Holding

Compensation in lieu of reinstatement is appropriate, and a compensation of Rs 2 lakh is proper in the facts of the case.

Summary

Ashok Kumar Sharma, a loader employed by Oberoi Flight Services since 1980, was dismissed in 1986 after being caught with 30 soup spoons in his shoe and allegedly admitting guilt. The dismissal was effected without any enquiry, charge‑sheet or show‑cause notice. The Labour Court held the dismissal contrary to law but awarded back wages; the Delhi High Court later declined reinstatement and ordered a compensation of Rs 60,000 in lieu of reinstatement. The Supreme Court examined whether such dismissal was illegal, whether compensation in lieu of reinstatement is permissible, and whether the amount awarded was adequate. It affirmed that compensation instead of reinstatement is appropriate where reinstatement is not feasible, but found the Rs 60,000 award grossly inadequate, directing the employer to pay Rs 2 lakh. The appeal was allowed in part, setting aside the lower court's award and ordering the higher compensation.

Issues considered

Whether the dismissal of the workman without an enquiry, charge‑sheet or show‑cause notice violated the Industrial Disputes Act.
Whether compensation in lieu of reinstatement and back wages is an appropriate remedy when reinstatement is not feasible.
Whether the amount of Rs 60,000 awarded by the High Court is adequate under the circumstances.

Legislation cited

Industrial Disputes Act, 1947s. 25F, s. 2(oo)

Subjects

labour lawindustrial disputeunfair dismissalcompensation in lieu of reinstatementback wagesnatural justiceIndustrial Disputes Act

Judgment

[2009] 15 (ADDL.) S.C.R. 602

A ASHOK KUMAR SHARMA
v. ~-

OBEROI FLIGHT SERVICES i'

(Civil Appeal No. 7395 of 2009)
NOVEMBER 6, 2009
B
[TARUN CHATTERJEE AND R.M. LODHA, JJ.]

Labour Law:
¥. -

c Compensation in lieu of reinstatement and back wages-
Dismissal of workman on a/legation of theft, held by Labour
Court though contrary to law, yet, in the circumstances, not
unjustified - Division Bench of High Court noticing that no
enquiry having been conducted, dismissal of workman without
D issuing him charge-sheet or show cause notice was
unsustainable - However, the Division Bench did not deem
(..
it proper to order re-instatement of workman, and instead '
~
directed the Management to pay him Rs. 60, 0001- in full and
final settlement of claim - HELD: Award of compensation in
lieu of reinstatement and back wages has been held by
E
Supreme Court to be appropriate and in the interest of justice
- In the light of the settled legal position, the view of the High
Court that monetary compensation in lieu of reinstatement of
workman would be proper cannot said to be unjustified - .....
However, the compensation in the sum of Rs. 60, 0001- t
F awarded by High Court is grossly inadequate - Regard being,
had to all relevant facts and circumstances, including the
nature of employment and the ~act that the workman was a
confirmed employee, compensation of Rs. 2 lac to him by the
employer shall meet the ends of justice - Ordered
G accordingly.

U.P. State Brassware Corpn. Ltd. &Anr. vs. Udai Narain .,_.. ....
Paney 2005 (5) Suppl. SCR 609; Sita Ram & Ors vs Moti
Lal Nehru Farmers Training Institute 2008 (4) SCR 471;
H 602
ASHOK KUMAR SHARMA v. OBEROI FLIGHT 603
SERVICES
Singh vs Haryana State Agriculture Marketing Board & A
_ _, Anr. 2009 (9) JT 396, relied on.

Case Law Reference:

2005 (5) Suppl. SCR 609 relied on para 7
B
2008 (4) SCR 471 relied on para 8

2009 (9) JT 396 relied on para 10

CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7395 of 2009. c
From the Judgment & Order dated 18.3.2008 of the High
Court of Delhi in LPA No. 39 of 2008.

Amitabh Chaturvedi, Nikhil Srivastav, Dr. Vipin Gupta for
~ the Appellant. D

Nikhil Goel, Marsook Bajak (for Sheela Goel) for the
Respondent.

The Judgment of the Court was delivered by
E
R.M. LODHA, J. 1. Delay condoned. Leave granted.

2. In this appeal by special leave, the workman has
challenged the judgment and order passed by the Division

- Bench of Delhi High Court on March 18, 2008 whereby
monetary compensation of Rs.60,000/- has been ordered to be
paid by the Management to him in lieu of reinstatement and
F

back wages.

3. The Appellant (for short "workman") was employed by
Oberoi Flight Services-Respondent (for short "Management") G
as a loader on March 10, 1980. Allegedly on August 31, 1986
Dwhile returning from duty, the workman was found carrying 30
KLM soup spoons illegally in his shoe. The workman is said to ·
have admitted his guilt in writing on August 31, 1986 itself and
H
_,•
604 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.

A then again on the next day i.e. September 1, 1986. The
Management acting on the said admission of guilt by the -~~

workman, vide order dated September 3, 1986 dismissed him
from service. Having been unsuccessful in his representation
and legal notice to the Management, the workman raised
B industrial dispute before the appropriate Government which was
referred for adjudication to the Labour Court, Delhi on June 19,
1987.

4. The workman in his statement of claim before the l( .
Labour Court set out that being a union leader, the
c Management hatched a conspiracy against him for his removal
and obtained confession letters under threat and coercion. He
also set up the plea that without holding any inquiry and in
breach of the principles of the natural justice, the order of
dismissal was passed by the Management. In the written
D statement, the Management, on the other hand, narrated the
circumstances in which the workman had stolen 30 KLM soup/
spoons by carrying them in his shoe. The parties led evidence 't"
in support of their respective stand. The Labour Court, after
hearing the parties, vide his award dated January· 31, 1996 held
E that order of dismissal passed by the Management was contrary
to law but at the same time it also held that the dismissal of
the workman from the service of the Management was not
unjustified. The Labour Court, howev$r, awarded full back
;..
wages to the workman from· the date of his dismissal until the t
F date of award. ._....._

5. The workman challenged the award of the Labour Court
by filing Writ Petition which was heard by the Single Judge. The
Single Judge held that workman has failed to make out any
ground for interference with the impugned awa.rd and,
G
consequently, dismissed the Writ Petition ·on July 30, 2007.
';t ..
..
6. Not satisfied with the order of the Single Judge, the
workman preferred Letters Patent Appeal. The Division Bench
held that it was difficult to believe the contention of the
H
...
I
I
~
ASHOK KUMAR SHARMA v. OBEROI FLIGHT 605
SERVICES [R.M. LODHA, J.]

Management that 30 KLM soup spoons could be put in a shoe A
~~
and that workman walked with the said spoons in his shoe from
the work area to the security check area. The Division Bench
'Jalso noticed that Management having not conducted any
enquiry, the dismissal of workman without issuing him charge-
sheet or a show cause notice was unsustainable. However, the B
Division Bench vide his judgment dated March 18, 2008 did
not deem it proper to order reinstatement of the workman and
instead directed the Management to pay him Rs.60,000/- in full
);--
and final settlement of the claim. It is this part of the order which
is under challenge in this appeal. c
7. This Court in U.P. State Brassware Corporation Ltd. V.
Uday ~raia -P-aade}t m;mLthu-s:. . · _..:.::::~-"""'·~----
----
"41. The Industrial Courts while adjudicating on disputes
between the Management and the workman, therefore, D
must take such decisions which would be in consonance
y
with the purpose the law seeks to achieve. When justice
is the buzzword in the matter of adjudication under the
Industrial Disputes Act, it would be wholly improper on the
part of the superior courts to make them apply the cold E
letter of the statutes to act mechanically. Rendition of
justice would bring within its purview giving a person what
..,,:
is due to him and not what can be given to him in law.
f 42. A person is not entitled to get something only because
F
it would be lawful to do so. If that principle is applied, the
functions of an Industrial Court shall lose much of their
significance.

45. The Court, therefore, emphasised that while granting
relief, application of mind on the part of the Industrial Court G
is imperative. Payment of full back wages, therefore,
_,, y
cannot be the natural consequence."

8. In the case of Sita Ram V. Moti Lal Nehru Farmers
1. J.T. 2005 (10) SC 344. H
606 SUPREME COURT REPORTS [2009) 15 (ADDL.) S.C.R.

A Training lnstitute 2 this Court considered the matter thus:
~-

"21. The question, which, however, falls for our
consideration is as to whether the Labour Court was .,
justified in awarding reinstatement of the appellants in ~
service. ,
B
22. Keeping in view the period during which the services
were rendered by the respondent (sic appellants); the fact
that the respondent had stopped its operation of bee '(
farming, and the services of the appellants were terminated
c - in December 1996, we are of the opinion thatit
/
is not a fit
case where the appellants could have been directed to be
reinstated in service.

23. Indisputably, the Industrial Court, exercises a
D discretionary jurisdiction, but such discretion is required to ...,
be exercised judiciously. Relevant factors therefor were
required· to be taken into consideration; the nature of y
appointment, the period of appointment, the availability of :'
the job, etc. should weigh with the court for determination
of such an issue.
E
24. This Court in a large number of decisions opined that
payment of adequate amount of compensation in place of
a direction to be reinstated in service in cases of this "'
nature would subserve the ends of justice. (See Jaipur t
F Development Authority v. Ramsahai [(2006) 11 SCC "t-
684], M.P. Admn. v. Tribhuban [(2007) 9 SCC 748] and
Uttaranchal Forest Development Corpn. v. M. C. Joshi
[(2007) g sec 353])

G 25. Having regard to the facts and circumstances of this
case, we are of the opinion that payment of a sum of Rs.
1,00,000 to each of the appellants, would meet the ends 't ~

of justice. This appeal is allowed to the aforementioned

H 2. J.T. 2008 (3) SC 622.

')--
ASHOK KUMAR SHARMA v. OBEROI FLIGHT 607
SERVICES [R.M. LODHA, J.]
extent. In the facts and circumstances of this case, there A
~ ) shall be no order as to costs."

9. The afore-referred two decisions of this Court and few
more decisions were considered by us in the case of Jagbir
Singh V. Haryana State Agriculture Marketing Boarc/3 albeit B
in the context of retrenchment of a daily wager in violation of
section 25F of Industrial Disputes Act who had worked for more
than 240 days in a year and we observed thus:
" ¥
"7. It is true that earlier view of this Court articulated in
many decisions reflected the legal position that if the c
termination of an employee was found to be illegal, the
relief of reinstatement with full back wages would ordinarily
follow. However, in recent past, there has been a shift in
the legal position and in long line of cases, this Court has
consistently taken the view that relief by way of D
reinstatement with back wages is not automatic and may
'<( be wholly inappropriate in a given fact situation even
though the termination of an employee is in contravention
to the prescribed procedure. Compensation instead of
reinstatement has been held to meet the ends of justice." E
10. It is not necessary to multiply the decisions of this Court
wherein award of compensation in lieu of reinstatement and
"' + back wages has been held to be adequate and in the interest
of justice.
F
11. In light of the aforesaid legal position, the view of the
High Court that monetary compensation in lieu of reinstatement
of the workman would be proper cannot be said to be
unjustified. However, we find that the compensation in the sum
of Rs.60,000/- awarded by the Division Bench is ogrossly G
inadequate. Regard being had to all relevant facts and
.» ..,,
circumstances, including the nature of employment and the fact
that he was a confirmed employee, in our considered view

3. J.T. 2009 (9) sec 396. H
608 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.

A compensation of Rs.2 lacs to the appellant by the Respondent
shall meet the ends of justice. We order accordingly. ~Such ·~
payment should be made, after deducting the amount alreaay
paid, within six weeks from today failing which the same shall
carry interest at the rate of 9 per cent per annum on unpaid
/B amount.

12. Appeal is allowed in part to the aforesaid extent with
no order as to costs.

R.P. Appeal partly allowed.

'j '