M/S. P.V.K.Distillery Ltd vs Mahendra Ram

2)The facts in nutshell are as follows: the respondent, Mahendra Ram, was recruited on casual basis some time in the year 1981 in M/s P.V.K. Distillery Ltd. (now rechristened as Lords Distillery Ltd.). On 14.8.1982 he was shifted to bottling section as a permanent workman by the orders 1 of the General Manager. On 19.1.1985 services of the respondent were terminated by an oral order from the employer. Aggrieved by the said order, respondent went before the Labour Court inter-alia alleging that he was employed in the establishment of the employer and that his services were terminated orally in an unjustifiable and illegal manner. Appellants on the other hand contended, that, respondent was engaged by Gaya Singh Yadav, contractor and therefore respondent was never in their employment and thus master-servant relationship never existed between them.

4)In the interregnum, the appellant's factory remained closed for years together and ultimately it was declared as a sick unit. Management of the company was substituted with the present management for its rehabilitation/reconstruction.

21)Giving a realistic approach to the matter and in spite of all these circumstances we are restricting ourselves to the question of 50% of the total back wages. Although services of the respondent have been terminated unjustifiably and illegally, it itself does not create a right of reinstatement with full employment benefits and full back wages. The notice was issued with a view that the appellant's factory has been taken over by a new management altogether and by asking the appellant to pay full back wages for the long interregnum would be unfair and unjust. The workman has not entered appearance to justify the award passed by the Labour Court. Therefore, in our view, it would be unreasonable to put a huge burden on the appellant by directing them to reinstate respondent with continuity of service and with full back wages, because the appellant's factory had been declared sick and remained closed for many years and has been assigned to a new management led by its Chief Executive Director, Sri M.K. Pilania in order to rehabilitate/reconstruct it.

22)In view of the above discussion, we are of the opinion that it would be fair and reasonable to direct the employer to deposit 50% of back wages 11 by way of arrears of back wages, instead of full wages awarded by the Labour Court.

23)Accordingly, the judgment and order of the Labour Court and the High Court are set aside and it is declared that the respondent herein shall be entitled to 50% of the total back wages payable during the aforesaid period in terms of Section 6-N of the U.P. Industrial Disputes Act.

24)The appellant is directed to calculate 50% of the total back wages payable during the aforesaid period and to deposit the same in the Labour Court, Nati Imli, Varanasi, U.P. within 6 weeks from the date of the order. Labour Court, Nati Imli, Varanasi, U.P. is further directed to deposit the said amount in a fixed deposit in a nationalized bank within two weeks thereafter. If for any reason, the respondent claims the said amount within two years from the date of deposit of the said amount in the Labour Court, the Labour Court is directed to take effective steps to ascertain the identity of the respondent and on determining the same; the said amount shall be disbursed to the respondent with interest. If for any reason, respondent does not claim the said amount within two years from the date of deposit of the said amount in the Labour Court, the same 12 should be handed over to the District Legal Service Authority with interest.

25)For the reasons aforementioned, the appeal is allowed in part and to the extent mentioned hereinbefore. However, there shall be no order as to costs.