Supreme Court of India
DEEPALI GUNDU SURWASEversusKRANTI JUNIOR ADHYAPAK MAHAVIDYALAYA (D.ED.) AND OTHERS
- Citation
- 2013 INSC 529
- Decided
- 12 August 2013
- Disposal
- Appeal(s) allowed
- Bench
- G S SINGHVI
Holding
The Supreme Court restored the School Tribunal’s order, holding that the termination was illegal, the inquiry violated natural justice, and the appellant is entitled to reinstatement with full back wages.
Summary
The appellant, a teacher in a private aided school, refused to contribute to a tax demand and was suspended and later terminated without proper approval or a fair inquiry, violating the Maharashtra Employees of Private Schools (Conditions of Service) Act, 1977 and principles of natural justice. The School Tribunal quashed the termination and ordered reinstatement with full back wages, finding the charges frivolous. The Bombay High Court set aside the back‑wages award, erroneously holding that the appellant had not proved she was unemployed during the suspension. The Supreme Court held that the High Court gravely erred, restored the Tribunal’s order, and directed the management to pay full back wages with interest. The Court also clarified the law on reinstatement, back wages, and the burden of proof on the employer in cases of illegal termination.
Issues considered
- Whether the suspension and termination of the teacher were illegal under the Maharashtra Employees of Private Schools (Conditions of Service) Act, 1977 and its Rules.
- Whether the principles of natural justice were violated in the inquiry process.
- Whether the appellant is entitled to full back wages upon reinstatement.
- Whether the High Court was correct in setting aside the Tribunal’s award of back wages.
- Who bears the burden of proving gainful employment during the period of suspension.
Legislation cited
- Contempt of Courts Act, 1971
- Indian Evidence Act, 1872s. 106
- Industrial Disputes Act, 1947s. 11-A
- Maharashtra Employees of Private Schools (Conditions of Service) Act, 1977s. 10, s. 11, s. 16, s. 2(7), s. 9
Subjects
reinstatementback wagesillegal terminationnatural justicesuspensionschool tribunalIndustrial Disputes ActMaharashtra private schools actburden of proof
Judgment
(2013] 9 S.C.R. 1
DEEPALI GUNDU SURWASE A
v.
KRANTI JUNIOR ADHYAPAK MAHAVIDYALAYA (D.ED.)
AND OTHERS
(Civil Appeal No. 6767 of 2013)
AUGUST 12, 2013 B
[G.S. SINGHVI AND V. GOPALA GOWDA, JJ.]
Service Law:
c
Back wages on reinstatement - Suspension and
termination of services of school teacher - Declared by
Tribunal as illegal - Reinstatement - Award of full back
wages, set aside by High Court - Held: High Court committed
grave error by interfering with the order passed by Tribunal
0
for payment of back wages, ignoring that the charges levelled
against appellant were frivolous and the inquiry was held in
gross violation of the rules of natural justice - Impugned
order set aside and order passed by Tribunal restored -
Management shall pay full back wages to appellant.
E
Award of back wages, when termination of employee
found to be illegal - Principles culled out - Labour law -
Industrial Disputes Act, 1947 - s.11-A - Back wages.
Maharashtra Employee$ of Private Schools (Conditions F
of Service) Act, 1977:
Objects of the Act - Explained.
Maharashtra Employees of Private Schools (Conditions
of Service) Rules, 1981: G
r. 34 - Suspension of employee - Entitlement to
subsistence allowance - Discussed.
Words and Phrases:
1 H
- -
2 SUPREME COURT REPORTS [2013] 9 S.C.R.
A 'Reinstatement' in the context of termination of service of
an employee - Connotation of - Explained.
The appellant was appointed as a teacher in a
Primary School run by a trust and receiving grant in aid,
which included rent for the building. In 2005, the
8
Municipal Corporation raised a tax bill of Rs.79,974/-
treating the said property as commercial. Thereupon,' the
Headmistress of the school, who was also President of
the Trust, addressed a letter to all the employees
C including the appellant requiring them to contribute a sum
of Rs.1500/- per month towards the tax liability. The
appellant refused to comply with the said dictate. The
management issued as many as 25 memos to the
appellant and then placed her under suspension by letter
dated 14.11.2006. She was not even paid subsistence
D allowance. The management issued notice dated
28.12.2006 for holding an inquiry against the appellant
under rr. 36 and 37 of the Maharashtra Employees of
Private Schools (Conditions of Service) Rules, 1981. The
appellant's nominee was not allowed to participate in the
E inquiry proceedings, which were conducted ex parte.
Ultimately, the appellant's services were terminated by
order dated 15.6.2007. The appeal filed by the appellant
was allowed by the School Tribunal with full back wages.
In the writ petition filed by the Management, the High
F Court concurred with the Tribunal that suspension and
termination of the appellant were violative of the statutory
provisions and the principles of natural justice, but, it,
relying upon the judgments in J.K. Synthetics Ltd1 • and
Zilla Parishad2, Gadchiroli, set aside the direction for
G payment of back wages.
Allowing the appeal, the Court
1. K.P. Agrawal and another 2007 (2) SCR 60.
H 2. Prakash slo Nagorao Thete and another 2009 (4) Mh. L.J. 628.
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 3
ADHYAPAK MAHAVIDYALAYA (D.ED.)
HELD: 1.1. The Maharashtra Employees of Private A
Schools (Conditions of Service) Regulation Act, 1977
was enacted to regulate the recruitment and conditions
of service of employees in private schools in the State
and to instill a sense of security among the employees
so that they may fearlessly discharge their duties B
towards the pupil, the institution and the society. Another
object of the Act is to ensure that the employees becom~
accountable to the management and contribute their
might for improving the standard of education. [Para 12]
~0-E~ C
1.2. Rule 35 of the Maharashtra Employees of Private
Schools (Conditions of Service) Rules, 1981 empowers
the management to suspend an employee with the prior
approval of the competent authority. The exercise of this
power is hedged with the condition that the period of D
suspension shall not exceed four months without prior
permission of the authority concerned. The suspended
employee is entitled to subsistence allowance under the
scheme of payment [Rule 34] through Co-operative Bank
for a period of four months. A suspended employee can E
be denied subsistence allowance only in the
contingencies enumerated in clauses (3) and (4) of r. 33,
i.e., when he takes up private employment or leaves the
headquarters without prior approval of the Chief
Executive Officer. [Para 13] [21-D-G] F
2.1. The word "reinstatement" has not been defined
in the Act and the Rules. Its dictionary meaning, in the
context, may be taken as 'to restore to a state or position
from which the object or person had been removed.' The
very idea of restoring an employee to the position which G
he held before dismissal or removal or termination of
service implies that the employee will be put in the same
position in which he would have been but for the illegal
action taken by the employer. [Paras 16 and 17] [28-H; 29-
D-E] H
4 SUPREME COURT REPORTS (2013] 9 S.C.R.
A Shatter Oxford English Dictionary, Vol. II, 3rd Edition;
Law Lexicon, 2nd Edition; Merriam Webster Dictionary;
Black's Law Dictionary, 6th Edition - referred to.
2.2. The injury suffered by a person, who is
dismissed or removed or is otherwise terminated from
8 service cannot easily be measured in terms of money.
With the passing of an order which has the effect of
severing the employer employee relationship, the latter's
source of income gets dried up. Not only the employee,
but his entire family suffers grave adversities. The
C reinstatement of such an employee, which is preceded
by a finding of the competent judicial/quasi judicial body
or court that the action taken by the employer is ultra
vires the relevant statutory provisions or the principles
of natural justice, entitles the employee to claim full back
D wages, subject to the employer pleading and proving that
during the int~rvening period the employee was gainfully
employed and was getting the same emoluments. The
propositions iri this regard culled out from the judgments
of this Court are:
E
(i) In cases of wrongful termination of service,
reinstatement with continuity of service and back
wages is the normal rule.
(ii) The rule (i) is subject to the rider that while
F deciding th~ issue of back wages, the adjudicating
authority or the court may take into consideration the
length of service of the employee/workman, the
nature of misconduct, if any, found proved against
the employeelworkman, the financial condition of the
G employer and similar other factors.
(iii) Ordinarily, an employee or workman whose
services are terminated and who is desirous of
getting back wages is required to either plead or at
least make a statement before the adjudicating
authority or the court of first instance that he/she
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 5
ADHYAPAK MAHAVIDYALAYA (D.ED.)
was not gainfully employed or was employed on A
lesser wages. Once the employee shows that he was
not employed, the onus lies on the employer to
specifically plead and prove that the employee was
gainfully employed and was getting the same or
substantially similar emoluments. B
(iv) The cases in which the Labour Court/Industrial -
Tribunal exercises power u/s. 11-A of the Industrial
Disputes Act, 1947 and finds that even though the
enquiry held against the employee/workman is
consistent with the rules of natural justice and I or C
certified standing orders, if any, but holds that the
punishment was disproportionate to the misconduct
found proved, then it will have the discretion not to
award full back wages. However, if the Labour Court/
Industrial Tribunal finds that the employee or D
workman is not at all guilty of any misconduct or that
the employer had foisted a false charge, then there
will be ample justification for award of full back
wages.
E
(v) The cases in which the competent court or
tribunal finds that the employer has acted in gross
violation of the statutory provisions and/or the
principles of natural justice or is guilty of victimizing
the employee or workman, then the court or tribunal
concerned will be fully justified in directing payment F
of full back wages. In such cases, the superior
courts should not exercise power under Art. 226 or
Art. 136 of the Constitution to interfere with the award
passed by the Labour Court, etc., merely because
there is a possibility of forming a different opinion on G
the entitlement of the employee/workman to get full
back wages or the employer's obligation to pay the
same. Courts must always keep in view that in the
. cases of wrongful I illegal termination of service, the
wrongdoer is the employer and sufferer is the H
6 SUPREME COURT REPORTS [2013) 9 S.C.R.
A employee/workman and there is no justification to
give premium to the employer of his wrongdoings by
relieving him of the burden to pay to the employee/
workman his dues in the form of full back wages.
(vi) In a number of cases, the superior courts have
B interfered with the award of the primary adjudicatory
authority on the premise that finalization of :itigation
has taken long time ignoring that in majority of cases
the parties are not responsible for such delays. Lack
of infrastructure and manpower is the principal
c cause for delay in the disposal of cases. For this the
litigants cannot be blamed or penalised. It would
amount to grave injustice to an employee or
workman if he is denied back wages simply because
there is long lapse of time between the termination
D of his service and finality given to the order of
reinstatement. Courts should bear in mind that in
most of these cases, the employer is in an
advantageous position vis-a-vis the employee or
workman. Therefore, in such cases it would be
E prudent to adopt the course suggested in Hindustan
Tin Works Private Limited v. Employees of Hindustan
Tin Works Private Limited*.
(vii) The observation made in J.K. Synthetics Ltd. v.
K.P. Agrawal** that on reinstatement the employee/
F workman cannot claim continuity of service as of
right is contrary to the ratio of the judgments of three
Judge Benches and cannot be treated as good law.
This part of the judgment is also against the very
concept of reinstatement of an employee/workman.
G [Para 17 and 33] [29-0-F, G-H; 30-A; 47-E-H; 48-A-H;
49-A-G]
*Hindustan Tin Worl<s Private Limited v. Employees of
Hindustan Tin Worl<s Private Limited 1979 (1) SCR 563 =
H (1979) 2 SCC 80, Surendra Kumar Verma v. Central
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 7
ADHYAPAK MAHAVIDYALAYA (D.ED.)
Government Industrial Tribunal-cum-Labour Court, New Delhi A
1981 (1) SCR 789 = (1980) 4 SCC 443; Mohan Lal v.
Management of Bharat Electronics Limited 1981 (3)
SCR 518 = (1981) 3 SCC 225; Workmen of Calcutta Dock
Labour Board and Another v. Employers in relation to
Calcutta Dock Labour Board and Others (1974) 3 SCC 216; B
P.G.I. of Medical Education & Research, Chandigarh v. Raj
Kumar 2000 (4) Suppl. SCR 50 = (2001) 2 SCC 54;
Hindustan Motors Ltd. v. Tapan Kumar Bhattacharya 2002 (1)
Suppl. SCR 127 = (2002) 6 SCC 41; MP. State Electricity
Board v. Jarina Bee 2003 (1) Suppl. SCR 535 =(2003) 6 c
sec 141 - relied on.
Indian Railway Construction Co. Ltd. v. Ajay Kumar 2003
. (2) SCR 387 = (2003) 4 SCC 579; Kendriya Vidya/aya
Sangathan v. S.C. Sharma 2005 (1) SCR 374 =(2005) 2 SCC
363; -General Manager, Haryana Roadways v. Rudhan Singh D
2005 (1) Suppl. SCR 569 = (2005) 5 sec 591; U.P. State
Brassware Corporation Ltd. v. Uday Narain Pandey 2005 (5)
Suppl. SCR 609 = (2006) 1 SCC 479; Andhra Pradesh. State
Road Transport Corporation v. P. Jayaram Reddy 2008 (17)
SCR 1185 = (2009) 2 SCC 681; Novartis India Limited v. E
State of West Bengal 2008 (16) SCR 918 = (2009) 3 SCC
124; Metropolitan Transport Corporation v. V. Venkatesan
2009 (12) SCR 583 = (2009) 9 sec 601; Jagbir Singh v.
Haryana State Agriculture Marketing Board 2009 (10)
SCR 908 = (2009) 15 SCC 327 - referred to. F
**J.K. Synthetics Ltd. v. K.P. Agrawal and Another 2007
(2) SCR 60 =2007 (2) SCC 433 - disapproved.
2.3. In the case in hand, the management's decision
to terminate the appellant's service was found by the G
Tribunal as wholly arbitrary and vitiated due to violation
of the rules of natural justice. The Tribunal further found
that the allegations levelled against the appellant were
frivolous, and after satisfying itself that she was not
gainfully employed anywhere, ordered her reinstatement H
B SUPREME COURT REPORTS [2013] 9 S.C.R.
A with full back wages. [Para 34) [50-A, B-C]
2.4. The single Judge of the High Court, while setting
aside the award of back wages by making a cryptic
observation that the appellant had not proved the factum
of non-employment during the intervening period, not
8
only overlooked the order passed by the Division Bench
in the earlier writ petition, but also r. 33 which prohibits
an employee from taking employment elsewhere. It was
not even the pleaded case of the management that during
C the period of suspension, the appellant had left the
Headquarters without prior approval of the Chief
Executive Officer and thereby disentitled her from getting
subsistence allowance or that during the intervening
period she was gainfully employed elsewhere. The single
Judge committed grave error by interfering with the order
D passed by the Tribunal for payment of back wages,
ignoring that the charges levelled against the appellant .
were frivolous and the inquiry was held in gross violation
of the rules of natural justice. The impugned order is set
aside and the order passed by the Tribunal restored. The
E management shall pay full back wages to the appellant.
[Para 35-37] [50-D-H; 51-A]
Case Law Reference:
2007 (2) SCR60 disapproved para 9
F
1979 (1) SCR 563 relied on para 10
1981 (1) SCR 789 relied on para 10
1981 (3) SCR518 relied on para 10
G 1974 (3) sec 216 relied on para 10
2005 (5) Suppl. SCR 609 referred to para 11
2008 (17) SCR 1185 referred to para 11
H 2008 (16) SCR 918 referred to para 11
DEEPALI GUNDU SURWASE v. KRANTl JUNIOR 9
ADHYAPAK MAHAVIDYALAYA (D.ED.)
2009 (12) SCR583 referred to para 11 A
2009 (10) SCR 908 referred to para 11
2000 (4) Suppl. SCR 50 relied on para 20
2002 (1) Suppl. SCR 127 relied on para 21
B
2003 (1) Suppl. SCR 535 relied on para 10
2003 (2) SCR 387 referred to para 22
2005 (1) SCR374 referred to para 25
c
2005 (1) Suppl. SCR 569 referred to para 25
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6767 of 2013,
From the Judgment & Order dated 28.09.2011 of the High o
Court of Bombay at Aurangabad in W.P. No. 10032 of 2010.
I Gaurav Agrawal for the Appellant.
Sudhanshu S. Choudhari, Sachin J. Patil, Asha Gopalan
Nair for the Respondents. E
The Judgment of the Court was delivered by
G.S. SINGHVI, J. 1. Leave granted.
2. The question which arises for consideration in this F
appeal filed against order dated 28.9.2011 passed by the
learned Single Judge of the Bombay High Court, Aurangabad
Bench is whether the appellant is entitled to wages for the
period during which she was forcibly kept out of service by the
management of the school. G
3. The appellant was appointed as a teacher in Nandanvan
Vidya Mandir (Primary School) run by a trust established and
controlled by Bagade family. The grant in aid given by the State
Government, which included rent for the building was received H
10 SUPREME COURT REPORTS [2013) 9 S.C.R.
A by Bagade family because the premises belonged to one of
its members, namely, Shri Dulichand. In 2005, the Municipal
Corporation of Aurangabad raised a tax bill of Rs.79,974/- by
treating the property as commercial. Thereupon, the
Headmistress of the school, who was also President of the
B Trust, addressed a letter to all the employees including the
appellant requiring them to contribute a sum of Rs.1500/- per
month towards the tax liability. The appellant refused to comply
with the dictate of the Headmistress. Annoyed by this, the
management issued as many as 25 memos to the appellant
c and then placed her under suspension vide letter dated
14.11.2006. She submitted reply to each and every
memorandum and denied the allegations. Education Officer
(Primary) Zilla Parishad, Aurangabad did not approve the
appellant's suspension. However, the letter of suspension was
not revoked. She was not even paid subsistence allowance in
0
terms of the Maharashtra Employees of Private Schools
(Conditions of Service) Rules, 1981 (for short, 'the Rules')
framed under Section 16 of the Maharashtra Employees of
Private Schools (Conditions of Service) Regulation Act, 1977
E (for short, 'the Act').
4. Writ Petition No.8404 of 2006 filed by the appellant
questioning her suspension was disposed of by the Division
Bench of the Bombay High Court vide order dated 21.3.2007
and it was declared that the appellant will be deemed to have
F rejoined her duties from 14.3.2007 and entitled to consequential
benefits in terms of Rule 37(2)(f) of the Rules and that the
payment of arrears shall be the liability of the management.
Paragraphs 4 and 5 of that order read as under:
"4. Considering the order we intend passing it is not
G
necessary for us to deal with the rival contentions of the
parties. That will be for the Inquiry Committee to decide.
In view of the apprehensions expressed regarding the
inquiry being dragged on unnecessarily, it is necessary to
safeguard the interests of the petitioner as well.
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 11
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
5. In the circumstances, Rule is made absolute in the A
following terms.
(i) The Inquiry Committee shall conclude the
proceedings and pass a final order on or before
31.5.2007.
B
(ii) The petitioner shall be at liberty to have her case
represented by Smt.Sulbha Panditrao Munde.
(iii) The petitioner/her representative shall appear, in the
first instance, before the Inquiry Committee at 11 c
a.m. on 26.3.2007- and, thereafter, as directed by
the Inquiry Committee.
(iv) The petitioner is entitled to the benefit of Rule 37
(2) (f) of Maharashtra Employees of Private
Schools (Conditions of Service) Rules, 1981, as D
specified in paragraph 11 of the order and
judgment of the Division Bench in the case of
Hamid Khan Nayyar s/o Habib Khan v. Education
Officer, Amravati and Others (supra). The petitioner
shall be deemed to have rejoined the duties from E
14.3.2007 and entitled to consequential benefits
that would flow out of Rule 37 (2) (f). The payment
of arrears shall be the liability of the management."
5. In the meanwhile, the management issued notice dated F
28.12.2006 for holding an inquiry against the appellant under
Rules 36 and 37 of the Rules. The appellant nominated Smt.
Sulbha Panditrao Munde to appear before the Inquiry
Committee, but Smt. Munde was not allowed to participate in
the inquiry proceedings. The Inquiry Committee conducted ex G
parte proceedings and the management terminated the
appellant's service vide order dated 15.6.2007.
6. The appellant challenged the aforesaid order under
Section 9 of the Act. In the appeal filed by her on 25.6.2007,
the appellant pleaded that the action taken by the management H
12 SUPREME COURT REPORTS [2013) 9 S.C.R.
A was arbitrary and violative of the principles of natural justice.
She further pleaded that the sole object of the inquiry was to
teach her a lesson for refusing to comply with the illegal demand
of the management.
7. The management contested the appeal and pleaded·
8
that the action taken by it was legal and justified because the
appellant had been found guilty of misconduct. It was further
pleaded that the inquiry was held in consonance with the
relevant rules and the principles of natural justice.
C 8. By an order dated 20.6.2009, the Presiding Officer of
the School Tribunal, Aurangabad Division (for short, 'the
Tribunal') allowed the appeal and quashed the termination of
the appellant's service. He also directed the management to
pay full back wages to the appellant. The Tribunal considered
D the appellant's plea that she had not been given reasonable
opportunity of hearing and observed:
"Now let us test for what purpose and for what subject
inquiry was initiated in what manner inquiry was conducted,
which witnesses have been examined and how injury was
E
conclude. I have already demonstrate above that starting
point against this appellant is calling upon staff members
collection of fund for payment for tax dues page 54 of
appeal memo. All the staff members have objected this
joining hands together page 58 of appeal. Fact finding
F
committee have submitted its report Exhibit 62. Report of
Education Officer (Primary) in regard to the proposal of
appointment of Administrator page 71. If we see issuance
of memo by Head Mistress, I observe that language which
is used to revengeful against this appellant. It seems that
G attitude towards this appellant was of indecent and I also
observed that behaviour of the appellant have also
instigated Head Mistress for the same. Language is of law
standard use in the letter by imputing defamed language
and humiliation to the appellant.
H
..
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 13
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
If we see memos, we can find that some memos are of A
silly count i.e. late for 3 minutes page 95, query about the
examination page 93 to which appellant have replied that
when no examinations were held where is the question of
getting inquiry by the parents page 96. In regard to the
memo, in regard to the black dress on 15.08.2005 and B
06.12.2005 and about issuance of show cause notice for
issuing false affidavit page 143.
We can find attitude of this Head Master towards appellant.
Three minute late is very silly ground query about
examination which was not at all held, wearing of black C
dress during course of argument there was argument on
photograph, however, no such photograph is submitted on
record. In this regard during course of argument, it was
brought to my notice that on 15.08.2005 this appellant have
wore black colour blouse, however, she had wore white D
sari on her person. First thing is that there is no such rule
about so called colour that it is bogus colour or this colour
is being used for protesting or otherwise. How and why
Head Mistress and Management have made issue of this
black colour blouse I cannot understand. I have gone E
through the whole record but I do not find any circular
issued by Head Mistress by which all the staff members
have been called upon to come in dress for this function.
So in the absence of such circular, how it can be an .issue
of inquiry. F
Another aspect is that one of the staff Vijay Gedam have
lodged appeal before this Tribunal in favour of him, this
appellant and one another staff teacher have swear
affidavit. I do not find how this issue can be a subject of
inquiry that appellant have swear false affidavit. Is Head G
Mistress having authority to say that this appellant have
. swear false affidavit. Here I find 5 to 6 staff members have
supported this appeliant, at the same time some teachers
have also come forward this Head Mistress. They were in
H
14 SUPREME COURT REPORTS [2013] 9 S.C.R.
A dilemma to whom they may favour. So over all attitude of
this Head Mistress against this appellant is revengeful with
ulterior motive to drag this appellant in inquiry proceeding.
I gone through the statement recorded of the witnesses. I
find that all the statements are general in nature and it is
B
repetition of statement of first witness Surajkumar
Khobragade. Nobody has made statement specifically
with date and incident. The deposition is a general
statement which is already in memos which have been
issue by the Head Mistress to the appellant.
c
More important in this regard that no cross examination
of witnesses by the appellant. In the statement of
witnesses, I do not find any endorsement that appellant
was absent or appellant is present, she declined to cross
D examine or otherwise. These statements have been
concluded that witnesses have stated before inquiry
committee, that is all. If we read first statement of first
witnesses we can find carry forward of the statement for
other witnesses by some minor change in the statement.
E
One crucial aspect in regard to the proceeding is that this
Head Mistress who had issued more than 25 bulky memos
against this appellant and on whose complaint or
grievances this inquiry was initiate, have not been
examined by the inquiry committee. I am surprised that why
F such a key witness is not examined. In reply this appellant
have put her grievances against Head Mistress. By taking
advantage of this Chief Executive Officer of the inquiry i.e.
Sonia Bagale called upon written explanation from Head
Mistress to cover up complaint and grievances of the
G appellant. It is on 21.05.2007, page 777, 778 and 781 by
this explanation again one issues have been brought which
were not subject matter of the chargesheet. So it is serious
lacuna in this inquiry proceeding that witnesses Head
Mistress have not been examined."
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 15
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
The Tribunal then adverted to the charges levelled against A
the appellant and held:·
"It is also demonstrated in the course of argument that
permission was not granted as per letter dated 22.11.2006
of Education Officer. So naturally suspension of this
B
appellant was in question. It is another aspect that on
persuasion appellant ha.ve been paid subsistence
allowance. However, remaining subsistence allowance till
today is not paid to the appellant. So it can be another
ground for vitiating inquiry.
c
204(1)Mh. L.J. page 676 in case of Awdhesh Narayan K.
Singh vs. Adarsh Vidya Mandir Trust and Another, (a)
Maharashtra Employees of Private Schools (Conditions of
Service) Rules 1981, R.R. 35 and 33- Failure to obtain
prior permission of Authority under Rule 33(1) before o
suspending an employee does not affect the action of
suspension pending inquiry- If prior permission is
obtained, Rule 35(3) is attracted and the suspended
employee is entitled for subsistence allowance under the
scheme of payment through Cooperative Banks for a E
period of four months after which period the payment is to
be made by the Management. If an employee is
suspended without obtaining prior approval of the
Education Authority, payment of subsistence allowance for
entire period has to be made by the Management. So if
F
considered all these aspects, we can find that appeal
deserves to be allowed by quashing inquiry held against
appellant."
The Tribunal finally took cognizance of the fact that the
appellant was kept under suspension from 14.11.2006 and she G
was not gainfully employed after the termination of her service
and declared that she is entitled to full back wages. The
operative portion of the order passed by the Tribunal reads as
under:
H
16 SUPREME COURT REPORTS [2013] 9 S.C.R.
A "(1) Appeal is allowed.
(2) The termination order dated 15.06.2007 issued by
Respondent on the basis of inquiry report is hereby
quashed and set aside.
B
(3) The appellant is hereby reinstated on her original post
and Respondents are directed to reinstate the appellant
in her original post as Asst. Teacher Nandanvan
Vidyamandir (Primary School), Aurangabad with full back
c wages from the date of termination till date of
reinstatement.
(4) The Respondent Nos.1 to 3 are hereby directed to
deposit full back wages i.e. pay and allowances of the
appellant from the date of her termination till the date of
D
her reinstatement in the service, within 45 days in this
Tribunal from the date of this order.
(5) The appellant will be entitled to withdraw the above
amounts from this Tribunal immediately after it is
E deposited."
9. The management challenged the order of the Tribunal
in Writ Petition No. 10032 of 2010. The learned Single Judge
examined the issues raised by the management in detail and
F expressed his agreement with the Tribunal that the decision of
the management to suspend the appellant and to terminate her
service were vitiated due to violation of the statutory provisions
and the principles of natural justice. While commenting upon
the appellant's suspension, the learned Single Judge observed:
G "It has also come on record that the appellant was
suspended by suspension letter dated 14.11.2006. The
appellant made representation to the Education Officer.
The Education Officer refused to approve suspension of
the appellant as per his letter dated 22.11.2006. From
H careful perusal of the material brought on record, I do not
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 17
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
find that, there arose extraordinary situation to suspend A
services of the appellant without taking prior approval of
the Education Officer, as contemplated under Rules. No
doubt, the Management can suspend services of an
employee without prior approval of the Education Officer,
but for that there should be extraordinary situation. B
However, in the facts of this case, nothing is brought on
record to suggest that there was extraordinary situation
existing so as to take emergent steps to suspend services
of the appellant without taking prior approval of the_
Education Officer (Primary), Zilla Parishad, Aurangabad. c
It is also not in dispute that the Education Officer declined
to approve suspension of the appellant as per his letter
dated 22.11.2006.
Therefore, taking into consideration facts involved in the
present case, conclusion is reached by the School Tribunal D
that the Management of the petitioner-school/Institution is
dominated by the members of Bagade family."
The learned Single Judge then considered the finding
recorded by the Tribunal that the Inquiry Committee was not E
validly constituted and observed:
"In the present case, admittedly petitioners herein did not
file any application or made prayer for reconstituting the
inquiry committee and to proceed further for inquiry by
F
newly reconstituted committee. On the contrary, from
reading the reply filed by the petitioners herein before the
School Tribunal, it is abundantly clear that the petitioners
went on justifying constitution of the Committee and stating
in the reply that no fault can be attributed with the
constitution of the Committee. Therefore, in absence of G
such prayer, the School Tribunal proceeded further and
dealt with all the charges which were levelled against the
appellant i.e. Respondent No.3 herein. Therefore, in my
opinion, further adjudication by the Tribunal on merits of the
matter cannot be said to be beyond jurisdiction or powers H
18 SUPREME COURT REPORTS [2013] 9 S.C.R.
A of the School Tribunal. In the facts of this case, as it is
apparent from the findings recorded by the School Tribunal,
that as the case in hand is a case of victimization and
petitioner Management as well as the Inquiry Committee
having joined hands against the delinquent right from the
B beginning, no premium can_~e put over the action of the
petitioner-Management and Inquiry Committee who threw
the principles of natural justice in the air. It would be a
travesty of justice, in these circumstances, to-- allow the
petitioner-Management to once again hold inquiry in such
c a extreme case."
However, the learned Single Judge set aside the direction
given by the School Tribunal for payment of back wages by
relying upon the judgments in J.K. Synthetics Ltd. v. K. P.
D Agrawal and Another (2007) 2 SCC 433 and Zilla Parishad,
Gadchiroli and Another v. Prakash slo Nagorao Thete and
Another2009 (4) Mh. L. J. 628. The observations made by the
learned Single Judge on this issue are extracted below:
"Bare perusal of above reproduced para 40 of the judgment
E of the School Tribunal would make it abundantly clear that,
the advocate for the appellant, in the course of arguments,
argued that the appellant was kept under suspension from
14.11.2006 till the appeal is finally heard. It was argued
that the appellant was not gainfully employed anywhere
F during the period of suspension and termination and
therefore, she is entitled to back wages from the date of
her suspension. The Tribunal has observed that no rebuttal
argument by other side. Therefore, it appears that, the
School Tribunal has considered only oral submissions of
G the Counsel appearing for the appellant, in the absence
of any specific pleadings, prayers and evidence for
payment of back wages. There was no application or
pleadings before the School Tribunal on oath by the
appellant stating that she was not gainfully employed from
the date of suspension till reinstatement. Therefore, in my
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 19
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.j
considered opinion, finding recorded by the Tribunal in A
clauses 3 to 5 of the operative order, in respect of
payment of back wages, cannot be sustained, in the light
of law laid down by this Court and Honourable Supreme
Court in respect of payment of back wages."
8
10. Learned counsel for the appellant relied upon the
judgments of this Court in Hindustan Tin Works Private
Limited v. Employees of Hindustan Tin Works Private Limited
(1979) 2 SCC 80, Surendra Kumar Verma v. Central
Government Industrial Tribunal-cum-Labour Court, New Delhi
(1980) 4 SCC 443, Mohan Lal v. Management of Bharat C
Electronics Limited (1981) 3 SCC 225, Workmen of Calcutta
Dock Labour Board and Another v. Employers in relation to
Calcutta Dock Labour Board and Others (1974) 3 SCC 216
and argued that the impugned order is liable to be set aside
because while the appellant had pleaded that she was not D
gainfully employed, no evidence was produced by the
management to prove the contrary. Learned counsel submitted
that the order passed by the Tribunal was in consonance with
the provisions of the Act and the Rules and the High Court
committed serious error by setting aside the direction given by E
the Tribunal to the management to pay back wages to the
appellant on the specious ground that she had not led evidence
to prove her non-employment during the period she was kept
away from the job. He emphasized that in view of the embargo
contained in Rule 33(3), the appellant had not taken up any F
other employment and argued that she could not have been
deprived of full pay and allowances for the entire period c;luring
which she was forcibly kept out of job.
11. Learned counsel for the respondent supported the
impugned order and argued that the High Court did not commit G
any error by setting aside the direction given by the Tribunal
for payment of back wages to the appellant because she had
neither pleaded nor any evidence was produced that during the
period of suspension and thereafter she was not employed
H
20 SUPREME COURT REPORTS (2013] 9 S.C.R.
A elsewhere. Learned counsel relied upon the judgments in M.P.
State Electricity Board v. Jarina Bee (2003) 6 SCC 141,
Kendriya Vidyalaya Sangathan v. S. C. Sharma (2005) 2 SCC
363, U.P. State Brassware Corporation Ltd. v. Uday Narain
Pandey (2006) 1 SCC 479, J.K. Synthetics Ltd. v. K.P.
B Agrawal and Another (supra), The Depot Manager,
A.P.S.R. T.C. v. P. Jayaram Reddy (2009) 2 SCC 681,
Novartis India Ltd. v. State of West Bengal and Others (2009)
3 SCC 124, Metropolitan Transport Corporation v. V.
Venkatesan (2009) 9 SCC 601 and Jagbir Singh v. Haryana
c State Agriculture Marketing Board and Another (2009) 15
sec 327 and argued that the rule of reinstatement with back
wages propounded in 1960's and ?O's has been considerably
diluted and the Courts/Tribunal cannot ordain payment of back
wages as a matter of course in each and every case of wrongful
0 termination of service. Learned counsel submitted that even if
the Court/Tribunal finds that the termination, dismissal or
discharge of an employee is contrary to law or is vitiated due
to violation of the principles of natural justice, an order for
payment of back wages cannot be issued unless the employee
E concerned not only pleads, but also proves that he/she was not
employed gainfully during the intervening period.
12. We have considered the respective arguments. The
Act was enacted by the legislature to regulate the recruitment
and conditions of service of employees in certain private
F schools in the State and to instill a sense of security among
such employees so that they may fearlessly discharge their
duties towards the pupil, the institution and the society. Another
object of the Act is to ensure that the employees become
accountable to the management and contribute their might for
G improving the standard of education. Section 2 of the Act
contains definitions of various words and terms appearing in
other sections. Section 8 provides for constitution of one or
more Tribunals to be called "School Tribunal" and also defines
the jurisdiction of each Tribunal. Section 9(1) contains· a non
H obstante clause and provides for an appeal by any employee
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 21
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
of a private school against his/her dismissal or removal from A
service or whose services are otherwise terminated or who is
reduced in rank. The employee, who is superseded in the
matter of promotion is also entitled to file an appeal. Section
10 enumerates general powers and procedure of the Tribunal
and Section 11 empowers the Tribunal to give appropriate relief B
and direction. Section 12 also contains a non obstante clause
and makes the decision of the Tribunal final and binding on the
employee and the management. Of course, this is subject to
the power of judicial review vested in the High Court and this
Court. Section 16(1) empowers the State Government to make c
rules for carrying out the purposes of the Act. Section 16(2)
specifies the particular matters on which the State Government
can make rules. These include Code of Conduct and
disciplinary matters and the manner of conducting inquiries.
13. Rule 35 of the Rules empower the management to D
suspend an employee with the prior approval of the competent
authority. The exercise of this power is hedged with the
condition that the period of suspension shall not exceed four
monthswithout prior permission of the concerned authority. The
suspended employee is entitled to subsistence allowance under E
the scheme of payment (Rule 34) through Co-operative Bank
for a period of four months. If the period of suspension exceeds
four months, then subsistence allowance has to be paid by the
management. In case, the management suspends an employee
without obtaining prior approval of the competent authority, then F
it has to pay the subsistence allowance till the completion of
inquiry. A suspended employee can be denied subsistence
allowance only in the contingencies enumerated in clauses (3)
and (4) of Rule 33, i.e., when he takes up private employment
or leaves headquarter without prior approval of the Chief G
Executive Officer. .
14. For the sake of reference, Sections 2(7), 9, 10, 11 and
16 of the Act are reproduced below:
"2(7) "Employee," means any member of the teaching H
22 SUPREME COURT REPORTS [2013) 9 S.C.R.
A and non teaching staff of a recognized school and includes
Shikshan Sevak;
9. Right of appeal to Tribunal to employees of a
private school.
B (1) Notwithstanding anything contained in any law or
contract for the time being in force, any employee in a
private school,-
(a) who is dismissed or removed or whose services are
c otherwise terminated or who is reduced in rank, by the
order passed by the Management; or
(b) who is superseded by the Management while making
an appointment to any post by promotion;
D and who is aggrieved, shall have a right to appeal and may
appeal against any such order or supersession to the
Tribunal constituted under section 8.
Provided that, no such appeal shall lie to the Tribunal in
E any case where the matter has already been decided by
a Court of competent jurisdiction or is pending before such
Court, on the appointed date or where the order of
dismissal, removal, otherwise termination of service or
reduction in rank was passed by the Management at any
time before the 1st July, 1976.
F
(2) to (4) xxxx xxxx
xxxx
10. General Powers and procedure of Tribunal.
G
(1) For the purpose of admission, hearing and disposal
of appeals, the Tribunal shall have the same powers as are
vested in an Appellate Court under the Code of Civil
Procedure, 1908, and shall have the power to stay the
operation of any order against which an appeal is made
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 23
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
on such conditions as it may think fit to impose and such A
other powers as are conferred on it by or under this Act.
(2)The Presiding Officer of the Tribunal shall decide the
procedure to be followed by the Tribunal for the disposal
of its business including the place or places at which and
B
the hours during which it shall hold its sitting.
(3) xxxx xxxx xxxx
11. Powers of Tribunal to give appropriate relief and
direction. C
{1) On receipt of an appeal, where the Tribunal, after giving
reasonable opportunity to both parties of being heard, is
satisfied that the appeal does not pertain to any of the.
matters specified in section 9 or is not maintainable by it,
or there is no sufficient ground for interfering with the order 0
of the Management it may dismiss the appeal.
(2) Where the Tribunal, after giving reasonable opportunity
to both parties of being heard, decides in any appeal that
the order of dismissal, removal, otherwise termination of E
service or reduction in_ rank was in contravention of any law
(including any rules made under this Act), contract or
conditions of service for the time being in force or was
otherwise illegal or improper, the Tribunal may set aside
the order of the Management, partially or wholly, and direct F
the Management,-
(a) to reinstate the employee on the same post or on a
lower post as it may specify;
(b) to restore the employee to the rank which he held before G
reduction or to any lower rank as it may specify;'
(c) to give arrears of emoluments to the employee for such
period as it may specify;
H
24 SUPREME COURT REPORTS [2013] 9 S.C.R.
A (d) to award such lesser punishment as it may specify in
lieu of dismissal, removal, otherwise termination of service
or reduction in rank, as the case may be;
(e) where it is decided not to reinstate the employee or in
B any other appropriate case, to give to the employee twelve
months' salary (pay and allowances, if any) if he has been
in the services of the school for ten years or more and six
months salary (pay and allowances, if any) if he has been
in service of the school for less then ten year, by way or
compensation, regard being had to loss of employment
c and possibility of getting or not getting suitable employment
thereunder, as it may specify; or
(f) to give such other relief to the employee and to observe
such other conditions as it may specify, having regard to
D the circumstances of the case.
(3) It shall be lawful for the Tribunal to recommend to State
Government that any dues directed by it to be paid to the
employee, or in case of an order to reinstate the employee
E an emoluments to be paid to the employee till he is
reinstated, may be deducted from the grant due and
payable, or that may become due and payable in future,
to the Management and be paid to the employee directly.
(4) Any direction issued by the Tribunal under sub-section
F (2) shall be communicated to both parties in writing and
shall be complied by the Management within the period
specified in the direction, which shall not be less than thirty
days from the date of its receipt by the Management.
G 16. Rules.
(1) The State Government may, by notification in the Official
Gazette, make rules for carrying out the purposes of this
Act.
H (2) In particular and without prejudice to the generality of
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 25
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
the foregoing power, such rules may provide for all or any A
of the following matters, namely :-
(a) to (c) xx xx xx xx
(d) the other conditions of service of such employees
including leave, superannuation, re-employment and 8
promotions;
(e) the duties of such employees and Code of Conduct
and disciplinary matters;
(f) the manner of conducting enquiries;
c
(g) xx xx xx xx
(2A) to (4) xx xx xx"
D
15. Rules 33 (1) to (4), 34(1), (2) and 35, which have
bearing on the decision of this appeal read as under:
"33. Procedure for inflicting major penalties.
(1) If an employee is alleged to be guilty of any of the E
grounds specified in sub-rule (5) of rule 28 and if there is
reason to believe that in the event of the guilt being proved
against him, he is likely to be reduced in rank or removed
from service, the Management shall first decide whether
to hold an inquiry and also to place the employees under F
suspension and if it decides to suspend the employee, it
shall authorise the Chief Executive Officer to do so after
obtaining the permission of the Education Officer or, in the
case of the Junior College of Educational and Technical
High Schools, of the Deputy Director. Suspension shall not G
be ordered unless there is a prima facie case for his
removal or there is reason to believe that his continuance
in active service is likely to cause embarrassment or to
hamper the investigation of the case. If the Management
decides to suspend the employee, such employee shall, H
26 SUPREME COURT REPORTS [2013] 9 S.C.R.
A subject to the provisions of sub-rule (5) stand suspended
with effect from the date of such orders.
(2) If the employee tenders resignation while under
suspension and during the pendency of the inquiry such
8 resignation shall not be accepted.
(3) An employee under suspension shall not accept any
private employment.
(4) The employee under suspension shall not leave the
c headquarters during the period of suspension without the
prior approval of the Chief Executive Officer. If such
employee is the Head and also the Chief Executive Officer,
he shall obtain the necessary prior approval of the
President.
D
34. Payment of subsistence allowance.
(1) (a) A subsistence allowance at an amount equal to the
leave salary which the employee would have drawn if he
had been on leave on half pay and in addition, Dearness
E allowance based on such leave salary shall be payable to
the employee under suspension.
(b) Where the period of suspension exceeds 4 months, the
authority which made or is deemed to have made the order
of suspension shall be competent to vary the amount of
F
subsistence allowance for any period subsequent to the
period of the first 4 months as follows, namely :-
(i) The amount of subsistence allowance may be increased
by a suitable amount not exceeding 50 per cent of the
G subsistence allowance admissible during the period of first
4 months, if in the opinion of the said authority, the period
of suspension has been prolonged for reasons, to be
recorded in writing, not directly attributable to the employee.
H (ii) The amount of subsistence allowance may be reduced
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 27
_ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
by a suitable amount, not exceeding 50 per cent of the A
subsistence allowance admissible during the period of the
first 4 months, if in the opinion of the said authority the
period of suspension has been prolonged due to reasons,
to be recorded in writing directly attributable to the
employee. B
(iii) The rate of Dearness allowance shall be based on the
increased or on the Decreased amount of subsistence
allowance, as the case may be, admissible under sub-
clauses (i) and (ii).
c
(2) Other compensatory allowances, if any, of which the
employee was in receipt on the date of suspension shall
also be payable to the employee under suspension to such
extent and subject to such conditions as the authority
suspending the employee may direct: D
Provided that the employee shall not be entitled to the
compensatory allowances unless the said authority is
satisfied that the employee continues to meet the
expenditure for which such allowances are granted:
E
Provided further that, when an employee is convicted by a
competent court and sentenced to imprisonment, the
subsistence allowance shall be reduced to a nominal
amount of rupee one per month with effect from the date
of such conviction and he shall continue to draw the same F
till the date of his removal or reinstatement by the
competent authority :
Provided also that, if an employee is acquitted by the
appellate court and no further appeal or a revision G
application to a higher court is preferred and pending, he
shall draw the subsistence allowance at the normal rate
from the date of acquittal by the appellate court till the
termination of the inquiry if any, initiated under these rules:
Provided also that, in cases falling under sub-rules (1) and H
28 SUPREME COURT REPORTS [2013] 9 S.C.R.
A (2) above, where the management refuses to pay or fails
to start and continue payment of subsistence allowance
and other compensatory allowances, if any, to an employee
under suspension, payment of the same shall be made by
the Education Officer or Deputy Director, as the case may
B be, who shall deduct an equal amount from the non-salary
grant that may be due and payable or may become due
and payable to the school.
35. Conditions of suspension.
c (1) In cases where the Management desires to suspend
an employee, he shall be suspended only with the prior
approval of the appropriate authority mentioned in rule 33.
(2) The period of suspension shall not exceed four months
D except with the prior permission of such appropriate
authority.
(3) In case where the employee I
is suspended with prior
approval he shall be paid subsistence allowance under the
'scheme of payment through Co-operative Banks for a
E period of four months only and thereafter, the payment shall
be made by the Management concerned.
(4) In case where the employee is suspended by the
Management without obtaining prior approval of the
F appropriate authority as aforesaid, the payment of
subsistence allowance even during the first four months of
suspension and for further period thereafter till the
completion of inquiry shall be made by the Management
itself.
G
(5) The subsistence allowance shall not be withheld except
in cases of breach of provisions of sub-rules (3) or (4) of
rule 33."
16. The word "reinstatement" has not been defined in the
H Act and the Rules. As per Shorter Oxford English Dictionary,
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 29
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
Vol.II, 3rd Edition, the word "reinstate" means to reinstall or re- A
establish (a person or thing in a place, station, condition, etc.);
to restore to its proper or original state; to reinstate afresh and
the word "reinstatement" means the action of reinstating; re-
establishment. As per Law Lexicon, 2nd Edition, the word
"reinstate" means to reinstall; to re-establish; to place again in B
a former state, condition or office; to restore to a state or
position from which the object or person had been removed and
the word "reinstatement" means establishing in former condition,
position or authority (as) reinstatement of a deposed prince.
As per Merriam Webster Dictionary, the word "reinstate" means c
to place again (as in possession or in a former position), to
restore to a previous effective state. As per Black's Law
Dictionary, 6th Edition, "reinstatement" means 'to reinstall, to
re-establish, to place again in a former state, condition, or
office? To restore to a state or position from which the object 0
or person had been removed.'
17. The very idea of restoring an employee to the position
which he held before dismissal or removal or termination of
service implies that the employee will be put in the same
position in which he would have been but for the illegal action E
taken by the employer. The injury suffered by a person, who is
dismissed or removed or is otherwise terminated from service
cannot easily be measured in terms of money. With the passing
of an order which has the effect of severing the employer
employee relationship, the latter's source of income gets dried F
up. Not only the concerned employee, but his entire family
suffers grave adversities. They are deprived of the source of
sustenance. The children are deprived of nutritious food and
all opportunities of education and advancement in life. At times,
the family has to borrow from the relatives and other
acquaintance to avoid starvation. These sufferings continue till G
the competent adjudicatory forum decides on the legality of the
action taken by the employer. The reinstatement of such an
employee, which is preceded by a finding of the competent
judicial/quasi judicial body or Court that the action taken by the
employer is ultra vires the relevant statutory provisions or the H
30 SUPREME COURT REPORTS [2013] 9 S.C.R.
A principles of natural justice, entitles the employee to claim full
back wages. If the employer wants to deny back wages to the
employee or contest his entitlement to get consequential
benefits, then it is for him/her to specifically plead and prove
that during the intervening period the employee was gainfully
B employed and was getting the same emoluments. Denial of
back wages to an employee, who has suffered due to an illegal
act of the employer would amount to indirectly punishing the
concerned employee and rewarding the employer by relieving
him of the obligation to pay back wages including the
c emoluments.
18. A somewhat similar issue was considered by a three
Judge Bench in Hindustan Tin Works Pvt. Ltd. v. Employees
of Hindustan Tin Works Pvt. Ltd. (supra) in the context of
termination of services of 56 employees by way of retrenchment
D due to alleged non-availability of the raw material necessary for
utilization of full installed capacity by the petitioner. The dispute
raised by the employees resulted in award of reinstatement with
full back wages. This Court examined the issue at length and .
held:
E
"It is no more open to debate that in the field of industrial
jurisprudence a declaration can be given that the
termination of service is bad and the workman continues
to be in service. The spectre of common law doctrine that
contract of personal service cannot be specifically enforced
F or the doctrine of mitigation of damages does not haunt
in this branch of law. The relief of reinstatement with
continuity of service can be granted where termination of
service is found to be invalid. It would mean that the
employer has taken away illegally the right to work of the
G workman contrarv to the relevant law or in breach of
contract and simultaneously deprived the workman of his
earnings. If thus the employer is found to be in the wrong
as a result of which the workman is directed to be
reinstated. the employer could not shirk his responsibility
H of paying the wages which the workman has been
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 31
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
deprived of by the illegal or invalid action of the employer. A
Speaking realistically, where termination of service is
questioned as invalid or illegal and the workman has to
go through the gamut of litigation. his capacity to sustain
himself throughout the protracted litigation is itself such an
awesome factor that he may not survive to see the day B
when relief is granted. More so in our system where the
law's proverbial delay has become stupefying. If after such
a protracted time and energy consuming litigation during
which period the workman just sustains himself. ultimately
he is to be told that though he will be reinstated. he will be C
denied the back wages which would be due to him. the
workman would be subjected to a sort of penalty for no
fault of his and it is wholly undeserved. Ordinarily. therefore.
a workman whose service has been illegally terminated
would be entitled to full back wages except to the extent
he was gainfully employed during the enforced idleness. D
That is the normal rule. Any other view would be a premium
on the unwarranted litigative activity of the employer. If the
employer terminates the service illegally and the
termination is motivated as in this case viz. to resist the
workmen's demand for revision of wages. the termination E
may well amount to unfair labour practice. In such
circumstances reinstatement being the normal rule. it
should be followed with full back wages. Articles 41 and
43 of the Constitution would assist us in reaching a just
conclusion in this respect. By a suitable legislation, to wit, F
the U.P. Industrial Disputes Act, 1947, the State has
endeavoured to secure work to the workmen. In breach of
the statutory obligation the services were terminated and
the termination is found to be invalid; the workmen though
willing to .do the assigned work and earn their livelihood, G
were kept away therefrom. On top of it they were forced
to litigation up to the Apex Court now they are being told
that something less than full back wages should be
awarded to them. If the services were not terminated the
workmen ordinarily would have continued to work and H
32 SUPREME COURT REPORTS [2013] 9 S.C.R.
A would have earned their wages. When it was held that the
termination of services was neither proper nor justified, it
would not only show that the workmen were always willing
to serve but if they rendered service they would legitimately
be entitled to the wages for the same. If the workmen were
B always ready to work but they were kept away therefrom ,
on account of an invalid act of the employer, there is no :•,
justification for not awarding them full back wages which
were very legitimately due to them.
In the very nature of things there cannot be a strait-jacket
c formula for awarding relief of back wages. All relevant
considerations will enter the verdict. More or less. it would
be a motion addressed to the discretion of the Tribunal.
Full back wages would be the normal rule and the party
objecting to it must establish the circumstances
D necessitating departure. At that stage the Tribunal will
exercise its discretion keeping in view all the relevant
circumstances. But the discretion must be exercised in a
judicial and judicious manner. The reason for exercising
discretion must be cogent and convincing and must
E appear on the face of the record. When it is said that
something is to be done within the discretion of the
authority. that something is to be done according to the
Rules of reason and justice. according to law and not
humour. It is not to be arbitrarv. vague and fanciful but legal
F and regular."
(emphasis supplied)
After enunciating the above-noted principles, this Court took
cognizance of the appellant's plea that the company is suffering
G loss and, therefore, the workmen should make some sacrifice
and modified the award of full back wages by directing that the
workmen shall be entitled to 75 % of the back wages.
19. Another three Judge Bench considered the same issue
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 33
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.)
in Surendra Kumar Verma v. Central Government Industrial A
Tribunal-cum-Labour Court, New Delhi (supra) and observed:
"Plain common sense dictates that the removal of an order
terminating the services of workmen must ordinarily lead
to the reinstatement of the services of the workmen. It is B
as if the order has never been. and so it must ordinarily
lead to back wages too. But there may be exceptional
circumstances wh!ch make it impossible or wholly
inequitable vis-a-vis the employer and workmen to direct
reinstatement with full back wages. For instance, the C
industry might have closed down or might be in severe
financial doldrums; the workmen concerned might have
secured better or other employment elsewhere and so on.
In such situations, there is a vestige of discretion left in the
court to make appropriate consequential orders. The court
may deny the relief of reinstatement where reinstatement D
is impossible because the indl•stry has closed down. The
court may deny the relief of award of full back wages where
that would place an impossible burden on the employer.
In such and other exceptional cases the court may mould
the relief. but. ordinarily the relief to be awarded must be E
reinstatement with full back wages. That relief must be
awarded where no special impediment in the way of
awarding the relief is clearly shown. True. occasional
hardship may be caused to an employer but we must
remember that. more often than not. comparatively far F
greater hardship is certain to be caused to the workmen
if the relief is denied than to the employer if the relief is
granted."
(emphasis supplied) G
20. The principle laid down in Hindustan Tin Works
Private Limited v. Employees of Hindustan Tin Works Private
Limited (supra) was reiterated in P.G.I. of Medical Education
& Research, Chandigarh v. Raj Kumar (2001) 2 SCC 54. That
case makes an interesting reading. The respondent had worked H
34 SUPREME COURT REPORTS [2013] 9 S.C.R.
A as helper for 11 months and 18 days. The termination of his
service was declared by Labour Court, Chandigarh as
retrenchment and was invalidated on the ground of non-
compliance of Section 25-F of the Industrial Disputes Act, 1947.
As a corollary, the Labour Court held that the respondent was
B entitled to reinstatement with continuity of service. However, only
60% back wages were awarded. The learned Single Judge of
the Punjab and Haryana High Court did not find any error
apparent in the award of the Labour Court but ordered payment
of full back wages. The two Judge Bench of this Court noted
c the guiding principle laid down in the case of Hindustan Tin
Works Private Limited and observed:
"While it is true that in the event of failure in compliance
with Section 25-F read with Section 25(b) of the Industrial
Disputes Act, 1947 in the normal course of events the
D Tribunal is supposed to award the back wages in its
entirety but the discretion is left with the Tribunal in the
matter of grant of back wages and it is this discretion,
which in Hindustan Tin Works (P) Ltd. case this Court has
stated must be exercised in a judicial and judicious
E manner depending upon the facts and circumstances of
each case. While, however, recording the guiding principle
for the grant of relief of back wages this Court in Hindustan
case, itself reduced the back wages to 75%, the reason
being the contextual facts and circumstances of the case
F under consideration.
The Labour Court being the final court of facts came to a
conclusion that payment of 60% wages would comply with
the requirement of law. The finding of perversity or being
G erroneous or not in accordance with law shall have to be
recorded with reasons in order to assail the finding of the
Tribunal or the Labour Court. It is not for the High Court to
go into the factual aspects of the matter and there is an
existing limitation on the High Court to that effect. In the
event, however the finding of fact is based on any
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 35
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
misappreciation of evidence, that would be deemed to be A
an error of law which can be corrected by a writ of
certiorari. The law is well settled to the effect that finding
of the Labour Court cannot be challenged in a proceeding
in a writ of certiorari on the ground that the relevant and
. .material evidence adduced before the Labour Court was B
insufficient or inadequate though, however, perversity of
the order would warrant intervention of the High Court. The
observation, as above, stands well settled since the
decision of this Court in Syed Yakoob v. K. S.
Radhakrishnan AIR 1964 SC 477. c
Payment of back wages having a discretionary element
involved in it has to be dealt with, in the facts and
circumstances of each case and no straight-jacket formula
can be evolved, though, however, there is statutory
sanction to direct payment of back wages in its entirety. D
As regards the decision of this Court in Hindustan Tin
Works (P) Ltd. be it noted that though broad guidelines,
as regards payment of back wages, have been laid down
by this Court but having regard to the peculiar facts of the
matter, this Court directed payment of 75% back wages E
only.
The issue as raised in the matter of back wages has
been dealt with by the Labour Court in the manner as
above having regard to the facts and circumstances of the F
matter in the issue, upon exercise of its discretion and
obviously in a manner which cannot but be judicious in
nature. In the event, however, the High Court's interference
is sought for, there exists an obligation on the part of the
High Court to record in the judgment, the reasoning before G
however denouncing a judgment of an inferior Tribunal, in
the absence of which, the judgment in our view cannot
stand the scrutiny of otherwise being reasonable. There
ought to be available in the judgment itself a finding about
th~ perversity or the erroneous approach of the Labour
H
36 SUPREME COURT REPORTS [2013] 9 S.C.R.
A Court and it is only upon recording therewith the High Court
has the authority to interfere. Unfortunately, the High Court
did not feel it expedient to record any reason far less any
appreciable reason before denouncing the judgment."
21. The aforesaid judgment became a benchmark for
8
almost all the subsequent judgments. In Hindustan Motors Ltd.
v. Tapan Kumar Bhattacharya (2002) 6 SCC 41, the Fifth
Industrial Tribunal, West Bengal had found that the finding of
guilty recorded in the departmental inquiry was not based on
any cogent and reliable evidence and passed an award for
C reinstatement of the workman with other benefits. The learned
Single Judge allowed the writ petition filed by the employer and
quashed the award of the Industrial Tribunal. The Division
Bench of the High Court reversed the order of the learned
Single Judge"#This Court issued notice to the respondent limited
D to the question of back wages. After taking cognizance of the
judgments in Hindustan Tin Works Private Limited v.
Employees of Hindustan Tin Works Private Limited (supra)
and P.G.I. of Medical Education & Research, Chandigarh v.
Raj Kumar (supra), the Court observed:
E
"As already noted. there was no application of mind to the
question of back wages by the Labour Court. There was
no pleading or evidence whatsoever on the aspect whether
the respondent was employed elsewhere during this long
F interregnum. Instead of remitting the matter to the Labour
Court or the High Court for fresh consideration at this
distance of time. we feel that the issue relating to payment
of back wages should be settled finally. On consideration
of the entire matter in the fight of the observations referred
to supra in the matter of awarding back wages. we are of
G
the view that in the context of the facts of this particular case
including the vicissitudes of iong-drawn litigation, it will
serve the ends of justice if the respondent is paid 50% of
the back wages till the date of reinstatement. The amount
already paid as wages or subsistence allowance during
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 37
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
the pendency of the various proceedings shall be deducted A
from the back wages now directed to be paid. The appellant
will calculate the amount of back wages as directed herein
and pay the same to the respondent within three months,
failing which the amount will carry interest at the rate of 9%
per annum. The award of the Labour Court which has been B
confirmed by the Division Bench of the High Court stands
modified to this extent. The appeal is disposed of on the
above terms. There will be no order as to costs."
(emphasis supplied) C
22. In Indian Railway Construction Co. Ltd. v. Ajay Kumar
(2003) 4 sec 579, this Court was called upon to consider
whether the services of the respondent could be terminated by
dispensing with the requirement of inquiry enshrined in Indian
Railway Construction Co. Ltd. (Conduct, Discipline and Appeal) D
· Rules, 1981 read with Article 311(2) of the Constitution. The
learned Single Judge of the Delhi High Court held that there
was no legal justification to dispense with the inquiry and
ordered reinstatement of the workman with back wages. The·
Division Bench upheld the order of the learned Single Judge. E
The two Judge Bench of this Court referred to the judgments in
Hindustan Tin Works Private Limited v. Employees of
Hindustan Tin Works Private Limited (supra) and P.G.I. of
Medical Education & Research, Chandigarh v. Raj Kumar
(supra) and held that payment of Rs.15 lakhs in full and final F
settlement of all claims of the employee will serve the ends of
justice.
23. In M.P. State Electricity Board v. Jarina Bee (Smt.)
(supra), the two Judge Bench referred to P.G.I. of Medical
Education & Research, Chandigarh v. Raj Kumar (supra) and G
held that it is always incumbent upon the Labour Court to
decide the question relating to quantum of back wages by
considering the evidence produced by the parties.
24. In Kendriya Vidyalaya Sangathan v. S. C. Sharma
(supra), the Court found that the services of the respondent had H
38 SUPREME COURT REPORTS (2013] 9 S.C.R.
A been terminated under Rule 19(ii) of the Central Civil Services
(Classification, Control and Appeal) Rules, 1965 on the charge
that he was absconding from duty. The Central Administrative
Tribunal held that no material was available with the disciplinary
authority which could justify invoking of Rule 19(ii) and the order
B of dismissal could not have been passed without holding
regular inquiry in accordance with the procedure prescribed
under the Rules. The Division Bench of the Punjab and Haryana
High Court d.id not accept the appellants' contention that
invoking of Rule 19(ii) was justified merely because the
c respondent did not respond to the notices issued to him and
did not offer any explanation for his willful absence from duty
for more than two years. The High Court agreed with the
Tribunal and dismissed the writ petition. The High Court further
held that even though the respondent-employee had not
D pleaded or produced any evidence that after dismissal from
service, he was not gainfully employed, back wages cannot be
denied to him. This Court relied upon some of the earlier
judgments and held that in view of the respondent's failure to
discharge the initial burden to show that he was not gainfully
employed, there was ample justification to deny him back
E
wages, more so because he had absconded from duty for a
long period of two yearFl.
25. In General Manager, Haryana Roadways v. Rudhan
Singh (2005) 5 SCC 591, the three Judge Bench considered
F the question whether back wages should be awarded to the
workman in each and every case of illegal retrenchment. The
factual matrix of that case was that after finding the termination
of the respondent's service as illegal, the Industrial Tribunal-
cum-Labour Court awarded 50% back wages. The writ petition
G filed by the appellant was dismissed by the Punjab and
Haryana High Court. This Court set aside award of 50% back
wages on the ground that the workman had raised the dispute
after a gap of 2 years and 6 months and the Government had
made reference after 8 months. The Court then proceeded to
observe:
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 39
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
"There is no rule of thumb that in every case where the A'
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 B
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 c
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
0
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 E
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 F
short or intermittent daily-wage employment though it may
be for 240 days in a calendar year."
26. In U.P. State Brassware Corporation Ltd. v. Uday
Narain Pandey (supra), the two Judge Bench observed: G
"No precise formula can be laid down as to under what
circumstances payment of entire back wages should be
~.
allowed. Indisputably, it depends upon the facts and
circumstances of each case. It would, however, not be
H
40 SUPREME COURT REPORTS [2013] 9 S.C.R.
A correct to contend that it is automatic. It should not be
granted mechanically only because on technical grounds
or otherwise an order of termination is found to be in
contravention of the provisions of Section 6-N of the U.P.
Industrial Disputes Act."
B
27. The Court also reiterated the rule that the workman is
required to plead and prima facie prove that he was not
gainfully employed during the intervening period.
28. In Depot Manager, Andhra Pradesh State Road
C Transport Corporation v. P. Jayaram Reddy (supra), this Court
noted that the services of the respondent were terminated
because while seeking fresh appointment, he had suppressed
the facts relating to earlier termination on the charges of grave
misconduct. The Labour Court did not find any fault with the
D procedure adopted by the employer but opined that dismissal
was very harsh, disproportionate and unjustified and accordingly
exercised power under Section11-A of the Industrial Disputes
Act, 1947 for ordering reinstatement with back wages. This
Court referred to the judgments in P.G.I. of Medical Education
E & Research, Chandigarh v. Raj Kumar (supra) and J.K.
Synthetics Ltd. v. K. P. Agrawal (supra) and held that the
Labour Court was not justified in awarding back wages.
29. In Novartis India Limited v. State of West Bengal
F (supra), the services of the workman were terminated on the
charge of not joining the place of transfer. The Labour Court
quashed the termination of services on the ground of violation
of the rules of natural justice and passed an award of
reinstatement of the workman with back wages. The learned
Single Judge of the High Court dismissed the writ petition filed
G by the appellant but the letters patent appeal was allowed by
the Division Bench on the ground that the State of West Bengal
was not the appropriate Government for making the reference .
.· The special leave petition filed by the workman was allowed
by this Court and the Division Bench of the High Court was
H asked to decide the letters patent appeal on merits. In the
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 41
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
second round, the Division Bench dismissed the appeal. This A
Court referred to shift in the approach regarding payment of
back wages and observed:
"There can, however, be no doubt whatsoever that there
has been a shift in the approach of this Court in regard to B
payment of back wages. Back wages cannot be granted
almost automatically upon setting aside an order of
termination inter alia on the premise that the burden to
show that the workman was gainfully employed during
interregnum period was on the employer. This Court, in a c
number of decisions opined that grant of back wages is
not automatic. The burden of proof that he remained
unemployed would be on the workmen keeping in view the
provisions contained in Section 106 of the Evidence Act,
1872. This Court in the matter of grant of back wages has
0
laid down certain guidelines stating that therefor several
factors are required to be considered including the nature
of appointment; the mode of recruitment; the length of
service; and whether the appointment was in consonance
with Articles 14 and 16 of the Constitution of India in cases
of public employment, etc. E
It is also trite that for the purpose of grant of back wages,
conduct of the workman concerned also plays a vital role.
Each decision, as regards grant of back wages or the
quantum thereof, would, therefore, depend on the fact of F
each case. Back wages are ordinarily to be granted,
keeping in view the principles of grant of damages in mind.
It cannot be claimed as a matter of right."
30. In Metropolitan Transport Corporation v. V.
Venkatesan (supra), the Court noted that after termination of G
service from the post of conductor, the respondent had
acquired Law degree and started practice as an advocate. The
Industrial Tribunal declared the termination of the respondent's
service by way of removal as void and inoperative on the
ground that the Corporation had not applied for approval under H
42 SUPREME COURT REPORTS [2013] 9 S.C.R.
A Section 33(2)(b) of the Industrial Disputes Act. At one stage,
the High Court stayed the order of the Industrial Tribunal but
finally dismissed the writ petition. The workman filed application
under Section 33-C(2) of the Industrial Disputes Act claiming
full back wages. The Labour Court allowed the claim of the
B respondent to the extent of Rs.6,54,766/-. The writ petition filed
against the order of the Labour Court was dismissed by the
learned Single Judge and the appeal was dismissed by the
Division Bench. This Court referred to the earlier precedents
and observed:
c "First, it may be noticed that in the seventies and eighties,
the directions for reinstatement and the payment of full back
wages on dismissal order having been found invalid would
ordinarily follow as a matter of course. But there is change
in the legal approach now.
D
We recently observed in Jagbir Singh v. Haryana State
Agriculture Mktg. Board that in the recent past there has
been a shift in the legal position and in a long line of cases,
this Court has consistently taken the view that the relief of
E 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 held to be in
contravention of the prescribed procedure.
Secondly, and more importantly, in view of the fact that the
F
respondent was enrolled as an advocate on 12-12-2000
and continued to be so until the date of his reinstatement
(15-6-2004), in our thoughtful consideration, he cannot be
held to be entitled to full back wages. That the income
received by the respondent while pursuing legal profession
G has to be treated as income from gainful employment
does not admit of any doubt. In North-East Kamataka RTC
v. M. Nagangouda this Court held that "gainful
employment" would also include self-employment. We
respectfully agree.
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 43
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, .J.]
It is difficult to accept the submission of the learned Senior A
Counsel for the respondent that he had no professional
earnings as an advocate and except conducting his own
case, the respondent did not appear in any other case. The
fact that he resigned from service after 2-3 years of
reinstatement and re-engaged himself in legal profession B
leadit us to assume that he had some practice in law after
he took sanad on 12-12-2000 until 15-6-2004, otherwise
he wovld not have resigned from the settled job and
resumed profession of glorious uncertainties."
31. In Jagbir Singh v. Haryana State Agriculture
c
Marketing Board (supra), this Court noted that as on the date
of retrenchment, respondent No.1 had worked for less than 11
months and held:
"It would be, thus, seen that by a catena of decisions in D
recent time, this Court has clearly laid down that an order
of retrenchment passed in violation of Section 25-F
although may be set aside but an award of reinstatement
should not, however, be automatically passed. The award
of reinstatement with full back wages in a case where the E
workman has completed 240 days of work in a year
preceding the date of termination, particularly, daily wagers
has not been found to be proper by this Court and instead
compensation has been awarded. This Court has
distinguished between a daily wager who does not hold a F
post and a permanent employee.
Therefore, the view of the High Court that the Labour Court
erred in granting reinstatement and back wages in the
facts and circumstances of the present case cannot be said
to suffer from any legal flaw. However, in our view, the High G
Court erred in not awarding compensation to the appellant
while upsetting the award of reinstatement and back
wages."
32. We may now deal with the judgment in J.K. Synthetics H
44 SUPREME COURT REPORTS (2013] 9 S.C.R.
A Ltd. v. K.P. Agrawal and Another (supra) in detail. The facts of
that case were that the respondent was dismissed from service
on the basis of inquiry conducted by the competent authority.
The Labour Court held that the inquiry was not fair and proper
and permitted the parties to adduce evidence on the charges
B levelled against the respondent. After considering the evidence,
the Labour Court gave benefit of doubt to the respondent and
substituted the punishment of dismissal from service with that
of stoppage of increments for two years. On an application filed
by the respondent, the Labour Court held that the respondent
c was entitled to reinstatement with full back wages for the period
of unemployment. The learned Single Judge dismissed the writ
petition and the Division Bench declined to interfere by
observing that the employer had willfully violated the order of
the Labour Court. On an application made by the respondent
D under Section 6(6) of the U.P. Industrial Disputes Act, 1947,
the Labour Court amended the award. This Court upheld the
power of the Labour Court to amend the award but did not
approve the award of full back wages. After noticing several
precedents to which reference has been made hereinabove,
E the two Judge Bench observed:
"There is also a misconception that whenever
reinstatement is directed, "continuity of service" and
"consequential benefits" should follow, as a matter of
course. The disastrous effect of granting several
F promotions as a "consequential benefit" to a person who
has not worked for 10 to 15 years and who does not have
the benefit of necessary experience for discharging the
higher duties and functions of promotional posts, is seldom
visualised while granting consequential benefits
G automatically. Whenever courts or tribunals direct
reinstatement, they should apply their judicial mind to the
facts and circumstances to decide whether "continuity of
service" and/or "consequential benefits" should also be
directed.
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 45
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
Coming back to back wages, even if the court finds it A
necessary to award back wages, the question will be
whether back wages should be awarded fully or only
partially (and if so the percentage). That depends upon the
facts and circumstances of each case. Any income
received by the employee during the relevant period on B
account of alternative employment or business is a relevant
factor to be taken note of while awarding back wages, in
addition to the several factors mentioned in Rudhan Singh
and Uday Narain Pandey. Therefore, it is necessary for the
employee to plead that he was not gainfully employed from c
the date of his termination. While an employee cannot be
asked to prove the negative, he has to at least assert on
oath that he was neither employed nor engaged in any
gainful business or venture and that he did not have any
income. Then the burden will shift to the employer. But 0
there is, however, no obligation on the terminated
employee to search for or secure alternative employment.
Be that as it may.
But the cases referred to above, where back wages were
awarded, related to termination/retrenchment which were E
held' to be illegal and invalid for non-compliance with
statutory requirements or related to cases where the Court
found that the termination was motivated or amounted to
victimisation. The decisions relating to back wages
payable on illegal retrenchmeri~ or termination may have F
no application to the case like the present one, where the
termination (dismissal or removal or compulsory
retirement) is by way of punishment for misconduct in a
departmental inquiry, and the court confirms the finding
regarding misconduct, but only interferes with the G
punishment being of the view that it is excessive, and
awards a lesser punishment, resulting in the reinstatement
of employee. Where the power under Article 226 or
Section 11-A of the Industrial Disputes Act (or any other
similar provision) is exercised by any court to interfere with H
46 SUPREME COURT REPORTS [2013] 9 S.C.R.
A the punishment on the ground that it is excessive and the
employee deserves a lesser punishment, and a
consequential direction is issued for reinstatement, the
court is not holding that the employer was in the wrong or
that the dismissal was illegal and invalid. The court is
B merely exercising its discretion to award a lesser
punishment. Till such power is exercised, the dismissal is
valid and in force. When the punishment is reduced by a
court as being excessive, there can be either a direction
for reinstatement or a direction for a nominal lurnp sum
c compensation. And if reinstatement is directed, it can be
effective either prospectively from the date of such
substitution of punishment (in which event, there is no
continuity of service) or retrospectively, from the date on
which the penalty of termination was imposed (in which
event, there can be a consequential direction relating to
D
continuity of service). What requires to be noted in cases
where finding of misconduct is affirmed and only the
punishment is interfered with (as contrasted from cases
where termination is held to be illegal or void) is that there
is no automatic reinstatement; and if reinstatement is
E directed, it is not automatically with retrospective effect
from the date of termination. Therefore, where
reinstatement is a consequence of imposition of a lesser
punishment, neither back wages nor continuity of service
nor consequential benefits, follow as a natural or
F necessary consequence of such reinstatement. In cases
where the misconduct is held to be proved, and
reinstatement is itself a consequential benefit arising from
imposition of a lesser punishment, award of back wages
for the period when the employee has not worked, may
G amount to rewarding the delinquent employee and
punishing the employer for taking action for the misconduct
committed by the employee. That should be avoided.
Similarly, in such cases, even where continuity of service
is directed, it should only be for purposes of pensionary/
H retirement benefits, and not for other benefits like
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 47
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI; J.]
increments, promotions, etc. A
But there are two exceptions. The first is where the court
sets aside the termination as a consequence of employee
being exonerated or being found not guilty of the
misconduct. Second is where the court reaches a 8
conclusion that the inquiry was held in respect of a frivolous
issue or petty misconduct, as a camouflage to get rid of
the employee or victimise him, and the disproportionately
excessive punishment is a result of such scheme or
intention. In such cases, the principles relating to back C
wages, etc. will be the same as those applied in the cases
of an illegal termination.
In this case, the Labour Court found that a charge against
the employee in respect of a serious misconduct was
proved. It, however, felt that the punishment of dismissal D
was not warranted and therefore, imposed a lesser
punishment of withholding the two annual increments. In
such circumstances, award of back wages was neither
automatic nor consequential. In fact, back wages was not
warranted at all." E
33. The propositions which can be culled out from the
aforementioned judgments are:
(i) In cases of wrongful termination of service, reinstatement
with continuity of service and back wages is the normal rule. F
(ii) The aforesaid rule is subject to the rider that while
deciding the issue of back wages, the adjudicating authority or
the Court may take into consideration the length of service of
the employee/workman, the nature of misconduct, if any, found G
proved against the employee/workman, the financial condition
of the employer and similar other factors.
(iii) Ordinarily, an employee or workman whose services
are terminated and who is desirous of getting back wages is
required to either plead or at least make a statement before H
48 SUPREME COURT REPORTS [2013] 9 S.C.R.
A the adjudicating authority or the Court of first instance that he/
she was not gainfully employed or was employed on lesser
wages. If the employer wants to avoid payment of full back
wages, then it has to plead and also lead cogent evidence to
prove that the employee/workman was gainfully employed and
B was getting wages equal to the wages he/she was drawing
prior to the termination of service. This is so because it is
settled law that the burden of proof of the existence of a
particular fact lies on the person who makes a positive
averments about its existence. It is always easier to prove a
C positive fact than to prove a negative fact. Therefore, once the
employee shows that he was not employed, the onus lies on
the employer to specifically plead and prove that the employee
was gainfully employed and was getting the same or
substantially similar emoluments.
D (iv) The cases in which the Labour Court/Industrial Tribunal
exercises power under Section 11-A of the Industrial Disputes
Act, 1947 and finds that even though the enquiry held against
the employee/workman is consistent with the rules of natural
justice and I or certified standing orders, if any, but holds that
E the punishment was disproportionate to the misconduct found
proved, then it will have the discretion not to award full back
wages. However, if the Labour Court/Industrial Tribunal finds
that the employee or workman is not at all guilty of any
misconduct or that the employer had foisted a false charge, then
F there will be ample justification for award of full back wages.
(v) The cases in which the competent Court or Tribunal
finds that the employer has acted in gross violation of the
statutory provisions and/or the principles of natural justice or is
guilty of victimizing the employee or workman, then the
G concerned Court or Tribunal will be fully justified in directing
payment of full back wages. In such cases, the superior Courts
should not exercise power under Article 226 or 136 of the
Constitution and interfere with the award passed by the Labour
Court, etc., merely because there is a possibility of forming a
H
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 49
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
different opinion on the entitlement of the employee/workman A
to get full back wages or the employer's obligation to pay the
same. The Courts must always be kept in view that in the. cases
of wrongful I illegal termination of service, the wrongdoer.is the
employer and sufferer is the employee/workman and th~re is
no justification to give premium to the employer of his B
wrongdoings by relieving him of the burden to pay to the
employee/workman his dues in the form of full back wages:
(vi) In a number of cases, the superior Courts have
interfered with the award of the primary adjudicatory authority C
on the premise that finalization of litigation has taken long time
ignoring that in majority of cases the parties are not responsible
for such delays. Lack of infrastructure and manpower is the
principal cause for delay in the disposal of cases. For this the
litigants cannot be blamed or penalised. It would amount to
grave injustice to an employee or workman if he is denied back D
wages simply because there is long lapse of time between the
termination of his service and finality given to the order of
reinstatement. The Courts should bear in mind that in most of
these cases, the employer is in an advantageous position vis-
a-vis the employee or workman. He can avail the services of E
best legal brain for prolonging the agony of the sufferer, i.e., .the
employee or workman, who can ill afford the luxury of spending
money on a lawyer with certain amount of fame. Therefore, in
such cases it would be prudent to adopt the course suggested
in Hindustan Tin Works Prhlate Limited v. Employees of F
Hindustan Tin Works Private Limited (supra).
(vii) The observation made in J.K. Synthetics Ltd. v. K.P.
Agrawal (supra) that on reinstatement the employee/workman
cannot claim continuity of service as of right is contrary to the G
ratio of the judgments of three Judge Benches referred to
hereinabove and cannot be treated as good law. This part of
the judgment is also against the very concept of reinstatement
of an employee/workman.
34. Reverting to the case in hand, we find that the H
50 SUPREME COURT REPORTS [2013] 9 S.C.R.
A management's decision to terminate the appellant's service
was preceded by her suspension albeit without any rhyme or
reason and even though the Division Bench of the High Court
declared that she will be deemed to have rejoined her duty on
14.3.2007 and entitled to consequential benefits, the
B management neither allowed her to join the duty nor paid
wages. Rather, after making a show of holding inquiry, the
management terminated her service vide order dated
15.6.2007. The Tribunal found that action of the management
to be wholly arbitrary and vitiated due to violation of the rules
C of natural justice. The Tribunal further found that the allegations
levelled against the appellant were frivolous. The Tribunal also
took cognizance of the statement made on behalf of the
appellant that she was not gainfully employed anywhere and the
fact that the management had not controverted the same and
ordered her reinstatement with full back wages.
0
35. The learned Single Judge agreed with the Tribunal that
the action taken by the management to terminate the
appellant's service was per se illegal but set aside the award
of back wages by making a cryptic observation that she had
E not proved the factum of non-employment during the intervening
period. While doing so, the learned Single Judge not only
overlooked the order passed by the Division Bench in Writ
Petition No.8404/2006, but also Rule 33 which prohibits an
employee from taking employment elsewhere. Indeed, it was
F not even the pleaded case of the management that during the
period of suspension, the appellant had left the Headquarter
without prior approval of the Chief Executive Officer and thereby
disentitling her from getting subsistence allowance or that
during the intervening period she was gainfully employed
G elsewhere.
36. In view of the above discussion, we hold that the
learned Single Judge of the High Court committed grave error
by interfering with the order passed by the Tribunal for payment
of back wages, ignoring that the charges levelled against the
IH
DEEPALI GUNDU SURWASE v. KRANTI JUNIOR 51
ADHYAPAK MAHAVIDYALAYA (D.ED.) [G.S. SINGHVI, J.]
appellant were frivolous and the inquiry was held in gross A
violation of the rules of natural justice.
37. In the result, the appeal is allowed, the impugned order
is set aside and the order passed by the Tribunal is restored.
The management shall pay full back wages to the appellant 8
within four months from the date of receipt of copy of this order
failing which it shall have to pay interest at the rate of 9% per
annum from the date of the appellant's suspension till the date
of actual reinstatement.
38. It is also made clear that in the event of non-compliance C
of this order, the management shall make itself liable to be
punished under the Contempt of Courts Act, 1971.
R.P. Appeal allowed.
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "reinstatement"Sign in to search