REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  7011   of 2008 (Arising out of SLP (C) No. 21254 of 2007)

Novartis India Ltd. ….   Appellant   

Versus

State of West Bengal and others ….    Respondents

J U D G M E N T

S.B. SINHA, J.

1. Leave granted.

2 Whether back wages should have been directed to be paid in favour

of respondent Nos. 2 to 4 by the Industrial  Tribunal as also by the High

Court of Calcutta is the question involved in this appeal which arises out of

a judgment  and order dated 1st August,  2007 whereby and whereunder a

Letters  Patent  Appeal  filed  by the  appellant  from a  judgment  and  order

dated 11th July, 2003 passed by a learned Single Judge of the High Court

was affirmed dismissing the writ petition filed by the appellant herein and

questioning the validity of an award dated 10th October, 2002.   

3. Appellant  herein is  a successor in interest of a company known as

Sandoz  (India)  Limited.   Respondents  were  appointed  as  Sales

Representatives by the said Santoz (India) Limited.  Indisputably in terms of

offers of appointment they could be transferred from one place to another.    

In October, 1994 respondent Nos. 2 to 4 were transferred to Siwan,

Karimganj and Farrukabad respectively.  They were allegedly relieved from

their duties and were directed to report at the transferred places on or about

17th October,  1994.   They  filed  their  representations  requesting  for

withdrawal/ cancellation of their respective orders of transfer.   

4. Respondent No.4 sought for cancellation of the order of his transfer

on medical grounds.   

Respondent  No.3  in  his  representation  dated  19th October,  1994

stated:-   

“Now,  the  Company  Advocate  Shri  C.U.  Singh has  made  statement  before  Her  Hon’ble  Judge

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Miss Sondur  of Bombay City Civil  Court  to  the effect  that  “the  Defendants  shall  not  take  any disciplinary action against the transferred Medical Representatives  not  reporting  to  their  posts  of transfer  during  the  pendency  of  Notice  of Motion”.  On this statement, the Notice of Motion are fixed for hearing on 5th October, 1994.

I have not accepted transfer and not reported at the place of  transfer  in  view of the above statement and  awaiting  result  of  Motion.  I  am advised  by Association  to  defer  to  file  suit  to  challenge  the transfer order.”  

5. Indisputably Civil Suits were filed in the District  Court at Mumbai

which were marked as Suit  Nos. 6263 and 6290 of 1994 questioning the

policy of transfer of the company.   

6. The company, however, asked the respondents to report for duties at

their respective transferred places.  Reminders were sent by the company to

respondent Nos. 2 and 4 on 1st April, 1995 while to respondent No.3 on 31st

March, 1995.   As the respondents did not join at their transferred places,

they  were  discharged  from  services  by  orders  dated  15th April,  1995,

stating:_

“Note that as you have failed to honour adhere to and  comply  with  the  contractual  obligations  on your  part,  we are  left  with  no  alternative  but  to

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determine your contract of employment which we hereby do with immediate effect, with one month pay in lieu of notice.  The notice pay for a sum of Rs.7311/-  (Rupees seven thousand three hundred and eleven only) by a Demand Draft  No.736343 dated 14.04.95 is being sent herewith as a part of the same transaction.

Your legal dues arising out of determination of the Contract of Employment shall be remitted to you at  your  last  known  local  address  upon  your surrendering  all  company  property  such  a Detailing  Bag,  Promotion  Aids,  Medical Dictionary, Training Manual, Operations Manual, Literatures,  Company  Correspondence  etc.  at  an early date.”

7. It is, however, not in dispute that in the meantime respondent Nos. 2

to 4 had approached the Regional Labour Commissioner for conciliation.

The Company refused to participate therein.    

Questioning  the said  orders  of  termination  respondent  Nos.  2  to  4

raised an industrial dispute.  The Government of West Bengal by an order

dated  12th June,  1997  referred  the  said  dispute  for  determination  by the

Third Industrial Tribunal, West Bengal, the terms whereof read as under :-

“Whether the  termination  of services  of  (1)  Shri Bikash  Bhusan  Ghosh,  (2)  Shri  Pradip  Kumar Mukherjee and (3) Shri Shyama Charan Mallick is justified ?  What relief, if any, are they entitled ?”  

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8. The company filed its written statement before the Industrial Tribunal

inter alia  questioning its jurisdiction.  A preliminary issue was raised  as

regards the maintainability of the reference on the ground that the dispute, if

any,  could  have  been  raised  only  at  the  transferred  locations  and  the

appropriate  State  Governments  where  respondent  Nos.  2  to  4  have  been

transferred  only had  the  jurisdiction  to  refer  the  alleged  dispute.   By an

order dated 30th March, 1999 the said preliminary objection was rejected.

The Industrial Tribunal made an award on 10th October, 2002 holding that

since  no  domestic  inquiry  was  conducted  before  passing  the  orders  of

termination, the same were bad in law.  It was observed that since the said

respondents had superannuated in the meantime, the question of directing

their reinstatement did not arise.  It however, held that the said respondents

were entitled to back wages  from the date of  termination till  the date of

attaining their  normal superannuation.   However,  it  was directed that  the

back wages should be calculated on the basis of the last pay drawn.  

9. Questioning the validity of said award a writ petition was filed before

the  High Court  of  Calcutta.   A learned  Single  Judge  of  the  High  Court

dismissed the writ petition.  However, in a Letters Patent Appeal filed by

the appellant,  by a judgment and order dated 1st March, 2006, a Division

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Bench of  the said  court  held  that  the  State  of  West  Bengal  was  not  the

appropriate Government for making the reference.   

A Special Leave Petition was filed by the workmen before this Court.

By a judgment and order dated 27th April, 2007, reported as Bikash Bhushan

Ghosh and others  v.  Novartis India Ltd and another, [ (2007) 5 SCC 591 ]

this Court differed with the findings of the Calcutta High Court and while

setting aside the judgment of the High Court remitted back the matter to it

for consideration of the matter on its own merits.   

10. Pursuant to and in furtherance of the said directions, the matter was

considered afresh by a Division Bench of the Calcutta High Court and by

reason of the impugned judgment dated 1st August, 2007 the said Letters

Patent Appeal was dismissed, stating:-

“ From a perusal of the award passed by the learned Tribunal, we find that the learned Judge, 3rd Industrial Tribunal, Calcutta decided the matter after taking into consideration the entire evidence on record and we do not find any reason to send back the mater again to the Tribunal to decide the matter on merits after taking into consideration the same evidence on record.  So far as the payment of back  wages  we  also  do  not  find  any  reason  to interfere with the same.”

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11. This  Court  issued  notice  on  23rd November,  2007  confined  to  the

question of back wages only.

12. Mr.  J.P.  Cama,  learned  senior  counsel  appearing  on  behalf  of  the

appellant would submit :-

1) That  the  Tribunal  and  consequently  the  High  Court  committed  a

serious error in awarding back wages in favour of respondent Nos. 2

to  4  herein  without  taking  into  consideration  the  factors  relevant

therefor.   

2) Respondents 2 to 4 had not discharged the onus placed on them to

show that they were not employed elsewhere during the period of 3rd

October, 1994 and the date of the award and even assuming that they

were  not  employed  in  any  undertaking,  they  should  have  at  least

shown as to how they survived for such a long time.      

3) The Tribunal applied the wrong test in so far as it proceeded  on the

basis that the order of termination being bad in law, back wages were

to be paid automatically.

4) Learned Single Judge has failed to arrive at a finding as to why the

back wages should be granted.

5) The Division Bench has also not assigned any reason in support of

the findings as to why the back wages should be paid.  

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6) The  Tribunal  having  directed  that  the  back  wages  should  be

calculated  on  the  basis  of  last  pay  and  no  consequential  benefits

having been given which has attained finality, the contention of the

workmen that back wages should be calculated keeping in view the

revised scale of pay must be held to be wholly unsustainable.  

13. Mr. Pradip Kumar Ghosh, learned senior counsel appearing on behalf

of  respondents  2  to  4,  on  the  other  hand,  would  support  the  judgment,

contending:

1) The back wages are granted in two different situations; i.e. firstly by

way of consequential relief; and secondly by way of a compensation

in a case where direction to reinstatement is not possible to be given.

2) Respondent Nos. 2 to 4 having served the company for more than 25

years with all sincerity, their transfer to far away places only a few

years prior to their dates of superannuation being mala fide, the same

was liable to be set aside.   

3) It was impossible for the respondents to get alternative employment at

that age, back wages have rightly been granted in their favour.

4) The  guidelines  laid  down  by  this  Court  for  non-payment  or  part

payment of back wages, in a situation of this nature should not be

applied and in any event the said guidelines which relate to the nature

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and mode of employment, the length of service, etc. cannot be said to

have any application in the instant case.  

5) The Tribunal having directed calculation of back wages on the basis

of  the  last  drawn wages,  the  same would  mean that  the  wages  to

which the workmen were entitled to and not the actual wages drawn

by them.   

14. Respondents were posted at Kolkata by the appellant. For a long time

they were posted there.  They were transferred to far away places.  They,

however, immediately did not initiate proceedings questioning the validity

of the orders of their transfer.  The question as regards validity of order of

transfer in similar matters was pending decision in a court  of law.  They

were advised to wait till the decision in the notice of motion in the suit filed

before the City Civil Court,  Mumbai is rendered.   

Admittedly,  however,  even  after  the  direction  went  against  the

employees, respondents did not join their services at their transferred places.

They might have committed a misconduct.  Their services, however,

were  terminated  without  holding  any domestic  inquiry.   Only a  month’s

wages were paid.   It  is  not  in dispute that  after passing of  the orders  of

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transfer  till  the  orders  of  termination,  no  amount  by  way  of  salary  or

otherwise has been paid to them.  No disciplinary proceeding was initiated.

No subsistence allowance was also paid.   

15. Indisputably  when  an  industrial  dispute  was  raised,  the  company

refused to participate in the conciliation proceedings before the conciliation

officer  on  12th April,  1995,  the  date  fixed  therefor  Allegedly  only  upon

receipt of notice of the conciliation proceeding, the services of respondents

2 to 4 were terminated.   

16. When an employee does not join at his transferred place, he commits

a  misconduct.   A  disciplinary  proceeding  was,  therefore,  required  to  be

initiated.   The  order  of  discharge  is  not  a  substitute  for  an  order  of

punishment.  If an employee is to be dismissed from services on the ground

that he had committed a misconduct, he was entitled to an opportunity of

hearing.  Had such an opportunity of hearing been given to them, they could

have shown that there were compelling reasons for their not joining at the

transferred  places.   Even  a  minor  punishment  could  have  been  granted.

Appellant  precipitated  the  situation  by  passing  a  post  haste  order  of

termination of their services.   

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17. This Court in Bikash Bhushan Ghosh and others (supra) in regard to a

contention raised by the appellant in earlier round of litigation that the order

of transfer having not been challenged, the award of the Industrial  Court

was not sustainable, held :-

“15. With  respect  to  the Division  Bench,  we do not  think  that  it  has  posed  unto  itself  a  correct question  of  law.  It  is  not  in  dispute  that  the appellants  did  not  join  their  duties  at  the transferred  places.  According  to  them,  as  the orders of transfer were illegal, their services were terminated  for  not  complying  therewith.  The assertion  of  the  respondent  that  the  appellants were relieved from job was unilateral. If the orders of  transfer  were  to  be  set  aside,  they  would  be deemed to be continuing to be posted in Calcutta. The legality of the orders of transfer, thus, had a direct nexus with the orders of termination.  

It was furthermore observed :-

“18. Yet again the appellants being workmen, their services were protected in terms of the Industrial Disputes  Act,  1947.  If  their  services  were protected, an order of termination was required to be communicated. Communication of an order of termination  itself  may  give  rise  to  a  cause  of action. An order of termination takes effect from the date of communication of the said order.”

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18. The issue before us, namely – as to whether the respondents 2 to 4

were entitled to full back wages must be determined keeping in view the

aforementioned background facts in mind.   

19. There can, however,  be no doubt whatsoever that  there has been a

shift  in  the  approach of  this  Court  in  regard to  payment  of  back wages.

Back wages cannot be granted almost automatically upon setting aside an

order of termination inter alia on the premises that the burden to show that

the workman was gainfully employed during interregnum period was on the

employer.  This Court, in a number of decisions opined that grant of back

wages is not automotic.  The burden of proof that he remained unemployed

would  be  on  the  workmen  keeping  in  view the  provisions  contained  in

Section 106 of the Evidence Act, 1972.  This Court in the matter of grant of

back wages has laid down certain  guidelines  stating that  therefor  several

factors are required to be considered including the nature of appointment;

the mode of recruitment; the length of service; and whether the appointment

was in consonance with Articles 4 and 16 of the Constitution of India in

cases of public employment; etc.   

20. It is also trite that for the purpose of grant of back wages, conduct of

the concerned workman also plays a vital role.  Each decision, as regards

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grant of back wages or the quantum thereof, would, therefore, depend on the

fact of each case.   

Back  wages  are  ordinarily  to  be  granted,  keeping  in  view  the

principles of grant of damages in mind.  It cannot be claimed as a matter of

right.

21. Large  number  of  decisions  have  been  referred  before  us  by  the

learned counsel for the parties.  It is not possible to deal with each one of

them.  We may, however, notice a few of them.   

22. In M.P. Sate Electricity Board   v.  Jarina Bee, [ (2003) 6 SCC 579]

this Court observed that the award of full back wages was not the natural

consequence of an order of reinstatement.   

23. In  Allahabad  Jal  Sansthan  v.   Daya  Shankar  Rai  and  another,

[ (2005) 5 SCC 124 ] it was held :-

“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.  It  is  not  in  dispute  that Respondent 1 herein was appointed on an ad hoc basis; his services were terminated on the ground of a policy decision, as far back as on 24-1-1987. Respondent  1  had  filed  a  written  statement wherein  he  had  not  raised  any plea  that  he  had

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been  sitting  idle  or  had  not  obtained  any  other employment  in  the  interregnum.  The  learned counsel for the appellant, in our opinion, is correct in submitting that a pleading to that effect in the written statement by the workman was necessary. Not only no such pleading was raised, even in his evidence,  the  workman  did  not  say  that  he continued  to  remain  unemployed.  In  the  instant case, the respondent  herein  had  been reinstated from 27-2-2001.”

It was furthermore observed :-

“16. We have referred to certain decisions of this Court  to highlight  that  earlier  in the event  of an order  of  dismissal  being  set  aside,  reinstatement with full back wages was the usual result. But now with the passage of time, it has come to be realised that  industry  is  being  compelled  to  pay  the workman for a period during which he apparently contributed little or nothing at all, for a period that was  spent  unproductively,  while  the workman is being compelled to go back to a situation which prevailed many years ago when he was dismissed. It  is  necessary  for  us  to  develop  a  pragmatic approach to problems dogging industrial relations. However, no just solution can be offered but the golden mean may be arrived at.”

24. Yet again in U.P. State Brassware Corporation Ltd.  v.  Uday Narain

Pandey, [ (2006) 1 SCC 479 ], this emphasized that grant or denial of back

wages would be subject matter of each case stating  :-

“61. It is not in dispute that the respondent did not raise any plea in his written statement that he was not gainfully employed during the said period. It is now well settled by various decisions of this Court that although earlier this Court insisted that it was for the employer to raise the aforementioned plea but having regard to the provisions of Section 106

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of the Evidence Act or the provisions analogous thereto,  such  a  plea  should  be  raised  by  the workman.”

25. In G.M. Haryana Roadways  v.  Rudhan Singh, [ (2005) 5 SCC 591 ],

which was mentioned in paragraph 54 of U.P. State Brassware Corporation

Ltd. (supra)  it was held :-

“8. There is  no rule of thumb that in every case where the Industrial Tribunal gives a finding that the  termination  of  service  was  in  violation  of Section 25-F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment i.e. whether after  proper  advertisement  of  the  vacancy  or inviting  applications  from  the  employment exchange, nature of appointment, namely, whether ad  hoc,  short  term,  daily  wage,  temporary  or permanent  in  character,  any special  qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of  back  wages.  One  of  the  important  factors, which  has  to  be  taken  into  consideration,  is  the length  of  service,  which  the  workman  had rendered with  the employer.  If  the workman has rendered a considerable period of service and his services  are  wrongfully  terminated,  he  may  be awarded  full  or  partial  back  wages  keeping  in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small,  the award of back wages for the complete period i.e. from the date of termination till the date of the award, which our experience shows is often quite  large,  would  be  wholly  inappropriate. Another  important  factor,  which  requires  to  be taken  into  consideration  is  the  nature  of employment.  A  regular  service  of  permanent character  cannot  be  compared  to  short  or intermittent daily-wage employment though it may be for 240 days in a calendar year.”

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26. Again in U.P.S.R.T.C. Ltd.    v.  Sarada Prasad Misra and another,

[  (2006)  4  SCC  733  ],  it  was  held  that  the  grant  of  back  wages  is

discretionary.   It  was  reiterated  that  initially  it  was  for  the  employee  to

prove that he had not been gainfully employed.   It was observed :-

“16. From  the  above  cases,  it  is  clear  that  no precise  formula  can  be  adopted  nor  “cast-iron rule” can be laid down as to when payment of full back  wages  should  be  allowed  by  the  court  or tribunal.  It  depends  upon  the  facts  and circumstances  of each case. The approach of the court/tribunal  should  not  be  rigid  or  mechanical but  flexible  and  realistic.  The  court  or  tribunal dealing with cases of industrial disputes may find force  in  the  contention  of  the  employee  as  to illegal termination of his services and may come to the  conclusion  that  the  action  has  been  taken otherwise  than  in  accordance  with  law.  In  such cases obviously, the workman would be entitled to reinstatement but the question regarding payment of back wages would be independent of the first question  as  to  entitlement  of  reinstatement  in service.  While  considering  and  determining  the second  question,  the  court  or  tribunal  would consider  all  relevant  circumstances  referred  to above  and  keeping  in  view  the  principles  of justice,  equity and good conscience,  should pass an appropriate order.”

27. In  A.P.S.R.T.C. and another   v.  B.S.  David  Paul,  [  (2006)  2 SCC

282],  it was observed :-

“8. The principle of law on point is no more res integra. This Court in A.P. SRTC v. S. Narsagoud1 succinctly crystallised the principle of law in para 9 of the judgment on SCC p. 215:

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‘9.  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  unauthorised absence from duty cannot claim the benefit of increments notionally earned during the period of  unauthorised  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.’ ”  

(  See  also  A.P.  Sate  Road Transport  Corporation  and others  v.   Abdul

Kareem,  [  (2005)  6  SCC  36  ].  and  Rajasthan  State  Road  Transport

Corporation and others  v. Shyam  BiharI Lal Gupta, [(2005) 7 SCC 406] ).

28. In  Muir  Mills  Unit  of  NITC  (U.p.)  Ltd.    v.  Swayam  Prakash

Srivastava and another, [ (2007) 1 SCC 491 ], it was held :-

“46. We are also of the view that the award of the Labour Court  is  perverse as it  had directed grant of back wages without giving any finding on the gainful employment of Respondent 1 and held that the discontinuance of the services of a probationer  was  illegal  without  giving  any finding to  the effect  that  the  disengagement  of Respondent  1  was  in  any manner  stigmatic.  In the  decision  in  M.P.  SEB v.  Jarina  Bee2  this Court held that payment of full back wages was not the natural consequence of setting aside an order of removal. In the instant case, though the termination  was  as  far  back  as  in  1983,  the

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industrial  adjudicator has not given any finding on unemployment. This Court in a recent case of State of Punjab v. Bhagwan Singh18 has held that even if the termination order of the probationer refers  to  the  performance  being  “not satisfactory”, such an order cannot be said to be stigmatic and the termination would be valid.”

29. In J.K. Synthetics Ltd.  v.  K.P. Agrawal and another, [ (2007) 2 SCC

433 ], Raveendran, J. speaking for the Division Bench held :-

“17. There is also a misconception that whenever reinstatement  is  directed,  “continuity  of  service” and “consequential  benefits”  should follow,  as  a matter of course. The disastrous effect of granting several promotions as a “consequential benefit” to a person who has not worked for 10 to 15 years and who does  not  have  the  benefit  of  necessary experience  for  discharging  the higher  duties  and functions  of  promotional  posts,  is  seldom visualised  while  granting  consequential  benefits automatically. Whenever courts or tribunals direct reinstatement,  they  should  apply  their  judicial mind  to  the  facts  and  circumstances  to  decide whether  “continuity  of  service”  and/or “consequential  benefits”  should  also  be directed. We may in this behalf refer to the decisions of this Court in A.P. SRTC v. S. Narsagoud, A.P. SRTC v. Abdul  Kareem14 and  Rajasthan  SRTC v.  Shyam Bihari Lal Gupta.”

30. Even if some income was derived by the employee, the same should

be taken into for consideration for the purpose of consideration in regard to

grant of entire back wages.  Our attention has been drawn to a decision of

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the Bombay High Court in Navin J. Surti  v.  Modi Rubber Ltd. and another,

[2004 II CLR 46] wherein it was observed :-  

“Eventually,  there  would  be  a  burden  cast  upon the employee to disclose the efforts made by him to secure another job during the time he was out of employment  on  account  of  termination  of  the service, in order to justify the claim for the back wages in its entirety. Indeed, the Division Bench in  Sadanand  Patankar's  case  (supra)  has  clearly ruled that "Since the facts about the employment or non-employment and/or the efforts made or not made to secure an alternative employment during the  period  of  enforced  idleness  are  within  the special knowledge of the employee, it is only fair and proper  that  he should first  state  whether,  he was employed or not and during what period, the amount of income earned by him if any, the nature of  efforts  made  by  him  for  securing  alternate employment or the circumstances which prevented him from making such efforts."  It  has  also  been clearly held that  once such burden is  discharged by the employee, it would be for the employer to prove  facts  to  the  contrary.  Similarly  is  the decision  of  the learned Single  Judge,  as  he then was  (Sri  Justice  B.N.  Srikrishna),  in  Indiana Engineering  Works  (Bombay)  Pvt.  Ltd.  v.  The Presiding Officer 5th Labour Court and Ors. 1995 (II) C.L.R. 890 where it has been clearly held that "I  am of  the considered  view that  the dismissed workman  also  owes  a  duty  to  the  industrial adjudicator to honestly disclose full particulars of the facts  which are purely within  his  knowledge and that any attempt to mislead the Tribunal must surely be looked at askance,"

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It was furthermore observed :-

“Apart  from  the  obligation  on  the  part  of  the employer to  establish gainful  employment  of  the employee  during  such  period,  it  would  also  be necessary for the employee to disclose the efforts made by him to get. some other job or employment during such period as well as about the source of income during the said period and if so, to what extent. Mere silence on the part of the employee in that  regard  cannot,  in  any  manner,  enure  to  the benefit  of  the  employee  to  justify  the  claim for back wages in entirety. It cannot be forgotten that the  order  for  payment  of  back  wages  has  to  be from  the  point  of  view  of  compensating  the employee for the loss suffered during the time he was out of the employment and not a reward for having  succeeded  in  establishing  the  action  of termination of the service by the employer to be illegal.”

31. In regard to the construction of the words “last pay dawn”, learned

counsel has drawn our attention to the decision of this Court in Dena Bank

v. Kirti Kumar T. Patel, [ (1999) 2 SCC 106 ] wherein it was held :-

“19. As  per  the  decisions  of  the  High  Courts referred to above, the expression “full wages last drawn” in Section 17-B can mean as under: (i) Wages only at the rate last drawn and not at the same rate at which the wages are being paid to the workmen  who  are  actually  working.  (Daladdi

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Coop. Agriculture  Service  Society  Ltd. v. Gurcharan Singh) (ii) Wages drawn on the date of termination of the services  plus  the  yearly  increment  and  the dearness allowance to be worked out till the date of the award. (Visveswaraya Iron and Steel Ltd. v. M. Chandrappa and Kirtiben B. Amin v. Mafatlal Apparels7) (iii) Full wages which the workman was entitled to draw  in  pursuance  of  the  award  and  the implementation of which is suspended during the pendency of the  proceedings.  (Carona Sahu Co. Ltd. v. A.K. Munafkhan6, Macneil and Magor Ltd. v. First Addl. Labour Court8 and P. Chennaiah v. Dy. Executive Engineer10)

20. The first construction gives to the words “full wages  last  drawn”  their  plain  and  material meaning.  The  second  as  well  as  the  third constructions read something more than their plain and material meaning in those words. In substance these constructions read the words “full wages last drawn”  as  “full  wages  which  would  have  been drawn”. Such an extended meaning to the words “full  wages last  drawn” does not  find support  in the  language  of  Section  17-B.  Nor  can  this extended  meaning  be  based  on  the  object underlying the enactment of Section 17-B.”

32. There cannot be any doubt whatsoever that  ordinarily an employee

who  has  been  transferred  should,  subject  to  just  exceptions,  join  at  his

transferred  place.   Ordinarily  in  an  industrial  undertaking  indiscipline

should not be encouraged.   

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33. This Court in State Bank of India   v.  Anjan Sanyal and others, [ JT

2001 (5) SC 203 ], observed that the conduct of an employee in a transfer

case is material as he cannot get a premium for his disobedience.  

34. There  are,  however,  certain  exceptional  situations  in  this  case.

Admittedly the respondents were challenging the right of the employer to

order transfer of the employee particularly when they hold some posts in the

association.   The dispute was subjudice.   They were in their  late fiftees.

They had served the company for a period of more than 25 years.  It is true

that they did not join at their transferred posts within a reasonable time.  It

may also in an ordinary situation be held that seven months is too long a

period to  join at  the  transferred place.   There cannot furthermore be any

doubt that the transfer is an incidence of service.  Unless an order of transfer

is passed contrary to the provisions of the statutory rule or settlement, the

same should not be interfered.   

35. However,  the  question  which  arose  for  consideration  before  the

Industrial Tribunal was as to whether the order of termination passed by the

company was valid.   The  answer  to  the  said  issue  was  answered in  the

negative.  It had attained finality.  We have also noticed hereinbefore that

there  did  not  exist  any  justifiable  reason  as  to  why  such  a  post  haste

decision was taken.  

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36. The  workmen  had  pleaded  that  they remained unemployed.   They

stated so in their respective depositions.  The fact that they survived and did

not die of starvation itself could not be a ground for denying back wages to

them.  Even an unemployed person has a right to survive.  He may survive

on his past savings.  He may beg or borrow but so long as he has not been

employed, back wages, subject to just exceptions, should not be denied.   

An  award  of  reinstatement  in  service  was  denied  to  them  only

because in the meanwhile, they attained their age of superannuation.   

37. Back  wages  in  a  situation  of  this  nature  had  to  be  granted  to

respondents  by  way  of  compensation.   If  the  principle  of  grant  of

compensation in a case of this nature is to be applied, indisputably having

regard to the fact situation obtaining herein, namely, that they were doing a

specialized job and were to reach their age of superannuation within a few

years,  grant  of  back  wages  was  the  only  relief  which  could  have  been

granted.  It was furthermore not expected that they would get an alternative

employment as they were superannuated.  Burden of proof was undoubtedly

upon the workmen.  The said burden, however, was a negative one.  Once

they discharged their burden by deposing before the Tribunal, it shifted to

the employer to show that their contention that they had not been employed,

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was incorrect.  No witness was examined on behalf of the employer.  Even

there was no pleading in that behalf.   

38. Respondents  were  in  private  employment  and  not  in  public

employment.  Their services were permanent in nature.  The termination of

their services was held to be illegal as prior to issuance of the orders, no

enquiry had been conducted.   The order  of  discharge  was,  thus,  void  ab

initio.   Back wages,  therefore,  could have been granted from the date of

termination of service.   

39. In Nicks (India) Tools v.  Ram Surat [(2004) 8 SCC 222], this Court

held :

“19. Reliance placed by the learned counsel for the appellant  on  the  case  of  P.G.I.  of  Medical Education  & Research in  our  opinion,  does  not take the case of the appellant any further. In that case, this Court held that the Labour Court being the final court of facts the superior courts do not normally  interfere  with  such  findings  of  fact unless  the  said  finding  of  fact  is  perverse  or erroneous  or  not  in  accordance  with  law.  In  the instant case, we have already noticed that the basic ground  on  which  the  Labour  Court  reduced  the back wages was based on a judgment of the High Court  of  Punjab  and  Haryana  which,  as  further noticed  by  us,  was  overruled  by  a  subsequent judgment of a Division Bench. Therefore, the very foundation of the conclusion of the Labour Court having  been  destroyed,  the  appellant  could  not derive any support from the abovecited judgments

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of that Court. Similarly, in the case of  M.P. SEB this  Court  only  said  that  it  is  not  an  inevitable conclusion  that  every  time  a  reinstatement  is ordered,  full  back  wages  was  the  only consequence. This Court,  in our opinion, did not conclude that even in cases where full back wages are legally due, the superior courts are precluded from doing  so merely because  the Labour  Court has  on  an  erroneous  ground  reduced  such  back wages. In the instant case, we have noticed that the trial  court apart  from generally observing that in Ludhiana, there must have been job opportunities available,  on  facts  it  did  not  rely  upon  any particular material to hold that either such job was in fact available to the respondent and he refused to accept the same or he was otherwise gainfully employed  during  the  period  he  was  kept  out  of work. On the contrary, it is for the first time before the  writ  court  the  appellant  tried  to  produce additional  evidence  which  was  rightly  not considered  by the  High  Court  because  the  same was not brought on record in a manner known to law. Be that as it may, in the instant case we are satisfied  that  the  High  Court  was  justified  in coming  to  the  conclusion  that  the  appellant  is entitled to full back wages.”

{See also Jasbir Singh v. Punjab & Sind Bank & Ors. [(2007) 1 SCC 566]}.

40. In Madhya Pradesh Administration v. Tribhuvan [(2007) 9 SCC 748],

while reiterating the principle relating to grant of back wages in some of the

decisions  to  which  we had adverted  to,  this  Court  opined  that  the  court

should consider each case on its own merits.  So far as the issue that the

orders of transfer were not in question, in the case of the parties themselves

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in Bikash Bhushan Ghosh (supra), it was observed that the orders of transfer

were not in issue before the Tribunal.

41. There is another aspect of the matter which cannot be lost sight of.

The Industrial Court had directed calculation of back wages on the last pay

drawn.  Its attention, however, was not drawn to the fact that in the mean

time revision in wages had taken place.  On the date of their superannuation,

they were entitled to a much higher pay as the revision in wages had taken

place to which the workman were entitled to.  In view of the fact that the

same attained finality, this Court is not inclined to exercise its jurisdiction

under  Article  142 of  the  Constitution  of  India  for  the  purpose  directing

payment of back wages on the basis of revised scale of pay and, thus, it will

not be fit and proper to interfere with the impugned judgment while noticing

the law in this behalf.

42. For the reasons aforementioned, the impugned judgment warrants no

interference.  The appeal is dismissed with costs.  Counsel’s fee assessed at

Rs.50,000/-.

……………………………….J. [S.B. Sinha]

..…………………………..…J.

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[Cyriac Joseph]

New Delhi; December 02, 2008

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