--- 1 --- HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE S.B.: HON'BLE MR. S. C. SHARMA, J WRIT PETITION NO. 3020 / 2004 RAJESH KUMAR S/O JAGANATH NAROLIYA Vs. THE STATE OF MP & FIVE OTHERS * * * * * O R D E R ( 29/9/2011) The petitioner before this Court has filed this present writ petition being aggrieved by the order dt. 7/10/04 by which his absorption on the post of Asstt. Grade III has been set aside. The contention of the petitioner is that he was appointed as a Driver on 14/7/93 by the Chief Executive Officer, Fish & Farmers Development Authority, Rajgarh and he continued in the services of the Fish & Farmers Development Authority, Rajgarh though it was a contractual appointment. Petitioner has further stated that on 7/11/97 he was, keeping in view his qualifications and eligibility and after obtaining due approval of the Working Committee of --- 2 --- the Fish & Farmers Development Authority, Rajgarh, appointed as an Asstt. Grade III and the petitioner continued on the aforesaid post. The last order dt. 5/11/98 continuing the petitioner as Asstt. Grade III is on record as Annexure P/ 4 . Petitioner has further stated that the State Government took a policy decision to close down Fish & Farmers Development Authority, and it was also resolved by the State Government by taking a decision by the Council of Ministers in Coordination dt. 2/2/1999 to absorb those employees who have completed 8 to 10 years of service. The contention of the petitioner is that his case was forwarded along with other employees of the Authority and an order was issued absorbing the petitioner on 27/9/99. The case of the petitioner was forwarded for absorption by the Chief Executive Officer, Fish & Farmers Development Authority, Rajgarh vide letter dt. 27/9/99 to the Collector, Rajgarh and the Collector Rajgarh has finally passed an order on 27/8/03 absorbing the petitioner on the post of Asstt. Grade III against a vacant post of Asstt. Grade III under the Dy. Director, Food & Drugs Administration. The --- 3 --- petitioner thereafter like other absorbed employees submitted his joining and his grievance is that without issuing any show cause notice of any kind the impugned order dt. 9/10/04 has been passed, putting an end to the petitioner's services. Learned counsel for the petitioner has also argued before this Court that the petitioner was treated as a regular employee for all purposes while serving as an Asstt. Grade III and his services could not have been discontinued only on the ground that the appointing authority in respect of Asstt. Grade III is the Director, Food & Drugs Administration and not the Collector. A reply has been filed on behalf of the respondents and the stand of the respondents is that the Collector, Rajgarh was not the appointing authority in respect of Asstt. Grade III and therefore the absorption of the petitioner is void ab initio. It has also been stated in the return that there are 41 posts of Asstt. Grade III and the post of Asstt. Grade III at Rajgarh was not vacant. Contention of the respondent is that once Controller was the appointing authority, the Collector could not have passed the order of absorption and in absence --- 4 --- of posts such an order of absorption could not have been passed by the Collector and therefore the Controller, Food & Drugs has rightly passed the impugned order as contained in (Annexure P/1) dt. 12/1/04. learned counsel for the respondent / State prays for dismissal of the writ petition. Heard learned counsel for the parties at length and perused the record. In the present case, it has not been disputed by the respondents that the petitioner was an employee of Fish & Farmers Development Authority, Rajgarh. It has also not been disputed by the respondents that the State Government took a policy decision for closing down the various Fish & Farmers Development Authorities throughout the State of MP and the State Government on 2/2/99 also resolved to absorb the employees serving for the last 8 to 10 years in various other departments of the State of MP. A letter was accordingly issued to all the Collectors throughout the State of MP and Fish & Farmers Development Authority, Rajgarh was also finally closed down and the case of the petitioner was forwarded to the Collector, Rajgarh for absorption on --- 5 --- an equivalent post ie., Asstt. Grade III as the petitioner was serving on the post of Asstt. Grade III. The Collector, Rajgarh, keeping in view the policy decision taken by the Council of Ministers dt. 2/2/99 and also keeping in view the letter of the Director, Fisheries dt. 1/3/99 and after verifying the service details of the petitioner has passed an order on 27/8/03 appointing the petitioner against a vacant post of Asstt. Grade III in the pay scale of Rs. 3050 – 4590. The impugned order has been passed on 7/10/04 and it is an admitted fact that before terminating the services of the petitioner no show cause notice of any kind has been issued. The petitioner has not been accorded any opportunity of hearing in the matter. The apex court in the case of Shravan Kumar Jha Vs. State of Bihar (AIR 1991 SC 309) has held as under : 3. By an order dated November 2, 1988, the Deputy Development Commissioner cancelled the appointments of the appellants. Mr. Ashok H. Desai, learned Solicitor General appearing for the respondents has contended that the appointments have been cancelled because the District Superintendent of Education had no authority to make the --- 6 --- appointments, It was a device of by- passing the reservations and that the conditions which are part of the appointment order were not complied with. Mr. U. R. Lalit and Mr. A. K. Ganguli, learned Senior Advocates, appearing for the appellants have controverted these allegations and have dated that all these teachers were validly appointed and they had joined their respective schools. It is not necessary to go into all these questions. In the facts and circumstances of this case, we are of the view that the appellants should have been given an opportunity of hearing before cancelling their appointments. Admittedly, no such opportunity was afforded to them. It is well settled that no order to the detriment of the appellants could be passed without complying with the rules of natural justice. We set aside the impugned order of cancellation dated November 3, 1988 on this short ground. As suggested by the learned Solicitor General, we direct that the secretary (Education), Government of Bihar, or to other person nominated by him should give an opportunity of hearing to the appellants and thereafter give a finding as to whether the appellants were validly appointed as Assistant Teachers. He shall also determine as to whether any of the teachers joined their respective schools and for how much duration. In case some of them joined their schools and worked, they shall be entitled to their salary for such period. --- 7 --- Keeping in view the aforesaid, as the petitioner who was absorbed on the post of Asstt. Grade III and as he has been discontinued / terminated by the impugned order dt. 7/10/2004 without following the principles of natural justice and fair play, is certainly entitled for reinstatement in service. Not only this, in the present case, a ground has been raised by the State Government that the Collector, Ratlam was not competent to appoint the petitioner as it is only the Director who is competent to appoint Asstt. Grade III. Learned counsel for the petitioner has drawn attention of this court towards a notification issued by the State Government dt. 10/1/2000 and the aforesaid notification reveals that the powers have been delegated to the Collectors also for appointment of Class III and Class IV employees. Even if the aforesaid executive instruction is ignored, the fact remains that in the present case on the basis of policy decision taken by the State Government (Council of Ministers) dt. 2/2/99 the Collector, Rajgarh as well as the other Collectors throughout the State of MP were directed to consider the cases of absorption of surplus employees of --- 8 --- Fish & Farmers Development Authorities and the petitioner was considered by the Collector, Rajgarh and after due verification of his service record, he was absorbed as an Asstt. Grade III and therefore merely because the order of absorption has been passed by the Collector, it will not vitiated the absorption in the case of the petitioner. Not only this, the respondents have stated in the return that no post of Asstt. Grade III was lying vacant at Rajgarh. In the present case, respondents have filed Annexure R/1 and Rajgarh finds place at Sl. No. 24 of the list. The aforesaid list makes it very clear that at the relevant point of time there was one sanctioned post of Asstt. Grade III and the same is shown as vacant in Annexure R/1 and therefore keeping in view Annexure R/1 it cannot be presumed that the post of Asstt. Grade III was not available at Rajgarh. It is pertinent to note that the respondents though they have stated the total number of posts of Asstt. Grade III in the State of MP ie., 41 posts, but for the reasons best known to them, they have not stated in the return about the vacant posts, meaning thereby, they have not demonstrated that many posts were vacant at --- 9 --- the relevant point of time. This Court is of the considered opinion that there is a deliberate attempt on the part of the respondent to conceal the material information while filing the return. Keeping in view the totality of the circumstances of the case as the petitioner was absorbed pursuant to a policy decision of the State Government by the Collector, his services could not have been dispensed with in the manner and method it has been done by the Controller, Food & Drugs Administration, MP and therefore the impugned order dt. 7/10/04 is accordingly quashed. Learned counsel for the petitioner has also prayed for backwages in the matter. In the present case, the petitioner was appointed as a contractual employee in the service of Fish & Farmers Development Authority and by virtue of a policy decision of the State of MP, he was absorbed on the post of Asstt. Grade III in the Department of Food & Drugs. It is not a case of a regular employee who has been discontinued by passing an order of termination and in fact it is a case of contractual employee who was later on regularised on being surplus in the services of the State Government and thereafter his --- 10 --- absorption has been cancelled by the Director, Food & Administration vide order dt. 7/10/11. The apex court in the matter of Reeta Marbles Vs. Prabhakant Shukla reported in 2010 (2) MPLJ 294, while considering the issue relating to backwages has held as under : 13. The only limited issue to be determined by us, in this appeal, is whether the High Court was justified in granting full back wages to the respondent in spite of the denial thereof by the Labour Court. In our opinion the High Court erred in law in not examining the factual situation. The High Court merely stated that it was not the case of the employer that the workman had been gainfully employed elsewhere. Although it noticed the principle that the payment of back wages having a discretionary element involved in it, has to be dealt with in the circumstances of each case and no strait-jacket formula can be evolved, yet the award of the Labour Court was modified without any factual basis. 14. In the case of M/s. Hindustan Tin Works Pvt. Ltd. v. The Employees of M/s. Hindustan Tin Works Pvt. Ltd. and Ors. AIR 1979 SC 75, (Para 9) it has been held as follows : "Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the --- 11 --- enforced idleness. That is the normal rule." 15. These observations were subsequently considered in the case of Hindustan Motors Ltd. v. Tapan Kumar Bhattacharya and Anr., (2002) 6 SCC 41 : (2002 AIR SCW 3008) (Paras 11 to 13 and 16) and it was observed as follows : "Under Section 11-A as amended in 1971, the Industrial Tribunal is 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 section is couched in wide and comprehensive terms. It vests a wide 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. 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 payment of full back wages to the workman was passed without --- 12 --- 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 as a matter of course. In Hindustan Tin Works (P) Ltd. v. Employees a three-Judge Bench of this Court laid down (SCC p. 86, para 11) : (AIR 1979 SC 75) (Para 11) "11. 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 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 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 and justice, according to law and not humour. It is not to be arbitrary, vague and fanciful but legal and regular. As already noted, there was no application of mind to the question of back wages by the Labour Court. --- 13 --- There was no pleading or evidence whatsoever on the aspect whether the respondent was employed elsewhere during this long interregnum." 16. The aforesaid judgment was subsequently considered in the case of U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey, (2006) 1 SCC 479 : (2005 AIR SCW 6314) (Paras 17, 22 and 46) it was observed as follows: "Before adverting to the decisions relied upon by the learned counsel for the parties, we may observe that although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter is being taken by the Court realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and / or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on technical grounds or --- 14 --- otherwise an order of termination is found to be in contravention of the provisions of Section 6-N of the U.P. Industrial Disputes Act. The changes brought about by the subsequent decisions of this Court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalization, privatization and outsourcing, is evident." 17. From the above observations it becomes apparent that payment of full back wages upon an order of termination being declared illegal cannot be granted mechanically. It does not automatically follow that reinstatement must be accompanied by payment of full back wages even for the period when the workman remained out of service and contributed little or nothing to the industry. 18. Again in the case of Haryana State Electricity Development Corporation Ltd. v. Mamni, (2006) 9 SCC 434 : (2006 AIR SCW 2979) this Court reiterated the principle. The principles laid down in U.P. State Brassware Corp. Ltd., (2005 AIR SCW 6314) (supra). 19. Recently this Court again examined the issues with regard to payment of full back wages in the case of P.V.K. Distillery Ltd. v. Mahendra Ram, (2009) 5 SCC 705 : (2009 AIR SCW 2904). 20. After examining the relevant case, (2009 AIR SCW 2904) (Paras 13 --- 15 --- to 15) law it has been held as follows : "Although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result but now, with the passage of time, a pragmatic view of the matter is being taken by the Court realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and/ or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched. In Haryana Urban Development Authority v. Om Pal, (2007 AIR SCW 7303) (Para 7) it is stated that (SCC p. 745, para 7) : "7.... It is now also well settled that despite a wide discretionary power conferred upon the Industrial Courts under Section 11-A of the 1947 Act, the relief of rein-statement with full back wages should not be granted automatically only because it would be lawful to do so. Grant of relief would depend on the fact situation obtaining in each case. It will depend upon several factors, one of which would be as to whether the recruitment was effected in terms of the statutory provisions operating in the field, if any." In deciding the question, as to whether the employee should be recompensed with full back wages and other benefits until the date of --- 16 --- reinstatement, the tribunals and the Courts have to be realistic albeit the ordinary rule of full back wages on reinstatement. (Western India Match Co. Ltd. v. Industrial Tribunal)", (AIR 1978 SC 311) 21. Applying the aforesaid ratio of law we have examined the factual situation in the present case. The services of the respondent were admittedly terminated on 11.6.87. The Labour Court gave its award on 27.9.02. Therefore, there is a gap of more than 15 years from the date of termination till the award of reinstatement in service. Labour Court upon examination of the entire issue concluded that the respondent would not be entitled to any back wages for the period he did not work. A perusal of the award also shows that the respondent did not place on the record of the Labour Court any material or evidence to show that he was not gainfully employed during the long spell of 15 years when he was out of service of the appellant. In the writ petition the respondent was mainly concerned with receiving wages in accordance with the Minimum Wages Act and for inclusion of the period spent in Conciliation Proceedings for the calculation of financial benefits. The High Court without examining the factual situation, and placing reliance on the judgment in M/s. Hindustan Tin Works Pvt. Ltd. v. The Employees of M/s. Hindustan Tin Works Pvt. Ltd. and Ors., (AIR 1979 SC 75) held that the normal rule of full back wages --- 17 --- ought to be followed in this case. We are of the considered opinion that such a conclusion could have been reached by the High Court only after recording cogent reasons in support thereof. Especially since the award of the Labour Court was being modified. The Labour Court exercising its discretionary jurisdiction concluded that it was not a fit case for the grant of back wages. In the case of P.V.K. Distillery Ltd., (2009 AIR SCW 2904) (supra), it is observed as follows : "The issue as raised in the matter of back wages has been dealt with by the Labour Court in the manner as above having regard to the facts and circumstances of the matter in the issue, upon exercise of its discretion and obviously in a manner which cannot but be judicious in nature. There exists an obligation on the part of the High Court to record in the judgment, the reasoning before however denouncing a judgment of an inferior tribunal, in the absence of which, the judgment in our view cannot stand the scrutiny of otherwise being reasonable." 22. In our opinion the High Court was unjustified in awarding full back wages. We are also of the opinion that the Labour Court having found the termination to be illegal was unjustified in not granting any back wages at all. Keeping in view the peculiar facts and circumstances of the case, the petitioner shall be entitled to be reinstated in --- 18 --- service along with 25% backwages and all other consequential benefits. It is also made clear that in case the post of Asstt. Grade III is not vacant at Rajgarh, the respondents shall be free to transfer the petitioner and post him against a vacant post. With the aforesaid, the petition is allowed. No order as to costs. (S. C. SHARMA) J U D G E KR