REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.     4331       OF 2008 [Arising out of S.L.P. (C) No. 6853 of 2006]

RAJASTHAN LALIT KALA ACADEMY — APPELLANT (S)

VERSUS

RADHEY SHYAM — RESPONDENT (S)

J U D G M E N T

D.K. JAIN, J.:

Leave granted.

2. The appellant-management has challenged in this appeal  

the judgment and order dated 1st December, 2005, passed by

the High Court of Judicature for Rajasthan at Jaipur in D.B.

Special Appeal  (Writ) No. 279 of 2001, dismissing the intra-

court appeal  against the order of a learned Single Judge in

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S.B. Civil Writ Petition No.1895 of 1998.  The learned Single

Judge had affirmed the award of the Labour Court in L.C.R.

No. 348 of 1985, directing reinstatement of the respondent-

workman with continuity of service and 25% back-wages from

the date of termination of his services to the date of award.

3. A few material  facts leading  to  these  proceedings,  are  as

follows:

The respondent was appointed on 7th June, 1980 on a

monthly salary of Rs.300/- to do the work of a Junior Clerk.

On  4th April,  1981  his  services  were  terminated.   On  an

industrial  dispute  being  raised,  the  Industrial  Tribunal,

Jaipur, by an award dated 24th September, 1983, set aside the

order  of  termination  and  directed  reinstatement  of  the

respondent with effect from 24th September,  1983 with 50%

back-wages.   The  respondent  claims to  have  submitted  his

joining report on the very next date of award.  The award was

published  under  Section  17  of  the  Industrial  Disputes  Act,

1947 (for short ‘the Act’) on 17th April, 1984.  The respondent

again  submitted  his  joining  report  to  the  Secretary  of  the

appellant but was not taken back on duty.

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4. The validity  of  the award was questioned  by preferring a

Civil Writ Petition No.1317 of 1984.  During the pendency of

the  writ  petition,  the  High  Court  granted  stay  of  the

direction  in  regard  to  payment  of  back-wages.   However,

direction regarding reinstatement of the respondent was not

stayed.  Yet the respondent was not taken back on duty.

Ultimately, the writ petition was dismissed.

5. Since the appellant did not permit the respondent to join

duty,  the respondent took recourse  to proceedings under

Section 29 of the Act against the appellant.  According to

the  respondent,  he  again  reported  for  duty  on  17th

November, 1984, but the appellant did not permit him to

join.   Instead,  vide  order  dated  31st January,  1985,  the

appellant  terminated  the  services  of  the  respondent,

treating him to be in service with effect from 17th November,

1984.

6. The respondent raised an industrial dispute.  The dispute

was referred to the Labour Court for adjudication, and was

registered as L.C.R. No.348 of 1985.  The respondent also

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filed  an application  under  Section  33C (2)  of  the  Act  for

computation of wages for the period from 24th September,

1983 to 17th November, 1984 the same was registered as

L.C.R. No. 438 of 1986.

7. Before  the  Labour  Court,  the  stand of  the  appellant  was

that the respondent was temporarily appointed on 7th June,

1980 for a period of three months to do the work of gallery

attendant; he had himself abandoned the work but rejoined

service pursuant to order in the writ petition and that his

services  were  terminated  due  to  non  requirement  of  his

services, after complying with the provisions of Section 25-F

of the Act by paying an amount of Rs.1800/- by means of a

demand draft.   The  plea  of  the respondent,  on the other

hand, was that his services were terminated without service

of any notice, disclosing reasons for his retrenchment nor

any amount was paid to him in lieu of such notice.

8. On appraisal of evidence led by both the sides, the Labour

Court,  by  award  dated  26th April,  1997,  came  to  the

conclusion that the management had failed to adduce any

evidence in support of its plea that a demand draft in the 4

sum of  Rs.1800/-  was given to the respondent in lieu of

notice in terms of Section 25-F of the Act.  Thus, the Labour

Court  found  that  in  terminating  the  services  of  the

respondent,  the  appellant  had  failed  to  comply  with  the

statutory  requirements  and,  therefore,  order  dated  31st

January,  1985  was  arbitrary  and  illegal  and  had  been

passed  in  a  mala  fide  manner  in  order  to  victimize  the

respondent.   Accordingly,  the  Labour  Court  directed

reinstatement of the respondent with continuity in service

and  payment  of  25%  back-wages  from  the  date  of

termination of services to the date of award.  In the other

application  for  computation  of  wages  (L.C.R.  No.  438  of

1986),  the  Labour  Court  held  that  the  respondent  was

entitled to wages for the period from 4th September, 1983 to

17th November, 1984.

9. The award (in L.C.R. No. 348 of 1985) was challenged by

the appellant by preferring a writ petition in the Rajasthan

High  Court.   However,  Labour  Court’s  award  in  L.C.R.

No.438 of 1986 was not challenged.

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10.The learned  single  Judge  as  well  as  the  Division  Bench

have dismissed the writ petition and the appeal filed by the

appellant against the award of the Labour Court.  That is

how the appellant is before us.

11.We have heard learned counsel for the parties.

12. Learned  counsel  appearing  on  behalf  of  the  appellant

submitted that in the light of the evidence on record, the

Labour Court as well as the High Court have committed an

error in arriving at a finding that in terminating the services

of  the  respondent,  the  appellant  has  contravened  the

provision of Section 25-F of the Act.  It was contended that

the  courts  below  ignored  cogent  and  credible  evidence

which  suggested  that  a  demand  draft  in  the  sum  of

Rs.1800/- was issued to the respondent and, therefore, the

finding  regarding  non  compliance  with  the  provision  of

Section 25-F is erroneous and perverse.  Learned counsel

also urged that since the respondent had not rendered any

services, the courts below erred in awarding back-wages to

the  respondent  and  that  too  on  the  basis  of  salary

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equivalent to that of junior employee.  Lastly, it was urged

that assuming that the appellant had failed to comply with

the provision of Section 25-F of the Act but having regard to

the  fact  that  the  services  of  the  respondent  had  been

terminated over two decades ago, it would not be proper to

reinstate the respondent with back-wages and instead some

reasonable  amount of compensation could be awarded to

him  in  lieu  of  his  reinstatement.   In  support  of  the

proposition that award of back-wages is not necessary in

every  case where the termination of  service  is held to be

violative of Section 25-F of the Act, reliance is placed on a

decision  of  this  Court  in  General  Manager,  Haryana

Roadways Vs. Rudhan Singh1.  Reference is also made to

the decisions of this Court in  Central P&D Inst. Ltd.  Vs.

Union  of  India  &  Anr.2;  Haryana  State  Electronics

Development  Corpn.  Ltd.  Vs.  Mamni3 and  Madhya

Pradesh  Administration  Vs.  Tribhuban4,  where  lump

sum amounts had been awarded in lieu of reinstatement.

1 (2005) 5 SCC 591 2 (2005) 9 SCC 171 3 (2006) 9 SCC 434 4 (2007) 9 SCC 748

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13. Per  contra,  Mr.  S.K.  Keshote,  learned  senior  counsel

appearing on behalf of the respondent, submitted that on

the  basis  of  the  material  on  record,  all  the  courts  have

returned a finding that the appellant had not only failed to

pay to the respondent any amount in lieu of notice in terms

of clause (a) of Section 25-F and compensation in terms of

clause (b) thereof,  they had also committed unfair labour

practice  by  victimizing  the  respondent.   The  submission

was  that  these  being  pure  findings  of  fact,  this  Court

should  decline  to interfere  with the  award of  the  Labour

Court,  affirmed  by  the  High  Court.   Learned  counsel

asserted that having regard to the conduct of the appellant,

where they deliberately did not comply with the first award

despite the fact that the High Court had declined to stay the

direction  with regard  to  reinstatement,  no  fault  could  be

found  with  the  direction  of  the  Labour  Court  regarding

reinstatement of the respondent with only 25% back-wages.

14.  It is trite that in the event of retrenchment of a workman,

employed in any industry,  continuously for not less than

one  year  under  an  employer,  compliance  with  the

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provisions of Section 25-F of the Act, in particular clauses

(a) and (b) thereof is mandatory.  A bare reading of Section

25-F  of  the  Act  shows  that  retrenchment  within  the

meaning of Section 2 (oo) of the Act, which admittedly is the

case here,  must satisfy the following conditions:

(i) the workman is given one month’s notice – (a) in

writing  (b)  indicating  the  reasons  for

retrenchment;

(ii)the  retrenchment  must  take  effect  after  the

expiry of the period of notice. i.e., one month or

else, the workman should be paid in lieu of such

notice, wages for the period of the notice:

(iii)at the time of retrenchment,  the workman has

been  paid  compensation,  equivalent  to  fifteen

days’  average  pay  for  every  completed  year  of

continuous service or any part thereof in excess

of six months; and  

(iv)The notice in the prescribed manner is served on

the appropriate government or such authority as

may be specified.

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15. As  noted  above,  the  specific  plea  of  the  appellant-

management before the Labour Court was that services of

the respondent were terminated on 31st January, 1985 after

payment of Rs.1800/- by demand draft, in compliance with

the provision of Section 25-F of the Act.  However, in the

award,  the  Labour  Court  has  observed  that  the

management  has  not  adduced  any  such  evidence

wherefrom a conclusion could be drawn that the workman

had received the said amount of Rs.1800/-.  It is pointed

out that neither any receipt, acknowledging receipt of draft

was produced nor the workman was cross-examined on this

aspect.   Even the computation of  compensation allegedly

paid  was  not  correct.   The  labour  court,  thus,  held  that

payment of compensation in accordance with Section 25-F

of the Act was not proved.  In the light of the pleadings and

undisputed  documents  available  on  record,  we  are

convinced that the finding of the Labour Court to the effect

that  the  appellant  has  failed  to  adduce  any  evidence  in

support of their plea that an amount of Rs.1800/- had been

paid to the respondent, does not suffer from any perversity

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as pleaded by learned counsel for the appellant.  Thus, it

cannot be said that the Labour Court or the High Court has

committed  any illegality,  warranting interference  with the

said concurrent finding of fact.  In that view of the matter,

we  deem  it  unnecessary  to  examine  the  issue  whether

termination  of  respondent’s  services  was  by  way  of

victimisation and thus, the appellant was guilty  of unfair

labour practice, as held by the Labour Court.

16.The  question  which  now  survives  for  consideration  is

whether  on  facts  in  hand,  relief  of  reinstatement  with

continuity of service and 25% back-wages should have been

granted to the respondent?

17.Once the termination of service of an employee is held to

be illegal, the relief of reinstatement is ordinarily available

to the employee.  But the relief of reinstatement with full

back-wages need not be granted automatically in every case

where  the  Labour  Court/Industrial  Tribunal  records  the

finding that the termination of services of a workman was in

violation of  the  provisions  of  the  Act.   For  this  purpose,

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several  factors,  like  the manner and method of selection;

nature  of  appointment—ad hoc,  daily-wage,  temporary  or

permanent etc., period for which the workman had worked

and the delay in raising industrial dispute, are required to

be taken into consideration.

18. On this aspect, in General Manager, Haryana Roadways

case (supra), a  three-Judge  Bench  of  this  Court  has

observed thus:

“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

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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.”

19. It appears to us that in the present case there has not been

due application of mind either by the Labour Court or the

High Court on the question of reinstatement and payment

of  25%  back-wages.   The  only  ground  on  which

reinstatement and continuity of service has been ordered is

because  the  order  of  termination  has  been  held  to  be

unlawful.   Similarly,  25% back-wages have been awarded

for  the  reason  that  the  services  of  the  petitioner  were

terminated with immediate effect but no specific reason as

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such has been assigned  for  the  award of  the  said  back-

wages.   In  our  opinion,  though,  illegality  of  the  order  of

termination  is  one  of  the  prime  considerations  for

determining the question and quantum of back-wages, but

it  cannot  be  the  sole  criterion therefor.   A  host  of  other

factors, a few enumerated above, are required to be taken

into consideration before issuing directions in that behalf.

Therefore,  the  award  of  the  Labour  Court  to  that  extent

cannot be sustained.  However, we feel that at this distant

time,  it  would  not  be  fair  to  the  respondent-workman to

remit  the  matter  back  to  the  Labour  Court  or  the  High

Court for fresh consideration of the issue.  In the light of

the observations referred to supra and having regard to the

nature  and  the  period  of  services  rendered  by  the

respondent and the fact that his services were terminated

initially on 4th April, 1981 and then on 31st January, 1985

and the vicissitudes of long-drawn litigation, the respondent

has undergone for over 27 years, interest of justice would

be met if instead and in place of direction for reinstatement

and back-wages—a sum Rs.3 lakhs is directed to be paid to

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the  respondent  by  way  of  compensation.   We  direct

accordingly.     The  payment  shall  be  made  within  eight

weeks from today, failing which it shall carry interest @ 9%

per annum  from the date of this judgment till the date of

actual payment.  We may note that in the affidavit, filed in

response  to  the  query  raised  by the Court  on 29th April,

2008, it is stated that if the present appeal is dismissed, the

appellant  would  be  liable  to  pay to the  respondent  more

than  Rs.8  lakhs.   It  goes  without  saying  that  the  said

amount of compensation is over and above the amount, the

respondent  is  entitled to receive  in terms of  award dated

24th September, 1983, which has attained finality.

20.Resultantly, the appeal is allowed to the extent indicated

above.   However,  in  the  facts  and  circumstances  of  the

case, there shall be no order as to costs.

…………………………………………J.        (C. K. THAKKER)  

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                              ..….…………………………………….J.        ( D.K. JAIN)

NEW DELHI; JULY 11, 2008.

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