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TMI Blog2013 (8) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... ration of Aurangabad raised a tax bill of ₹ 79,974/- by treating the property as commercial. Thereupon, the Headmistress of the school, who was also President of the Trust, addressed a letter to all the employees including the Appellant requiring them to contribute a sum of ₹ 1500/- per month towards the tax liability. The Appellant refused to comply with the dictate of the Headmistress. Annoyed by this, the management issued as many as 25 memos to the Appellant and then placed her under suspension vide letter dated 14.11.2006. She submitted reply to each and every memorandum and denied the allegations. Education Officer (Primary) Zilla Parishad, Aurangabad did not approve the Appellant's suspension. However, the letter of suspension was not revoked. She was not even paid subsistence allowance in terms of the Maharashtra Employees of Private Schools (Conditions of Service) Rules, 1981 (for short, 'the Rules') framed Under Section 16 of the Maharashtra Employees of Private Schools (Conditions of Service) Regulation Act, 1977 (for short, 'the Act'). 4. Writ Petition No. 8404 of 2006 filed by the Appellant questioning her suspension was disposed of by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further pleaded that the sole object of the inquiry was to teach her a lesson for refusing to comply with the illegal demand of the management. 7. The management contested the appeal and pleaded that the action taken by it was legal and justified because the Appellant had been found guilty of misconduct. It was further pleaded that the inquiry was held in consonance with the relevant rules and the principles of natural justice. 8. By an order dated 20.6.2009, the Presiding Officer of the School Tribunal, Aurangabad Division (for short, 'the Tribunal') allowed the appeal and quashed the termination of the Appellant's service. He also directed the management to pay full back wages to the Appellant. The Tribunal considered the Appellant's plea that she had not been given reasonable opportunity of hearing and observed: Now let us test for what purpose and for what subject inquiry was initiated in what manner inquiry was conducted, which witnesses have been examined and how injury was conclude. I have already demonstrate above that starting point against this Appellant is calling upon staff members collection of fund for payment for tax dues page 54 of appeal memo. All t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Here I find 5 to 6 staff members have supported this Appellant, at the same time some teachers have also come forward this Head Mistress. They were in dilemma to whom they may favour. So over all attitude of this Head Mistress against this Appellant is revengeful with ulterior motive to drag this Appellant in inquiry proceeding. I gone through the statement recorded of the witnesses. I find that all the statements are general in nature and it is repetition of statement of first witness Surajkumar Khobragade. Nobody has made statement specifically with date and incident. The deposition is a general statement which is already in memos which have been issue by the Head Mistress to the Appellant. More important in this regard that no cross examination of witnesses by the Appellant. In the statement of witnesses, I do not find any endorsement that Appellant was absent or Appellant is present, she declined to cross examine or otherwise. These statements have been concluded that witnesses have stated before inquiry committee, that is all. If we read first statement of first witnesses we can find carry forward of the statement for other witnesses by some minor change in the statement. One ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her service and declared that she is entitled to full back wages. The operative portion of the order passed by the Tribunal reads as under: (1) Appeal is allowed. (2) The termination order dated 15.06.2007 issued by Respondent on the basis of inquiry report is hereby quashed and set aside. (3) The Appellant is hereby reinstated on her original post and Respondents are directed to reinstate the Appellant in her original post as Asst. Teacher Nandanvan Vidyamandir (Primary School), Aurangabad with full back wages from the date of termination till date of reinstatement. (4) The Respondent Nos. 1 to 3 are hereby directed to deposit full back wages i.e. pay and allowances of the Appellant from the date of her termination till the date of her reinstatement in the service, within 45 days in this Tribunal from the date of this order. (5) The Appellant will be entitled to withdraw the above amounts from this Tribunal immediately after it is deposited. 9. The management challenged the order of the Tribunal in Writ Petition No. 10032 of 2010. The learned Single Judge examined the issues raised by the management in detail and expressed his agreement with the Tribunal that the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, further adjudication by the Tribunal on merits of the matter cannot be said to be beyond jurisdiction or powers of the School Tribunal. In the facts of this case, as it is apparent from the findings recorded by the School Tribunal, that as the case in hand is a case of victimization and Petitioner Management as well as the Inquiry Committee having joined hands against the delinquent right from the beginning, no premium can be put over the action of the Petitioner-Management and Inquiry Committee who threw the principles of natural justice in the air. It would be a travesty of justice, in these circumstances, to allow the Petitioner-Management to once again hold inquiry in such a extreme case. However, the learned Single Judge set aside the direction given by the School Tribunal for payment of back wages by relying upon the judgments in J.K. Synthetics Ltd. v. K.P. Agrawal and Anr. (2007) 2 SCC 433 and Zilla Parishad, Gadchiroli and Anr. v. Prakash S/o. Nagorao Thete and Anr. 2009 (4) Mh.L.J. 628. The observations made by the learned Single Judge on this issue are extracted below: Bare perusal of above reproduced para 40 of the judgment of the School Tribunal would make it abunda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ull pay and allowances for the entire period during which she was forcibly kept out of job. 11. Learned Counsel for the Respondent supported the impugned order and argued that the High Court did not commit any error by setting aside the direction given by the Tribunal for payment of back wages to the Appellant because she had neither pleaded nor any evidence was produced that during the period of suspension and thereafter she was not employed elsewhere. Learned Counsel relied upon the judgments in M.P. State Electricity Board v. Jarina Bee (2003) 6 SCC 141, Kendriya Vidyalaya Sangathan v. S.C. Sharma (2005) 2 SCC 363, U.P. State Brassware Corporation Ltd. v. Uday Narain Pandey (2006) 1 SCC 479, J.K. Synthetics Ltd. v. K.P. Agrawal and Anr. (supra), The Depot Manager, A.P.S.R.T.C. v. P. Jayaram Reddy (2009) 2 SCC 681, Novartis India Ltd. v. State of West Bengal and Ors. (2009) 3 SCC 124, Metropolitan Transport Corporation v. V. Venkatesan (2009) 9 SCC 601 and Jagbir Singh v. Haryana State Agriculture Marketing Board and Anr. (2009) 15 SCC 327 and argued that the rule of reinstatement with back wages propounded in 1960's and 70's has been considerably diluted and the Courts/T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exercise of this power is hedged with the condition that the period of suspension shall not exceed four months without prior permission of the concerned authority. The suspended employee is entitled to subsistence allowance under the scheme of payment (Rule 34) through Co-operative Bank for a period of four months. If the period of suspension exceeds four months, then subsistence allowance has to be paid by the management. In case, the management suspends an employee without obtaining prior approval of the competent authority, then it has to pay the subsistence allowance till the completion of inquiry. A suspended employee can be denied subsistence allowance only in the contingencies enumerated in Clauses (3) and (4) of Rule 33, i.e., when he takes up private employment or leaves headquarter without prior approval of the Chief Executive Officer. 14. For the sake of reference, Sections 2(7), 9, 10, 11 and 16 of the Act are reproduced below: 2(7) Employee, means any member of the teaching and non teaching staff of a recognized school and includes Shikshan Sevak; 9. Right of appeal to Tribunal to employees of a private school. (1) Notwithstanding anything contained in any law or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agement,- (a) to reinstate the employee on the same post or on a lower post as it may specify; (b) to restore the employee to the rank which he held before reduction or to any lower rank as it may specify;' (c) to give arrears of emoluments to the employee for such period as it may specify; (d) to award such lesser punishment as it may specify in lieu of dismissal, removal, otherwise termination of service or reduction in rank, as the case may be; (e) where it is decided not to reinstate the employee or in any other appropriate case, to give to the employee twelve months' salary (pay and allowances, if any) if he has been in the services of the school for ten years or more and six months salary (pay and allowances, if any) if he has been in service of the school for less then ten year, by way or compensation, regard being had to loss of employment and possibility of getting or not getting suitable employment thereunder, as it may specify; or (f) to give such other relief to the employee and to observe such other conditions as it may specify, having regard to the circumstances of the case. (3) It shall be lawful for the Tribunal to recommend to State Government that any dues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and during the pendency of the inquiry such resignation shall not be accepted. (3) An employee under suspension shall not accept any private employment. (4) The employee under suspension shall not leave the headquarters during the period of suspension without the prior approval of the Chief Executive Officer. If such employee is the Head and also the Chief Executive Officer, he shall obtain the necessary prior approval of the President. 34. Payment of subsistence allowance. (1) (a) A subsistence allowance at an amount equal to the leave salary which the employee would have drawn if he had been on leave on half pay and in addition, Dearness allowance based on such leave salary shall be payable to the employee under suspension. (b) Where the period of suspension exceeds 4 months, the authority which made or is deemed to have made the order of suspension shall be competent to vary the amount of subsistence allowance for any period subsequent to the period of the first 4 months as follows, namely: (i) The amount of subsistence allowance may be increased by a suitable amount not exceeding 50 per cent of the subsistence allowance admissible during the period of first 4 months, if in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... desires to suspend an employee, he shall be suspended only with the prior approval of the appropriate authority mentioned in Rule 33. (2) The period of suspension shall not exceed four months except with the prior permission of such appropriate authority. (3) In case where the employee is suspended with prior approval he shall be paid subsistence allowance under the scheme of payment through Co-operative Banks for a period of four months only and thereafter, the payment shall be made by the Management concerned. (4) In case where the employee is suspended by the Management without obtaining prior approval of the appropriate authority as aforesaid, the payment of subsistence allowance even during the first four months of suspension and for further period thereafter till the completion of inquiry shall be made by the Management itself. (5) The subsistence allowance shall not be withheld except in cases of breach of provisions of Sub-rules (3) or (4) of Rule 33. 16. The word reinstatement has not been defined in the Act and the Rules. As per Shorter Oxford English Dictionary, Vol. II, 3rd Edition, the word reinstate means to reinstall or re-establish (a person or thing in a place, sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad and prove that during the intervening period the employee was gainfully employed and was getting the same emoluments. Denial of back wages to an employee, who has suffered due to an illegal act of the employer would amount to indirectly punishing the concerned employee and rewarding the employer by relieving him of the obligation to pay back wages including the emoluments. 18. A somewhat similar issue was considered by a three Judge Bench in Hindustan Tin Works Pvt. Ltd. v. Employees of Hindustan Tin Works Pvt. Ltd. (supra) in the context of termination of services of 56 employees by way of retrenchment due to alleged non-availability of the raw material necessary for utilization of full installed capacity by the Petitioner. The dispute raised by the employees resulted in award of reinstatement with full back wages. This Court examined the issue at length and held: It is no more open to debate that in the field of industrial jurisprudence a declaration can be given that the termination of service is bad and the workman continues to be in service. The spectre of common law doctrine that contract of personal service cannot be specifically enforced or the doctrine of mitigation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and earn their livelihood, were kept away therefrom. On top of it they were forced to litigation up to the Apex Court now they are being told that something less than full back wages should be awarded to them. If the services were not terminated the workmen ordinarily would have continued to work and would have earned their wages. When it was held that the termination of services was neither proper nor justified, it would not only show that the workmen were always willing to serve but if they rendered service they would legitimately be entitled to the wages for the same. If the workmen were always ready to work but they were kept away therefrom on account of an invalid act of the employer, there is no justification for not awarding them full back wages which were very legitimately due to them. In the very nature of things there cannot be a strait-jacket formula for awarding relief of back wages. All relevant considerations will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the workmen if the relief is denied than to the employer if the relief is granted. (Emphasis supplied) 20. The principle laid down in Hindustan Tin Works Private Limited v. Employees of Hindustan Tin Works Private Limited (supra) was reiterated in P.G.I. of Medical Education Research, Chandigarh v. Raj Kumar (2001) 2 SCC 54. That case makes an interesting reading. The Respondent had worked as helper for 11 months and 18 days. The termination of his service was declared by Labour Court, Chandigarh as retrenchment and was invalidated on the ground of non-compliance of Section 25-F of the Industrial Disputes Act, 1947. As a corollary, the Labour Court held that the Respondent was entitled to reinstatement with continuity of service. However, only 60% back wages were awarded. The learned Single Judge of the Punjab and Haryana High Court did not find any error apparent in the award of the Labour Court but ordered payment of full back wages. The two Judge Bench of this Court noted the guiding principle laid down in the case of Hindustan Tin Works Private Limited and observed: While it is true that in the event of failure in compliance with Section 25-F read with Section 25(b) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Labour Court in the manner as above having regard to the facts and circumstances of the matter in the issue, upon exercise of its discretion and obviously in a manner which cannot but be judicious in nature. In the event, however, the High Court's interference is sought for, there exists an obligation on the part of the High Court to record in the judgment, the reasoning before however denouncing a judgment of an inferior Tribunal, in the absence of which, the judgment in our view cannot stand the scrutiny of otherwise being reasonable. There ought to be available in the judgment itself a finding about the perversity or the erroneous approach of the Labour Court and it is only upon recording therewith the High Court has the authority to interfere. Unfortunately, the High Court did not feel it expedient to record any reason far less any appreciable reason before denouncing the judgment. 21. The aforesaid judgment became a benchmark for almost all the subsequent judgments. In Hindustan Motors Ltd. v. Tapan Kumar Bhattacharya (2002) 6 SCC 41, the Fifth Industrial Tribunal, West Bengal had found that the finding of guilty recorded in the departmental inquiry was not based on any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itution. The learned Single Judge of the Delhi High Court held that there was no legal justification to dispense with the inquiry and ordered reinstatement of the workman with back wages. The Division Bench upheld the order of the learned Single Judge. The two Judge Bench of this Court referred to the judgments in Hindustan Tin Works Private Limited v. Employees of Hindustan Tin Works Private Limited (supra) and P.G.I. of Medical Education Research, Chandigarh v. Raj Kumar (supra) and held that payment of ₹ 15 lakhs in full and final settlement of all claims of the employee will serve the ends of justice. 23. In M.P. State Electricity Board v. Jarina Bee (Smt.) (supra), the two Judge Bench referred to P.G.I. of Medical Education Research, Chandigarh v. Raj Kumar (supra) and held that it is always incumbent upon the Labour Court to decide the question relating to quantum of back wages by considering the evidence produced by the parties. 24. In Kendriya Vidyalaya Sangathan v. S.C. Sharma (supra), the Court found that the services of the Respondent had been terminated under Rule 19(ii) of the Central Civil Services (Classification, Control and Appeal) Rules, 1965 on the charge t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service, which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period i.e. from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily-wage employment though it may be for 240 days in a calendar year. 26. In U.P. State Brassware Corporation L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch regarding payment of back wages and observed: There can, however, be no doubt whatsoever that there has been a shift in the approach of this Court in regard to payment of back wages. Back wages cannot be granted almost automatically upon setting aside an order of termination inter alia on the premise that the burden to show that the workman was gainfully employed during interregnum period was on the employer. This Court, in a number of decisions opined that grant of back wages is not automatic. The burden of proof that he remained unemployed would be on the workmen keeping in view the provisions contained in Section 106 of the Evidence Act, 1872. This Court in the matter of grant of back wages has laid down certain guidelines stating that therefor several factors are required to be considered including the nature of appointment; the mode of recruitment; the length of service; and whether the appointment was in consonance with Articles 14 and 16 of the Constitution of India in cases of public employment, etc. It is also trite that for the purpose of grant of back wages, conduct of the workman concerned also plays a vital role. Each decision, as regards grant of back wages or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt held that gainful employment would also include self-employment. We respectfully agree. It is difficult to accept the submission of the learned Senior Counsel for the Respondent that he had no professional earnings as an advocate and except conducting his own case, the Respondent did not appear in any other case. The fact that he resigned from service after 2-3 years of reinstatement and reengaged himself in legal profession leads us to assume that he had some practice in law after he took sanad on 12-12-2000 until 15-6-2004, otherwise he would not have resigned from the settled job and resumed profession of glorious uncertainties. 31. In Jagbir Singh v. Haryana State Agriculture Marketing Board (supra), this Court noted that as on the date of retrenchment, Respondent No. 1 had worked for less than 11 months and held: It would be, thus, seen that by a catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in violation of Section 25-F although may be set aside but an award of reinstatement should not, however, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial benefits automatically. Whenever courts or tribunals direct reinstatement, they should apply their judicial mind to the facts and circumstances to decide whether continuity of service and/or consequential benefits should also be directed. Coming back to back wages, even if the court finds it necessary to award back wages, the question will be whether back wages should be awarded fully or only partially (and if so the percentage). That depends upon the facts and circumstances of each case. Any income received by the employee during the relevant period on account of alternative employment or business is a relevant factor to be taken note of while awarding back wages, in addition to the several factors mentioned in Rudhan Singh and Uday Narain Pandey. Therefore, it is necessary for the employee to plead that he was not gainfully employed from the date of his termination. While an employee cannot be asked to prove the negative, he has to at least assert on oath that he was neither employed nor engaged in any gainful business or venture and that he did not have any income. Then the burden will shift to the employer. But there is, however, no obligation on the terminated employee to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of service nor consequential benefits, follow as a natural or necessary consequence of such reinstatement. In cases where the misconduct is held to be proved, and reinstatement is itself a consequential benefit arising from imposition of a lesser punishment, award of back wages for the period when the employee has not worked, may amount to rewarding the delinquent employee and punishing the employer for taking action for the misconduct committed by the employee. That should be avoided. Similarly, in such cases, even where continuity of service is directed, it should only be for purposes of pensionary/retirement benefits, and not for other benefits like increments, promotions, etc. But there are two exceptions. The first is where the court sets aside the termination as a consequence of employee being exonerated or being found not guilty of the misconduct. Second is where the court reaches a conclusion that the inquiry was held in respect of a frivolous issue or petty misconduct, as a camouflage to get rid of the employee or victimise him, and the disproportionately excessive punishment is a result of such scheme or intention. In such cases, the principles relating to back wages, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e punishment was disproportionate to the misconduct found proved, then it will have the discretion not to award full back wages. However, if the Labour Court/Industrial Tribunal finds that the employee or workman is not at all guilty of any misconduct or that the employer had foisted a false charge, then there will be ample justification for award of full back wages. v) The cases in which the competent Court or Tribunal finds that the employer has acted in gross violation of the statutory provisions and/or the principles of natural justice or is guilty of victimizing the employee or workman, then the concerned Court or Tribunal will be fully justified in directing payment of full back wages. In such cases, the superior Courts should not exercise power under Article 226 or 136 of the Constitution and interfere with the award passed by the Labour Court, etc., merely because there is a possibility of forming a different opinion on the entitlement of the employee/workman to get full back wages or the employer's obligation to pay the same. The Courts must always be kept in view that in the cases of wrongful/illegal termination of service, the wrongdoer is the employer and sufferer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of natural justice. The Tribunal further found that the allegations levelled against the Appellant were frivolous. The Tribunal also took cognizance of the statement made on behalf of the Appellant that she was not gainfully employed anywhere and the fact that the management had not controverted the same and ordered her reinstatement with full back wages. 35. The learned Single Judge agreed with the Tribunal that the action taken by the management to terminate the Appellant's service was per se illegal but set aside the award of back wages by making a cryptic observation that she had not proved the factum of non-employment during the intervening period. While doing so, the learned Single Judge not only overlooked the order passed by the Division Bench in Writ Petition No. 8404/2006, but also Rule 33 which prohibits an employee from taking employment elsewhere. Indeed, it was not even the pleaded case of the management that during the period of suspension, the Appellant had left the Headquarter without prior approval of the Chief Executive Officer and thereby disentitling her from getting subsistence allowance or that during the intervening period she was gainfully employed els ..... X X X X Extracts X X X X X X X X Extracts X X X X
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