2021 (2) TMI 916 - HC - Indian Laws

Dishonor of Cheque - honourable acquittal - full exoneration - conviction of the respondent u/s 138 of the Negotiable Instruments Act - claim for backwages - HELD THAT - It has been averred in the complaint before the Labour Court that during the period of his conviction and acquittal the respondent was not gainfully employed. The fact of acquittal of the respondent by this Court was made aware to the petitioner in March 2011 itself which is indicated from the application for amendment filed before the Labour Court (Annexure-B/pg.13) pursuant to which the petitioner ought to have reinstated the respondent in service in March 2011 itself since the reason for his termination did not survive and could have availed the benefit of the services of the respondent till the time of his superannuation. The petitioner for reasons best known to it did not do so and forced the respondent to continue with the litigation before the Labour Court which resulted in the direction for his reinstatement with continuity in services and 50% back wages. Not only this the petitioner challenged the said judgment before the Industrial Court by way of a revision during which period the respondent retired having crossed the age of superannuation. In spite of the dismissal of the revision as filed by the petitioner and stay to the effect operation and execution of the orders passed by the subordinate Courts except to the extent of the direction to pay 50% back wages being declined and a direction to process the claim of the respondent for other retiral benefits the order dated 11/9/2015 records that this has not been done. This conduct on part of the petitioner clearly defies logic. In Baldev Singh Vs. Union of India and others 2005 (10) TMI 600 - SUPREME COURT relied upon by Mr. Mehadia learned Counsel for the petitioner the Hon ble Apex Court has held that merely because there has been an acquittal it does not automatically entitle the employee to get salary for the period concerned. Thus the award of 50% back wages to the respondent in light of the above position of law is not sustainable. However the claim for back wages from the date of acquittal till the date of superannuation is clearly sustainable in law. The impugned judgement is modified as follows (A) The direction as passed by the learned Labour Court for reinstatement of the respondent with continuity of service is maintained. (B) The direction as passed by the learned Labour Court to pay 50% back wages is hereby set aside. (C) The petitioner is directed to pay full back wages to the respondent from the date of acquittal i.e. from 22/2/2011 to the date of superannuation. (D) All the above payments should be made within three months from the date of this order subject to adjustments of any amounts which may have been received by the respondent earlier.

Summary

Issues:
Challenge to judgment and order dated 11/9/2015 by Industrial Court, Amravati; Termination of services due to conviction under Section 138 of Negotiable Instruments Act; Validity of termination under Rule 81 of Bombay State Transport Employees Service Regulations; Reinstatement and back wages granted by Labour Court; Appeal for revision by petitioner; Acquittal by High Court; Legal basis for reinstatement and back wages; Duty of employer post-acquittal; Justification for back wages; Modification of impugned judgments.

Analysis:

1. The petition challenged the judgment and order dated 11/9/2015 by the Industrial Court, Amravati, arising from a complaint regarding termination of services due to a conviction under Section 138 of the Negotiable Instruments Act. The termination was challenged by the respondent before the Labour Court, leading to reinstatement with continuity of service and 50% back wages. The petitioner contended that the termination was in accordance with Rule 81 of the Bombay State Transport Employees Service Regulations, despite issuing a notice and providing an opportunity to explain. The petitioner argued that the acquittal by the High Court was not a clean acquittal, and therefore, reinstatement was not justified, citing legal precedents. The petitioner also questioned the grant of back wages, relying on relevant case laws.

2. The respondent opposed the petition, arguing that the termination was hasty and without proper consideration. It was contended that since the conviction did not hinder the respondent's ability to render services, the termination was illegal. The respondent highlighted that the acquittal by the High Court should have prompted immediate reinstatement, especially since the termination was solely based on the conviction. The respondent claimed entitlement to full back wages from the date of acquittal till superannuation, citing legal precedent to support the claim.

3. The Court noted that the conviction under Section 138 of the Negotiable Instruments Act had been set aside by the High Court. The Court emphasized the lack of evidence presented to support the contention that the acquittal was due to compounding of the offence. Legal arguments were analyzed, including the applicability of Rule 81 of the Regulations and the absence of specific provisions regarding reinstatement post-acquittal. The Court differentiated various legal precedents cited by both parties to determine the appropriateness of reinstatement and back wages.

4. The Court found that the termination based on the conviction was not justified post-acquittal. The Court modified the impugned judgments to maintain the reinstatement with continuity of service but set aside the grant of 50% back wages. Instead, the Court directed the petitioner to pay full back wages to the respondent from the date of acquittal till superannuation within three months. The Court highlighted the duty of the employer to reinstate the employee post-acquittal when the conviction was the sole basis for termination.

5. The Court's decision balanced the legal principles governing reinstatement and back wages post-acquittal, emphasizing the employer's obligation to act in accordance with the law and ensure fair treatment of employees in such circumstances.