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CASE NO.: Appeal (civil)  3212 of 2002

PETITIONER: Divisional Controller, G.S.R.T.C.

RESPONDENT: Kadarbhai J. Suthar

DATE OF JUDGMENT: 13/02/2007

BENCH: Dr. ARIJIT PASAYAT & S.H. KAPADIA

JUDGMENT: J U D G M E N T

Dr. ARIJIT PASAYAT, J.

       Challenge in this appeal is to the judgment rendered by a  Division Bench of the Gujarat High Court partly allowing the  Letters Patent Appeal filed by the present appellant.   

       Background facts in a nutshell are as follows:

       The respondent (hereinafter referred to the ’workman’)  was employed with the appellant-Gujarat State Road  Transport Corporation (hereinafter referred to as the  ’Corporation’) as a driver.  While driving a corporation vehicle  respondent caused an accident as a result of which a child  aged about 8 years died. Criminal proceedings were initiated  against the workman but he was acquitted.  A claim petition  claiming compensation was filed under the Motor Vehicles Act,  1988 (in short ’M.V. Act’) and the Corporation paid  compensation of about Rs.45,000/- to the claimants.   Departmental proceedings were initiated against the workman  and he was found guilty. His negligence of duty as well as  charge of misconduct were held to have been proved.   Accordingly, he was dismissed from service.  A reference was  made under Section 10(1)(c) of the Industrial Disputes Act,  1947 (in short ’Act’) to the Labour Court, Ahmedabad.  The  Presiding Officer came to hold that since the workman was  acquitted in the criminal case, a contrary view in the  departmental proceedings was not permissible.  Accordingly,  reinstatement was directed without back wages by order dated  11.5.1990. Immediately thereafter respondent-workman was  reinstated and the Award of the Labour Court was not  challenged by the Corporation. Subsequently, in November,  1991, the workman filed writ petition before the High Court,  questioning correctness of the refusal of back wages.  By order  dated 21.9.2000 writ petition was allowed by a learned Single  Judge who directed payment of full back wages from the due  date till the date from which he was reinstated along with  running interest @ 6% p.a.  Corporation filed Letters Patent  Appeal before the High Court. By the impugned judgment the  Division Bench reduced back wages to 75% instead of full  back wages as directed by the learned Single Judge.   

       Learned counsel for the appellant submitted that the  view taken by the Labour Court about the effect of acquittal is

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clearly contrary to law. The Corporation had to pay  compensation of about Rs.45,000/- to the claimants.  The  respondent was earlier also responsible for several acts of  misconduct. In fact, there were more than two dozen  proceedings. The Labour Court while deciding on the question  of entitlement of back wages had taken note of this aspect.   Unfortunately, neither the learned Single Judge nor the  Division Bench took note of it. Further, conclusions that  whenever reinstatement is directed, payment of back wages is  the natural corollary is contrary to law.  

       Learned counsel for the respondent on the other hand  submitted that though neither the learned Single Judge nor  the Division Bench has referred to the earlier acts of  misconduct, that has no relevance. The accident occurred  because of inaction by the authorities to take note of the  intimation by the respondent-workman about the defect in the  several vital parts of the vehicle.  

The orders of both the learned Single Judge and the  Division Bench suffer from several infirmities. First and  foremost, mere acquittal in a criminal case does not have the  effect of nullifying the decision taken in the departmental  proceedings.  They operate in different areas of considerations.   This position was recently highlighted by a three-Judge Bench  of this Court in Noida Entrepreneurs’ Association v. Noida and  Ors. (W.P. (C) No.150 of 1997 with W.P. (C) 529 of 1998  decided on 15.1.2007).

When fixing the back wages several factors need to be  noted. It is a well settled position in law that on the finding  that termination was not lawful there is no automatic  entitlement to full back wages. In Hindustan Tin Works Pvt.  Ltd. v. The Employee of Hindustan Tin Works Pvt. Ltd. and  Ors. (1979 (2) SCC 80), a three three-judge Bench of this  Court laid down: "In the very nature of things there cannot be a  straight-jacket formula for awarding relief of  back wages. All relevant considerations will  enter the verdict. More or less, it would be a  motion addressed to the discretion of the  Tribunal. Full back wages would be the normal  rule and the party objecting to it must  establish the circumstances necessitating  departure. At that stage the Tribunal will  exercise its discretion keeping in view all the  relevant circumstances. But the discretion  must be exercised in a judicial and judicious  manner. The reason for exercising discretion  must be cogent and convincing and must  appear on the face of the record. When it is  said that something is to be done within the  discretion of the authority, that something is  to be done according to the rules of reason and  justice, according to law and not humour. It is  not to be arbitrary, vague and fanciful but  legal and regular (See Susannah Sharp v.  Wakefield, [1891] AC 173, 179)".

In P.G.I. of Medical Education and Research, Chandigarh  v. Raj Kumar (2001 [2] SCC 54), 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

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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  affect."

Again at paragraph 12, this Court observed: "Payment of back wages having a discretionary  element involvement 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."  [See: Hindustan Motors Ltd. v. Tapan Kumar  Bhattacharya and Anr. (2002 AIR SCW  3008)]."

       Additionally, the Labour Court had taken note of the  previous acts of misconduct by the workman while denying  the back wages. That aspect was completely lost sight of by  the learned Single Judge as well as the Division Bench. Merely  because the Corporation did not challenge the order of  reinstatement that does not lead to a conclusion that it  accepted any illegality in the departmental proceedings.  As a  matter of fact, the Labour Court clearly noted that the  workman admitted the legality and propriety of the inquiry  held against him.

       In the aforesaid circumstances, the inevitable conclusion  is that the direction of payment of back wages cannot be  sustained.  The orders passed by the learned Single Judge as  partly modified by the Division Bench stand set aside to the  aforesaid extent.

       The appeal is allowed without any order as to costs.