Case: Jayant Dhirajlal Kachalia Vs. Dowells Electro Works

R.M.S. KHANDEPARKAR, J. ( 1 ) A short point which arises for consideration in the matter is whether in the facts and circumstances of the case the award of compensation in lieu of reinstatement and further limiting it to Rs. 50,000/- is justified. ( 2 ) THE appellant herein was appointed as a commercial artist in the respondent No. 1 firm on November 8, 1976. His services came to be terminated on August 6, 1981, consequent to which industrial dispute was sought to be raised and under reference order dated March 6, 1982 the matter was referred to the Labour Court for adjudication of the dispute. The Labour Court by its award dated January 2, 1995 held that the termination of services of the appellant was illegal and ordered reinstatement without any backwages. The award was sought to be challenged by the respondent No. 1, while the appellant also filed counter petition to claim backwages. While the appellants petition was dismissed in limine on July 17, 1991, the learned single Judge allowed the petition filed by the respondent No. 1 by the impugned judgment dated September 4, 1997 and substituted the relief of reinstatement by awarding compensation in lieu thereof to the extent of Rs. 50,000/ -. Hence, the present appeal. ( 3 ) WHILE challenging the impugned judgment, the learned advocate for the appellant submitted that the Learned single judge failed to take into consideration the fact that the appellant had clearly established through the testimony of Harish Kumar, one of the employees of the respondent No. 1 itself that there was sufficient work available with the respondent No. 1 for reinstatement of the appellant and that therefore there was no reason for ordering compensation in lieu of reinstatement. He further submitted that without prejudice to the first ground of challenge and even assuming that the compensation is to be awarded in lieu of reinstatement, the Learned single Judge ought to have taken into consideration the fact that at the time of passing of the order by the Learned single Judge, the appellant was 42 years of age and therefore he could have attained the age of superannuation after a period of 18 years and therefore the loss which would be sustained by the appellant on account of awarding of compensation in lieu of reinstatement ought to have been taken into consideration while fixing the amount of compensation, however, the learned single Judge failed to consider the, same. Reliance was sought to be placed in that regard in the decision in case of V. B. Rao v. Steel Authority of India Limited and Another air 1991 SC 1742 : (1991) Supp 2 SCC 338. The learned advocate appearing for the respondents has submitted that there is no case made out for interference in the impugned order as the materials on record clearly establish that there was no continuous work available for reinstatement of the appellant and hence the order of compensation in lieu of reinstatement was justified. He has further submitted that the compensation has been awarded by following the law laid down by the Apex Court in O. P. Bhandari v. Indian Tourism Development corporation Ltd. AIR 1987 SC 111 : (1986) 4 scc 337 : 1986-II-LLJ-509 and the sum of Rs. 50,000/- awarded was equivalent to forty months salary which would have earned by the appellant if he was to be reinstated in the said post. ( 4 ) AS regards the first ground of challenge about the availability of the work to justify reinstatement of the appellant, it is true that the witness Harish Kumar had deposed in his testimony that after termination of the services of the appellant, the company used to get the work done from other sources. But at the same time it is to be noted that the witness has categorically admitted that after the termination of the services of the appellant, no designer or commercial artist was employed by the respondent No. 1 in its firm. As also, the testimony of the appellant himself discloses that he is qualified holder of the government diploma in arts and he was employed as commercial artist by the respondent No. 1. He has also admitted that there had been no work of preparing designs and that therefore there was no work given to him after January, 1981 till august, 1981 i. e. till the date of termination of his services and further that his services were terminated for want of work of the nature for which he was originally employed with the respondent No. 1. It is true that in the course of his cross examination he has denied the suggestion that after January, 1981 the company did not introduce any new product. However, at the same time he has nowhere disclosed as to whether the company has produced any new product after January, 1981. Curiously after denying the said suggestion he has further stated that it is not my job and hence I cannot tell which new product the company introduced after January, 1981. Obviously he has no knowledge as to whether the company has introduced any new product after January, 1981 or not. As against this, there is a specific assertion on behalf of the respondent No. 1 even in the pleadings before the Labour Court that the company had not introduced any new product after January, 1981. In the background of these facts therefore, it is apparent that since January, 1981 and particularly after the termination of the services of the appellant there was no continuous work available for a commercial artist with the respondent No. 1. Considering this aspect of the matter, no fault can be found with the impugned order holding that in the facts and circumstances of the case, the award of compensation in lieu of reinstatement is justified. The Apex Court in Surendra Kumar verma v. The Central Government Industrial tribunal-cum-Labour Court, New Delhi and another AIR 1981 SC 422 : (1980) 4 SCC 443 : 1981-I-LLJ-386 had clearly held that awarding of compensation in lieu of reinstatement win depend on the facts of each case and the same view has been reiterated in O. P. Bhandari v. Indian Tourism Development Corporation Ltd. (supra) case as well as in later decision in workmen v. Bharat Fritz Werner (P) Ltd. and another AIR 1990 SC 1054 : (1990) 3 SCC 565 : 1990-II-LLJ-226. Even in V. B. Raos case (supra) relied upon by the learned advocate for the appellant, the same view was reiterated while holding that the compensation to be awarded to the employee should be reasonable and just depending upon the circumstances of a case. ( 5 ) THE Apex Court in Workmen v. Bharat fritz Werner (P) Ltd. (supra) while following its earlier decision in O. P. Bhandari v. Indian toursm Development Corporation Ltd. (supra)case had held the compensation equivalent to 3. 33 years salary including allowances as admissible on the basis of the last pay and allowances would be reasonable in lieu of reinstatement. Similar view had been taken by the Apex Court in number of cases including shetty (S. S.) v. Bharat Nidhi Ltd. AIR 1958 SC 12 : 1957-II-LLJ-696 and Assam Oil Company ltd. v. Its workmen AIR 1960 SC 1264 : 1960-I-LLJ-587. In Utkal Machinery Ltd. v. Santi Patnaik (Miss) 1966-I-LLJ-398 (SC) an amount of compensation of two years salary was reduced to one years salary on the ground that the employee was employed with the employer only for five months. In Mahendra singh Dantwal v. Hindustan Motors Limited and Others AIR 1976 SC 2062 : (1976) 4 SCC 606 : 1976-II-LLJ-259 the compensation was quantified at Rs. 20,000/ -. In the Management of Monghyr Factory of I. T. C. Ltd. , Monghyr, bihar v. The Presiding Officer, Labour Court, patna (Bihar) and Others AIR 1978 SC 1428 : (1978) 3 SCC 504 : 1978-II-LLJ-354 the supreme Court quantified the compensation to rs. 30,000/- in the facts and circumstances of the said case. It is thus clear, that the consistent view taken by the Apex Court regarding the quantum of compensation is on the basis of the facts and circumstances of each case. The similar view has been taken by this Court in jagatpal Dhuria v. Madhav Corporation 2001-III-LLJ (Suppl)-225 (Bom) while awarding compensation in lieu of reinstatement. In the case in hand it is undisputed that the appellant was employed for a period of five years. The circumstances disc lose that after January, 1981 the respondent no. 1 could not provide continuous work to the appellant and even after termination of the services, there was no possibility of availing continuous work for the appellant with the respondent No. 1 of the nature for which he was initially employed with the respondent No. 1. Taking into consideration the wages which were drawn by the appellant and applying the criteria of O. P. Bhandari v. Indian Tourism development Corporation Ltd. (supra) as well as in Workmen v. Bharat Fritz Werner (P) Ltd. (supra), in our considered opinion, the compensation of Rs. 50,000/- awarded in lieu of reinstatement to the appellant cannot be said to be either unreasonable or unjust. In fact, in the circumstances of the case it is quite reasonable and just compensation awarded to the appellant in lieu of reinstatement.

Decision reasoning: 0[ds]The circumstances disc lose that after January, 1981 the respondent no. 1 could not provide continuous work to the appellant and even after termination of the services, there was no possibility of availing continuous work for the appellant with the respondent No. 1 of the nature for which he was initially employed with the respondent No. 1. Taking into consideration the wages which were drawn by the appellant and applying the criteria of O. P. Bhandari v. Indian Tourism development Corporation Ltd. (supra) as well as in Workmen v. Bharat Fritz Werner (P) Ltd. (supra), in our considered opinion, the compensation of Rs. 50,000/awarded in lieu of reinstatement to the appellant cannot be said to be either unreasonable or unjust. In fact, in the circumstances of the case it is quite reasonable and just compensation awarded to the appellant in lieu of reinstatement.