fflGH COURT OF DELffl : NEW DELHI + WP (C) No. 5467 of 2003 JudgementreseiTedon: September20. 2004 % Judgementdeliveredon: October6, 2004 # ManagementofAsiaticAirConditioning and Refrigeration Pvt. Ltd. 505, Sarswati House 27, NehiTi Place New Delhi-110019 throughRanaRamnik Singh Executive ...Petitioner t Through Mr. C.S.S.Tomar,Adv. Versus $ 1. Presiding Officer Labour Couit-X ; Karkardooma Court ^ Delhi-110032 ^ 2. JagdishTripaliii S/o Shri Tirath Raj Tripathi R/- C-25, Mohan Bawa Nagar Tajpur Road, Gali No.5 { Badarpur,New Delhi-110014 ...Respondents ^ Through None WP (C)No. 5467/2003 Page 1 of20 1 Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified / Coram: HON'BLE MR. JUSTICE MADAN B. .LOKUR 1. Whether the Reporters of local papers may be allowedto see tliejudgement? Yes 2. Tobereferredto Reporterornot? Yes 3. Whetherthejudgementshouldbe reported in the Digest? Yes » MABAN LOKUR, J. Notice in this case was confined only to the issue of back wagesto be paid to theRespondent. 2. What should be the quantum of back wages to be awarded to a worker (I deliberately use a gender-neutralword) assumingreinstatementis directed,has been the subjectmatter ^ of debate and discussionin literally hundreds of cases. One of the reasons for this, I think, is that discretion in this regard is exerciseddependingupon the facts and circumstancesof each case without formulating an identifiable norm. Therefore, each WP {Q No. 5467/2003 Page2 of20 A I 7 -4 case, aiid there ai'e thousands of them, has to be individually considered,placing an avoidable and enoraious burden on the courts. 3. Aharon Barak in his more than educative Judicial Discretion defines discretion,most appropriately when he says it "[I]s the power given to a person with authority to choose between two or more alternatives, when each of the alternatives is lawful." But, he also pointsout that one of the areas of discretionlies in the establishment of a norm, and judicial discretion chooses fi'om among the normativepossibilitiesthe optionthat it deem.s f appropriate. Hopefully in due course of time, a normative possibility will be established for exercising discretion in awarding back wages to a reinstated workei\ WP (C) No. 5467/2003 Page3 of20 1 A -4' t 4. Respondent No.2 (tlie Respondent) joined the servicesof the Petitioneron 20*January, 1985 as a Welder on a montlily salary of Rs.700/-. 5. On 17* June, 1986, the Respondentwas not allowedto join duties and he was informed tliat he was placed under suspension. Soon diereafter, two charge sheets were issued to him to which replies were sent denying the charges. Enquiry proceedings were then held against him in December, 1986. Accordingto the Respondent,he was not told the date of hearing in the enquiry after 20* December, 1986 but accordingto the Petitioner, since he was proceeded against ex parte on that date, there was no occasion to inform him about further proceedings in the enquiry. The enquiry officer found the Respondent guilty of the charges levelled against him and by an order dated 12* March, 1987, the Respondent was dismissed from service. The allegations against the Respondent wei'e that on WP (C) No. 5467/2003 Page 4 of20 June, 1986 he came to the factory premises but did not do any work and instead roamed ai'ound here and there. He threatened two workers that he would beat them if tiiey work. On 12* June, 1986 he stood on the road at the gate of the factor)', abused his superior and shouted that two of his employers were extremists. The police tried to pacify tlie Respondent,but when that did not help, he was aiTested and \/> producedbeforea MetropolitanMagisti'ate,where he admitted his guiltand was fined. On 25* June, 1986 he, along with two others beat up the accountantof the Petitioner,called him an extremistand put a burningcigarettein his hand. The Assistant Labom^ Commissioner had to intervene and rescue the accountant. •X 1 4 > 7. On 11* October, 1987, the following question was refen'edfor adjudicationto the LabourCourt: Whether the termination of services of Shri JagdishTripathiis illegaland/orunjustified, if so, to what relief is he entitled and what WP (C) No. 5467/2003 5 of20 1 directions ai'e necessary in this respect? 8. Hie learned Labow Court framed a preliminai-y issue concerning the validity of the domestic enquiry and by an order dated 28"^ August, 2001, it was held that the domestic enquiry was vitiated since it was not conducted in accordance witli tlie principles of natui'aljustice. This order is not undei' challenge in / > tliepresent writ petition. 9. Thereafter, the Petitioner did not lead any evidence to prove the Respondent's misconduct but ai'guments were addressed by both the parties regarding gainful employment of the Respondent and back wages due to him. 4 10. By tiie impugned Award dated 3V' My, 2002, the learned Labour Court, relying upon a decision of the Supreme Comt in Hindusian Tin Works Ltd. vs. Its Employees^ (1979) 2 see 80, held that die Respondent was entitled to reinstatement WP (C) No. 5467/2003 Page 6 of20 "It' // witli full back wages and continuity of service. 11. Tiie Petitioner challenged die Award dated 31'^ July, 2002 but, as mentioned above, the grievance of the Petitionei' was confined to tlie question of back wages. It appeal's that die Respondentis not interestedin reinstatement. 12. Learned counsel for die Petitioner* contended diat die Respondent was a skilled worker and could not have remained unemployed for as long as 15 years during die pendency of the industrial dispute. In fact, die Petitioner has filed some documents on record to show that the Respondent has been gainfully employed and is npw the proprietor of M/s Tripathi Gas Welding Works in OMila Industrial Ai'ea, New Delhi. It was contended by learned counsel for the Petitioner diat it cannot be diat in such circumstances a worker has to be awarded full back wages. He submitted that diis causes an undue, financial strain on die employer and necessary orders are WP {Q No. 5467/2003 Page 7 of20 requii'ed to be passed in tliis regard for the guidance of tlie Labour Courts. 13. No one appeai'ed on behalf of the Respondent to make submissions on the issues raised. 14. It appears to me that cases decided by tlie Supreme j Court show that even though the normal mle is to grant full back wages to the worker, yet the power to grant wages involves the exercise of discretion. I think the nomial rule now flows from tlie statutory requirement of making an Awai'd within tlii'ee months of tlie reference of an industrial dispute involving an individual worker [Section 10(2A) of the Act] or within such period as may be prescribed by the appropriate government. Once the statutory period is exceeded, tlie industrial adjudicator has to exercise its discretion judicially and judiciously in awarding back wages. Wliile exercising its discretion, several factoid are required to be taken into consideration. Case law .•A WP fC) No. 5467/2003 Page 8 of20 show that some illusti'ative factors are: a. Tiie time iiivolyed In litigation. In Municipal Corporation of Delhi vs. Prem Ckmid GuptOy (2000) 10 see 115 the Supreme Court took into consideration tlie fact tliat tlie industrial dispute lingered on for as long as 33 yeai's and nobody was really to blame for the delay, except the justice delivei'y system. Only 50% back wages wei'e awarded to tlie worker. A similar view was taken in Bkarat Coking Coal Ltd. vs. Presiding Officer, (2002) 9 see 69^ while awai'ding only 50% back wages. In Anil Kumar Puri vs. Presiding Officer, (2000) 9 'SCC 129 a worker approached tlie Central Administrative Tribunal for relief. He was told five yeai's later that the Tribunal had no jurisdiction to entertain the dispute. Thereafter, the worker raised an industrial dispute. It was held that since die management was not responsible for the delay, die worker would be entitled to only 50% back wages. Delay in WP (C) No. 5467/2003 Page 9 of20 T A- •X disposalof an industrialdisputeresultingin paymentof 15 yeai'sback wages (and the otherfacts and circumstancesof tlie case) promptedthe SupremeCourt to awai'd only 50% back wages in Vikmmaditya Fandey vs. Industrial Tribunal (2001) 2 SCC 423. Similai'ly,in EMT Ud. vs. Labour Court, (1994) 2 SCC 38, litigation between the partieswentonfor 14yeai's.The SupremeCourtnoted tliat it is accepted tliat no paity should suffer on account of delay in renderinga decisionby the Coiut. Consequently, only 60% back wages were awardedto the worker. Causes of delay in disposal of a reference may be due to vmious reasons, and the industrial adjudicator must apply his mind to die relevant factor causing delay, and who is responsiblefor them.For example,an employermay delay filing a wiittenstatementor cross-examiningthe worker's witnesses or leading its own evidence. Similarly, the worker may delay filing a statement of claim or leading WP (C) No. 5467/2003 Page10of20 'r J. evidence or cross-examining the witnesses of tlie employer. b. Tlie manageineiit is a public body meant for public benefit. In Prem Chand Gupta this was considered a relevant factor for denying full back wages to the worker, particularly in view of tlie enoraious delay in deciding the industrial dispute. c. Possibility of tlie worker being gainfully employed. It is unlikely, as implied in Prem Chand Gupta, Uiat a worker can remain unemployed for an indefinite period. Tlie Supreme Court found it difficult to accept that the worker had remained unemployed for 33 years. Prem Chand Gupta was awarded 50% back wages. Similarly, in Haryana Urban Development Authority vs. Devi Dayal^ (2002) 3 see 473 it was noted that it was reasonably possible that the worker, being a helper doing manual WP {Q No. 5467/2003 Pagell of20 I labour, would have possibly got some daily wage or intermittent employment during the pendency of tiie industrial dispute. This was one of tlie factors taken into account while awai'ding him 50% back wages. d. Nature of tlie alleged niiscoiiduct. In C/.P. SRTC vs, EhagwaU Frasad Pathakf (2000) 10 SCC425 the worker was an Assistant Cashier accused of embezzlement. Hiough he was found not guilty and could not be reinstated because he had reached tiie age of superannuation, the Supreme Couit nevertheless reduced the quantum of back wages awai'ded by the High Court fi'om 50% to 25%. In Hissar Central Cooperative Bank 'U£ vs> Kali Ram, (2003) 9 SCC 221, the allegation against the worker was of embezzlement of money of a society. Even though the allegations against the worker were not proved, the Supreme Court considered that since WP (C) No. 5467/2003 Page 12 of20 f - _> 1 he did not generally possess a clean record, only 25% back wages should be given to him. e. Ffnencial burden. It appears that in Management^ LokasMkshana Trust vs. Presiding Officer, (2000) 9 SCC 451 the Supreme Couit found the burden of full back wages to be too onerous. Accordingly, only 60% of the back wages were awarded to tlie worker. Similarly, in Hindustan Tim Works the quantum of back wages was reduced to 75% in view of the financial condition of the employer. Also, in U>F. Drugs & Fharmaceuticals €o» Ltd vs. Rammmj Yadav^ (20§3) 8 SCC 334 the financial position of the appellant and proceedings against it before the Board of Industrial and Financial Reconstruction were taken into consideration for denying back wages to the worker. WP (C) No. 5467/2003 Page 13 of20 f. Delay in raising an industrial dispute. Back wages for a period of about 8 years delay in raising an industrial dispute were denied to tlie worker in Gurmail Singh vs. Principal^ Government College of Education^ (2000) 9 see 496. For the subsequent period till his reinstatement, the worker was awai'ded only 50% back wages. A similar' view was taken in Executive Engineer vs. C GuMappa^ (2002) 10 see 577. In Kamataka Power Transmission eorpn vs. Amalgamated Electricity Ca Ltd^ (2001) 1 see 586 delay in seeking a reference long after the dispute arose between the parties prompted the Supreme Court to reduce the back wages fi'om 50% awarded by tlie industiial ^ adjudicator to 40%. However, in S,M Nilajkar vs. Telecom District Manager, (2003) 4 SeC 27 tlie Supreme ' Court declined to interfere witli an order of a Single Judge of tlie High Court gi'anting reinstatement without back wages,even though blame for tlie delay of about 4 yeai'sin raising an industrial dispute could not be put on the WP{Q No. 5467/2003 Page 14 of20 employee. Additionally, in this case the employee did not put tliis in issue by filing an appeal. g. Duration of employment. In Talwinder Singh vs. PO, Labour Courts (2003) 10 SCC 283, tlie Supreme Couit did not gi'ant any back wages to the reinstated workman ^ apparentlybecausehe had put in just 240 days of semce. The Supreme Court, however, noted that there was no material to show on what ground his services had been temiinated. Similarly, in Devi Dayal, die worker had rendered duty for 340 days, which was also not continuous, and he frequently remained absent fi'om duty. This was taken into consideration by the Supreme Court while gi'anting only 50% back wages. It was also noted tliat the worker was a helper, which apparently involved- manual laboui'. There was a reasonable possibility, therefore, of the worker being employed elsewhere at least for some days in a montli, on daily wages if not regularly. WP (C) No. 5467/2003 Page 15 of20 r i ~4- 2-^ Nature of einploymeiit. In Chief Conservator of Forests vs, Rahmat UlMi^ (2003) 10 SCC 92 die worker, a malU was out of service since 1990 and since "he was an ordinary worker, he must have been working elsewhere to earn his livelihood. There is no material to show that he was not gainfully employed." Consequently, back wages awai'ded to him were reduced fi'om 100% to 50%, Similarly, in Devi Dayal the reinstated worker was a helper. Hie Supreme Court said tliat since his work involved manual laboui; there was a reasonable possibility of his finding some employment, on a daily wage basis, if not regularly. Interestingly, it may be mentioned that the Second Report of the National Commission on Labour concluded in Chapter 12.74 tiiat only 5% of tlie workforce had necessary vocational skills. In view of the shortage of skilled workers, a reasonable presumption can be di'awn tliat such a person will not remain unemployed for long. Y/F (C) No. 5467/2003 Page 16 of20 T •j m -i 15. A few recent decisions will, I think, clear tlie air of any doubts and ambiguities. In P>GJ. of Medical Education & Research vs. Raj Eumar, {2001) 2 SCC 54 tiie Supreme Court noted tliat in die normal coui'se of events an industrial adjudicator is supposed to awai'd back wages in its entirety, but even in Hindustan Tin ^Works where tliis observation was made, tlie Supreme Court itself reduced the back wages from 100% to 75%, tlie reason being tlie contextual facts and circumstances of the case. Therefore, Hindustan Tin Works itself permits flexibility in award of back wages, a discretional^ alternative that in tlie present case the learned Labour Court seems to have lost sight of. 16. Hindustan Motors lid-, vs. Tapan 'Kumar Bhattacharya, (2002) 6 SCC 41 discussed both Hindustan Tin ¥/orks and PGIMER and cleaily laid down that a worker's statement of claim must have some pleading regarding his employmentand tliere must also be some oral evidencein this WP(a No. 5467/2003 Page 17 of20 r \ U 2> regard. Additionally, the industrial adjudicator must state and discuss the reasons for gi'ant or denial of back wages. An order of reinstatement with full back wages does not follow as a matter of coui'se. The vicissitudes of a long drawn litigation were considered by the Supreme Court for reducing back wages from 100% to 50%. 17. The Supreme Court was quite categorical and emphatic in M.F. State Electricity Board vs. Jarina Bee^ (2003) 6 see 141 when it said, after discussing the relevant case law, that "[T]he inevitable conclusion is that the High Court committed an error in holding that the award of Ml back wages was the natural consequence (of reinstatement)." 18. An analysis of the facts of the present case would show that the Respondent worked with the Petitioner for about IVi yeai's before he got into trouble witii his employer. The WP (C) No. 5467/2003 ^ Page 18 of20 irT giievances of the Respondent had nothing to do with his conditions of service or his employment, which could in a given case have some importance. The industrial dispute was not raised after any delay, but its disposal took almost 15 years. Hiere is nothing in the pleadings before me to indicate who was responsible, any of the parties or the system, for delay in disposal of tlie reference. There is notliing to suggest that the Petitioner is such a large organization that it can absorb tlie cost of paying the Respondent 15 yeai's back wages witliout having taken any work from him. The Respondent is a skilled person and appears to be gainfully employed and perhaps can-ying on his own business. In fact, tlie Respondent has not shown any interest in being reinstated, nor has he asked for payment of wages under Section 17-B of tlie Industiial Disputes Act, 1947. ) Taking all these facts into consideration, I am of tlie view that I this is not a fit case in which back wages ought to have been awarded to tlie Respondent. WP {C) No. 5467/2003 Page 19 of20 J • 'r, r \ A f 19. Consequently, since reinstatement of the Respondent was not an issue before me, while upholding the impugned Award,I would hold tliat tlie Respondentis not entitled to any back wages. To this extent, the impugned Awai'dis set aside. 20. The writ petition is disposed of in tlie above teiins. No costs. October 6, 2004 iicg Certified that the corrected copy of the judgment has been transmitted in the main Server. oh WP (C) No. 5467/2003 —«- (Madan B. Lokur) Judge ^ Page 20 of20