C.W.P. No.8275 of 2004 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No.8275 of 2004 Date of Decision:23.09.2009 M/s Nestle India Limited .....Petitioner Versus The Presiding Officer, Labour Court, Bathinda and another ...Respondents Present: Mr. M.L. Sarin, Sr. Advocate with Mr. Nitin Sarin, Advocate and Mr. B.B. Mahajan, Advocate for the petitioner. Ms. Abha Rathore, Advocate for respondent No.2. 2. C.W.P. No.11991 of 2005 (O&M) Sh. J.S. Sahota .....Petitioner Versus M/s Nestle India Ltd. and another ...Respondents CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to the Reporters or not ? Yes 3. Whether the judgment should be reported in the Digest? Yes -.- K. KANNAN J.(ORAL) C.M.No.15926 of 2009 Application allowed. Replication is taken on record. C.W.P. No.8275 of 2004 and C.W.P. No.11991 of 2005 1. Against the award directing reinstatement and full back wages, the management came on a writ petition in C.W.P. No.8275 of C.W.P. No.8275 of 2004 -2- 2004. The workman had also independently filed C.W.P. No.11991 of 2005 contending that if he had been in employment, he would have obtained promotions and detailing the status of persons, who had joined the service subsequently and how their respective career progressions had been, the workman sought for monetary benefits that he would have earned if promotions had been granted to him as his juniors were. Both the writ petitions arise out of same set of facts and therefore, with the consent of both parties, they are taken up together. 2. The only contention, which was urged before me by the learned Senior Counsel, Sh. M.L. Sarin is with regard to the issue of payment of back wages. According to him, even at the time when the proceedings were pending before the Labour Court, the workman had attained the age of superannuation and therefore, he could not have been reinstated. He would refer to several decisions of the Hon'ble Supreme Court that dealt with the issue that full back wages would not be granted merely because the workman was entitled to reinstatement. The Hon'ble Supreme Court noticed a paradigm shift to what the workman should prove in order that he is entitled to the payment of back wages. In this case, according to him, the workman had admitted in evidence that after he was terminated from service, he had not looked for employment elsewhere and it was contended that he was carrying on agricultural operations in his fields. He had admitted in his evidence of his ownership of 56 kanals of land and he had also stated that he was making an earning of Rs.15,000/- to Rs.16,000/- per year. Referring to a decision of the Hon'ble Supreme Court in North East Karnataka Road Transport Corporation Vs. M. C.W.P. No.8275 of 2004 -3- Nagangouda 2007(1) LLN 582, the learned Senior Counsel would submit that even income from agricultural operations must be taken as income earned in gainful employment. The Hon'ble Supreme Court said in paragraph 17 as follows:- "On the said question, we are unable to accept the reasoning of the Labour Court that the income received by the respondent from agricultural pursuits could not be equated with income from gainful employment in any establishment. In our view, "gainful employment" would also include self- employment wherefrom income is generated. Income either from employment in an establishment or from self- employment merely differentiates the sources from which income is generated, the end use being the same. Since the respondent was earning some amount from his agricultural pursuits to maintain himself, the Labour Court was not justified in holding that merely because the respondent was receiving agricultural income he could not be treated to be engaged in "gainful employment." 3. The Hon'ble Supreme Court had held that it was immaterial whether the income which the workman had been earning during the period of his non-employment was out of self-employment or a job done for a third party. The Hon'ble Supreme Court was actually dealing with the effect of income which the workman was earning by his operations in agricultural fields while considering the eligibility to back wages. The Hon'ble Supreme Court was dealing with the situation where the Labour Court had awarded 50% of salary in such a C.W.P. No.8275 of 2004 -4- case which was up-turned by the High Court on a view that income from agriculture by self-employment cannot mean gainful employment. The view of the High Court was found fault with by the judgment referred to above. 4. Learned counsel appearing for the workman, Ms. Abha Rathore would contend that the case was fought out for several number of years only by the conduct of victimisation on the workman on flimsy and frivolous charges. According to her, it was admittedly a case where the workman had been removed from service without holding any enquiry. Even the charges were not grave in nature but related to some vague incidents of alleged misconduct such as taking undue advantage of commission agents, transporting personal goods through vehicles of contractors etc. According to her, these vague charges had been specifically met with in reply and the management still went ahead to terminate the services which was set aside by the Labour Court. There having been no enquiry, it was a case of patent illegality of the order of dismissal where the workman was entitled to reinstatement with full back wages. Making distinction on the pronouncement of the Hon'ble Supreme Court in North East Karnataka Road Transport Corporation's case (supra), the learned counsel would submit that the property, which the workman was cultivating, was his own lands and all this income afterall was available to him even if he were in employment. The decision of the Hon'ble Supreme Court does not bring out the fact whether the workman had held lands even prior to his non-employment and whether that income was also available to him. In my view, while I C.W.P. No.8275 of 2004 -5- can certainly appreciate the distinction where a workman already had the benefit of income from agricultural land and in a situation of non- employment, the workman expending his labour and realising his income might not really go to make an additional new income or gainful employment, this distinction was not considered by the Hon'ble Supreme Court and as making any difference. So long as the issue was whether the workman during his period of non-employment in a factory or an establishment was not without any source of income, if he had income from other sources and if he had not worked in the factory for whatever reasons, it would be justification enough to deny the person whole of back wages. It is not after all that no wages are offered for the workman who had not worked. The scales are put even by still making available to the workman 50% of back wages although he had not contributed to any productivity of the establishment. The learned counsel for the workman relies on the judgment of the Hon'ble Supreme Court in Novartis India Limited Vs. State of West Bengal and others (2009) 3 SCC 124 where the Hon'ble Supreme Court held that when no domestic enquiry had been conducted before passing an order of termination and when the same had been held bad in law, the direction by Tribunal to back wages from the date of termination till the date of attaining the normal superannuation was not required to be interfered with. In the said judgment, the Hon'ble Supreme Court was actually specifically considering the pleading and proof relating to a state of unemployment by the workmen and held that the fact that they survived and did not die of starvation itself could not be a ground for denying back wages to them. It is not a case of a workman trying to C.W.P. No.8275 of 2004 -6- establish that he was employed in some menial task to keep his heart and soul together. It was, on the other hand, a case of reasonably comfortable living with 7 acres of land and income which he was earning from his land was to such an extent that allowed the workman the liberty of choosing not to look for employment elsewhere. The issue relating to payment of back wages could, therefore, have to be always considered in the context of whether the workman had any other source of living or not and if he had, the entitlement does not always become a matter of right to payment of the back wages. At the time when the writ petition had been admitted and when the Court had granted stay relating to a direction for reinstatement, this Court had ordered payment of 50% of back wages by order dated 21.03.2005 and it is an admitted case that the amount had been paid, although the actual quantum of amount which represented 50% is disputed by the counsel for the respondent. The workman had, therefore, the benefit of 50% of back wages in the manner calculated by the management and in my view, that would serve the ends of justice for a just consideration of the case. 5. Learned counsel appearing for the workman would further contend that other junior workmen who had continued in employment, had obtained promotions and received higher scales of pay and hence while quantifying the entitlement of the workman, the promotion and the higher incomes should be duly quantified and given to him. In my view, it may not always be possible to project situations of how the avenues of promotion would have worked, if he had not been removed from service and what higher scales of pay he C.W.P. No.8275 of 2004 -7- would have attained to. It may amount to treading in realms of conjecture and factoring too many ifs and buts. It would be impermissible to even assume that the workman would have earned the promotion. If he had continued in employment, it could also be likely that he had not earned a promotion for other reasons like ineligibility or unsuitability. The only benefit which a workman could ask for even while computing back wages could be the wages with such increments as that particular post carried if he had not been terminated from service and if he had continued upto the age of superannuation. If the workman is entitled to draw increments in that post, which he held when he was wrongly terminated, he would be entitled to make such computation and obtain the benefits arising therefrom by either making a demand on the management or by seeking for its computation in appropriate proceedings. Having regard to the fact that the order of termination is held to be bad as charges against the workman had not been established and the finding of the Labour Court is not interfered in any manner regarding the legality of termination, the workman shall also be entitled to all the terminal benefits that are admissible for such workman, if he had been continued in service and if he had been superannuated in the usual course of his employment. The workman shall be entitled only to 50% backwages and reinstatement itself is not feasible, in view of the fact that the workman had crossed the age of superannuation during the proceedings before the Labour Court itself. While reckoning the backwages if the workman were to have the benefit any revision of pay or increments, if he had continued in his employment in the same C.W.P. No.8275 of 2004 -8- post and if there is found to be a shorfall from the payment made during the pendency of the case before the Court, that amount shall be paid within six weeks from the date when such calculation is made and informed to the management. If it is, however, found that the amount that had been paid by the management already constituted a complete discharge of liability on a proper reckoning in the manner referred to above, there would exist no further liability for the management. Needless to state that the workman shall also be entitled to terminal benefits such as Provident Fund, Grauity etc., if not already paid. 6. The writ petition in C.W.P. No.8275 of 2004 shall stand disposed of as above and C.W.P. No.11991 of 2005 shall stand dismissed. No costs. (K. KANNAN) JUDGE September 23, 2009 Pankaj*