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CASE NO.: Appeal (civil)  129 of 2007

PETITIONER: North East Karnataka Road Transport Corporation

RESPONDENT: M.Nagangouda

DATE OF JUDGMENT: 09/01/2007

BENCH: Dr.AR. Lakshmanan & Altamas Kabir

JUDGMENT:

J U D G M E N T (Arising out of S.L.P.(c) No.24222/2005)

ALTAMAS KABIR, J.         Leave granted.         This appeal is directed against the judgment and final  order dated  1st July, 2005 passed by the High Court of  Karnataka at Bangalore in Writ Appeal No.2446/2005  choosing not to interfere with the findings recorded in the  award of the Tribunal as also the order of the learned Single  Judge that on account of the forced idleness of the  respondent-workman,  he would be entitled to full back wages  on reinstatement.         For a  proper appreciation of the order passed by the  Tribunal and the High Court, it is necessary to set out a few  facts in brief.         The respondent-workman was working as a Conductor of  Kudligi Depot of  the appellant-corporation.  On 5th October,  1980,  while the said respondent was on duty in vehicle  No.MYF-2613 plying between Hadagali to Medalagatta, the  said bus came to be checked by the Central Line Checking  Squad, Bangalore at  Medalgatta Stage No.3.  The allegation  against the respondent is that he had failed to issue tickets  of   0.90 paise denomination to four passengers despite collection   of requisite fare at the boarding point.   On the basis of the  report submitted by the Checking Squad, disciplinary  proceedings were initiated against the respondent and he was  served with  Articles of Charges.  The respondent  filed his  written statement of defence denying the charges levelled  against him.  However,  the disciplinary authority was not  satisfied with  the defence taken by the respondent and   appointed the Assistant Traffic Manager  as  Enquiring  Authority to conduct  an enquiry against the respondent.         Enquiry was duly conducted on 21st January, 1981 and  on the materials available, the Enquiring Authority held the  respondent to be guilty of misconduct.  Accepting the reports  submitted by the Enquiring Authority, the  Disciplinary  Authority by its order dated 27th August, 1981 dismissed the  respondent from service with immediate effect under powers  vested in it by Regulation 19 (3) under Part-III of the KSRTC  Servants (C & D) Regulations, 1971.  The respondent  approached the Assistant Labour Commissioner for  conciliation.  As the same failed, the matter was referred to the  Labour Court by the Government of  Karnataka vide Reference  dated  22nd November, 1982.  The Terms of   Reference were as  follows:-

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"(i) Is the Management justified in  dismissing M. Nagangouda, Ex- Conductor, Kudligi Depot, Bellari  Division from service with effect from  27.08.1981?

(ii)    If not to what other relief the  said  workman is entitled?"

The said reference, being Reference No.46/1992, came  up before the  Labour Court  which in its turn framed the  following issues for consideration:-   

                (a)     Whether the domestic enquiry is fair and  proper ?

(b)     Whether the order of termination passed by  the respondent is legal and valid ?

(c)     What order ?"

On 20th October, 1994, the Labour Court heard issue  No.1 as a preliminary issue and held that  the domestic  enquiry   was not fair and proper.   On 3rd January, 1995, while the proceedings were  pending before the Labour Court, the respondent filed an  interim application which was allowed by the Labour  Court  and the appellant-corporation was directed to pay 50 %  of the  salary last drawn by the respondent.  In view of the aforesaid   order, the appellant was  permitted to obtain work from the  respondent on the strength of  a joint memorandum  filed by  the parties.  Subsequently, on  23rd  Febraury, 1998, the  Labour Court allowed the respondent’s claim petition  by  ordering his reinstatement into service and also holding that  he was  entitled to receive 50 % of the back wages.   Aggrieved  by the aforesaid order, the respondent filed a Writ Petition  No.26409/1998 before the High Court of Karnataka which   remitted the matter back to the Labour Court  with a direction  to  pass appropriate orders with regard to  back wages,  continuity of service and  other consequential benefits, after  affording an opportunity to both the parties.  After remand,  the Tribunal vide its Order dated 10th August, 2001, allowed  the Reference   and held that the respondent was entitled to  receive full back wages from the date of the order of dismissal  till the date of the award with continuity of service  and all  consequential benefits. The appellant-corporation  challenged the award passed   by the Tribunal by way of   a Writ Petition No.46673/2003  contending that the award of the Labour  Court was erroneous  on the face of the  record   and the conclusions arrived at were  untenable.   One of the  grounds taken by the appellant was  that the Labour Court having found that the  respondent is  engaged in agricultural operations,  should not have held that  the same was not an alternative employment. The Writ Petition filed  by the appellant  came to be listed  for final hearing before the learned Single Judge on 2nd  February, 2005, and by his Order  of even date the  Single  Judge dismissed the Writ Petition holding that the  management had not been able to  establish that the  respondent was engaged in  any gainful employment during  the period  of dismissal.  The learned Judge also came to a  finding  that  when the misconduct was not proved, there  could be no justification  in denying grant of  back wages and

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that the conclusion arrived at  by the Industrial Tribunal was   neither perverse nor arbitrary. Being aggrieved by the above, the appellant preferred an  appeal.  The Writ Appeal was taken up for  hearing by the  Division Bench of the High Court on  1st July, 2005 and was  dismissed, thus confirming the orders passed by the learned  Single Judge  and the Industrial Tribunal. As indicated hereinbefore, this appeal  is directed against  the judgment and order of the Division Bench. At the very outset it was submitted on behalf of the  appellant  that the Corporation had no grievance against the  award as was made by the Labour Court on 23rd February,  1998 and that the Corporation was ready and willing to  reinstate the respondent and to pay 50 % of the salary last  drawn by him.  The Corporation was, however,  aggrieved by  the subsequent award passed by the Labour Court after  remand whereby the Labour Court altered its earlier directions  after  coming to a finding that the respondent was entitled  to  full back wages and not 50 % as had been directed earlier. It was sought to be urged that after coming to a finding  on the basis of the evidence of the respondent himself that the  during the period of termination of  his services, he was  engaged in agriculture and that he was receiving  certain  amounts therefrom, it was not  open to the Labour Court to  observe that "gainful employment" would not include such  income from agriculture.  It was urged that income from any  source, whether from employment in an establishment or from   self-employment, would have to be treated as income for the   purposes of deciding whether  the respondent  would be  entitled to receive full back wages.  It  was urged that both the  Tribunal and the High Court erred in taking a view to the  contrary and the orders  passed on the basis thereof were  liable to be set aside. On behalf of the respondent the stand taken before the  Labour Court and the High Court was reiterated and it was  contended that engaging in agricultural work would not  amount to  being gainfully employed and hence the orders  passed by the Tribunal  as affirmed by the High Court for  payment of  full back wages to the respondent, did not call for  any interference. We have carefully considered the submissions made on  behalf of the respective parties in the backdrop of the facts of  the case.  Since  the finding on the issue as to whether the  domestic enquiry had been fairly and properly held  had been  decided  in favour of the respondent and had not been  challenged  by the appellant, the  only issue which was   remitted by the High Court  to the Tribunal  was whether the  respondent would be entitled to full back wages from the date  of his dismissal till the date of  the award, with continuity of   service and consequential benefits. On the said  question, we are unable to accept the  reasoning of the Labour Court that the income received by the  respondent from agricultural  pursuits could not be equated  with income from  gainful employment in any establishment.   In our view,  "gainful employment" would also include  self- employment wherefrom income is generated.  Income either  from employment  in an establishment or from self- employment merely differentiates the  sources  from  which  income is generated, the end use being the same.  Since the  respondent was earning some amount from his agricultural  pursuits to maintain himself, the Labour  Court was not  justified  in holding that merely because the respondent was  receiving agricultural income, he could not be treated to be   engaged in "gainful employment". The Single  Judge of the High Court  without looking into

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this aspect of the matter merely observed that the  management had not established that the workman was  engaged in any gainful employment during  the period of  dismissal and on such finding, the learned Single Judge chose  not to interfere with the  award as passed by the  Tribunal  after remand. The Division Bench which heard the Writ Appeal did not  also consider the aforesaid aspect of the matter and  mechanically disposed of the appeal with the observation that  after going through the  order of the learned Single Judge and  the award of the Tribunal,  it found no ground to interfere with  the findings recorded therein. In view of what we have stated hereinabove regarding the  income received by the respondent for the period of his  dismissal from service  till the date of the award, we are of the  view  that the award passed by the Tribunal after remand and   affirmed by the High Court, both by the learned  Single Judge  and the Division Bench is liable  to be modified  and the earlier   award of the Labour Court dated 23rd February, 1998 is liable  to be  restored.   We, accordingly, allow the appeal and restore the award  passed by the Labour Court dated 23rd February, 1998 and  direct the respondent  to give effect to the same expeditiously,  if the  same has not  already been implemented. In the event   full back wages from the date of dismissal  till the date of the award has already been paid to the  respondent, the appellant-Corporation will be entitled to  recover the same from the respondent. There will be no order as to costs.