THE MANAGEMENT OF REGIONAL CHIEF ENGINEER P.H.E.D. RANCHI  versus THEIR WORKMEN REP. BY DISTRICT SECRETARY
[2018] 11 S.C.R. 759, Supreme Court of India, 2018
Outcome: Case Partly allowed (Granted)
Segment: Ratio
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THE MANAGEMENT OF REGIONAL CHIEF ENGINEER
P.H.E.D. RANCHI
v.
THEIR WORKMEN REP. BY DISTRICT SECRETARY
(Civil Appeal No. 9832 of 2018)
SEPTEMBER 20, 2018
[ABHAY MANOHAR SAPRE AND S. ABDUL NAZEER, JJ.]
Labour Laws:
Back wages – When can be claimed  – Courts below awarded
full back wages directing reinstatement of the workmen – Held: A
workman has no right to claim back wages if he has been reinstated
– It is necessary for the workman to plead and prove that he was
not gainfully employed – Employer is also entitled to prove otherwise
– However, initial burden is on the workman – Direction of courts
below to award full back wages has caused prejudice to the employer
– In exercise of jurisdiction u/Art. 142 of the Constitution, in the
interest of justice, 50% of total back wages is awarded – Evidence
– Burden to prove – Constitution of India – Art. 142 – Industrial
Disputes Act, 1947 – s. 25F.
Partly allowing the appeal, the Court
HELD: 1. A workman has no right to claim back wages
from his employer as of right only because the Court has set
aside his dismissal order in his favour and directed his
reinstatement in service. It is necessary for the workman in such
cases to plead and prove with the aid of evidence that after his
dismissal from the service, he was not gainfully employed
anywhere and had no earning to maintain himself or/and his family.
The employer is also entitled to prove it otherwise against the
employee, namely, that the employee was gainfully
employed
during the relevant period and hence not entitled to claim any
back wages.  Initial burden is, however, on the employee. [Paras
11 and 12] [762-G-H; 763-A-B]
2. The Court may decline to award the back wages in its
entirety whereas in some cases, it may award partial depending
[2018] 11  S.C.R. 759
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upon the facts of each case by exercising its judicial discretion in
the light of the facts and evidence.  [Para 13] [763-B]
3. The Court is required to keep in consideration several
factors, and then to record a finding as to whether it is a fit case
for award of the back wages and, if so, to what extent. In the
present case neither the Labour Court and nor the High Court
kept in consideration the principles of law.  Similarly, no party to
the proceedings either pleaded or adduced any evidence to prove
the material facts required  for award of the back wages enabling
the Court to award the back wages. [Paras 14 and 15] [763-E-G]
4. Direction of the Courts below awarding full back wages
to the workman has caused prejudice to the appellant (employer).
In exercise of powers under Article 142 of the Constitution of
India for doing substantial justice to the parties concerned, it
would be just and proper and in the interest of justice to award to
these 37 workmen 50% of the total back wages. [Paras 18, 19
and 20] [764-C-E]
M.P. State Electricity Board v. Jarina Bee(Smt.) (2003)
6 SCC 141 : [2003] 1 Suppl. SCR 535; G.M. Haryana
Roadways v. Rudhan Singh (2005) 5 SCC 591 : [2005]
1 Suppl. SCR 569; U.P. State Brassware Corporation
v. Uday Narain Pandey (2006) 1 SCC 479 : [2005] 5
Suppl. SCR 609; J.K. Synthetics Ltd. v. K.P. Agrawal &
Anr. (2007) 2 SCC 433 : [2007] 2 SCR 60, Metropolitan
Transport Corporation v. V. Venkatesan
(2009) 9 SCC
601 : [2009] 12 SCR 583; Jagbir Singh v. Haryana
State Agriculture Marketing Board & Anr. (2009) 15
SCC 327) : [2009] 10 SCR 908; Deepali Gundu
Surwase v. Kranti Junior Adhyapak Mahavidyalaya
(D.Ed.) & Ors. (2013) 10 SCC 324 : [2013] 9 SCR 1 –
relied on.
Case Law Reference
[2003] 1 Suppl. SCR 535
relied on
Para 13
[2005] 1 Suppl. SCR 569
relied on
Para 13
[2005] 5 Suppl. SCR 609
relied on
Para 13
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[2007] 2 SCR 60
relied on
Para 13
[2009] 12 SCR 583
relied on
Para 13
[2009] 10 SCR 908
relied on
Para 13
[2013] 9 SCR 1
relied on
Para 13
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9832
of 2018
From the Judgment and Order dated  02.02.2017 of the High
Court of Jharkhand at Ranchi in L.P.A. No. 484 of 2008
Atulesh Kumar, Adv. for the appellant.
Abhijeet Sinha, Adv. for the respondent.
The Judgment of the Court was delivered by
ABHAY MANOHAR SAPRE, J. 1. Leave granted.
2. This appeal is directed against the final judgment and order
dated 02.02.2017 of the High Court of Jharkhand at Ranchi in L.P.A.
No.484 of 2008 whereby the Division Bench of the High Court dismissed
the appeal filed by the appellant herein and upheld the order dated
08.07.2008 passed by the Single Judge of the High Court in W.P.(L)
No.3962 of 2006.
3. Few facts need to be mentioned hereinbelow for the disposal
of the appeal, which involves a short issue.
4. The short question, which arises for consideration in this appeal,
is whether the Courts below, namely, the High Court and the Labour
Court were justified in awarding full back wages to the 37 workmen
represented by Workmen Union after setting aside their dismissal order
holding it to be bad in law being in contravention of Section 25-F of the
Industrial Disputes Act, 1947 (hereinafter referred to as “I.D. Act”)
and, in consequence, directing reinstatement of these workmen in services
of the appellant in their Public Health and
Engineering Department
(PHED).
5. The appellant is the Department of the State of Jharkhand
[Public Health and Engineering Department (PHED)] whereas the
respondent is the Workmen Union representing the interest of the
workmen working in the Public Health and Engineering Department
(PHED).
MGMT OF REGIONAL CHIEF ENGR. v. THEIR WORKMEN
REP. BY DISTT. SECY.
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6. The State made a reference under Section 10 of the I.D. Act
to the Labour Court, Ranchi at the instance of the respondent-Union to
decide the following dispute:
“Whether the dismissal and non absorption of 37 acting daily
wages Hastrashid employees as mentioned in schedule “K”
in work charged establishment by Public Health Engg.
Division, East Ranchi (Department of PHED, Jharkhand)
is lawful.  If not, what other reliefs their employees are
entitled to?”
7. By award dated 29.06.2005, the Labour Court (Annex.P-1)
answered the reference in respondent- Union’s favour and directed re-
instatement of 37 workmen with payment of full back wages in Reference
Case No.6 of 2002.
8. The appellant (employer), felt aggrieved by the award of the
Labour Court, filed  writ petition in the High Court of Jharkhand.  The
Single Judge of the High Court, by order dated 08.07.2008, dismissed
the writ petition filed by the appellant and affirmed the award passed by
the Labour Court.
9. Being aggrieved by the order of the Single Judge, the appellant
filed intra court appeal. By impugned order, the Division Bench of the
High Court dismissed the appeal and upheld the order of the Single Judge,
which gave rise to filing of this appeal by way of special leave by the
appellant-employer in this Court.
10. Having heard the learned counsel for the parties and on perusal
of the record of the case, we are inclined to allow the appeal in part and
while modifying the impugned order award 50% back wages to the
workmen in place of full wages.
11. In our considered opinion, the Courts below completely failed
to see that the back wages could not be awarded by the Court as of right
to the workman consequent upon setting aside of his dismissal/termination
order. In other words, a workman has no right to claim back wages from
his employer as of right only because the Court has set aside his dismissal
order in his favour and directed his reinstatement in service.
12. It is necessary for the workman in such cases to plead and
prove with the aid of evidence that after his dismissal from the service,
he was not gainfully employed anywhere and had no earning to maintain
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himself or/and his family. The employer is also entitled to prove it
otherwise against the employee, namely, that the employee was gainfully
employed during the relevant period and hence not entitled to claim any
back wages.  Initial burden is, however, on the employee.
13. In some cases, the Court may decline to award the back wages
in its entirety whereas in some cases, it may award partial depending
upon the facts of each case by exercising its judicial discretion in the
light of the facts and evidence. The questions, how the back wages is
required to be decided, what are the factors to be taken into consideration
awarding back wages, on whom the initial burden lies etc.  were
elaborately discussed in several cases by this Court wherein the law on
these questions has been settled.  Indeed, it is no longer res integra.
These cases are, M.P. State Electricity Board vs. Jarina Bee(Smt.),
(2003) 6 SCC 141, G.M. Haryana Roadways vs. Rudhan Singh,
(2005) 5 SCC 591, U.P. State Brassware Corporation vs. Uday
Narain Pandey, (2006) 1 SCC 479, J.K. Synthetics Ltd. vs. K.P.
Agrawal & Anr., (2007) 2 SCC 433, Metropolitan Transport
Corporation vs. V. Venkatesan, (2009) 9 SCC 601, Jagbir Singh vs.
Haryana State Agriculture Marketing Board & Anr., (2009) 15 SCC
327) and Deepali Gundu Surwase vs. Kranti Junior Adhyapak
Mahavidyalaya(D.Ed.) & Ors., (2013) 10 SCC 324.
14. The Court is, therefore, required to keep in consideration
several factors, which are set out in the
aforementioned cases, and then
to record a finding as to whether it is a fit case for award of the back
wages and, if so, to what extent.
15. Coming now to the facts of the case at hand, we find that
neither the Labour Court and nor the High Court kept in consideration
the aforesaid principles of law.  Similarly, no party to the proceedings
either pleaded or adduced any evidence to prove the material facts
required  for award of the back wages enabling the Court to award the
back wages.
16. On the other hand, we find that the Labour Court in one line
simply directed the appellant (employer) to pay full back wages for a
long period to 37 workmen while directing their reinstatement in service.
17. We, however, find that the High Court in para 9 of the order
placed reliance on the decision of this Court in Deepali Gundu Surwase
(supra) for holding that the question of back wages is covered by this
MGMT OF REGIONAL CHIEF ENGR. v. THEIR WORKMEN
REP. BY DISTT. SECY. [ABHAY MANOHAR SAPRE, J.]
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decision.  In our view, the High Court erred in so observing.  It should
have seen that in the case of Deepali Gundu Surwase (supra) itself,
this Court referred decisions, which we have mentioned in para 13 above
and then in para 38 of Deepali Gundu Surwase, this Court culled out
the ratio of all the cited  cases. Thereafter, this Court in Deepali Gundu
Surwase’ case granted relief to the concerned workers on the facts
involved in that case.  In our opinion, the High Court did not apply the
ratio of the decision in Deepali Gundu Surwase (supra) to the facts of
this case properly and only quoted one para of the judgment in Deepali
Gundu Surwase(supra) which contained general observations.  Those
observations had to be read in juxtaposition with para 38 which culled
out the ratio of all the case law on the subject.
18. We cannot, therefore, concur with such direction of the Courts
below awarding full back wages to the workman which, in our opinion,
has certainly caused prejudice to the appellant (employer).
19. However, having regard to the facts and circumstances of the
case, we consider it just and proper and in the interest of justice to
award to these 37 workmen 50% of the total back wages.
20. This we award to the workmen in exercise of our powers
under Article 142 of the Constitution of India for doing substantial justice
to the parties concerned having reiterated the legal principles which
govern the question of
award of back wages.
21. In the light of the foregoing discussion, the appeal succeeds
and is  allowed in part. Impugned order is modified to the extent indicated
above.
22. Let the amount be worked out and paid by the appellant to the
respondent-workmen after proper verification within three months from
the date of this judgment.
Kalpana K. Tripathy
         Appeal partly allowed.