TAPASH KUMAR PAULversusBSNL & ANR.

                    (2014] 4 S.C.R. 875


                  TAPASH KUMAR PAUL                              A
                              V.
                        BSNL & ANR.
              (Civil Appeal No. 4980 of 2014)
                     JANUARY 28, 2014                            B
 [GYAN SUDHA MISRA AND V. GOPALA GOWDA, JJ.)

     LABOUR LAW:

      Full Ba.ck wages - Termination - Tribunal held that C
 termination was in violation of s. 25-F of the ID Act and passed
 an order of reinstatement, however declined to grant back
wages to the appellant-workman except Rs. 20, 0001- as
compensation - Single Judge of High Court upheld the
 decision of Tribunal - On appeal, the Division Bench set o
 aside the award and in lieu of reinstatement passed an order
directing that the amount of Rs. 20,000 be paid by way of
compensation - On appeal, held: Court may .substitute
reinstatement by compensation but the same has to l)e based
on justifiable grounds i.e. where the industry is closed or E
where the employee has superannuated or going to retire
shortly and no period of service is left to his credit or where
 workman has been rendered incapacitated to discharge the
duties and is not fit to be reinstated or when he has lost
confidence of the management to discharge duties - In the F
instant case, the appellant's case did not fall in any of the
 categories so as to justify compensation in lieu of
reinstatement - There was no justification for the Division
 Bench to interfere with the order of the Tribunal and single
judge - The Division Bench of the High Court gravely erred
 in ignoring the normal rule that ordinarily a workman whose G
 service has been illegally terminated would be entitled to full
 back wages except to the extent he was gainfully employed
 during the enforced idleness - Relying upon the view
 expressed in *Deepali Gundu case to the effect that the order
                               875                                H
    876      SUPREME COURT REPORTS             [2014] 4 S.C.R.


A   of termination affects the entire family of the employee and
    deprives them of food, education and advancement in life,
    appellant is reinstated with full back wages since in the
    absence of full back wages, he will suffer punishment for no
    fault of his own - Industrial Disputes Act, 1947 - s.25-F.
B
       *Deepali Gundu Surwase vs. Kranti Junior Adhyaypak
  Mahavidyalaya (D.Ed) and Ors. 2013 (10) SCC 324: 2013
  (9) SCR 1; Senior Superintendent Telegraph (Traffic), Bhopal
  v. Santosh Kumar seal and Ors. 2010 (6) SCC 773; Jagbir
c Singh v. Haryana State Agriculture Mktg. Board & Anr. 2009
  (15) SCC 327: 2009 (10) SCR 908; Hindustan Tin Works (P)
  Ltd v. Employees of Mis Hindustan Tin Works Pvt. Ltd. & Ors.
  1979 (2) SCC 80: 1979 (1) SCR 563 ; Surendra Kumar
  Verma & Ors. v. central Government Industrial Tribunal-cum-
D Labour Court, New Delhi & Anr. 1980 (4) SCC 443: 1981 (1)
  SCR 789 - relied on.

                           Case Law Reference:
          2010 (6) sec 113        Relied on           Para 2
E         2009 (10) SCR 908       Relied on           Para 2
          2013 (9) SCR 1          Relied on           Para 3
          1979 (1) SCR 563        Relied on           Para 3

F         1981 (1) SCR 789        Relied on           Para 3

        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    4980 of 2014.

        From the Judgment and Order dated 04.02.2013 of the
G   High Court at Calcutta in FM.A. No. 1514 of 2011.

        Pijush K. Roy, Kakali Roy, Rajan K. Chourasia for the
    Appellant.

        R.D. Agrawala, Pavan Kumar, Prithvi Pal for the
H   Respondents.
       TAPASH KUMAR PAUL v. BSNL & ANR.                  877


    The following order of the Court was delivered             A

                           ORDER

    GYAN SUDHA MISRA, J. 1. Leave granted.

     2. This appeal has been preferred by the appellant who B
succeeded in getting an order of reinstatement in his favour by
the Central Government Industrial Tribunal at Calcutta in
Reference No. 27of1997 dated 13th May, 2002, by which the
order of reinstatement was passed in his favour. However, the
Tribunal declined to grant back wages to the appellant except C
Rs.20,000/- to be paid by the respondent as compensation
towards back wages. This Award was passed by the Tribunal
since the Management had failed to produce relevant
documents to disclose the actual number of days for which
appellant has worked and so his termination was held to be in D
violation of Section 25F of the Industrial Disputes Act, 1947.

     3. The respondent-Management of the BSNL, however,
appealed against the Award passed by the Tribunal by way of
a Writ Petition in the High Court before the Single Judge
whereby the learned Single .Judge affirmed the Award passed E
by the Tribunal and dismissed the writ petition filed by the
respondent- Management. The respondent was noi satisfied
with the order passed by the Single Judge and refused to give
effect to the Award in favour of the appellant and preferred a
further appeal before the Division Bench. The Division Bench, F
however, was pleased to allow the appeal by setting aside the
Award passed in favour of the appellant and in lieu of
reinstatement, passed an order directing that the amount of
Rs.20,000/- be paid by way of compensation to the appellant
which in any case had been passed by the Tribunal as G
compensation towards back wages. Thus, in effect, the
compensation which has been ordered to be paid was legally
due to the appellant towards back wages and the High Court
set aside the entire Award passed by the Tribunal which in effect
can be construed that no amount was paid by way of H
                                                                       I
    878      SUPREME COURT REPORTS                [2014) 4 S.C.R.


A   compensation. Although the High Court recorded that
    Rs.20,000/- be paid by way of compensation, as aforesaid, the
    same was towards back wages as per the Award passed by
    the Tribunal.

B        .4 It is no doubt true that a Court may pass an order
    substituting an order of. reinstatement by awarding
    compensation but the same has to be based on justifiable
    grounds viz. (I) where the industry is closed; (ii) where the
    employee has superannuated or going to retire shortly and no
c   period of service is left to his credit; (iii) where the workman
    has been rendered incapacitated to discharge the duties and
    cannot be reinstated and I or (iv) when he has lost confidence
    of the Management to discharge duties. What is sought to be
    emphasised is that there may be appropriate case on facts
    which may justify substituting the order of reinstatement by
0
    award of compensation, but that has to be supported by some
    legal and justifiable reasons indicating why the order of
    reinstatement should be allowed to be substituted by award of
    compensation.

E        5. In the instant matter, we are not satisfied that the
    appellant's case falls in to any of the categories referred to
    hereihbefore which would justify compensation in lieu of
    reinstatement. We thus find no justification for the High Court
    so as to interfere with the Award passed by the Tribunal which
F   was affirmed even by the Single Judge, but the Division Bench
    thought it appropriate to set aside the order of reinstatement
    without specifying any reasons whatsoever, as to why it
    substituted with compensation of a meagre amount of
    Rs.20,000/- to the appellant.
G
        6. In view of this we set aside the judgment and order of
    the High Court and restore the Award of the Tribunal and the
    order of the Single Judge affirming the same.

          7. The appeal accordingly is allowed but without cost.
H
        TAPASH KUMAR PAUL v. BSNL & ANR.                      879

V. GOPALA GOWDA, J. (Concurring)                                     A

     1. While concurring with the finding and reasons recorded
by my sister Justice Gyan Sudha Misra in allowing the Civil
Appeal by setting aside the impugned judgment of the High
Court of Calcutta and restoring the award of the Labour Court
                                                                     8
with consequential benefits of awarding backwages, I am giving
my additional reasons after distinguishing decisions of this
Court upon which reliance has been placed by the learned
senior counsel appearing on behalf of the appellant.

     2. The learned counsel on behalf of the respondent has C
relied upon the decision of this Court in the case of Senior
Superintendent Telegraph (Traffic), Bhopal v. Santosh Kumar
Seal and Others1 to contend that in the last few years it has
been consistently held by this Court that relief by way of
reinstatement with back wages is not automatic even if the D
termination of employee has been found illegal or is in
contravention to the prescribed procedure. The learned counsel
has further relied upon the Santosh Kumar Seal's judgment
(supra) which hold as under:
                                                                     E
     "10. In a recent judgment authored by one of us (R.M.
     Lodha, J.) in Jagbir Singh v. Haryana State Agriculture
     Mktg. Board & Anr. 2 , the aforesaid decisions were noticed
     and it was stated:

     7. It is true that the earlier view of this Court articulated in F
     many decisions reflected the legal position that if the
     termination of an employee was found to be illegal, the
     relief of reinstatement with full back wages would ordinarily
     follow. However, in recent past, there has been a shift in
     the legal position and in a long line of cases, this Court G
     has consistently taken the view that relief by way of
     reinstatement with back wages is not automatic and may
     be wholly inappropriate in a given fact situation even
1   (201 OJ 6 sec 773.
2   (2009) 1s sec 327.                                               H
    880       SUPREME COURT REPORTS                 [2014] 4 S.C.R.


A         though the termination of an employee is in contravention
          of the prescribed procedure. Compensation instead of
          reinstatement has been held to meet the ends of justice.

          ***
B         14. It would be, thus, seen that by a catena of decisions in
          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
c         of reinstatement with full back wages in a case where the
          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
D         distinguished between a daily wager who does not hold a
          post and a permanent employee."

    The learned senior counsel has further relied upon the decision
    of this Court in Civil Appeal No.107 of 2014 titled BSNL & Ors.
    Vs. Kai/ash Narayan Sharma to hold that reinstatement may
E
    not be a natural consequence of termination of $ervice of a work
    in contravention to Section 25 F of the ID Act. The relevant para
    reads as under:

          "The decisions of this Court referred to above, in no
F         uncertain terms hold that in case of termination in violation
          of Section 25-F .of the l.D. Act, relief of reinstatement may.
          not be the natural consequence. It will depend upon the
          facts and circumstances of each case. It is not automatic.
          In the facts of a given case, instead of reinstatement,
G         monetary compensation can be granted. The cases in
          hand clearly fall within the ratio of the decisions of this
          Court, referred to above."

         3. However, it is pertinent to mention that the recent
H   decision. of this Court in the case of Deepali Gundu Surwase
        TAPASH KUMAR PAUL v. BSNL & ANR.                      881
              [V. GOPALA GOWDA, J.]

v. Kranti Junior Adhyapak Mahavidyalaya (D.Ed) and Ors. 3            A
took a contrary view. The Court in this case, opined as under:

       "22. 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 B
       position in which he would have been but for the illegal
       action 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        c
       the effect of severing the employer-employee relationship,
       the latter's source of income gets dried up. Not only the
       employee concerned, but his entire family suffers grave
       adversities. They are deprived of the source of
       sustenance. The children are deprived of nutritious food
                                                                      0
       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 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 E
       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 wages. If
       the employer wants to deny back wages to the employee F
       or cor:itest 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
       employed and was gettir.g the same emoluments.
       Thedenial of back wages to an employee, who has G
       suffered due to an illegal act of the employer would amount
       to indirectly punishing the employee concerned and
       rewarding the employer by relieving him of the obligation
       to pay back wages including the emoluments.
3.   (2013) 1o sec 324.                                               H
    882        SUPREME COURT REPORTS                 [2014] 4 S.C.R.

A         23. A somewhat similar issue was considered by a three-
          J ud ge Bench in Hindustan Tin Works (P) Ltd. v.
          Employees of Mis Hindustan Tin Works Pvt. Ltd. & Ors. 4
          in the context of termination of services of 56 employees
          by way of retrenchment due to alleged non-availability of
B         the raw material necessary for utilisation 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:

c         "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
          or the doctrine of mitigation of damages does not haunt
D
          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
          workman contrary to the relevant law or in breach of
E
          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
          of paying the wages which the workman has been
F         deprived of by the illegal or invalid action of the employer.
          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
G         awesome factor that he may not survive to see the day
          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
H   4.   (1979) 2 sec so.
  TAPASH KUMAR PAUL v. BSNL & ANR.                     883
        [V. GOPALA GOWDA, J.]
he is to be told that though he will be reinstated. he will be A
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 B
he was gainfully employed during the enforced idleness.
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   c
workmen's demand for revision of wages. the termination
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 D
conclusion in this respect. By a suitable legislation, to wit,
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 E
willing to do the assigned work and earn their livelihood,
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 F
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 G
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.
                                                               H
    884       SUPREME COURT REPORTS                   [2014] 4 S.C.R.

A         ***

          In the very nature of things there cannot be a straitjacket
          formula for awarding relief of back wages. All relevant
          considerations will enter the verdict. More or less. it would
B         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
          necessitating departure. At that stage the Tribunal will
          exercise its discretion keeping in view all the relevant
c         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
          is to be done within the discretion of the authority. that
          something is to be done according to the rules of reason
D
          and justice. according to law and not humour. It is not to
          be arbitrary, vague and fanciful but legal and regular."

          (emphasis supplied)

E After enunciating the abovenoted principles, this Court took
    cognizance of the appellant's plea that the company is suffering
    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.
F         24. Another three-Judge Bench considered the same issue
          in Surendra Kumar Verma & Ors. v. Central Government
          Industrial Tribunal-cum-Labour Court, New Delhi & Anr. 5
          and observed:

G         " ... 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 as if the order has never been. and so it must ordinarily
          lead to back wages too. But there may be exceptional
H   s.   (1980) 4 sec 443.
        TAPASH KUMAR PAUL v. BSNL & ANR.                        885
              [V. GOPALA GOWDA, J.]
     circumstances which make it impossible or wholly                   A
     inequitable vis-avis the employer and workmen to direct
     reinstatement with full back wages. For instance, the
     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.            B
     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
     is impossible because the industry has closed down. The
     court may deny the relief of award of full back wages where        C
     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
     reinstatement with full back wages. That relief must be
     awarded where no special impediment in the way of                  D
     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
     greater hardship is certain to be caused to the workmen
     if the relief is denied than to the employer if the relief is
     granted."                                                          E

                                             (emphasis supplied)

Therefore, in the light of the decision of this Court in Deepa/i
Gundu's case (supra) which has correctly relied upon higher
                                                                        F
bench decisions of this Court in Surendra Kumar Verma's case
(supra) and Hindustan Tin Works Pvt. Ltd. (supra), I am of the
opinion that the appellant herein is entitled to reinstatement with
full back wages since in the absence of full back wages. the
employee will be distressed and will suffer punishment for no           G
fault of his own.

     4. The Division Bench of the High Court has gravely erred
in law that the Tribunal and learned single Judge found that the
order of the termination is bad in law for non-compliance with
the above statutory provisions of the ID Act and therefore.             H
    886       SUPREME COURT REPORTS               [2014] 4 S.C.R.


A   following the normal Rule of Award of reinstatement is awarded
    but erroneously denied full back wages in the absence of proof
    of gainful employment of appellant-workman.

        5. For the foregoing additional reasons, the impugned
8   judgment and order of the Division Bench is set aside and the
    Award of the Tribunal and the order of the learned single Judge
    are restored. The appeal is accordingly allowed, but without
    costs.

                              ORDER
c
          1. Leave granted.

        2. In view of the two orders giving separate reasons, though
    concurring, the appeal is allowed.
D   Devika Gujral                                     Appeal allowed.