Holding

Under Section 11‑A the Tribunal must exercise a reasoned discretion on back wages, and full back wages cannot be awarded without such consideration; the award is therefore modified to 50% of the back wages.

Summary

The workman, Tapan Kumar Bhattacharya, assaulted his supervisor in 1980, was suspended, found guilty of major misconduct in a departmental enquiry and dismissed. The employer sought approval of the dismissal under Section 33(2)(b) of the Industrial Disputes Act, 1947, and the Industrial Tribunal initially approved it. The workman raised an industrial dispute; the Tribunal later held that the dismissal was not justified due to lack of cogent evidence and ordered reinstatement with back wages. The High Court set aside the Tribunal's award, but the Division Bench restored it, directing full back wages. The Supreme Court held that under Section 11‑A the Tribunal must exercise its discretion on back wages after considering the facts, and that awarding full back wages without reasoning was improper. Consequently, the Court modified the award to 50% of the back wages, deducting any interim payments, and disposed of the appeal.

Issues considered

Whether the Industrial Tribunal and the High Court were justified in ordering full back wages without applying their discretion under Section 11‑A of the Industrial Disputes Act.
What quantum of back wages, if any, should be awarded to a workman whose dismissal is held unjustified.
Whether the discretion to award back wages must be exercised with reasoned consideration of the facts and circumstances of the case.

Legislation cited

Industrial Disputes Act, 1947s. 10(2A), s. 11-A, s. 33(2)(b)

Subjects

industrial disputeback wagesreinstatementdismissalSection 11-Adiscretionlabour law

Judgment

HINDUSTAN MOTORS LTD. A
v.
TAPAN KUMAR BHATTACHARYA AND ANR.

JULY 12, 2002

B
[D.P. MOHAPATRA AND P. VENKATARAMA REDD!, JJ.]

Labour laws:

Industrial Disputes Act, I947-Section I I-A-Industrial Dispute-Setting C
aside order of discharge or dismissal of a workman-Reinstatement with
payment offull back wages-Justification of-Held, while granting such relief
tribunal is duty bound to consider the circumstances of the case-In the instant
case there was no application ofmind to the question of back wages~However,
on facts of the case and long drawn litigation, employee to be paid 50% of
the back wages. D
Respondent-workman was suspended from services for committing
misconduct. Departmental enquiry also found him guilty. Appellant-
management then dismissed the respondent-workman from services.
Tribunal approved the proposed order of dismissal from service of E
respondent-workman. Thereafter respondent-workman raised an
Industrial Dispute. Tribunal held that since the charges framed against
the respondent-workman were not proved by any cogent and reliable
evidence dismissal of the respondent-workman was not justified and as
such he was entitled to reinstatement with full back wages. Appellant-
management then filed petition before High Court challenging the award F
of the Tribunal. Single Judge set aside and quashed the award. Aggrieved,
respondent-workman filed an appeal. Division Bench allowed the appeal
and set aside the judgment of the Single Judge. Hence the present appeal.

The question that arose before this court was whether on the facts
and circumstances of the case Tribunal and the Division Bench of the High G
Court were justified in passing the order for payment of full back wages
in favour of the workman.

Appellant-management contended that both the Tribunal and the
Division Bench committed error in directing payment of full back wages
1n H
128 SUPREME COURT REPORTS [2002] SUPP. I S.C.R.

A since in the facts and circumstances of the case no order for payment of
back wages should have been passed. in favour of the workman.

Respondent-workman contended that since the Tribunal held that
the charges framed by the management against the workman could not
be established by adducing cogent and reliable evidence; as such the order
B of dismissal of service could not be passed, therefore, order of
reinstatement of the workman with full back wages was the only
alternative. It was further contended that since the Division Bench on
consideration of the matter, held the order of dismissal to be illegal and
unjustified, it rightly confirmed the award of the Tribunal directing
C reinstatement with full back wages.

Disposing of the appeal, the Court

HELD: 1. Under Section 11-A of the Industrial Disputes Act, 1947
as amended in 1971, the Industrial Tribunal is statutorily mandated, while
D setting aside the order of discharge or dismissal and directing
reinstatement of the workman to consider the terms and conditions,
subject to which the relief should be granted or to give such other relief
to the workman including the award of any other punishment in lieu of
the discharge or dismissal, as the circumstances of the case may require.
The section is couched in wide and comprehensive terms. It vests a wide
E discretion in the Tribunal in the matter of awarding proper punishment
and also in the matter of the terms and conditions on which reinstatement
of the workman should be ordered. It necessarily follows that the tribunal
is duty bound to consider whether in the circumstances of the case, back
wages have to be awarded and if so, to what extent. [131-G, H; 132-A, BJ
F Hindustan Tin Works Pvt. Ltd. v. The Employees of MIS Hindustan Tin
Works Pvt. Ltd. and Ors., [1979) 2 SCC 80 and P.G. I. o/Medical Education
and Research Chandigarh v. Raj Kumar, [2001) 2 SCC 54, referred to.

2. In the instant case from the award passed by the Industrial
G Tribunal, which has been confirmed by the Division Bench of the High
Court, it is clear that the order for payment of full back wages to the
workman was passed without any discussion and without stating any
reason. It.appears that the Tribunal and the Division Bench had proceeded
on the footing that since the order of dismissal passed by the management
was set aside, the order of reinstatement with full back wages was to follow
H as a matter of course. However, in the context of the facts of the instant
HINDUSTAN MOTORS LTD. v. TAPAN KUMAR BHATTACHARYA [MOHAPATRA, J.] J29

case including the vicissitudes of long drawn litigation, it will serve the A
ends of justice if the respondent-workman is paid 50% of the back wages
till the date of reinstatement. (132-8-C; 133-E, F(

CJVIL APPELLATE JURISDICTION : Civil Appeal No. 3984 of
2002.
B
From the Judgment and Order dated 26.6.200 I of the Calcutta High
Court in AP0540 of 1998.

Bhaskar P. Gupta, Ms. Divya Roy, Ms. Bina Gupta, Ms. Vanita
Bhargava and Ms. Rakhi Ray for the Appellants.
c
G.S. Chatterjee, Raja Chatterjee, Sachin Das and T.C. Sharma for
the Respondent.

.. The Judgment of the Court was delivered by

D.P. MOHAPATRA, J. Leave granted. D
This appeal, filed by the Management of Mis. Hindustan Motors Limited,
is directed against the judgment dated 26.06.2001 of the Division Bench of
Calcutta High Court in APO No.540 of 1998 setting aside the judgment of
the single Judge and directing reinstatement of the workman, respondent
herein with back wages. It was further ordered by the Division Bench that E
seniority and continuity in service should be maintained and any interim
amount paid by the management to the workman should be deducted from
the amount of back wages. The learned single Judge in his judgment dated
12.3.98 had set aside the Award of the Industrial Tribunal passed on 3.10.1991,
in which direction for reinstatement of the workman with back wages was F
ordered.

On 3.9.2001 this Court issued notice to the respondent limited to the
question of back wages only. In the light of the said order learned counsel
appearing for both the parties confined their arguments to the question of
back wages. G
The short resume of facts relevant for determination of the question
raised may be stated thus:

The respondent was employed as a mazdoor in the production control
department (car press shop) of the appellant. On 13.2.1980 at about 10.40 H
130 SUPREME COURT REPORTS [2002] SUPP. 1 S.C.R.
.
A p.m. while on duty in the car press shop he had assaulted one Ramagya
Jadav, General Supervisor of the department, as a result of which the said
Supervisor became unconscious and had to be hospitalized. On the basis of
the said incident a show cause notice was issued to the respondent to explain
why disciplinary action should not be taken against him for committing major
misconduct under Item Nos. 1,17 and 19 of Appendix 'D' of the Certified
B Standing Orders of the company. The respondent was immediately placed
under suspension. This was followed by a Departmental Enquiry in which the
respondent was found guilty of major misconduct. Thereafter the appellant
by the communication dated l .8.80 conveyed its decision to dismiss the
respondent from service with effect from 15.2.80. Thereafter the appellant
C filed an application under section 33(2) (b) of the Industrial Disputes Act,
1947 (for short 'the Act') before the Fourth Industrial Tribunal, West Bengal
seeking approval of the proposed dismissal order. The Tribunal by order
dated 12.7.1982 approved the proposed order of dismissal from the service
of the respondent. Thereafter at the instance of the respondent an industrial ~-

D. dispute was raised. The State Government by the order dated 22.7.1986
passed under sub-section (2A) of Section l 0 of the Act referred the following
dispute to the Tribunal for adjudication :

"I. Is the dismissal of Shri Tapan Kumar Bhattacharya from the
service is justified ? What relief, if any, is he entitled to ?"

E The Fifth Industrial Tribunal, West Bengal by its Award dated 3.10.1991
held that the charges framed against the respondent were not proved by any
cogent and reliable evidence and as such his services could not have been
terminated. On such finding the Tribunal answered the reference in the
following terms:
F "In the result, I find that the order of dismissal of the concerned
workman from his service is not at all justified and as such, he is
entitled to reinstatement in his service with other benefit upto the
date of his reinstatement."

The A ward of the Tribunal was challenged by the company by filing
G a writ petition before the High Court which was registered as matter No.212/
92. The learned single Judge by judgment dated 12.3.1998 allowed the said
writ petition. The operative portion of the order reads as under:

"In any event for the reasons as discussed above the impugned award
H is not liable to be sustained. I accordingly set aside and quash the
HINDUSTAN MOTORS LTD. v. TAPAN KUMAR BHATTACHARYA [MOHAPATRA, J.J 131.

same. Thus the writ petition succeeds. There will be no order as to A
costs. Consequently, the gazette notification published in the said
award is also set aside and quashed. Accordingly, there will be a writ
of mandamus commanding the respondent no. I not to give effect
and/or implement and/or enforce the said impugned award dated 3rd
October, 1991."
B
The respondent carried the matter in appeal before the Division Bench
in APO No.540/98, which, as noted earlier, was decided by the judgment
dated 26th June, 200 I. The Division Bench allowed the appeal and set aside
the judgment of the learned single Judge on the terms noted earlier. The said
judgment is under challenge in the present appeal.
c
In view of the limited notice issued in the appea~ the sole question for
determination is whether on the facts and circumstances of the case the
Tribunal and the Division Bench of the High Court were justified in passing
the order for payment of full back wages in favour of the workman.
D
Shri Bhaskar P. Gupta, learned senior counsel appearing for the appellant
strenuously contended that both the Tribunal as well as the Division Bench
of the High Court committed error in directing payment of full back wages
without considering the relevant aspects of the matter. Shri Gupta contended
that in the facts and circumstances of the case no order for payment of back
wages should be passed in favour of the workman. E
Per contra Shri G.S. Chatterjee, learned counsel appearing for the
respondent contended that since the Tribunal held that the charges framed by
the management against the workman could not be established by adducing
cogent and reliable evidence, as such the order of dismissal of service could
not be passed; therefore, there was no alternative before it but to order F
reinstatement of the workman with full back wages. Shri Chatterjee further
contended that since the Division Bench on consideration of the matter, held
the order of dismissal to be illegal and unjustified, therefore rightly confirmed
the award of the Tribunal directing reinstatement with full back wages.

Under Section 11-A as amended in 1971, the Industrial Tribunal is G
statutorily mandated, while setting aside the order of discharge or dismissal
and directing reinstatement of the workman to consider the terms and
conditions, subject to which the relief should be granted or to give such other
relief to the workman including the award of any other punishment in lieu of
the discharge or dismissal, as the circumstances of the case may require. The H
13l SUPREME COURT REPORTS (2002) SUPP. 1 S.C.R.

A section is couched II\ w·ide and comprehensive terms. It vests a wide discretion
in the Tribunitl 41\ the matter of awarding proper punishment and also in the
matter of the terms and conditions on which reinstatement of the workman
should be ordered. It necessarily follows that the Tribunal is duty bound to
consider whether in the circumstances of the case, back wages have to be
B awarded and if so, to what extent.

From the award passed by the Industrial Tribunal which has been
confirmed by the Division Bench of the High Court it is clear that the order
for payfilent of full back wages to the workman was passed without any
discussion Mid without stating any reason. It appears that the Tribunal and
C the Division Bench had proceeded on the footing that since the order of
dismissal passed by the Management was set aside, the order of reinstatement
with full back wages was to follow as a matter of course.

In Hindustan Tin Works Pvt. Ltd v. The Employees of Mis. Hindustan
Tin Works Pvt. Ltd and Ors., (1979] 2 SCC 80, a three-Judge Bench of this
D Court laid down :

"In the very nature of things there cannot be a strait-jacket 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
E and the party objecting to it must establish the circumstances
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 appear on the face of the record. When it is said that something
F 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 arbitrary, vague and fanciful but
legal and regular (see Susannah Sharp V. Wakefield (1891) AC 173,
179)".
G
The Court, on taking into account the financial position of the employer-
Company, thought it fit to modify the award by allowing 75% of the back
wages instead of full back wages.

In P.G.J. ofMedical Education & Research, Chandigarh v. Raj Kumar,
H (2001] 2 sec 54, this Court found fault with the High Court in setting aside
HINDUSTAN MOTORS LTD. v. TAPAN!WM!.RllNATI'AC:HARYA(MOHAPATRA,J.I 133

the award of the Labour Court which restricted the back wages to 600/o and A
directing payment of full back wages, It wu observed thus :

"The Labour Court being the t1nal court offacts came to a conclusion
that payment of 60% wajo$ would comply with the requirement of
law. The finding ofpervonity or being erroneous ornot in accordance
with law shall have to be reeorded with reasons in order to assail the B
finding of the Tribunal or tho 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."
Again at paragraph 12, this Court observed :
c
"Payment of back wages having a discretionary element involved in
it has to be delllt 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."

As already noted, there was no application of mind to the question of D
back wages by the Labour Court. There was no pleading or evidence
whatsoever on the aspect whether the respondent was employed elsewhere
duri~g this long interregnum. Instead of remitting the matter to the Labour
Court or 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 E
consideration of the entire matter in the light of the observations referred to
supra in the matter of awarding back wages, we are of the view that in the
context of the facts of thi~ particular case including the vicissitudes of long
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 the pendency of the various proceedings F
shall be deducted 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 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 G
no order as to costs.

N.J. Appeal disposed of.