Holding

The Court held that the employer’s illegal termination and the ensuing protracted litigation waste public money, and therefore the order for back wages stands without modification, and reinstatement cannot be treated as a bonafide ground to alter that order.

Summary

The respondent was employed as a sales girl by the Central Cooperative Consumers' Store, a cooperative society, and was allegedly humiliated, harassed and illegally terminated by a new manager without required approval or notice. After a seven‑year delay, the Assistant Registrar declared the termination illegal and ordered reinstatement but no back wages; the petitioner appealed repeatedly, leading to litigation in the Labour Court, High Court and finally the Supreme Court. The petitioner argued that ordering back wages would be financially untenable for the cooperative, invoking the principle that courts should consider the employer’s financial viability. The Supreme Court held that the petitioner, not the respondent, had caused the protracted litigation, wasted public money, and therefore there was no justification to modify the back‑wage order or to order reinstatement as a bonafide act. The Court dismissed the Special Leave Petition, upheld the High Court’s order for back wages, and directed the cooperative to recover the amount from the personal salaries of its officers responsible for the litigation.

Issues considered

Whether the termination of the respondent’s services was illegal and arbitrary
Whether the petitioner is liable to pay back wages to the respondent
Whether the court should exercise discretion to withhold back wages on the ground of the employer’s financial viability
Whether reinstatement of the respondent can be considered a bonafide act for modifying the back‑wage order
Whether the petitioner can be compelled to recover the back‑wage amount from its officers

Legislation cited

Cooperative Societies Act

Subjects

illegal terminationback wagesreinstatementfinancial viabilitypublic money wastecooperative societylabour lawcourt discretionspecial leave petition

Judgment

-~
CENTRAL COOPERATIVE CONSUMERS, STORE A

-
v.

LABOUR COURT, H.P. AND ANR.

APRIL 30, 1993
B
[R.M. SAHAI AND N. VENKA TACHALA, JJ.)

I l/egal termination of service-Fruitless litigation-Satisfaction of mis-
placed ego-Responsibility.

Recovery ofback wages-Financialviabilit)• ofthe employer-Iustiftcation c
for exercising favourable discretion by court. Whether reinstatement of the
employee would come within bona fide conduct for modification of the order of
back wages.

The private respondent was appointed as sales girl with the petitioner.
The new manager not only insulted, humiliated and harassed her, he also D
terminated her services.

On her plea, the Assistant Registrar who decided the case after seven
years, held -the impugned order as illegal, arbitrary and passed without
obtaining the requisite approval. He ordered reinstatement or the private
E
respondent but did not grant back wages.

The petitioner informed the private respondent that her joining report
could not be entertained. The latter was forced to approach the appellate and
revising authorities,the labour court and finally the High Court for back
wages and other benefits. F

-- The petitioner aproached this court to assail well reasoned finding
recorded by the High Court, without the least regard or the financial
implications. Meanwhile as the petitioner was unable to persuade this court
on merits of tJ;e case, the petitioner made attempt to highlight the financial
G
difficulties in payment or back wages. -

Surendra Kumar Vanna and others v. Central Government lndttstrial
Tribunal- Cum-Labottr Court, New Delhi & Anr. [1980) 4 SCC 443, referred to.

'l'he petitioner urged that the private respondent had heen punulng the H
477
...
478 SUPREME COURT REPORTS (1993) 3 S.C.R.

A remedy for 16 years. And the profit margin of the petitioner being very low
and the overhead expenses high. The State and the Centre who granted
financial ?"~istance for rehabilitation subject to the condition that the amount
be not paid towards past debts, would be rendered in serious predicament.

On facts this court found that it was the petitioner who was not
B complying with the orders passed by the authorities from time to time, so
there was no justification for exercising discretion in favour of the petitioner.

Dismissing the SLP and upholding the order of the High Court, this
Court,
c HELD: Public money has been wasted due to adamant behaviour not
only of the Officer who terminated the services of the private respondent but
also due to cantankerous attitude adopted by those who were respomible for
pursuing the litigation, and literally persecuted her. Working life of the
private respondent has been lost for more than twenty years. While consicl-
D ering the agony and suffering, the amount of back wages exceeding three
lakhs could not be a proper recompense. And the reinstatement of the private
respondent could not be considered as bonafule conduct for modification of
the orderofbac~ wages. (480-D)

Leaving it open to the petitioner to replenish itself and recover the
E amount of back wages from personal salary of its officers who were respon•
sible for the endless litigation and for terminating the services of the private
respondents this Court clarified tha~ this permission shall have nothing to do
with 'the direction and the step for recovery be taken o,nly after ,payment of
back wages to the private respondent. (480-G)
F
CIVIL APPELLATE JURISDICTION: Spe~ial Leave Petition (Civil) No.
4460 of 1993. ·

From the Judgment and Order dated 15.1.1993 of .the Himachal Pradesh
High Court in Civil Writ Petition No. 566 of 1990. . .
G
Aron Jaitley and Maninder Singh for the Petitioner.

· The following Order of the Court was delivered:

H How statutory bodies waste public money in fruitless litigation to satisfy
CONSUMERS' STORE v. LA.BOUR COURT 479

misplaced ego is demonstrated by this petition. A

The opposite party was appointed as Sales Girl by the petitfoner, a coopera-
tive society registered under Cooperative Societies Act, running a Super Bazar in
Shimla. When one of the managers came there on transfer, her trouble started.
Apart from insult, humiliaton and harassment thrust on her, that manager termi-
B
nated her services illegally without being authorised to do so and without obtaining
permission of the Administrator and without giving any notice or hearing her. The
opposite party who had been apprising her superiors of that manager's misbehaviour
and of her apprehensions that he was out to getrid of her although was assured not
. only of his good behaviour and security of her services, immediately took recourse
to legal action. To her misfortune the Assistant Registrar decided her case after c
seven years. It was held by him that the order of termination was illegal, arbitrary
and was passed without obtaining approval of the Administrator. He directed the
petitioner to reinstate her but did not grant any back wages. Even with th~s order
which was preju'dicial to her the op'posite party was satisfied but tbe ego of
petitioner was hurt. For eight months the order was not impl,emerited by the
petitioner as it was contemplating to file the appeal. And wfiin the petitioner D
succt:cded in obtaining the order it informed the opposite party that.her Joining
Report could not be entertained. Since then the opposite party has been knocking
at the door of the petitioner but she was made to approach the appellate authority,
the rt:vising authority. the High Court, the Labour Court and finally the High Court
again as the petitioner did not succeed anywhere put we.nt on filing appeal and
rt:vision forcing the opposite party to file cross appeal or revision or even wr~t for E
her back wages and other benefits. Not one authority, even in the cooperative
department found in favour of petitioner. Yet .the petitioner had the obstinacy not
only to approach this Court but to place the blame of inordinate delay on
adjudicatory process. Such obstinacy without the least regard of the financial
implications could only be indulged by a public body like the petitioner as those F
entrusted to look after public bodies affairs do not have any personal involvement
and the money that they squander in such litigation is not their own.

·sri Arun Jaitley the learned senior counsel attempted to assail the finding
recorded by the High Court and the Labour Court. Suffice it to say that the
conclusions arrived at are not only well reasoned but are based on material on G

.
record and could not be demonstrated to be vitiated by any error of Law.
.

Having failed to persuade us on merils the Learned counsel attempted to
high Iight tht: financia,I difficulty of the petitioner and placed reliance on Surendra
Kumar Verma & Ors. v. Central Government Industrial Tribunal-cum-Labour
H
Court, New Delhi & Another [ 1980) 4.SCC 443 in support of the submission that
480 SUPREME COURT REPORTS [1993) 3 S.C.R.

A the Courts while directing payment of back wages should exercise discretion
considering the finapcial viability of the emplqyer. It was urged that the respondent
has been pursuing her remedy for 16 years therefore the petitioner whose profit
margin is very low and the overhead expense~ are very high resulting in accumu-
lation of losses for which financial assistance has been granted by State as well as
the Central Government for rehabilitation subject to the condition that the amount
B shall not be utilised towards pas.t debts, shall be rendered in serious predicament
brought upon it by the respondent for which it is notiespoilsible. Nothing is farther
than truth. It was other way round. In fact it was the petitioner who had disputed ..
the finding of the Registrar, directing reinstatment without back wages, and made
respondent to .run (rom court to court. When the petitioner did not reinstate her and
C filed an appeal she too filed a cross appeal for back wages. It is more than apparent
that it was the petitioner who was not complying with the orders passed by the
authorities from time to time and was leaving no stone unturned to see that an
illegal order passed by its ?fficer was upheld. -We, therefore, do not see any
justification for exercising discretion in favour of such a litigant.

D Public money has been wasted due to .adamant behaviour not only of the
officer who.terminated the services but also due to cantankerous attitude adoped
by those responsible for pursuing the litigation before the one or the other
authority. They have literally persecuted her. Despite unequal strenght the
opposite party has managed to survive. We ar.e informed that the opposite party has
been reinstated. This was put forward as bonafide conduct qf petitioner to persuade
E us to modify the order in respect of back wages. Facts speak otherwise. Working
life of opposite party has been lost in this tortuous and painful litigation of more
than twenty years. For such thoughtless acts of its officers the petitioner-society
has to suffer and pay an amount exceeding three lakhs is indeed pitiable. Bu.t
considering the agony and suffering of the opposite party that amount cannot be
F a proper recompense. We, therefore, dismiss this petition as devoid of any merit
and direct the petitioner to comply with the directions of the High Court within the
time granted by it. We however leave it open to the society to replenish itself and
recover the amount of back wages paid by it to the opposite party from the personal
salary of the officers of the society who have been responsible for this endless
litigation including the officer who was responsible for terminating the services of
G the opposite party. We may clarify that the permission given, shall have nothing
to do with the direction to pay the respondent her back wages. Step if any to recover
the amount shall be ta.ken only after payment is made to the opposite party as
directed by the High Court.

SPS. SLP dismissed.