2021 (9) TMI 1523 - SC - Indian Laws

Cancellation of compensatory leave for adjudication to the Industrial Tribunal - whether the Appellant can be allowed to raise a contention that it is not an Industry within the meaning of I.D. Act? - HELD THAT - After considering the fact of loss of confidence in the employee and a long time gap, this Court granted compensation of Rs. 15 lakhs in full and final settlement to the employee without granting reinstatement. In the said case before this Court, there was no inquiry held for establishing misconduct. A finding was recorded that the acts of employee prima facie constitute misconduct. In our view, considering the aims and object of the Appellant and the serious nature of misconduct proved against the Respondent, instead of granting reinstatement, by balancing the conflicting interests, appropriate compensation needs to be awarded. Moreover, considering the nature of the misconduct proved against the Respondent, the grant of reinstatement will not be in the interest of justice. The long gap of 17 years will be also one of the considerations for not granting reinstatement especially considering the nature of the activities of the Appellant and the conduct of the Respondent. In the case of Talwara Cooperative Credit and Service Society Ltd. 2008 (10) TMI 731 - SUPREME COURT , this Court has held that the fact whether an employee after dismissal was gainfully employed is within his special knowledge and therefore, considering the principles laid down in Section 106 of the Indian Evidence Act, 1872, the burden is on the employee to come out with a case that he was not gainfully employed during the relevant period. In the present case, at no stage, even such a plea has been made by the Respondent. Even in the counter filed to these appeals, no such statement has been made. The amount of back wages payable up to June, 2010 was deposited in this Court. The said amount of Rs. 4,43,380/- has been withdrawn by the Respondent in the year 2010. From the year 2004, when order of compulsory retirement was passed, the Respondent has not worked with the Appellant. Moreover, he has not even pleaded that from the date of the compulsory retirement till date, he was not gainfully employed. The Respondent has used the amount of Rs. 4,43,380/- for the last 11 years. His gross salary in the year 2004 was Rs. 5788/- per month. Taking overall view of the various factual aspects which we have discussed above, we find that compensation in the range of Rs. 6,50,000/- to Rs. 7,00,000/- in lieu of reinstatement will be just and proper in the facts of the case. Thus, after taking into consideration the sum of Rs. 4,43,380/- already received by the Respondent, a sum of Rs. 2,50,000/- will be payable by the Appellant to the Respondent. The appeals allowed in part by setting aside the order of reinstatement of the Respondent and the order of payment of back wages to the Respondent - the Appellant further directed to pay total compensation of Rs. 6,50,000/- to the Respondent inclusive of the sum of Rs. 4,43,380/- already paid to the Respondent.

Summary

Issues Involved:
1. Whether the Appellant is an industry within the meaning of the Industrial Disputes Act (I.D. Act).
2. Legality of the compulsory retirement order without obtaining approval under Section 33(2)(b) of the I.D. Act.
3. Entitlement of the Respondent to reinstatement and back wages.
4. Adequacy of compensation in lieu of reinstatement.

Issue-wise Detailed Analysis:

1. Whether the Appellant is an industry within the meaning of the I.D. Act:
The Appellant contended that it is not an industry as defined under the I.D. Act, relying on the decision in Bangalore Water Supply and Sewerage Board v. A. Rajappa. The Appellant argued that it depends solely on government grants and donations, and thus cannot be considered an industry. However, the Court noted that the Appellant had consistently acted as if it were an industry, including applying for approval under Section 33(2)(b) of the I.D. Act and participating in industrial disputes without raising this contention. The Court concluded that the Appellant could not raise this issue at this stage but left the issue open for future litigation by other employees.

2. Legality of the compulsory retirement order without obtaining approval under Section 33(2)(b) of the I.D. Act:
The Court held that the compulsory retirement order was illegal due to non-compliance with the requirement of obtaining approval under Section 33(2)(b) of the I.D. Act. The Appellant's withdrawal of the application for approval was noted, and it was emphasized that the Appellant was aware of the necessity for such approval. The Court affirmed the finding that the order of compulsory retirement was null and void.

3. Entitlement of the Respondent to reinstatement and back wages:
The Court considered the serious misconduct proved against the Respondent, including assaulting a senior official. The Court referred to the decision in Indian Railway Construction Co. Ltd. v. Ajay Kumar, emphasizing that reinstatement is not always appropriate, especially in cases of loss of confidence and serious misconduct. The Court also noted the long gap of 17 years since the Respondent last worked with the Appellant. Regarding back wages, the Court highlighted that the Respondent did not plead or prove that he was not gainfully employed during the period of compulsory retirement, as required by the principles laid down in Talwara Cooperative Credit and Service Society Ltd. v. Sushil Kumar. Consequently, the Court found that reinstatement and back wages were not justified.

4. Adequacy of compensation in lieu of reinstatement:
The Court determined that compensation in lieu of reinstatement was appropriate, considering the nature of the Appellant's activities and the Respondent's misconduct. The Court noted that the Respondent had already withdrawn Rs. 4,43,380/- deposited by the Appellant and had used this amount for 11 years. The Court found that a total compensation of Rs. 6,50,000/- to Rs. 7,00,000/- would be just and proper, inclusive of the amount already received by the Respondent. Thus, the Court directed the Appellant to pay an additional Rs. 2,50,000/- to the Respondent within six weeks, failing which the amount would carry interest at 12% per annum.

Conclusion:
The appeals were partly allowed by setting aside the order of reinstatement and back wages. The Appellant was directed to pay a total compensation of Rs. 6,50,000/- to the Respondent, inclusive of the amount already received, with an additional payment of Rs. 2,50,000/- to be made within six weeks.