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CASE NO.: Appeal (civil)  2024 of 2006

PETITIONER: U.P.S.R.T.C. LTD.

RESPONDENT: SARADA PRASAD MISRA & ANR.

DATE OF JUDGMENT: 13/04/2006

BENCH: Dr. AR. LAKSHMANAN & C.K. THAKKER

JUDGMENT: JUDGMENT

ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 1053 OF 2004

C.K. THAKKER, J.

       Leave granted.

       This appeal is directed against the judgment and  order dated July 8, 2003 passed by the High Court of  Judicature at Allahabad in Civil Miscellaneous Writ  Petition No. 4084 of 1985. The facts necessary for  determining the controversy in the appeal may now be  stated:         The appellant U.P. State Road Transport  Corporation was constituted in 1972 succeeding the  erstwhile U.P. Government Roadways. On November 20,  1973, the first respondent herein Sarada Prasad Misra  was appointed as Conductor on purely temporary basis.  According to the appellant, even thereafter, he was  appointed from time to time on temporary basis as and  when the appellant was in need of his services. Finally,  the first respondent was appointed by order dated  September 1, 1975 as Conductor on purely ad-hoc basis  temporarily for a period of one month from September 1,  1975 to September 30, 1975. It was expressly stated in  the order of appointment that his services will be  terminated at any time without prior notice. Since the  services of the first respondent were no more needed, in  accordance with the terms and conditions of the order of  the appointment, the services of the first respondent  were terminated by an order dated 6th September, 1975.  It was stated in the order of termination that he would  be entitled to one month’s salary in lieu of notice. It is  the case of the appellant that the first respondent  accepted the order of termination along with salary of  one month in lieu of notice without protest.         It appears that thereafter, the first respondent  preferred a departmental appeal against the order of   termination issued by the Corporation, but the appeal  was dismissed. After about seven years from the date of  termination, the first respondent filed an application  under Section 2A of the U.P. Industrial Disputes Act,  1947 (hereinafter referred to as ’the Act’) before the  Conciliation Officer, Allahabad making grievance against  the action of termination of his services by the appellant  Corporation. It was stated that though he was appointed  by the Corporation in November, 1973, he was illegally  retrenched without following the provisions of law. Since

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his appeal had also been dismissed, he had approached  the Conciliation Officer for reinstatement, continuity of  past services and for payment of wages. When the notice  was issued on the appellant-Corporation, it raised  preliminary objection that the application filed by the  workman was belated and deserved to be dismissed on  the ground of delay and laches. According to the  Corporation, the services of the workman were  terminated in 1975 in accordance with the terms and  conditions of the order of appointment and though he  had accepted one month’s salary without any protest, he  had made an application before the Conciliation Officer  making grievance after long time and the application was  not maintainable. In spite of the objection, the  Conciliation Officer condoned delay and submitted  ’failure report’. Pursuant to the ’failure report’ by  Conciliation Officer, the State Government referred the  dispute to the Labour Court, Allahabad for adjudication.  The dispute which had been referred to read thus:  "Whether action of employers in terminating  the services of their workman Sarada Prasad  Misra S/o Sh. Ajab Sukh Misra, Conductor  w.e.f. 06.09.1975 is legal and/or valid? If not,  then to what relief the concerned workman is  entitled? And with what further details?"

The appellant Corporation contested the matter by  filing written statement contending that the workman  was engaged purely in a temporary capacity on ad-hoc  basis from time to time as and when need and necessity  arose and his engagement was continued or  discontinued on that basis. His services were terminated  even in past in accordance with the conditions of the  orders of appointment and no grievance could be made  against such action. So far as the last appointment was  concerned, it was the case of the Corporation that the  workman was appointed for a period of one month from  September 1, 1975 to September 30, 1975.  Since the  services of the workman were no more required, an order  was passed on September 6, 1975. But, as per the order  of appointment, he was paid one month’s salary for the  period between September 1, 1975 and September 30,  1975. The workman, without any protest, accepted the  amount.  Thereafter it was not open to him to raise a  dispute. It was also contended that the workman had  raised the dispute after about seven years and the same  should not be entertained. A prayer was, therefore, made  to dismiss the claim. The Labour Court, Allahbad, vide its award dated  September 17, 1984 held that the workman was  appointed in 1973 and he had completed 240 days. His  services, therefore, could not have been terminated  except in accordance with the provisions of the Act.  Since he had not been paid retrenchment compensation,  the action of the Corporation was illegal. He was,  therefore, entitled to reinstatement with full back wages.  Accordingly, the appellant-Corporation was directed to  reinstate the workman in service with full back wages. Being aggrieved by the award of Labour Court, the  appellant preferred a writ petition in the High Court of  Judicature at Allahabad. Initially, notice was issued on  March 25, 1985 and award passed by the Labour Court  was stayed. On February 4, 1988, however, the earlier  order was modified by the Court. The workman was  ordered to be reinstated and 50% wages was ordered to

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be paid to him. The interim order was made "subject to  such final orders as may be passed" at the final hearing  of the petition. It was the case of the appellant- Corporation that in compliance with the order passed by  the High Court, the workman was reinstated on  February 9, 1988. He was, however, found carrying  passengers without tickets and after holding an inquiry,  his services were again terminated on July 31, 1991. But  without considering the relevant facts and  circumstances including the action of terminating the  services of the workman in July, 1991, the High Court  disposed of the petition on July 8, 2003 by dismissing  the writ petition observing that the findings recorded by  the Labour Court did not warrant interference in  exercise of the power under Article 226 of the  Constitution. Accordingly, the petition was disposed of  and interim relief was vacated. It is this order which is  challenged in the present appeal. On January 27, 2004, the petition was called out  for admission hearing and notice was issued to the  respondent "confined to payment of back wages only".  Thereafter, the matter was heard from time to time.  We have heard the learned counsel for the parties. Learned counsel for the appellant-Corporation  submitted that services of the respondent-workman were  terminated in accordance with the terms and conditions  of the order of appointment and the authorities had  committed an error in entertaining the dispute and in  passing the award against the Corporation. It was also  submitted that there was gross delay and laches on the  part of the workman in approaching the Conciliation  Officer and the Labour Court. The action of termination  of services was taken in 1975, but an application was  made for the first time before the Conciliation Officer in  July, 1982 i.e. almost after seven years. Neither the  Conciliation Officer should have submitted ’failure  report’, nor the State Government should have referred  the matter for adjudication to Labour Court. The Labour  Court ought not to have passed an award of  reinstatement with continuity in service and back wages.  The said order, therefore, deserved to be set aside. The  High Court also ought to have considered all these facts  and allowed the petition filed by the Corporation. In any  case, even if this Court is of the view that the order of  reinstatement does not deserve interference, the  workman is not entitled to back wages and to that  extent, the appeal deserves to be allowed. The learned counsel for the first respondent, on the  other hand, supported the award made by the Labour  Court and the order passed by the High Court.  He  submitted that the contentions as to the nature of  appointment and delay in initiation of proceedings by the  workman may not be permitted to be raised by this  Court in view of limited notice issued by this Court as to  payment of back wages. It was stated that there was no  delay on the part of the workman in approaching Labour  forum.  Immediately after termination of services, the  workman filed departmental appeals and after the orders  in the appeals, he invoked jurisdiction of Labour  Authorities. On merits, it was submitted that when the  action was held to be bad by the Labour Court, the  workman was entitled to back wages and even that part  deserves no interference. He, therefore, submitted that  the appeal is liable to be dismissed. Having heard the learned counsel for the parties,

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we are of the opinion that the appeal deserves to be  partly allowed. There is considerable force in the  contention of the learned counsel for the appellant- Corporation that the appointment of the workman was  ad-hoc and purely temporary. He was paid one month’s  salary on September 6, 1975 when his services were  terminated. But, it appears that the workman made  grievance against the said action by filing departmental  appeals and thereafter approached Labour forum and a  reference was also made by the State Government. Since  this Court has issued limited notice as to payment of  back wages, it would not be appropriate now to hold that  there was delay on the part of the workman and the  action was not maintainable and no relief ought to have  been granted by the Labour Court or by the High Court. In our opinion, however, the limited grievance of  the learned counsel for the Corporation is well founded.  Admittedly, the order of termination was passed on  September 6, 1975. Admittedly, an application was made  to the Conciliation Officer, Allahabad by the workman on  July 17, 1982, that is, after about seven years from the  date of termination. In the circumstances, therefore, the  Corporation is justified in raising legitimate objection as  regards payment of wages for the said period. Since the  respondent had invoked jurisdiction of Labour forum  after seven years, it would not be appropriate to direct  the appellant-Corporation to pay wages for the  intervening period. But even otherwise, the award passed by the  Labour Court as also the order of the High Court  granting back wages deserves interference. In several  cases, this Court has held that payment of back wages is  a discretionary power which has to be exercised keeping  in view the facts and circumstances of each case and  neither straight jacket formula can be evolved, nor a rule  of universal application can be adopted [vide P.G.I. of  Medical Education & Research, Chandigarh v. Raj Kumar,  (2001) 2 SCC 54; Hindustan Motors v. Tapan Kumar  Bhattacharya, (2002) 6 SCC 41]. In Kendriya Vidyalaya  Sangathan v. S.C. Sharma, (2005) 2 SCC 363, this Court  held that when question of determination of entitlement  of back wages comes up for consideration, prima facie, it  is for the employee to prove that he had not been  gainfully employed. Initial burden is on the employee to  show that he remained without any employment. In  several cases, similar view has been taken by this Court  in recent years. In M.P. State Electricity Board v. Jarina  Bee, (2003) 6 SCC 141, it was observed that  reinstatement in service and payment of back wages are  two different things and payment of back wages is not a  natural consequence of setting aside an order of  dismissal. In Allahabad Jal Sansthan v. Daya Shanker  Rai, (2005) 5 SCC 124, it was indicated that the law is  not in absolute terms that in all cases of illegal  termination of services, a workman must be paid full  back wages. In Haryana State Coop. Land Development  Bank v. Neelam, (2005) 5 SCC 91, it was stated that the  aim and object of Industrial Disputes Act is to impart  social justice to the workman but keeping in view his  conduct. Payment of back wages, therefore, would not be  automatic on entitlement of the relief of reinstatement.  In General Manager, Haryana Roadways v. Rudhan  Singh, (2005) 5 SCC 591, the Court reiterated that there  is no rule of thumb that in each and every case, where  the Industrial Tribunal records a finding that the order

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of termination of service was illegal that an employee is  entitled to full back wages. A host of factors which are  relevant, must be taken into account.  The Court stated:         "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."

In Allahabad Jal Sansthan v. Daya Shankar Rai,  (2005) 5 SCC 124, after considering the relevant cases  on the point, the court stated:         "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 realized 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."

From the above cases, it is clear that no precise

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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.  Considering the case law on the point and applying  the principles laid down therein to the facts of the  present appeal, we are of the view that the respondent  workman is not entitled to back wages from 1975 when  his services were terminated. The award was passed in  the instant case on September 17, 1984 but was stayed  by the High Court vide interim order dated March 25,  1985. The interim order was modified on February 4,  1988 and the first respondent was reinstated  immediately on February 9, 1988. In our opinion,  therefore, ends of justice would be met if the workman is  allowed back wages to the extent of 50% from the date of  the award till he was reinstated in service. For the foregoing reasons, the appeal is partly  allowed and the award passed by the Labour Court,  Allahabad as also the order passed by the High Court of  Judicature, Allahabad is modified.  The first respondent- workman is not entitled to back wages from 1975 to  1984.  He is, however, held entitled to 50% back wages  from the date of the award till the date of reinstatement.  Thereafter obviously, he is entitled to his wages in  accordance with law. The appeal is accordingly disposed  of. In the facts and circumstances of the case, there shall  be no order as to costs.