The Management Of Regional Chief Engineer P.H.E.D. Ranchi Versus Their Workmen Rep. By District Secretary

[2018] 11 S.C.R. 759 THE MANAGEMENT OF REGIONAL CHIEF ENGINEER P.H.E.D. RANCHI v.

THEIR WORKMEN REP. BY DISTRICT SECRETARY (Civil Appeal No. 9832 of 2018) SEPTEMBER 20, 2018 [ABHAY MANOHAR SAPRE AND S. ABDUL NAZEER, JJ.] Labour Laws:

Back wages - When can be claimed - Courts below awarded full back wages directing reinstatement of the workmen - Held: A workman has no right to claim back wages if he has been reinstated - It is necessary for the workman to plead and prove that he was not gainfully employed - Employer is also entitled to prove otherwise - However, initial burden is on the workman - Direction of courts below to award full back wages has caused prejudice to the employer - In exercise of jurisdiction u/Art. 142 of the Constitution, in the interest of justice, 50% of total back wages is awarded - Evidence - Burden to prove - Constitution of India - Art. 142 - Industrial Disputes Act, 1947 - s. 25F.

Partly allowing the appeal, the Court HELD: 1. A workman has no right to claim back wages from his employer as of right only because the Court has set aside his dismissal order in his favour and directed his reinstatement in service. It is necessary for the workman in such cases to plead and prove with the aid of evidence that after his dismissal from the service, he was not gainfully employed anywhere and had no earning to maintain himself or/and his family. The employer is also entitled to prove it otherwise against the employee, namely, that the employee was gainfully employed during the relevant period and hence not entitled to claim any back wages. Initial burden is, however, on the employee. [Paras 11 and 12] [762-G-H; 763-A-B]

2. The Court may decline to award the back wages in its entirety whereas in some cases, it may award partial depending

upon the facts of each case by exercising its judicial discretion in the light of the facts and evidence. [Para 13] [763-B]

3. The Court is required to keep in consideration several factors, and then to record a finding as to whether it is a fit case for award of the back wages and, if so, to what extent. In the present case neither the Labour Court and nor the High Court kept in consideration the principles of law. Similarly, no party to the proceedings either pleaded or adduced any evidence to prove the material facts required for award of the back wages enabling the Court to award the back wages. [Paras 14 and 15] [763-E-G]

4. Direction of the Courts below awarding full back wages to the workman has caused prejudice to the appellant (employer). In exercise of powers under Article 142 of the Constitution of India for doing substantial justice to the parties concerned, it would be just and proper and in the interest of justice to award to these 37 workmen 50% of the total back wages. [Paras 18, 19 and 20] [764-C-E] M.P. State Electricity Board v. Jarina Bee(Smt.) (2003) 6 SCC 141 : [2003] 1 Suppl. SCR 535; G.M. Haryana Roadways v. Rudhan Singh (2005) 5 SCC 591 : [2005] 1 Suppl. SCR 569; U.P. State Brassware Corporation v. Uday Narain Pandey (2006) 1 SCC 479 : [2005] 5 Suppl. SCR 609; J.K. Synthetics Ltd. v. K.P. Agrawal & Anr. (2007) 2 SCC 433 : [2007] 2 SCR 60, Metropolitan Transport Corporation v. V. Venkatesan (2009) 9 SCC 601 : [2009] 12 SCR 583; Jagbir Singh v. Haryana State Agriculture Marketing Board & Anr. (2009) 15 SCC 327) : [2009] 10 SCR 908; Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (D.Ed.) & Ors. (2013) 10 SCC 324 : [2013] 9 SCR 1 - relied on.

Case Law Reference [2003] 1 Suppl. SCR 535 relied on Para 13 [2005] 1 Suppl. SCR 569 relied on Para 13 [2005] 5 Suppl. SCR 609 relied on Para 13

MGMT OF REGIONAL CHIEF ENGR. v. THEIR WORKMEN REP. BY DISTT. SECY.

[2007] 2 SCR 60 relied on Para 13 [2009] 12 SCR 583 relied on Para 13 [2009] 10 SCR 908 relied on Para 13 [2013] 9 SCR 1 relied on Para 13 CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9832 of 2018 From the Judgment and Order dated 02.02.2017 of the High Court of Jharkhand at Ranchi in L.P.A. No. 484 of 2008 Atulesh Kumar, Adv. for the appellant.

Abhijeet Sinha, Adv. for the respondent.

The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J. 1. Leave granted.

2. This appeal is directed against the final judgment and order dated 02.02.2017 of the High Court of Jharkhand at Ranchi in L.P.A. No.484 of 2008 whereby the Division Bench of the High Court dismissed the appeal filed by the appellant herein and upheld the order dated 08.07.2008 passed by the Single Judge of the High Court in W.P.(L) No.3962 of 2006.

3. Few facts need to be mentioned hereinbelow for the disposal of the appeal, which involves a short issue.

4. The short question, which arises for consideration in this appeal, is whether the Courts below, namely, the High Court and the Labour Court were justified in awarding full back wages to the 37 workmen represented by Workmen Union after setting aside their dismissal order holding it to be bad in law being in contravention of Section 25-F of the Industrial Disputes Act, 1947 (hereinafter referred to as "I.D. Act") and, in consequence, directing reinstatement of these workmen in services of the appellant in their Public Health and Engineering Department (PHED).

5. The appellant is the Department of the State of Jharkhand [Public Health and Engineering Department (PHED)] whereas the respondent is the Workmen Union representing the interest of the workmen working in the Public Health and Engineering Department (PHED).

6. The State made a reference under Section 10 of the I.D. Act to the Labour Court, Ranchi at the instance of the respondent-Union to decide the following dispute:

"Whether the dismissal and non absorption of 37 acting daily wages Hastrashid employees as mentioned in schedule "K" in work charged establishment by Public Health Engg. Division, East Ranchi (Department of PHED, Jharkhand) is lawful. If not, what other reliefs their employees are entitled to?"

7. By award dated 29.06.2005, the Labour Court (Annex.P-1) answered the reference in respondent- Union's favour and directed reinstatement of 37 workmen with payment of full back wages in Reference Case No.6 of 2002.

8. The appellant (employer), felt aggrieved by the award of the Labour Court, filed writ petition in the High Court of Jharkhand. The Single Judge of the High Court, by order dated 08.07.2008, dismissed the writ petition filed by the appellant and affirmed the award passed by the Labour Court.

9. Being aggrieved by the order of the Single Judge, the appellant filed intra court appeal. By impugned order, the Division Bench of the High Court dismissed the appeal and upheld the order of the Single Judge, which gave rise to filing of this appeal by way of special leave by the appellant-employer in this Court.

10. Having heard the learned counsel for the parties and on perusal of the record of the case, we are inclined to allow the appeal in part and while modifying the impugned order award 50% back wages to the workmen in place of full wages.

11. In our considered opinion, the Courts below completely failed to see that the back wages could not be awarded by the Court as of right to the workman consequent upon setting aside of his dismissal/termination order. In other words, a workman has no right to claim back wages from his employer as of right only because the Court has set aside his dismissal order in his favour and directed his reinstatement in service.

12. It is necessary for the workman in such cases to plead and prove with the aid of evidence that after his dismissal from the service, he was not gainfully employed anywhere and had no earning to maintain

MGMT OF REGIONAL CHIEF ENGR. v. THEIR WORKMEN REP. BY DISTT. SECY. [ABHAY MANOHAR SAPRE, J.] himself or/and his family. The employer is also entitled to prove it otherwise against the employee, namely, that the employee was gainfully employed during the relevant period and hence not entitled to claim any back wages. Initial burden is, however, on the employee.

13. In some cases, the Court may decline to award the back wages in its entirety whereas in some cases, it may award partial depending upon the facts of each case by exercising its judicial discretion in the light of the facts and evidence. The questions, how the back wages is required to be decided, what are the factors to be taken into consideration awarding back wages, on whom the initial burden lies etc. were elaborately discussed in several cases by this Court wherein the law on these questions has been settled. Indeed, it is no longer res integra. These cases are, M.P. State Electricity Board vs. Jarina Bee(Smt.), (2003) 6 SCC 141, G.M. Haryana Roadways vs. Rudhan Singh, (2005) 5 SCC 591, U.P. State Brassware Corporation vs. Uday Narain Pandey, (2006) 1 SCC 479, J.K. Synthetics Ltd. vs. K.P. Agrawal & Anr., (2007) 2 SCC 433, Metropolitan Transport Corporation vs. V. Venkatesan, (2009) 9 SCC 601, Jagbir Singh vs. Haryana State Agriculture Marketing Board & Anr., (2009) 15 SCC

327) and Deepali Gundu Surwase vs. Kranti Junior Adhyapak Mahavidyalaya(D.Ed.) & Ors., (2013) 10 SCC 324.

14. The Court is, therefore, required to keep in consideration several factors, which are set out in the aforementioned cases, and then to record a finding as to whether it is a fit case for award of the back wages and, if so, to what extent.

15. Coming now to the facts of the case at hand, we find that neither the Labour Court and nor the High Court kept in consideration the aforesaid principles of law. Similarly, no party to the proceedings either pleaded or adduced any evidence to prove the material facts required for award of the back wages enabling the Court to award the back wages.

16. On the other hand, we find that the Labour Court in one line simply directed the appellant (employer) to pay full back wages for a long period to 37 workmen while directing their reinstatement in service.

17. We, however, find that the High Court in para 9 of the order placed reliance on the decision of this Court in Deepali Gundu Surwase (supra) for holding that the question of back wages is covered by this

decision. In our view, the High Court erred in so observing. It should have seen that in the case of Deepali Gundu Surwase (supra) itself, this Court referred decisions, which we have mentioned in para 13 above and then in para 38 of Deepali Gundu Surwase, this Court culled out the ratio of all the cited cases. Thereafter, this Court in Deepali Gundu Surwase' case granted relief to the concerned workers on the facts involved in that case. In our opinion, the High Court did not apply the ratio of the decision in Deepali Gundu Surwase (supra) to the facts of this case properly and only quoted one para of the judgment in Deepali Gundu Surwase(supra) which contained general observations. Those observations had to be read in juxtaposition with para 38 which culled out the ratio of all the case law on the subject.

18. We cannot, therefore, concur with such direction of the Courts below awarding full back wages to the workman which, in our opinion, has certainly caused prejudice to the appellant (employer).

19. However, having regard to the facts and circumstances of the case, we consider it just and proper and in the interest of justice to award to these 37 workmen 50% of the total back wages.

20. This we award to the workmen in exercise of our powers under Article 142 of the Constitution of India for doing substantial justice to the parties concerned having reiterated the legal principles which govern the question of award of back wages.

21. In the light of the foregoing discussion, the appeal succeeds and is allowed in part. Impugned order is modified to the extent indicated above.

22. Let the amount be worked out and paid by the appellant to the respondent-workmen after proper verification within three months from the date of this judgment.

Kalpana K. Tripathy Appeal partly allowed.