Holding

The workman is not entitled to back wages from the date of termination; he is entitled only to 50% back wages from the date of the award until reinstatement.

Summary

Sarada Prasad Misra was appointed as a conductor on a temporary, ad‑hoc basis by U.P. State Road Transport Corporation and was terminated in September 1975 with one month’s salary in lieu of notice. After a delay of about seven years he filed an application under Section 2‑A of the U.P. Industrial Disputes Act seeking reinstatement and back wages. The Labour Court awarded reinstatement with full back wages; the Allahabad High Court modified the award to reinstatement with 50% back wages from the date of the award to the date of reinstatement. The Supreme Court held that payment of back wages is discretionary and, considering the nature of the appointment, the length of service and the delay, the workman is not entitled to back wages from 1975 but only to 50% back wages from the award date to reinstatement. The appeal was partly allowed and the award was modified accordingly.

Issues considered

The legality of terminating a temporary/ad‑hoc employee without retrenchment compensation under the U.P. Industrial Disputes Act.
Whether the workman is entitled to back wages from the date of termination or only from the date of the award/reinstatement.
Whether the delay of seven years in filing the grievance bars the claim for back wages.
Whether the award of full back wages can be altered by the higher courts.

Legislation cited

U.P. Industrial Disputes Act, 1947s. 25-F, s. 2-A

Subjects

temporary employmentad‑hoc appointmentreinstatementback wagesindustrial disputeSection 2-Adelaylachesdiscretionary relief

Judgment

U.P.S.R.T.C. LTD. A
v.
SARADA PRASAD MISRA AND ANR.

APRIL 13, 2006

[DR. AR. LAKSHMANAN AND C.K. THAKKER, JJ.]
·s

Labour Laws:

U.P. Industrial Disputes Act, 1947:
c
Section 2-A-Reinstatement Jn _service-Back wages-Award of-
Workman was appointed as a conductor with .the Corporation on purely
temporary basis-Even thereafter, iie was appointed from time I~ time. on
temporwy basis as and when the Corporation was (n need of his services-
. Finally, the workman was appointed as a conductor on purely ad-hoc basis D
temporarily for a period of one momh-/t was expressly st11ted in the order
of appointment that his services would be terminated at any time without
. prior notice-Since the services.of the workman were.no longer required, his
services were terminated-The labour Court held that since the workman
had not been paid retrenchment compensation, the action of the Corporation
was illegal-The labour Court further held that the workman was entitled E
to reinstatement with fi1ll back wages froni the date of his termination till the
date of his reinstatement-The High Court upheld the said award-
Correctness of-Held: No precise formula can be adopted nor 'castiron rule'
can be laid down as to when payment offull back wages should be allowed
by the Court or Tribunal-It depends upon the facts and circumstances of F
each case-The question regarding payment" of back wages Would be
independent of the question as to entitlement of reinswtement-/n the instant
case, workman is allowed back wages to the extent of 50% from the date of
the award till he was reinstated in service.

The first respondent-workman was appointed as a conductor with the . G
appellant-Corporation on purely temporary basis. According to the appellant,
even thereafter, he was appointed from tiine to time on temporary basis as
and when the appel!ant was iii need of his services. Finally, the first respondent
was appointed as a conductor on purely ad-hoc basis temporarily for a period
f
H
2 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A of one month. It was expressly stated in the order of appointment that his
services would be terminated at any time without prior notice. Since the
services of the first respondent were no longer needed, in accordance with
the terms and conditions of the order of the appointment, the services of the
first respondent were terminated.
B After about seven years from the date of termination, the first respondent
filed an application under Section 2-A of the U.P. Industrial Disputes Act,
1947 before the Conciliation Officer making grievance against the action of
termination of his services by the appellant-Corporation. The appellant-
Corporation raised a preliminary objection that the application filed by the
C first respondent was belated and deserved to be dismissed on the ground of

-
delay and laches. The Conciliation Officer condoned the delay and submitted
a 'failure report'. Pursuant to the 'failure report' by the Conciliation Officer,
the State Government referred the dispute to the Labour Court. .
The Labour Court held that the first respondent was appointed in 1973
D and since he had completed 240 days of continuous service his services could
not have been terminated except in accordance with the provisions of the Act.
The Labour Court held that since the first respondent had not been paid
retrenchment compensation, the action of the Corporation was illegal. The
Labour Court further held that the first respondent was entitled to
E reinstatement with full back wages.

Being aggrieved the appellant preferred a writ petition before the High
Court. The High Court dismissed the writ petition and directed reinstatement
of the first respondent with 50% back wages from the date of his termination
till the date of his reinstatement. Hence the appeal.
F
Disposing of the appeal, the Court

HELD: I. No precise formula can be adopted nor 'cast iron rule' can be
laid down as to when payment of full back wages should be allowed by the
Court or Tribunal. It depends upon the facts and circumstances of each case.
G The approach of the Court!fribunal should not be rigid or mechanical but
flexible and realistic. The Court or Tribunal dealing with cases of industrial
disputes may find force in the contention of the employee as to illegal
termination of his services and may come to the conclusion that the action
•
has been taken otherwise than in accordance with law. In such c-.ises obviously,
the workman would be entitled to reinstatement but the question regarding
H
U.P.S.R.T.C. LTD. v. SA RADA PRASAD MISRA [C.K. THAKKER, J.) 3

payment of back wages would be independent of the first question as to A
entitlement of reinstatement in service. While considering and determining
the second question, the Court or Tribunal would consider all relevant
circumstances and, keeping in view the principles of justice, equity and good
conscience, should pass an appropriate order. 19-D-G I

P.G.l. of Medical Education & Research v. Raj Kumar, (20011 2 SCC B
54, Hindustan Motors v. Tapan Kumar Bhattacharya, 120021 6 SCC 41,
Kendriya Vidyalaya Sangathan v. S.C. Sharma, (200512 SCC 363, M.P. State
Electricity Board v. Jarina Bee, (2003] 6 SCC 141, Allahabad Jal Sansthan
v. Daya Shanker Rai, (2005] 5 SCC 124, Haryana State Coop. Land
Development Bank v. Nee/am, (20051 5 SCC 91 and General Manager, C
Haryana Roadways v. Rudhan Singh, 120051 5 SCC 591, relied on.

2. The respondent-workman is not entitled to back wages from the date
when his services were terminated. The ends of justice would be met if the
workman is allowed back wages to the extent of 50% wages from the date of
the award till he was reinstated in service. 19-G; IO-Al D
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2024 of2006.

From the Final Judgment and Order dated 8.7.2603 of the High Court of
Judicature at Allahabad in C.M.W.P. No. 4084 of 1985.
E
Pradeep Misra for the Appellant.

Pawan Kumar Bahl, Harish Kumar and Goodwill Indeevar for the
Respondents.

The Judgment of the Court was delivered by F
C.K. THAKKER, J. Leave granted.

This appeal is directed against the judgment and order dated July 8,
2003 passed by the High Court of Judicature at Allahabad in Civil
Miscellaneous Writ Petition No. 4084 of 1985. The facts necessary for G
determining the controversy in the appeal may now be stated:

The appellant U.P . State Road Transport Corporation was constituted in
1972 succeeding the erstwhile U.P. Government Roadways. On November 20,
f 1973, the first respondent herein Sarada Prasad Misra was appointed as
H
4 SUPREME COURT REPORTS [20061 SUPP. I S.C.R.

A Conductor on purely temporary basis. According to the appellant, even
thereafter. he was appointed from time to time on temporary basis as and when
the appellant was in need of his services. Finally, the first respondent was
appointed by order dated September I, 1975 as Conductor on purely ad-hoc
basis temporarily for a period of one month from September I, 1975 to September
30, 1975. It was expressly stated in the order of appointment that his services
B will be terminated at any time without prior notice. Since the services of the
first respondent were no more needed, in accordance with the terms and
conditions of the order of the appointment, the services of the first respondent
were terminated by an order dated 6th September, 1975. It was stated in the
order of termination that he would be entitled to one month's salary in lieu
C of notice. lt is the case of the appellant that the first respondent accepted the
order of termination along with salary of one month in lieu of notice without
protest.

It appears that thereafter, the first respondent preferred a departmental
appeal against the order of termination issued by the Corporation, but the
D appeal was dismissed. After about seven years from the date of termination,
the first respondent filed an application under Section 2A of the U.P. Industrial
Disputes Act, 1947 (hereinafter referred to as 'the Act') before the Conciliation
Officer, Allahabad making grievance against the action of termination of his
services by the appellant Corporation. It was stated that though he was
E appointed by the Corporation in November, 1973, he was illegally retrenched
without following the provisions of law. Since his appeal had also been
dismissed, he had approached the Conciliation Officer for reinstatement,
continuity of past services and for payment of wages. When the notice was
issued on the appellant-Corporation, it raised preliminary objection that the
application filed by the workman was belated and deserved to be dismissed
F on the ground of delay and !aches. According to the Corporation, the services
of the workman were terminated in 1975 in accordance with the terms and
conditions of the order of appointment and though he had accepted one
month's salary without any protest, he had made an appiication before the
Conciliation Officer making grievance after long time and the application was
G not maintainable. In spite of the objection, the Conciliation Officer condoned
delay and submitted 'failure report'. Pursuant to the 'failure report' by
Conciliation Officer, the State Government referred the dispute to the Labour
Court, Allahabad for adjudication. The dispute which had been referred to
read thus:

"Whether action of employers in terminating the services of their
H
U.P.S.R.T.C. LTD. v. SARADA PRASAD MISRA [C.K. THAKKER, .I.] 5

f workman Sarada Prasad Misra S/o Sh. Ajab Sukh Misra, Conductor A
w.e.f. 06.09.1975 is legal and/or valid? If not, then to what relief the
concerned workman is entitled? And with what further details?"

The appellant Corporation contested the matter by filing written
statement contending that the workman was engaged purely in a temporary
capacity on ad-hoc basis from time to time as and when need and necessity B
arose and his engagement was continued or discontinued on that basis. His
services were terminated even in past in accordance with the conditions of
the orders of appointment and no grievance could be made against such
action. So far as the last appointment was concerned, it was the case of the
Corporation that the workman was appointed for a period of one month from
September I, 1975 to September 30, 1975. Since the services of the workman
c
were no more required,, an order was passed on September 6" 1975. But, as
per ,the order of appointment, he was paid one month's salary for the period
between September I, I 975 and September 30, 1975. The workman, without
any protest, accepted the amount. Thereafter it was not open to him to raise
a dispute. It was also contended that the workman had raised the dispute after D
about ..seven years and the same should not be entertained. A praye~ was,
~ therefore, made to dismiss the claim.

The Labour Court, Allahabad, vide its award dated September 17, 1984
held that the workman was appointed in 1973 and he had completed 240 days.
His services, therefore, could not have been terminated except in accordance E
with the provisions of the Act. Since he had not been paid retrenchment
compensation, the action of the Corporation was illegal. He was, therefore,
entitled to reinstatement with full back wages. Accordingly, the appellant-
·,
1 Corporation Was directed to reinstate the workman in service with full back
wages. F
Being aggrieved by the award of Labour Court, the appellant preferred
a writ petition in the High Court of Judicature at Allahabad. Initially, notice
was issued on March 25, 1985 and award passed by the Labour Court was
stayed. On February 4, 1988, however, the earlier order was modified by the
Court. The workman was ordered to be reinstated and 50% wages was ordered G
to be paid to him. The interim order was made "subject to such final orders
as .may be passed" at the final hearing of the petition. It was the case of the
appellant-Corporation that in compliance with the order passed by the High
Court, the workman was reinstated on February 9, 1988. He was, however,
i found carrying passengers without tickets and after holding an inquiry, his
services were again terminated on July 31, 1991. But without considering the H
6 SUPREME COURT REPORTS [2006J SUPP. I S.C.R.

A relevant facts and circumstances including the action of terminating the
services of the workman in Jt.ly, 1991, the High Court disposed of the petition
on July 8, 2003 by dismissing the writ petition observing that the findings
recorJed by the Labour Coun did not warrant interference in exercise of the
power under Article 226 of the Constitution. Accordingly, the petition was
B disposed of and interim relief was vacated. It is this order which is challenged
in the present appeal.

On January 27, 2004, the petition was called out for admission hearing
anJ notice was issued to the n:spondent ''confined to payment of back wages
only". Thereafter, the matte1 was heard from time to time.
c We have heard the learned counsel for the parties.

Learned counsel for the appellant-Corporation submitted that services
of the respundent-workmdn were terminatt:d in accordance with the terms and
co11ditions of the order of appointment and the authorities had committed an
D aror in entertaining the dispute and in passing the award against the
Corporation. It was also submitted that there was gross delay and la.:h~s un
the part of the workman in approaching the l\rnciliation Officer and the
Labour Court. The action of termination of services was taken in l 975, but
an application was made for the first time before the Conciliation Officer in
July. 1982 i.e. almost after seven years. Neither the Conciliation Ofticer should
E have submitted 'failure report', nur the Srare Government should havt: refrrred
the matter for adjuaication to Labour Court. The Labour Court ought not to
have passed an award of reinstatement with continuity in service and back
wag~s. The >aid order, thert:fore, deserved tu be sd aside. The High Court
also ought ro have considered all these facts and allowed thc petition filed
by the Curpuration. In any case, even if this Court is of the view that the order
F
of reinstatement does nut deservc intt:rferenc.:, the workman is not entitled
to ba.::k wages and tu that extent, the appeal deserves to be allowed.

The learned counsd for the first respondent. on I he other hand,
supported the award made by the Labour Cou11 and the order passed by the
U Hign Coun. He submitted that the contention> as tu the nature of appointment
arid delay in in~tiation of proceedings by the workman may not be pe1mitted
m be raist:d by this Court in view of limited notice issued by this Court as
to payment of back wages. It was stated that there was no dday on the part
of the workman in approaching Labour forum. lmmediately after termination
of services, the workman filed depanmental appeals and aftt:r th.: orders in
H
U.P.S.R.T.C. LTD. v. SARADA PRASAD MISRA [C.K. THAKKER, J.] 7
the appeals, he invoked jurisdiction of Labour Authorities. On merits, it was A
submitted that when the action was held to be bad by the Labour Court, the
workman was entitled to back wages and even that part deserves no
interference. He, therefore, submitted that the appeal is liable to be dismissed.

Having heard the learned counsel for the parties, we are of the opinion
that the appeal deserves to be partly allowed. There is considerable force in B
the contention of the learned counsel for the appellant-Corporation that the
appointment of the workman was ad-hoc and purely temporary. He was paid
one month's salary on September 6, 1975 when his services were tenninated.
But, it appears that the workman made grievance against the said action by
filing departmental appeals and thereafter approached Labour forum and a C
reference was also made by the State Government. Since this Court has issued
limited notice as to payment of back wages, it would not be appropriate now
to hold that there was delay on the part of the workman and the action was
not maintainable and no relief ought to have been granted by the Labour
Court or by the High Court.
D
In our opinion, however, the limited grievance of the learned counsel for
the Corporation is well founded. Admittedly, the order of tennination was
passed on September 6, 1975. Admittedly, an application was made to the
Conciliation Officer, Allahabad by the workman on July 17, 1982, that is, after
about seven years from the date of termination. In the circumstances, therefore,
the Corporation is justified in raising legitimate objection as regards payment E
of wages for the said period. Since the respondent had invoked jurisdiction
of Labour forum after seven years, it would not be appropriate to direct the
appellant-Corporation to pay wages for the intervening period.

But even otherwise, the award passed by the Labour Court as also the
F
order of the High Court granting back wages deserves interference. In several
cases, this Court has held that payment of back wages is a discretionary
power which has to be exercised keeping in view the facts and circumstances
of each case and neither straight jacket fonnula can be evolved, nor a rule
of universal application can be adopted [vide P. G.I. of Medical Education &
Research, Chandigarh v. Raj Kumar, (2001] 2 SCC 54; Hindustan Motors v. G
Tapan Kumar Bhattacharya, [2002] 6 SCC 41 ]. In Kendriya Vidyalaya
Sangathan v. S.C. Sharma, (2005] 2 SCC 363, this Court held that when
question of determination of entitlement of back wages comes up for
consideration, prima facie, it is for the employee to prove that he had not
i been gainfully employed. Initial burden is on the employee to show that he H
8 SUPREME COURT REPORTS [2006J SUPP. I S.C.R.

A remained without any employment. In several cases, similar view has been
taken by this Court in recent years. In M.P. State Electricity Board v. Jarina
Bee, (2003] 6 SCC 141, it was observed that reinstatement in service and
payment of back wages are two different things and payment of back wages
is not a natural consequence of setting aside an order of dismissal. In
B Allahabad Jal Sansthan v. Daya Shanker Rai. (2005] 5 SCC 124, it was
indicated that the law is not in absolute terms that in all cases of illegal
termination of services, a workman must be paid full back wages. In Haryana
State Coop. land Development Bank v. Nee/am. [2005] 5 SCC 91, it was
stated that the aim and object of Industrial Disputes Act is to impart social
justice to the workman but keeping in view his conduct. Payment of back
C wages, therefore, would not be automatic on entitlement of the relief of
reinstatement. In General Manager, Haryana Roadways v. Rudhan Singh,
(2005] 5 SCC 591, the Court reiterated that there is no rule of thumb that in
each and every case, where the Industrial Tribunal records a finding that the
order of termination of service was illegal that an employee is entitled to full
back wages. A host of factors which are relevant. must be taken into account.
D
The Court stated:

"There is no rule of thumb that in every case where the 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
E host of factors like the manner and method of selection and appointment
i.e. whether after proper advertisement of the vacancy or 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 req11ired for the job and the like
F should be weighed and balanced in taking a decision regarding 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 awarded full or partial back wages keeping in view the fact that at
G 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
date of the award, which our experience shows is often quite large,
H would be wholly inappropriate. Another important factor, which requires
U.P.S.R.T.C. LTD. v. SARADA PRASAD MISRA [C.K. THAKKER, J.] 9

·to be taken into consideration is the nature of employment. A regular A
service of permanent character cannot .be compared to short or
intermittent daily-wage employment though it may be for 240 days in
a calendar year."

In Allahabad Jal Sansthan v. Daya Shankar Rai, [2005] 5 SCC 124,
after considering the relevant cases on the point, the court stated: B
"We have referred to certain decisions of this Court to highlight
that earlier in the event of an order of dismissal being set aside,
reinstatement with full back wages was the usual result. But now with
the passage of time, it has come to be realized that industry is being
compelled to pay_ the workman for a period during which he apparently C
contributed little or nothing at all, for a period that was spent
unproductively, while the workman is being compelled to go back to
a situation which prevailed many years ago when he was dismissed.
It is necessary for us to develop a pragmatic approach to problems
dogging industrial relations. However, no just solution can be offered D
but the golden mean may be arrived at."

From the above cases, it is clear that no precise formula can be adopted
nor 'cast iron rule' can be laid down as to when payment of full back wages
should be allowed by the court or Tribunal. It depends upon the facts and
circumstances of each case. The approach of the Court/Tribunal should not E
be rigid or mechanical but flexible and realistic. The Court or Tribunal dealing
with cases of industrial disputes may find force in the contention of the
employee as to illegal termination of his services and may come to the
conclusion that the action has been taken otherwise than in accordance with
law. In such cases obviously, the workman would be entitled to rei_nstatement
but the question regarding payment of back wages would be independent of F
the first question as to entitlement of reinstatement in service. While
considering and determining the second question, the Court or Tribunal
would consider all relevant circumstances referred to above and keeping in
view the principles of justice, equity and good conscience, should pass an
appropriate order. G
Considering the case law on the point and applying the principles laid
down therein to the facts of the present appeal, we are of the view that the
respondent workman is not entitled to back wages from 1975 when his services
were terminated. The award was passed in the instant case on September 17,
f 1984 but was stayed by the High Court vide interim order dated March 25, H
10 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A 1985. The interim order was modified on February 4, 1988 and the first
respondent was reinstated immediately on February 9, 1988. In our opinion.
therefore, ends of justice would be met ifthe workman is allowed back wages
to the extent of 50% from the date of the award till he was reinstated m
service.

B For the foregoing reasons, the appeal is partly allowed and the award
passed by the Labour Court, Allahabad as also the order passed by the High
Court of Judicature, Allahabad is modified. The first respondent-workman is
not entitled to back wages from 1975 to 1984. He is, however, held entitled
to 50% back wages from the date of the award till the date of reinstatement. •
C Thereafter obviously, he is entitled to his wages in accordance with law. The
appeal is accordingly disposed of. In the facts and circumstances of the case,
there shall be no order as to costs.

v.s.s. Appeal disposed of.