 (7) SCC 177

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working on daily-wage basis and even after he is reinstated, he

has no right to seek regularisation [see State of

Karnataka v. Umadevi (3) [(2006) 4 SCC 1]. Thus when he

cannot claim regularisation and he has no right to continue

even as a daily-wage worker, no useful purpose is going to be

served in reinstating such a workman and he can be given

monetary compensation by the Court itself inasmuch as if he is

terminated again after reinstatement, he would receive

monetary compensation only in the form of retrenchment

compensation and notice pay. In such a situation, giving the

relief of reinstatement, that too after a long gap, would

not serve any purpose.

35. We would, however, like to add a caveat here. There may be

cases where termination of a daily-wage worker is found to be

illegal on the ground that it was resorted to as unfair labour

practice or in violation of the principle of last come first go viz.

while retrenching such a worker daily wage juniors to him

were retained. There may also be a situation that persons

junior to him were regularised under some policy but the

workman concerned terminated. In such circumstances, the

terminated worker should not be denied reinstatement unless

there are some other weighty reasons for adopting the course

of grant of compensation instead of reinstatement. In such

cases, reinstatement should be the rule and only in exceptional

cases for the reasons stated to be in writing, such a relief can

be denied.”

14. In the present case, this court finds no perversity or unreasonableness on

the part of the Labour Court and the single judge in directing the appellant’s

reinstatement. Had the respondent management chosen to accept the verdict, the

appellant would have been spared the agony of waiting for more than 10 years.

In such circumstances, the denial of backwages, has resulted in punishing him,

although the delay is attributable to the judicial process. However, the

respondent management cannot be absolved of the primary responsibility in its

litigative proclivity. In these circumstances, the appellant shall be entitled to

backwages for a period of two years immediately preceding, i.e., from

01.01.2020 to 01.01.2022.

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15. In light of the above discussion, the impugned judgment is hereby set

aside. The appellant workman shall be reinstated in the services of the

respondent within six weeks from today. He shall also be entitled to backwages

for a period of two years immediately preceding, i.e., from 01.01.2020 to

01.01.2022. The direction of the Labour Court and the learned Single Judge for

continuity of service is also restored. The respondent management is directed to

pay the backwages as directed by this court, at current rates, within 6 weeks

from today. Hence, the appeal is allowed in above terms, with no order as to

costs.

 ....................................................CJI.

 [UDAY UMESH LALIT]

 ......................................................J.

 [S. RAVINDRA BHAT]

New Delhi,

September 23, 2022.

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