IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CWP No.12985 of 2002 Date of decision: 19.10.2007 State of Haryana. -----Petitioner Vs. Prem Singh and another. -----Respondents CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE AJAI LAMBA Present: Mr. Jitendra Chauhan, Addl. A.G., Haryana. for the petitioner. --- ADARSH KUMAR GOEL, J. This petition seeks quashing of award dated 24.5.2001, Annexure P-5. Claim of the respondent No.1-workman was that he was appointed as Conductor on 13.5.1974. He was given a charge sheet dated 11.5.1992, alleging embezzlement of Rs.42/-. On that account, he was terminated from the service on 22.5.1993 and his appeal was dismissed on 11.4.1996. He raised an industrial dispute by way of a demand notice dated 8.10.1997, on the ground that he was not given adequate opportunity of being heard before passing of order of CWP No.12985 of 2002 termination. The petitioner-management contested the claim by submitting that fair inquiry was held and order of termination was justified. The Labour Court held that the inquiry was not fair and no new evidence was led by the management before the Labour Court. The workman was held to be entitled to reinstatement with continuity of service. At the time of admission of the writ petition, stay was granted only qua recovery of backwages. The workman was accordingly allowed to join service. It is stated by learned counsel for the State that the workman has since retired. In view of above development, we need not examine the question whether the finding of the Labour Court that the inquiry was not fair or that the workman was entitled to reinstatement, was justified or not. The workman had already rendered 19 years of service prior to termination of his services. Only question for consideration is whether the award of backwages was sustainable? The law in this regard has undergone a significant change. Even if termination is held to be illegal, award of backwages does not automatically follows. A pragmatic view is required to be taken, having regard to the fact that the employer may not be required to pay for the period when the workman did 2 CWP No.12985 of 2002 not contribute anything. The workman is also required to prove that he was not gainfully employed. We may refer to a recent judgment of the Hon’ble Supreme Court in J.K. Synthetics Ltd. v. K.P. Agrawal,(2007) 2 SCC 433, wherein it was held:- 15. But the manner in which “back wages” is viewed, has undergone a significant change in the last two decades. They are no longer considered to be an automatic or natural consequence of reinstatement. We may refer to the latest of a series of decisions on this question. In U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey, (2006) 1 SCC 479, this Court following Allahabad Jal Sansthan v. Daya Shankar Rai, (2005) 5 SCC 124 and Kendriya Vidyalaya San- gathan v. S.C. Sharma, (2005) 2 SCC 363 held as follows: ( Uday Narain Pandey case (supra) , SCC p. 480 d - g ) “A person is not entitled to get something only because it would be lawful to do so. If that prin- ciple is applied, the functions of an Industrial Court shall lose much of their significance. Although direction to pay full back wages on a declaration that the order of termination was in- valid 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 realising that an industry may not be compelled to pay to the workman for the period during which he appar- ently contributed little or nothing at all to it and/or for a period that was spent unproduc- tively 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. The changes brought about by the subsequent decisions of the Supreme Court, probably having regard to the changes in the policy decisions of the Gov- ernment in the wake of prevailing market econ- omy, globalisation, privatisation and out- sourcing, is evident. No precise formula can be laid down as to un- der what circumstances payment of entire back wages should be allowed. Indisputably, it de- pends upon the facts and circumstances of 3 CWP No.12985 of 2002 each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on techni- cal grounds or otherwise an order of termina- tion is found to be in contravention of the provi- sions of Section 6-N of the U.P. Industrial Dis- putes Act. While granting relief, application of mind on the part of the Industrial Court is im- perative. Payment of full back wages cannot be the natural consequence.” In G.M., Haryana Roadways v. Rudhan Singh, (2005) 5 SCC 591, this Court observed: “ 8 . There is no rule of thumb that in every case where the Industrial Tribunal gives a find- ing that the termination of service was in viola- tion of Section 25-F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment i.e. whether after proper adver- tisement of the vacancy or inviting applications from the employment exchange, nature of ap- pointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in charac- ter, any special qualification required for the job and the like 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 his age and the qualification pos- sessed 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 termina- tion till the date of the award, which our experi- ence shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily-wage employment 4 CWP No.12985 of 2002 though it may be for 240 days in a calendar year.” 16. There has also been a noticeable shift in placing the burden of proof in regard to back wages. In Ken- driya Vidyalaya Sangathan (supra), this Court held: “When the question of determining the entitle- ment of a person to back wages is concerned, the employee has to show that he was not gainfully employed. The initial burden is on him. After and if he places materials in that re- gard, the employer can bring on record materi- als to rebut the claim. In the instant case, the respondent had neither pleaded nor placed any material in that regard.” In U.P. State Brassware Corpn. Ltd. (supra), this Court observed: “ 61 . It is not in dispute that the respondent did not raise any plea in his written statement that he was not gainfully employed during the said period. It is now well settled by various deci- sions of this Court that although earlier this Court insisted that it was for the employer to raise the aforementioned plea but having re- gard to the provisions of Section 106 of the Evidence Act or the provisions analogous thereto, such a plea should be raised by the workman.” 17. There is also a misconception that whenever re- instatement is directed, “continuity of service” and “consequential benefits” should follow, as a matter of course. The disastrous effect of granting several pro- motions as a “consequential benefit” to a person who has not worked for 10 to 15 years and who does not have the benefit of necessary experience for dis- charging the higher duties and functions of promo- tional posts, is seldom visualised while granting con- sequential benefits automatically. Whenever courts or tribunals direct reinstatement, they should apply their judicial mind to the facts and circumstances to decide whether “continuity of service” and/or “conse- quential benefits” should also be directed. We may in this behalf refer to the decisions of this Court in A.P. SRTC v. S. Narsagoud (2003)2 SCC 212, A.P. 5 CWP No.12985 of 2002 SRTC v. Abdul Kareem (2005) 6 SCC 36 and Ra- jasthan SRTC v. Shyam Bihari Lal Gupta (2005) 7 SCC 406. Accordingly, this petition is allowed and the award of backwages is set aside. (Adarsh Kumar Goel) Judge October 19, 2007 (Ajai Lamba) ashwani Judge 6