[CASE NUMBER] IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL [CASE NUMBER] FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE [ENTITY] 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the [ACT] or any order made thereunder ? [PRECEDENT] Petitioner(s) Versus MAKWANA JAGAJI DHULAJI Respondent(s) Appearance: [ENTITY], ADVOCATE for the Petitioner(s) No. 1 MR [ENTITY], ADVOCATE for the Respondent(s) No. 1 RULE SERVED for the Respondent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE [ENTITY] Date : 29/09/2017 [ENTITY]
1. The petitioner Society, by way of present petition under [CASE NUMBER] Page 1 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] [SECTION] and [SECTION] of the [ACT], has challenged the award dated 29.02.2008 passed by the learned Presiding Officer, Labour Court, Kalol in [CASE NUMBER] whereby the order of reinstatement came to be passed with 50% back wages with cost of Rs.500/- to be paid to the respondent - workman.
2. The premise on which the present petition is filed by the Society is that the petitioner is a Cooperative Society under the provisions of [ACT] wherein the respondent workman was working as a Clerk. It is the case of the petitioner that on account of some domestic reasons, the respondent workman, on his own, tendered resignation on 20.03.2000 before the Executive Committee of the petitioner society. The meeting of the Executive Committee was held on 22.04.2000 wherein vide Resolution No.6, the resignation was deliberated in the committee and committee decided to accept the same. The petitioner also indicated and mentioned in the petition that the said acceptance of resignation was intimated by the specific letter dated 28.04.2000 and the respondent was instructed to collect its outstanding dues remained with the society.
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3. Surprisingly, as per the say of the petitioner that though acceptance was communicated to the respondent workman, he has raised an Industrial Dispute which ultimately referred to the Labour Court for adjudication vide order dated 17.07.2000. The claim which was put in the claim statement at Exh.5 that respondent was working as Clerk with monthly salary of Rs.1500/- and there was no reason whereby a resignation was required to be submitted. It was contended that with effect from 01.05.2000, the respondent came to be discontinued from the services and thereafter by alleging that there is clear violation of [SECTION] of the [ACT] ('[ACT]', for short) the action requested to be set at naught and the said Reference was registered as [CASE NUMBER] before the learned Presiding Officer, Labour Court, Kalol.
4. Upon service of the process of learned Presiding Officer, in the said Reference, a written reply has been filed by the petitioner establishment and it was categorically contended that though discharge of work by respondent as Clerk is not in dispute, however, the fact of discontinuing from the services by the petitioner society was resisted. It was contended that it is not correct to state that the petitioner has discontinued the [CASE NUMBER] Page 3 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] services, on the contrary on his own the respondent had voluntarily tendered his resignation on 20.02.2000. It was mentioned in the reply that upon receipt of resignation a meeting was conducted of Executive Committee and in the said meeting resolution bearing No.6 came to be passed on 27.04.2000 accepting the resignation of respondent and it was decided in Executive Committee that with effect from 01.05.2000, the respondent would be relieved. In this situation, the action cannot be said to be bad in law and the said acceptance of resignation came to be communicated by a specific letter as well which is not in dispute and therefore by raising such plea it was contended that Reference ought not to be entertained.
5. The learned Presiding Officer, after considering all pleadings and the material on record, has passed an award on 29.02.2008 whereby the petitioner society was directed to reinstate the respondent to its original post with 50% back wages and it is this award passed by the learned Presiding Officer which is made the subject matter of petition before this Court. It appears from the record that on 13.01.2009 the petition came to be heard and the Court granted time to learned advocate observing thus.
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"Shri [ENTITY], learned advocate appearing for the petitioner seeks time for ascertaining as to whether the petitioner is ready and willing to deposit the cost and give up the challenge to the award and reinstatement and confine this petition only to that of grant of back wages. The time is granted. Matter is kept at his request on 16.01.2009."
Thereafter, it appears that an indication was given whether petitioner was willing to confine his petition so far as it relates to awarding of back wages is concerned. In response to the said indication, Mr.[ENTITY], learned advocate appearing for the petitioner society has stated, on instructions, that the petitioner is ready and willing to reinstate the respondent workman if he gives up his claim for back wages and upon such instructions being recorded, the notice came to be issued by this Court on 16.01.2009. The said order reads as under:
"Shri [ENTITY], learned advocate appearing for the petitioner states that the petitioner is ready and willing to reinstate the respondent workman if and only if he gives up his claim for back wages as awarded in the order.
Notice pending admission returnable on 05.02.2009."
6. The record of the proceedings further indicates that bi- parte hearing took place on 25.02.2009 in which there was [CASE NUMBER] Page 5 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] some resistance from Mr.[ENTITY], learned advocate appearing for the respondent and ultimately the matter came to be admitted and the offer which was made appears to have not been concluded finally. In the aforesaid background, the petition has come up for final disposal before this Court.
7. Heard Mr.[ENTITY], learned advocate for the petitioner and Ms.[ENTITY], learned advocate for Mr.[ENTITY], learned advocate for the respondent no.1.
8. Mr.[ENTITY], learned advocate for the petitioner society has vehemently contended that, pursuant to the previous situation it appears that the respondent is very much in service as on date but this is in due deference to the concession made while issuing notice in the present proceedings. Mr.[ENTITY], learned advocate has further contended that there was no pleadings in Exh.5, which is a claim statement, that he has not been able to get any employment. The only point which has been canvassed in the claim statement is a violation of [SECTION] of the [ACT]. To justify his claim for seeking back-wages the respondent has not pleaded anything and therefore on the basis of inference it is not open for the Labour Court to grant benefit of [CASE NUMBER] Page 6 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] 50% back wages. Mr.[ENTITY], learned advocate has further contended that apart from this, even on merits also the claim of respondent is not sustainable since the resignation is signed by him tendered before the authority, the same was deliberated in a meeting of Executive Committee and the decision of acceptance of resignation is already taken and conveyed in writing to the respondent and, therefore, it was not open for the respondent workman to agitate any further. On the issue whether the back-wages ought to be awarded or not, it is contended that, by now it is very much settled by series of decisions that the back-wages should not be granted as a matter of rule or in a routine manner and if the person has not worked, he cannot be given premium by awarding an amount of back-wages. Mr.[ENTITY], learned advocate has specifically contended that before the learned Presiding Officer documents were produced to justify the communication about the acceptance of resignation submitted by the respondent workman. The letter was received by respondent and there is categorical admission on the part of respondent that a letter dated 23.06.2000 related to his resignation as informed to him and therefore it is contended that in case of such categorical admission which is reflecting on the part of the respondent workman, it was not open for the learned Presiding Officer to [CASE NUMBER] Page 7 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] award an amount of back-wages to the extent of 50%. Even in the petition as well, no adequate pleadings are canvassed so as to allow the respondent to have the benefits of back-wages and, therefore, when there is no material enough adduced by the respondent merely on the basis of inference that respondent must not have got the work cannot be justified to thrust a financial burden upon respondent. For the purpose of protesting the award insofar as it relates to back-wages is concerned, Mr.[ENTITY], learned advocate has pointed out few decisions of Apex Court in which no back-wages can be awarded as a matter of right. Referring to decision in the case of U.P.State Brassware Corporation Ltd. vs. Uday Narain [ENTITY] reported in [PRECEDENT], it has been contended that onus was on respondent to prove that he was not gainfully employed elsewhere nor has received any employment despite the efforts. Yet another decision which is tried to be pressed into service is in the case of [PRECEDENT] and by referring to this, Mr.[ENTITY], learned advocate has contended that initial burden is on employee who has to show that he was not gainfully employed and burden shifts thereafter on the employer to revert. On the basis of aforesaid premises, Mr.[ENTITY], learned advocate for the petitioner has [CASE NUMBER] Page 8 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] submitted that even there appears to be no justification in the conclusion while granting 50% back wages in given situation is very harsh and such unnecessary financial burden should not be thrust upon present petitioner and, therefore, in such situation the order passed by the learned Presiding Officer is not sustainable. Since undisputedly respondent was taken on employment neither side has submitted on the issue of acceptance of resignation issue or violation of statutory provisions and petition was concentrated by both sides related to back-wages question. No other submissions have been made.
9. To oppose the stand taken by learned advocate for the petitioner, Ms.[ENTITY], learned advocate for Mr.[ENTITY], learned advocate for the respondent workman has contended that he was specifically understood from the beginning that the issue related to back wages to be dealt with in the present proceedings and upon concession of learned advocate Mr.[ENTITY], upon instructions, Ms.[ENTITY], learned advocate has conveyed the Court that so far issue related to the reinstatement is not being canvassed. However, Ms.[ENTITY], learned advocate has specifically contended that once the action of discontinuance is found to be invalid the necessary consequence is to grant backwages. On the contrary [CASE NUMBER] Page 9 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] Ms.[ENTITY], learned advocate has contended that despite the fact of his discontinuance from service is found to be bad in law is deprived of rest of 50% back wages. On the contrary, once learned Presiding Officer came to the conclusion that action of the petitioner is not just and proper and invalid, full back wages could be awarded and therefore the Court may not interfere with the award in extra ordinary jurisdiction of this Court. Ms.[ENTITY], learned advocate has made an attempt to rely upon the decision of the Apex Court in case of [PRECEDENT] [ENTITY] reported in [PRECEDENT] and has contended that it is settled position of law by now that once the action of management is wholly found to be arbitrary on the ground of violation of any provision of law then full back wages needs to be awarded and by referring to this decision Ms.[ENTITY], learned advocate has contended that 50% back wages since awarded no interference be made in this regard and by referring to this decision she has requested the Court not to interfere with the award passed by learned Presiding Officer. Ms.[ENTITY], learned advocate has further contended that initial burden to prove that the workman was not gainfully employed is very much discharged during the course of adjudication and there appears to be a specific conclusion [CASE NUMBER] Page 10 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] about violation of statutory provisions hence the grant of only 50% back wages cannot be said tobe unjust and arbitrary. On the contrary, one [ENTITY], who is examined at Exh.22, has stated that back wages in toto should have been granted. However, be that as it may, since only 50% back wages have been awarded there is no earthly reason to indicate that order of learned Presiding Officer is not proper and since the petition being devoid of merits deserves to be dismissed. No other submissions have been made.
10. Having heard learned advocates appearing for the parties and having gone through the material on record and having perused the conclusion and the reasons arrived at by learned Presiding Officer following circumstances are not possible to be ignored by this Court while considering the question of granting of relief prayed for in the petition. 10.1 The center of controversy is subject of resignation dated 20.02.2000 which appears to have been deliberated in the meeting dated 27.04.2000 by the Executive Committee of the petitioner society. In the said meeting, the said resignation appears to have been accepted and that position emerging as undisputed. So much so that Exh.25 (15/3) is a letter written [CASE NUMBER] Page 11 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] by petitioner society to respondent herein and, therefore the factum of resignation issue is clearly emerging from the record of the case. However, the discontinuance in accordance with law or not is examined by the Court below and, therefore, when the learned Presiding Officer found that there is non- compliance of some of the statutory provisions an order of reinstatement is passed and as said earlier since the issue of written statement is not made the subject matter of present proceedings on volition by respective sides, the Court is not examined the merit or demerit of that issued. This is more so when during the pendency of petition, the respondent is already accommodated and as stated by the learned counsel appearing for the parties that he is serving in the establishment with all attached benefits, and, therefore, the issue related to an order of reinstatement has remained uncontested practically.
10.2 The aforesaid petition, therefore, left with only an issue to be dealt with as pressed upon by the counsel for respective sides and is confined with regard to issue of back wages and, therefore, there submissions have been appreciated in the context of the authorities cited by them before this Court.
[CASE NUMBER] Page 12 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] 10.4 First of all, the decision cited by counsel for the
petitioner in the case of [PRECEDENT] needs to be looked into. If the proposition of that decision is to be considered, it was a case in which the respondent of that proceeding was serving as the Principal in Kendriya Vidhalaya wherein permission to go abroad was declined by the Commissioner of Kendriya Vidhayalaya, New Delhi. As a result of which, since the respondent did not return, the proceedings appear to have been initiated and ultimately, the order of dismissal came to be passed on 05.05.1999 and in that background of fact, the Apex Court has dealt with an issue with regard to dismissal of the respondent. From the reading of the said decision, more particularly paras:14, 15 and 16, it appears that in that contest and background of fact, it was held by the Hon'ble Apex Court that while determining the question with regard to back wages the initial burden is of employee who has to show that he was not gainfully employed and thereafter the burden shifts. Now, if the facts of this case apply to the background of facts of the present case, this Court notices from the pleading that communication with regard to acceptance of resignation and discontinuance is undisputedly received and then no such pleadings or details have been [CASE NUMBER] Page 13 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] provided that respondent was not in a position to get any gainful employment. Even in the deposition, except one line that he was unemployed, he is not getting any work, no other details are reflecting and therefore, this is a case in which respondent has not pleaded so succinctly that he was not in a position to get the work and thereby could not receive an opportunity to argue. The facts remain that right from the June, 2000 to April, 2008, no efforts appear to have been made by respondent to get himself gainfully employed. Had there been a case that he made an attempt and could not receive the gainful employment, the case would have been on a different context. But here is a case where on the basis of record it is emerging that except bare assertion there is absolutely no material to hold that any attempts were made to get gainful employment and, therefore, the factual details are altogether different from that what has been mentioned in the decision referred to above, and, therefore, it cannot be applied as a straight jacket formula.
10.5 Yet another decision which is tried to be pressed into service is in the case of [PRECEDENT] [ENTITY] reported at [PRECEDENT] wherein also onus was held to be of respondent employee [CASE NUMBER] Page 14 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] when he asserts that he is not in a position to gainful employment and in view of [SECTION], the Supreme Court had an occasion to examine the factual data. However, it is held that the backwages cannot be granted automatically or mechanically only because an order of termination is found to be unsustainable, and, therefore, it appears this decision referred to above has some applicability to the stand taken by the petitioner and therefore it appears that in the absence of any specific pleadings and in the absence of any material it was not justified on the part of learned Presiding Officer to grant an amount of back wages to the extent of 50% so casually.
10.6 Now considering the aforesaid aspect, the decision pointed out by learned advocate Mr.[ENTITY] in the case of [PRECEDENT] [ENTITY] reported in [PRECEDENT]. The background of facts is also worth to be taken into consideration since it is settled position of law that if there is slight change in fact, it would make a world of difference in applying precedents. Hence, keeping this principle in mind, if the Court considers the background of fact the center of controversy was related to the action of management against [CASE NUMBER] Page 15 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] the teacher. In that case, the letter was addressed by the trust to an employee requiring them to compute sum of Rs.1500 per month towards tax liability which the appellant of that case had refused to complied with. As a result of which, management had given as many as 25 memos and then placed her under suspension. Further completion of proceedings against the said teacher an action was taken of suspending which was questioned by the said teacher and in that background the High Court of Bombay had passed an order which was subject matter of challenge before the Supreme Court. In that case, the Apex Court has found the action of management as bad in law and the termination of teacher was not found to be legal at all and in that context an order of full backwages was passed. Most important thing which is to be noticed from the said decision is that appellant of that case was not gainfully employed anywhere which fact was not confronted by the management at all, and, therefore, in that factual scenario it was held by the Court that denial of backwages would amount to indirectly punishing an employee. Here, in the present case on hand, it was not in dispute that resignation was submitted by the respondent himself. It was also not in dispute that same was deliberated in the meeting of the Executive Committee and, therefore, the background of [CASE NUMBER] Page 16 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] case on hand is altogether different from what was prevailing in decision cited above and therefore what comes down to boiling point is that whether back-wages to be awarded even to the extent of 50% or not. To determine this question related to back-wages in addition to the aforesaid decision, the Court has an advantage of yet another decision of the Apex Court in the case of [PRECEDENT] wherein the principle is propounded on the issue that Court has confronted with the order of awarding backwages. The principle of 'no work no pay' not inly is analysed in the said decision, but the burden upon whom to discharge is also analysed and, therefore, the Court is deemed it proper to quote relevant extracts of the said decision herein under.
" Leave granted. "No work, no pay", is the rule and "no work, yet pay", is the exception. Compulsory waiting period is one such exception. But to qualify for the exception, an employee has to establish that he had made earnest endeavours and yet that he was not able to join duty for no fault on his part. He must also show his earnestness to join duty. Voluntary waiting period is not covered by the exception."
10.7 The fact is not in dispute that in the case on hand pursuant to initial order of this Court, the respondent was [CASE NUMBER] Page 17 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] taken back in job and undisputedly is working and earning and therefore to saddle with the huge financial loss to the petitioner society is not an order to be treated as justifiable and therefore simply because the action is held to be bad, back wages issue cannot be followed automatically. There are several factors which are required to be noticed by the Court while considering the issue related to the back wages. Had there been a concrete material visible on record, the Court would not have interfered with the issue. However, since no detailed material is available on the pleadings except bare assertion in the deposition the respondent is ready and wiling to work and has not got any employment despite efforts, same would not automatically follow the award of backwages. Keeping in view the propositions of law laid down by the Apex Court, stated herein before, and in view of the background of fact the award with regard to grant of 50% back wages deserves to be quashed and set aside and so far order of reinstating the petitioner, it stands confirmed.
11. For the above reasons, the petition is partly allowed. The award dated 29.02.2008 passed by the learned Presiding Officer, Labour Court, Kalol in [CASE NUMBER] is hereby confirmed so far as it relates to the reinstatement of [CASE NUMBER] Page 18 of 19 Created On Sat Oct 07 09:16:31 IST 2017 [CASE NUMBER] the respondent workman is concerned. However, the award, so far as it relates to granting 50% back-wages, is hereby quashed and set aside. Rule is made absolute to the aforesaid extent.
([ENTITY], J.) [ENTITY] Page 19 of 19 Created On Sat Oct 07 09:16:31 IST 2017