Vaddi Annapoorna v. Second Appellate Authority under Sec.48(3) of A.P.Shops

This writ petition is filed, questioning the order, dated 14th of August 2004, passed by the Second Appellate authority constituted under Section 48(3) of the A.P. Shops and Establishments Act, 1988, in S.A.No.1 of 2003, the extent of not granting the relief reinstatement with continuity of service, back-wages and all other attendant benefits. The petitioner herein was working as a Sweeper in Urvasi 70 mm theatre, situated in Godavarikhani of Karimnagar District. Her services were terminated by the management, by an order, dated 16th January 2002. The termination was on the ground that she unauthorisedly absented from duty, on 16th of November

2001. The petitioner has questioned the order of termination by way of appeal under Section 48(1)(b) of the Andhra Pradesh Shops and Establishments Act, 1988. Respondents 3 and 4 appeared before the authority and defended the order of termination. Before the authority under Section 48(3) of the Act, oral and documentary evidence was adduced. Petitioner was examined as PW- 1 and another employee was examined on her behalf as PW-2, and exhibits A-1 to A-12 were marked. On behalf of the management, the 4th respondent herein was examined as RW-1 and documentary evidence in Exs.R-1 to R-19 were marked. Having appreciated the oral and

documentary evidence on record, the first appellate authority has allowed the appeal by an order, dated 19th June 2003, passed in Case No.APSE. 2 of 2002. In the aforesaid order, the first appellate authority has recorded a finding that the action of the management was vindictive and they have not followed the provisions under Section 47 of the Act, before terminating the services of petitioner, as such, by declaring the termination as illegal, ordered for reinstatement with continuity of service, attendant benefits and back-wages from the date of termination to the date of reinstatement. Further, an amount of Rs.3,000/- was also awarded towards costs. As against the same, respondents 3 and 4 have approached the 2nd appellate authority under Section 48(3) of the Act, in S.A.No.1 of 2003. The 2nd appellate authority has agreed with the findings recorded by the 1st appellate authority, and by recording a finding to the effect that there is no infirmity in the findings recorded by the 1st appellate authority, held that asmuch as the relations between the employer and employee are strained, the amount of Rs.37,582/-, which was deposited with the Court at the time of filing of appeal, be allowed as compensation in lieu of reinstatement.

By recording so, the direction issued by the 1st appellate authority for reinstatement, is modified to the extent indicated above. The present writ petition is filed questioning the order of the 2nd appellate authority to the extent of modifying the direction of reinstatement that of awarding compensation. It is the case of the petitioner that having approved the findings recorded by the 1st appellate authority, the 2nd appellate authority ought not to have awarded compensation in lieu of reinstatement. It is submitted by the learned counsel for petitioner Sri G.Vidyasagar, that no reasons at all are indicated by the 2nd appellate authority, for modifying the punishment of reinstatement to that of awarding compensation. It is further submitted that the amount of back-wages, which were ordered to be paid by the 1st appellate authority, cannot be treated as compensation in lieu of direction for reinstatement.

Counter affidavit is filed on behalf of respondents 3 and 4. On 28.06.2010, as there was no representation on behalf of respondents 3 and 4, this writ petition is posted to today. Even today also, there is no representation on behalf of respondents. In the counter affidavit, respondents have given in detail, the reasons for initiating disciplinary action against the petitioner. But, there is no averment in the counter affidavit, justifying the modification of the relief of reinstatement to that of award of compensation. I have perused the copies of the orders passed by the 1st appellate authority and also the 2nd appellate authority. Although it is the case of the establishment that a detailed inquiry was conducted before passing the order of termination, by considering the oral and documentary evidence elaborately, the 1st appellate authority has clearly held that there was no reason to terminate the services of petitioner, and accordingly, ordered reinstatement with continuity of service, attendant benefits and also back-wages.

Aggrieved by the same, the 2nd appeal was preferred by respondents 3 and 4. Even the 2nd appellate authority has confirmed the findings of 1st appellate authority and specifically recorded a finding that there is no infirmity in the findings recorded by the 1st appellate authority, but, only on the ground that relations are strained between respondents 3 and 4, and the petitioner, has modified the relief of reinstatement to that of treating the amount, which is already deposited, as compensation in lieu there of. At this stage, it is to be noted that the amount of Rs.37,582/-, is deposited as arrears of back-wages in compliance of the Statutory condition under Section 48(3) of the A.P. Shops and Establishments Act, 1988. As per the provision contained under Section 48(3) of the Act, no 2nd appeal can be maintained without depositing back-wages, in case, such back-wages are ordered to be paid by the 1st appellate authority.

In that view of the matter, the said deposit, which was made by respondents 3 and 4 towards arrears of back-wages, in compliance of condition as per the proviso, cannot be termed as compensation in lieu of reinstatement. Though some discretion is granted to the authorities under Section 48 of the Act, but there is no reason indicated in the order passed by the 2nd appellate authority for modifying the relief of reinstatement to that of awarding compensation. In normal course, when termination is declared as illegal, the direction reinstatement shall follow. Though some discretion is vested with the authorities to award compensation in lieu of reinstatement, but such discretion is to be used by recording a valid reason for award of compensation in lieu of reinstatement. Unless there is compelling and valid reason, as a rule, when termination is found illegal, reinstatement follows. A perusal of the order passed by the 2nd appellate authority indicates that though it has recorded a finding that there is no infirmity in the findings recorded by the 1st appellate authority, but only on the ground that the relations are strained between the parties, the order of reinstatement is modified to that of awarding compensation.