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CASE NO.: Appeal (civil)  2956 of 2000

PETITIONER: A.P.S.R.T.C. &  Anr.

RESPONDENT: B.S. David Paul

DATE OF JUDGMENT: 01/02/2006

BENCH: ARIJIT PASAYAT & R.V. RAVEENDRAN

JUDGMENT: J U D G M E N T (With C.A. No. 2957 of 2000 and C.A. No. 2958 of 2000)

ARIJIT PASAYAT, J.  

       These appeals involve identical issues and are therefore  disposed of by this common judgment.  

        Andhra Pradesh State Road Transport Corporation (in  short the ’Corporation’) calls in question legality of the  judgments rendered by the High Court holding that the  respondent in each of the appeals was  entitled to back wages.   

       A brief reference to the factual position which is almost  undisputed would suffice:

       Respondents who claimed to be employee of the  appellant-Corporation claimed before the Labour Court,  Hyderabad (in short ’the Labour Court’) that their services  were illegally terminated. Reference was made by the State  Government under the Industrial Disputes Act, 1947 (in short  the ’Act’).   

       Appellant-Corporation took the stand that they were not  its employees and, in fact, were employees of independent  contractors. The Labour Court did not accept the stand and  held that the termination was bad and the concerned  applicants were entitled for reinstatement.  It is not in dispute  that the appellant-Corporation has reinstated the  respondents.  Subsequently, the respondents filed application  before the Labour Court stating that they were entitled to back  wages for the period they were out of employment and they  were entitled to be paid back wages in terms of Section 33-C  (2) of the Act.

       The Corporation resisted the claim on the ground that  there was no direction for payment of back wages and,  therefore, Section 33-C (2) had no application.  The Labour  Court did not accept the stand and directed payment.  Such  adjudication was challenged before the High Court which  dismissed the writ application.   

       Learned counsel for the appellant submitted that when  the only direction given by the Labour Court was  reinstatement, there was no question of payment of any back  wages and in any event Section 33 \026C (2) had no application.   

       Learned counsel for the respondents on the other hand  submitted that when the reinstatement was directed, back

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wages were the natural consequence.

       The principle of law on point is no more res integra. This  Court in A.P. SRTC and Anr. Vs. S. Narsagoud  (2003 (2) SCC  212) succinctly crystallized the principle of law in Paragraph 9  of the judgment on Page SCC 215 :  "We find merit in the submission so made.  There is a difference between an order of  reinstatement accompanied by a simple  direction for continuity of service and a  direction where reinstatement is accompanied  by a specific direction that the employee shall  be entitled to all the consequential benefits,  which necessarily flow from reinstatement or  accompanied by a specific direction that the  employee shall be entitled to the benefit of the  increments earned during the period of  absence. In our opinion, the employee after  having been held guilty of unauthorized  absence from duty cannot claim the benefit of  increments notionally earned during the period  of unauthorized absence in the absence of a  specific direction in that regard and merely  because he has been directed to be reinstated  with the benefit of continuity in service."      The above position was re-iterated in A.P. State Road  Transport Corporation and Ors. v. Abdul Kareem (2005 (6)  SCC 36) and in Rajasthan State Road Transport Corporation  and Ors. v. Shyam Bihari Lal Gupta (2005 (7) SCC 406).   In the case of State Bank of India vs. Ram Chandra  Dubey & Ors.,  (2001) 1 SCC 73, this Court held as under:

"7.  When a reference is made to an Industrial  Tribunal to adjudicate the question not only as  to whether the termination of a workman is  justified or not but to grant appropriate relief,  it would consist of examination of the question  whether the reinstatement should be with full  or partial back wages or none.  Such a  question is one of fact depending upon the  evidence to be produced before the Tribunal.  If  after the termination of the employment, the  workman is gainfully employed elsewhere it is  one of the factors to be considered in  determining whether or not reinstatement  should be with full back wages or with  continuity of employment.  Such questions can  be appropriately examined only in a reference.   When a reference is made under Section 10 of  the Act, all incidental questions arising thereto  can be determined by the Tribunal and in this  particular case, a specific question has been  referred to the Tribunal as to the nature of  relief to be granted to the workmen.

8.      The principles enunciated  in the  decisions referred by either side can be  summed up as follows:

Whenever a workman is entitled to receive  from his employer any money or any benefit  which is capable of being computed in terms of  money and which he is entitled to receive from  his employer and is denied of such benefit can

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approach Labour Court under Section 33-C(2)  of the Act.  The benefit sought to be enforced  under Section 33-C(2) of the Act is necessarily  a pre-existing benefit or one flowing from a  pre-existing right.  The difference between a  pre-existing right or benefit on one hand and  the right or benefit, which is considered just  and fair on the other hand is vital.  The former  falls within jurisdiction of Labour Court  exercising powers under Section 33-C(2) of the  Act while the latter does not.  It cannot be  spelt out from the award in the present case  that such a right or benefit has accrued to the  workman as the specific question of the relief  granted is confined only to the reinstatement  without stating anything more as to the back  wages.   

Hence that relief must be deemed to have been  denied, for what is claimed but not granted  necessarily gets denied in judicial or quasi- judicial proceeding.  Further when a question  arises as to the adjudication of a claim for  back wages all relevant circumstances which  will have to be gone into, are to be considered  in a judicious manner.  Therefore, the  appropriate forum wherein such question of   back wages could be decided is only in a  proceeding to whom a reference under Section  10 of the Act is made.  To state that merely  upon reinstatement, a workman would be  entitled, under the terms of award, to all his  arrears of pay and allowances would be  incorrect because several factors will have to  be considered, as stated earlier, to find out  whether the workman is entitled to back wages  at all and to what extent.  Therefore, we are of  the view that the High Court ought not to have  presumed that the award of the Labour Court  for grant of back wages is implied in the relief  of reinstatement or that the award of  reinstatement itself conferred right for claim of  back wages"

       The position was recently reiterated by three-judge Bench  in State of U.P. and Another v. Brijpal Singh (2005 (8) SCC  58).

       The orders of the Labour Court as affirmed by the High  Court are indefensible, deserve to be set aside, which we  direct.

       The appeals are allowed but without any order as to  costs.