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CASE NO.: Appeal (civil)  4601 of 2003

PETITIONER: M.P. State Electricity Board                             

RESPONDENT: Vs. Smt. Jarina Bee          

DATE OF JUDGMENT: 15/07/2003

BENCH: DORAISWAMY RAJU & ARIJIT PASAYAT                                         

JUDGMENT:

J U D G M E N T

(Arising out of SLP(C) No. 3092 OF 2003)

ARIJIT PASAYAT, J.

       Leave granted.

       The primal issue involved in this appeal is whether  award of full back wages is the natural consequence when an  order of dismissal is set aside.  The High Court of Madhya  Pradesh at Jabalpur held it to be so, and that is why the  Madhya Pradesh State Electricity Board (hereinafter referred  to as ’the Board’) filed this appeal.

        Factual background which is almost undisputed is as  follows :-

       One Habib Khan (hereinafter referred to as the  ’employee’) husband of respondent Smt. Jarina Bee, was  employed as a Line Attendant, Grade-II in the Board. On the  allegation that he was responsible for theft of large  quantity of aluminum wire, criminal case was lodged and   departmental proceedings were initiated. In the departmental  inquiry he was found guilty and was removed from service on  20.1.1996. Such removal was challenged by him before the  Labour Court-I, Bhopal. The said Court held that since  departmental inquiry was not conducted in accordance with  the principles of natural justice, the dismissal was bad.  Direction was given for reinstatement of employee by  granting opportunity to the Board to prove his misconduct.   While directing reinstatement, it was held that he was not  entitled to any back wages.  Both the Board and the employee  preferred appeals before the Industrial Court, Bench at  Bhopal. By order dated 11.2.2002, the Industrial Court  allowed the appeal filed by the employee, while dismissing  the one filed by the Board.  It was held that when an order  of dismissal was set aside, entitlement for full back wages  was automatic.

       During the pendency of the matter before the Industrial  Court the employee breathed his last. Therefore, the  direction for re-instatement has become infructuous.           The Board challenged the order of the Industrial Court  before the High Court which by the impugned judgment dated  8th October 2002 held that when a charge was not

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established at all and the order of removal is set aside  award of back wages was the natural consequence.          Shri S.K. Agnihotri, learned counsel appearing for the  Board, submitted that the Industrial Court as well as the  High Court fell in grave error by holding that the award of  back wages was the natural consequence in all cases where  the order of removal was set aside. Mr. B.S. Banthia,  learned counsel appearing for the respondent (widow of the  employee) submitted that the High Court was justified in its  conclusion considering the fact that the order of dismissal  was without sanctity in law.  Alternatively, it was  submitted that full back wages are to be paid, considering  the nature of the allegations and findings recorded by the  Labour Court, Industrial Court and the High Court and the  directions cannot be faulted on the facts of the case.   

       In P.G.I. of Medical Education and Research, Chandigarh  v. Raj Kumar (JT 2001(1) SC 336), this Court found fault  with the High Court in setting aside the award of the Labour  Court which restricted the back wages to 60% and directing  payment of full back wages.  It was observed thus:

"The labour court being the final  court of facts came to a conclusion  that payment of 60% wages would comply  with the requirement of law.  The  finding of perversity or being  erroneous or not in accordance with  law shall have to be recorded with  reasons in order to assail the finding  of the Tribunal or the labour Court.  It is not for the High Court to go  into the factual aspects of the matter  and there is an existing limitation on  the High Court to that effect."

       Again at paragraph 12, this Court observed:

"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  straight-jacket formula can be  evolved, though, however, there is  statutory sanction to direct payment  of back wages in its entirety."

       The position was reiterated in Hindustan Motors Ltd.  v. Tapan Kumar Bhattacharya and Another (2002 AIR SCW 3008)  and Indian Railway Construction Co. Ltd. v. Ajay Kumar (JT  2003(2) SC 295.

Applying the legal principles, the inevitable  conclusion is that the High Court committed an error in  holding that the award of full back wages was the natural  consequence.   

That brings us to the alternate submission of the  learned counsel for the respondent. Considering the  background of the case and the fact that the order of  dismissal was found to be defective as the principles of

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natural justice were not properly followed, and an  opportunity was granted to the Board to proceed in  accordance with law, and the fact that the employee has  expired in the meantime, we feel the payment of Rs.85,000/-  towards back wages would meet the ends of justice. The  payment is to be made within a period of 8 weeks from today.   If any amount has been paid pursuant to the directions given  by the Industrial Court and/or the High Court, the same  shall be adjusted from the aforesaid sum.  If any payment  has been made in excess of the amount, the Board shall be  entitled to refund thereof.   

       The appeal is allowed to the extent indicated above.   Costs made easy.