The Nizamabad District Cooperative Central Bank Limited, Nizamabad, Represented by its General Manager v. N.Gangaram and another.

THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.3496 OF 2000 O R D E R The Nizamabad District Co-operative Central Bank Limited, Nizamabad, assails the Award dated 23.11.1999 passed by the Labour Court-II, Hyderabad, in I.D.No.139 of 1996. By the said Award, the Labour Court directed the reinstatement in service of the first respondent with continuity of service along with 25% of the back wages payable to him for the period that he remained out of service. This Court, by order dated 03.03.2000, granted interim suspension of the impugned Award subject to the condition that the petitioner-Bank pay a sum of Rs.1,000/- per month to the first respondent with effect from 06.02.2000 and continuing to pay the same until further orders. The case of the first respondent before the Labour Court was that he was appointed on 01.04.1992 as a Peon in a permanent vacancy in the petitioner-Bank’s branch office at Bodhan, Nizamabad District. He claimed to have worked in the said post for more than three years without any break in service. He asserted that his services were deliberately not regularized and he was shown as a daily wage employee so as to deny him the benefits and salary of a permanent employee. He further alleged that his services were orally terminated with effect from 01.02.1995 without following the due procedure. Aggrieved thereby, he along with others similarly situated filed W.P.No.5010 of 1995 before this Court. Eventually the said writ petition was dismissed leaving it open to the petitioners therein to approach the Labour Court. Thereupon, the first respondent filed the subject I.D. under Section 2-A(2) of the Industrial Act, 1947 (for brevity, ‘the Act of 1947’). The petitioner-Bank contested the matter before the Labour Court alleging that the first respondent was never employed in a permanent vacancy and that his services were utilized on a daily wage basis depending upon the exigencies of work in the branch office at Bodhan, Nizamabad District. Stating that the first respondent had not been appointed by following the due process of selection, the petitioner- Bank disputed his right to claim regularization of his services. Before the Labour Court, the first respondent examined himself as WW.1 but did not mark any documentary evidence. The petitioner- Bank examined its Deputy General Manager, Nizamabad Branch as MW.1 and adduced Ex.M.1 in evidence. MW.1, speaking on behalf of the petitioner-Bank, admitted before the Labour Court that the first respondent had worked on daily wage basis in the petitioner-Bank at Bodhan, Nizamabad District, from 1992 to 1995. He however denied that the first respondent worked continuously during the said period. He stated to the effect that the Bodhan Branch of the petitioner-Bank maintained a wages register and an attendance register for its employees and that employees, whether permanent or contingent, are required to sign in the attendance register. He categorically stated that there was record to show the payments made to the first respondent and the number of days worked by him during the period 1992-1995. Surprisingly, the petitioner-Bank failed to produce the aforestated registers which, according to it, indicated the nature and length of service rendered by the first respondent. That being so, the Labour Court rightly drew an adverse inference and observed that non-production of documents must be held against the petitioner-Bank. The finding of the Labour Court that the first respondent must therefore be presumed to have worked for more than 240 days during the year preceding his termination from service, as required under Section 25-B(2) of the Act of 1947, cannot be found fault with. Admittedly, the petitioner-Bank did not follow the procedure prescribed in Section 25-F of the Act of 1947 while removing the first respondent in service. Hence, the oral termination of the first respondent from service with effect from 01.02.1995 was illegal and invalid, as held rightly by the Labour Court. The direction of the Labour Court to the petitioner-Bank to reinstate the first respondent in service basing on the aforestated findings is therefore unassailable on facts and in law. However, there is no discussion whatsoever in the Award under challenge as to what prompted the Labour Court to direct payment of 25% of the back wages payable to the first respondent for the period that he remained out of service. Relevant to note, there is no averment by the first respondent in his claim petition that he remained unemployed after his services were terminated by the petitioner-Bank. Further, the Labour Court did not consider any of the factors relevant for the purpose of deciding entitlement to back wages. Trite to state, award of back wages is no longer an automatic or inevitable incident of a direction of reinstatement in service. As pointed out by the Supreme Court in J.K. SYNTHETICS LTD. V/s. K.P.AGRAWAL[1], even if the Court finds it necessary to award back wages the question as to whether the same should be awarded fully or partially, and if so, the percentage, would have to depend upon the facts and circumstances of the case. The Supreme Court was of the opinion that it would therefore be necessary for the employee to plead that he was not gainfully employed from the date of his termination. The least that is required of him, as per the Court, was that he should assert on oath that he was neither employed nor engaged in any gainful business or venture and that he did not have any income. Only then, the burden would shift to the employer. In the present case, the first respondent did not cross this threshold. In such circumstances, that portion of the Award of the Labour Court granting 25% of the back wages, without any reasons therefor forthcoming, is liable to be set aside and is so done. The writ petition is accordingly allowed in part to the extent indicated above and confirming the Award in all other respects. There shall be no order as to costs. -------------------------- SANJAY KUMAR,J 6th SEPTEMBER, 2010 PGS ( RR ) THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.3496 OF 2000 6TH SEPTEMBER, 2010 [1] (2007) 2 SCC 433