1971 (2) TMI 111 - SC - Indian Laws

Whether relief by way of payment of compensation should not be substituted for the relief by way of reinstatement granted by the Labour Court to the workman, H. P. Bhagavati, Store, Clerk? Held that - Unable on the existing record to sustain the appellants submission that the order of reinstatement made by the Labour Court suffers from any legal infirmity justifying its substitution by an order of payment of compensation to the workman. A suggestion has been thrown by Shri Chagla that in all probability the employee must have secured employment elsewhere as he could not have remained idle all these years an payment of compensation in place of reinstatement would, therefore, cause him no prejudice. On behalf, of the employee it is denied that he had been employed anywhere else during this period. In our opinion, this matter being controversial should have been raised before the Labour Court and we are not in a position to express any opinion on it in the present proceedings. Appeal dismissed

Summary

Issues Involved:
1. Whether the relief of reinstatement or compensation should be granted to the workman, H. P. Bhagavati.
2. Whether the management's loss of confidence in the workman justifies the refusal of reinstatement.
3. Whether the lapse of ten years since the dismissal affects the appropriateness of reinstatement.

Issue-Wise Detailed Analysis:

1. Relief of Reinstatement vs. Compensation:
The primary issue in this appeal was whether H. P. Bhagavati, a store clerk, should be reinstated or compensated after being wrongfully dismissed. The Labour Court had initially ordered reinstatement with all back wages and benefits. The management challenged this, arguing that compensation would be more appropriate given the circumstances. The Supreme Court considered past precedents, including Ruby General Insurance Co. Ltd. v. Chopra and Hindustan Steel Ltd. v. A. K. Roy, where compensation was awarded instead of reinstatement due to specific circumstances like loss of trust and confidence.

2. Management's Loss of Confidence:
The management argued that it had lost confidence in Bhagavati's integrity, making reinstatement impractical. The Supreme Court examined whether this loss of confidence was genuine and justified. The Labour Court had found the domestic enquiry against Bhagavati to be violative of natural justice and the evidence against him insufficient. The Supreme Court emphasized that the management's plea of loss of confidence was not substantiated before the Labour Court and was primarily based on the suspicion of collusion with another employee, Borgohain. The Court noted that the chit (Ex. 12) implicating Bhagavati was not in his handwriting and that criminal proceedings against him had been discharged for lack of evidence.

3. Lapse of Ten Years:
The management also contended that reinstatement after a lapse of ten years would be unjust. The Supreme Court rejected this argument, stating that the delay in adjudication should not defeat the workman's claim for reinstatement if the dismissal was wrongful. The Court cited previous cases, such as Assam Match Co. Ltd. v. The Presiding Officer, Labour Court, and Swadesamitran Ltd. v. Their Workmen, where it was held that the passage of time or the hiring of new employees does not negate the right to reinstatement in cases of wrongful dismissal.

Conclusion:
The Supreme Court concluded that the Labour Court had exercised its judicial discretion appropriately in ordering reinstatement. The Court found no legal infirmity in the Labour Court's decision and held that the general rule of reinstatement should apply in the absence of special circumstances justifying compensation. The appeal was dismissed, and the order of reinstatement was upheld, with no order as to costs.