25 August 2004
Supreme Court
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M/S. NICKS INDIA TOOLS Vs RAM SURAT

Case number: C.A. No.-004146-004147 / 2001
Diary number: 1099 / 2001
Advocates: NARESH BAKSHI Vs PREM MALHOTRA


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CASE NO.: Appeal (civil)  4146-4147 of 2001

PETITIONER: M/s. Nicks (India) Tools                                   

RESPONDENT: Ram Surat & Anr.                                           

DATE OF JUDGMENT: 25/08/2004

BENCH: N. Santosh Hegde &  S.B. Sinha  

JUDGMENT: J U D G M E N T

SANTOSH HEGDE, J.

 The Government of Punjab referred the following industrial dispute  between the workman and management  of the appellant herein for  adjudication  under Section 10 (1) (c)  of the Industrial Disputes Act, 1947  to adjudication by the Labour Court, Ludhiana in Reference No.  1145/1993 :-

(1)     Whether termination of Services of Shri Ram  Surat, workman, is justified  and in order? If not,   to what relief/exact amount of compensation is  entitled.   

The above dispute  arose on a complaint made by the 1st respondent  workman  that he was working under the appellant management  for a  period of 12 years and his services were terminated  on 12th May, 1993  without  any notice, charge-sheet  or inquiry.  He also contended  that he  was drawing  Rs. 2,750/- per month as his wages at the time  of the  termination of  his services.  He prayed for his reinstatement  with full  back wages and continuity of service.

The appellant  management in the said reference  filed a written  statement  contending that there was no relationship  of employee and  employer between the  1st respondent herein  and the appellant  from 12th  of May, 1993.  Since on the said date  the workman  voluntarily   discontinued  his services with the appellant after  receiving all his dues   in full and final settlement. Certain other  preliminary  objections, like  maintainability  of the reference on the ground that the 1st respondent  was  holding a supervisory post hence an industrial dispute  was not  maintainable, were also raised. The workman filed his rejoinder to the  said written statement

Based on the pleadings before it the Labour Court framed the  following issues :- 1)      Whether relationship of master and servant existed  between the parties on the alleged date of termination ?

2)      Whether the reference  is not maintainable, as alleged ?

3)      Whether  the claimant is not a ’Workman as defined  under the Industrial Act?

4)      Whether termination of the services  of the workman is  justified and in order?

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The Labour Court by its award dated 18th of May, 1998 held in  regard to the first question that there existed a relationship  of master and  servant between the parties at the time of termination of services of the  workman.

In regard to issues 2 and 3, the Labour Court held that the  contention of the appellant management that the respondent No. 1 was not  a workman as defined under the Industrial Disputes Act cannot be  sustained, hence the reference was valid.  

In regard to issue No. 4  the Labour Court held that on the relevant  date 1st respondent  being in the service of the appellant management his  services  were wrongfully  terminated.  Hence, he was entitled  for re- instatement, however,  with regard to back wages it following a judgment  of the Punjab & Haryana High Court reported in 1997 (2) LLN Page 299,   in the case of  M.K. Kholi  Vs. Afadeal Chemicals, Faridabad  & Anr.  confined the same to 25%  of the wages from the time his services were  terminated till he was reinstated.  

Being aggrieved by the said order of the Labour Court  both the  management as well as the appellant preferred writ petitions before the  High Court of Punjab & Haryana at Chandigarh. So far as the  management is concerned, it questioned  the finding  of the Labour Court  that the services  of the respondent workman  were  illegally  terminated  and  the consequential awarding  of back wages at the rate of 25% of the  wages.  

While the workman being aggrieved  by the restricted back wages  awarded by the Labour Court challenged  that part of the award claiming   the entire wages due to him for his wrongful termination of service since  he was unemployed  during the said period.

The High Court  by the impugned judgment  while dismissing the  petition  of the management agreed  with the contention of the respondent  workman and allowed his petition directing  the payment of full back  wages because of which the appellant has now become liable to not only  to reinstate the respondent workman but also to pay the full back wages as  claimed by the workman in his claim petition. Shri U.U. Lalit, learned senior counsel appearing for the appellant  in these appeals  contended  that the management had produced sufficient  evidence to establish the fact that the workman had voluntarily  left the  services of the management after receiving his dues as a full and final  settlement which can be seen from the receipt  executed by the workman  dated 22nd of April, 1993 marked by the Labour Court as M/X (M3). He  also submitted  that  the said factum of his  voluntary retirement and  his  receipt of dues  in full and final settlement  is established beyond  reasonable doubt from the oral evidence led by the management, as also  by documentary evidence produced by  way of the payment receipt  as  well as the bonus register Ex. M/X.  

He pointed out  from the judgment of the Labour Court  that the  only ground on which the documentary  evidence, especially,  that of the  receipt M/X (M3) was rejected by the courts below was on the ground that  the same was  not confronted to the workman when he was in the witness  box, therefore, they held since the workman  did not have an opportunity   of either accepting or denying  the contents  and the  signature  of the said  document, the courts below  rejected the said evidence adduced on behalf  of the appellant  which according to the learned counsel  is erroneous   because strict rules  of evidence  are not applicable  to a proceedings   before the Labour Court. He endeavoured  to submit  that the workman   had sufficient  opportunity of cross examining  the management  witness   and could have  established  the fact that the receipt  relied upon  by the  appellant was not executed by him.  He not having  done the same when

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the management witness  was in the witness box,  the courts below should  not have drawn  an adverse inference.   Alternatively, he contended, at any rate the High Court  was not  justified  in  enhancing  the back wages from 25%  to 100% when the  management  has established  that the workman was gainfully  employed   during the period when  he was not in the service of the appellant.

Learned counsel appearing for the respondent  understandably  supported  the finding of the Labour Court in regard to the evidentiary  value  of the receipt  produced  by the management.  He further contended   that the High Court  was justified  in enhancing  the back wages  to 100%,   since the material produced by the appellant  for the first time in the writ  court showing that the respondent workman was gainfully employed   could not have been accepted  in evidence or  relied upon for denying  the  workman his legitimate  right to claim full back wages. He also submitted  the said evidence was not reliable and in fact the workman was not  gainfully employed.

Having heard the learned counsel  for the parties  and having  perused  the records we notice  that the factum that the workman was in  the service  of the management till 22nd of April, 1993 is not disputed .   While, the workman contends  that  his services  from that day  were  wrongfully  terminated, the appellant  contends that the workman  voluntarily  left the services  of  the appellant having taken all his dues.   Since the respondent workman  was in the service of the appellant  management  at least up to the 22nd of the April, 1993, the burden of  proving  that he voluntarily left the services then falls on appellant   management.  This the appellant contends  is satisfied by the oral  evidence  adduced by the management and the documentary  evidence  produced in the form  of the receipt M/X (M3) purportedly  executed by  the workman  and the entries  in the bonus register M/X.  The Labour  Court considering the said document,  which is said to be a receipt  executed by the  respondent,  noticed the fact that the original of this  document  was never produced by the appellant and what was produced   was only a photocopy. Even this photocopy was not confronted to the  workman when he  was in the witness box and the signature  found in the  said photocopy as also  in the photocopy of the bonus register shows  that  though  two documents came into existence simultaneously  the ink with  which the respondent workman is supposed to have signed the two  documents  was different.  In such circumstances, it held that it was not  safe to rely upon the said document to accept the case of the appellant.   The High Court in this regard held though it may not be necessary to  apply the strict  rule of evidence  in regard to production and proof  of a  document  still the workman ought to have been provided with an  opportunity  to explain  his version  as to the alleged receipt having been  executed by him and such opportunity  not having been offered by  confronting the document to the workman the appellant in effect has  violated the principles of natural justice and hence by its  act of default   the workman’s case  can not be  prejudiced.  However, as stated above Shri U.U. Lalit, learned senior counsel   contended  that the workman was aware of the contents of the document  because  he had the photocopy  of the document served  on him,  based on  which he had cross examined   the management witness. He further  contended that since the workman had been unable to establish  through  his cross examination  of the management witness that the receipt  in  question was not executed by him,  it should be held that the document in  question stands proved  and the  case of the management as to the  voluntarily abandonment  of service by the respondent after taking  all his  dues is also established.

We are unable to accept this argument because   if we look into the  overall proceedings  before the Labour Court, we notice that though the  management did take the stand that the workman  had left the services of  the appellant management voluntarily  by receiving  his total dues in full  and final settlement it did not, at the stage of filing  of its written

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statement,   contend that the workman  has executed  a receipt  which is  now sought to be  produced as Ex. M/X (M3).  This coupled  with the fact  that the said document was not confronted  to the respondent  workman,   in our opinion  is sufficient to hold that this document  cannot be  relied  upon for establishing  the fact that the management has proved its case  that the workman had voluntarily  left his services.  The Trial Court  has  further  buttressed this finding  by noticing  the difference in the ink in the  receipt as well as the bonus register as also the absence of revenue  stamp   in the receipt  from which it  drew an inference  that the receipt  in  question may have been signed previously but was  filled up subsequently.   This finding of the Labour Court  has been accepted by the High Court  and this being a finding  of fact and which cannot be  said to be  perverse,   we are not inclined  to interfere with the same in this appeal.  

This leaves  us to consider the next limb  of the argument of Shri  U.U. Lalit, learned senior counsel who contended  that the Labour Court   having come to the conclusion  that in Ludhiana  where the appellant’s  factory is situated, there are  large number of other industries hence it was  always possible for the respondent workman to have obtained a gainful  employment on that basis, was justified in confining the back wages to  only 25% of the full back wages,  and the High Court  in this regard erred   in reversing that finding  by not taking into consideration  the additional  material produced by the management in regard to this aspect of the case,  i.e., of the respondent being gainfully employed  during the relevant  period.  He also relied on two judgments of this Court in the case of   P.G.I. of Medical Education  & Research, Chandigarh   vs.   Raj Kumar    2001 (2)  SCC 54   and  M.P. State Electricity Board  vs.   Jarina Bee  (SMT)  2003 (6) SCC 141  .

In this regard, we  notice that  the Labour Court awarded only 25%  of the back wages primarily relying on a judgment of the Punjab &  Haryana High Court in the case of M.K. Kholi  vs.  Afadeal Chemicals,  Faridabad and Anr. 1997 (2) LLN 299, the High Court  in its judgment   has noticed the fact that the said judgment was reversed by a Division  Bench of the very same court in a subsequent judgment delivered in civil  writ petition No. 8665 of 2000, in the matter of State of Haryana vs. Ram  Kumar and Anr.,   hence it found that the  reliance placed by the Labour  Court on the above said judgment  of M.K. Kholi  vs.  Afadeal Chemicals,  Faridabad and Anr.   was not sustainable.  

Reliance placed by the learned counsel for the appellant in the case  of P.G.I. of Medical Education & Research, Chandigarh (supra), 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 finding of facts unless  the said finding of fact is perverse or erroneous or not in accordance with  law. In the instant case, we have already noticed the basic ground on  which the Labour Court reduced the back wages was based on a judgment  of the High Court of Punjab & 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 above cited  judgments of that Court. Similarly, in the case of M.P. State Electricity  Board (supra), 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 preclude 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 has 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 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

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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. For the reasons stated above these appeals fail  and  the same are  dismissed.