Judicature For Rajasthan High Court · 2011

Judgment

9.5.2011 HON'BLE MR. JUSTICE A.M. SAPRE HON'BLE MRS.JUSTICE NISHA GUPTA Mr. Manoj Bhandari, for the appellant. Mr. Jagdish Vyas, for the respondents. BY THE COURT : (PER HON'BLE SAPRE,J.) This is an intra court appeal filed by respondent No.1 of W.P. No.1471/2000 under Rule 134 of the Rajasthan High Court Rules read with Article 225 of the Constitution of India, against an order dated 20.11.2008, whereby the learned Single Judge allowed the writ petition of the respondent herein in part and in consequence enhanced the compensation amount of Rs.32,000/- awarded by Labour Court to Rs.1,45,000/- in lieu of his right to claim reinstatement and back-wages in services.

2. So the question that arises for consideration in this writ appeal is whether the Single Judge was justified in enhancing the compensation amount of Rs.32,000/- to that of Rs.1,45,000/- for being paid to respondent (workman) in lieu of his right to claim reinstatement/back-wages?

Facts of the case are these.

3. In exercise of powers conferred by Section 10 of the Industrial Disputes Act, the State Government made the following reference to the Labour Court, Udaipur in relation to the dispute of 2 respondent's termination from the services of appellant:- “क(cid:2)(cid:3) शम(cid:7)क श(cid:9) (cid:7)दन ग(cid:13)प(cid:3)ल व(cid:2)(cid:3)स, ह(cid:19)ड ट(cid:3)ई(cid:7) क(cid:23)पर क(cid:13) (cid:7)(cid:19)न(cid:19)ज(cid:26)(cid:27)ग ड(cid:3)(cid:2)र(cid:19)कटर परफ(cid:19) कट थ(cid:19)ड म(cid:7)लस मल० अम"(cid:19)र# उद(cid:2)प%र द(cid:3)र(cid:3) स(cid:19)व(cid:3) (cid:7)( व(cid:3)पस नह#(cid:27) मल(cid:2)(cid:3) (cid:26)(cid:3)न(cid:3) उच*त एव(cid:27) व-द ह-?”

4. On receipt of the reference, the Labour Court called upon the parties to file their statement of claims. The appellant (employer) filed his statement and so also the respondent (employee). He in the statement contended that he had worked continuously for more than 240 days in one calender year; and since no inquiry was held prior to his termination nor any retrenchment compensation was paid as provided under the Industrial Disputes Act to him hence, a case of illegal retrenchment was made out. It was, thus, contended that the workman continued to remain in the employment of the appellant and entitled to claim all the consequential benefits. The appellant inter-alia took the stand in their reply that firstly the workman had not completed 240 days of service in one calender year and hence, in view of this factual scenario emerging from the record, the provisions of Industrial Disputes Act would have no application to this case nor the workman was entitled to claim the relief of reinstatement in service. Secondly the respondent was all along on unauthorised leave for most of the time etc. and hence not entitled to claim any equitable relief of reinstatement and lastly the respondent was working for gains in some other organisations during the period in question and hence not entitled to claim any relief i.e. either reinstatement or back-wages.

5. The parties adduced evidence in support of their respective claim. By the award dated 24.8.1999, the Labour Court, Udaipur answered the reference i.e. Case No.182/90 and held that the termination of the services of the workman by the employer was illegal and directed payment of compensation of Rs.32,000/- to the workman in lieu of his right to claim reinstatement because in the meantime, he had attained the age of superannuation. It was held that workman had worked for more than 240 days 3 continuously in one calender year in service and since no inquiry into any charges was held prior to his termination, he was entitled to claim a relief of reinstatement against the appellant. It was also held that the workman was entitled to be paid retrenchment compensation as per the provisions of Section 25 of the I.D. Act prior to his termination from the services and since the same was not paid nor was he given any prior notice as provided therein, it was a clear case of illegal retrenchment. In this way, the Labour Court, while answering the reference in the respondent's (workman/employee) favour, directed payment of lump sum compensation of Rs.32,000/- because as observed supra, the respondent in the meantime had attained the age of superannuation. It is against this award, the respondent (employee/workman) felt aggrieved and filed the writ petition under Article 226/227 of Constitution of India out of which this appeal arises. The learned Single Judge by impugned order partly allowed the writ petition and held that this is fit case for interference in the award of Labour Court in so far as quantum of compensation is concerned and in place of direction to pay Rs.32,000/- to respondent (employee) was concerned, it enhanced to Rs.1,45,000/-. This is what was held by learned Single Judge: “I am having no doubt that the discretion exercised by the Labour Court is not required to be interfered by this Court while exercising powers under Articles 226 and 227 of the Constitution of India, if the same is based on adequate appreciation of the facts available on record and the discretion exercised is just and proper. In the instant matter the Labour Court allowed compensation in a tune of Rs.32,000/- to the petitioner workman by treating a loss of Rs.4000/- per annum due to alternative employment. As a matter of fact in entire period in which the workman employment, he was in alternative employment for a very limited period i.e. from 9.6.1987 to 21.7.1987 with Sajjan Chemicals and from 18.9.1987 remained out 4 Court in a to 3.10.1987 with Bajaj Tempo. Merely on the count that the petitioner remained in employment for the period referred above, it cannot be held that the workman suffered loss of Rs.4000/- only per annum. As a matter of fact the petitioner received wages only for a period of about three months by availing alternative employment and for rest of the period he earned nothing. The Labour Court, therefore, erroneously treated the workman in alternative employment for the entire period he faced termination from service. The finding given by the Labour Court regarding alternative employment during the entire period commencing from 1.5.1987 to 6.6.1994 is contrary to the facts available on record. The determined Labour compensation tune of Rs.32,000/- on basis of the fact relating to alternative employment, whereas by alternative employment the petitioner earned wages for an approximate amount of Rs.3500/-. The Labour Court, therefore, certainly erred by determining yearly loss to the workman in a tune of Rs.4000/- only. The termination of the petitioner was held bad by the Labour Court, thus, he is entitled for complete wages for the period he remained out employment, except for the period in which he availed alternative employment. Accordingly, this petition for writ is allowed. The award impugned dated 24.8.1999 is modified to the extent it relates to the grant of relief. The reference made by the appropriate government vide its notification dated 13.4.1990 is answered in the terms that the termination of the workman Madan Gopal Vyas w.e.f. 1.5.1987 was not legal and proper, hence the same is quashed. Workman Shri Madan Gopal Vyas is declared entitled for getting the wages for the period commencing from 1.5.1987 to 6.6.1994, excluding the wages he earned by availing alternative 5 employment during the period aforesaid. The amount of wages due to the workman is determined as a sum of Rs.1,45,000/- only.”

6. It is against this order, the employer has felt aggrieved and filed this appeal.

7. Heard Shri Manoj Bhandari, learned counsel for the appellant and Shri Jagdish Vyas, learned counsel for the respondent.

8. Submission of learned counsel for the appellant was mainly one. According to him, the Learned Single Judge erred in enhancing the amount of compensation amount of Rs.32,000/- awarded to the respondent (employee) by the Labour Court to that of Rs.1,45.000/-. Learned Counsel urged that Labour Court was justified in awarding reasonable compensation of Rs.32,000/- as it was commensurate with the work done by the respondent with the appellant. It was urged that respondent had been working for a long period with other organisation after he severed his relations with the appellant and hence the amount that he earned should have been adjusted or/and taken into consideration. He relied upon the decisions reported in 2005(6) SCC 224 and 2006 (7) SCC 379.

9. In reply learned counsel contended that the order passed by the Writ Court is based on sound reasoning and takes into consideration all relevant aspect including even the services rendered by the respondent and hence no case is made out for interference in the impugned order.

10. Having heard the learned counsel for the parties and on perusal of the record of the case, we are inclined to dismiss the appeal as in our opinion; no case is made out for any interference in the order impugned herein.

11. In our view the Writ Wourt has given cogent reasons for award of compensation of Rs.1,45.000/- in place of Rs.32,000/- awarded by the Labour Court.

12. This is not a case of award of back wages to the employee after directing his reinstatement in service but is a case of award of lump sum compensation to the employee/workman in 6 lieu of his right to claim reinstatement though upheld but due to workman attaining the age of superannuation, was held not possible to implement.

12. In our opinion, the consideration for grant of compensation in place of relief of reinstatement cannot be kept at par solely with the consideration usually applied for grant of back wages. In the case of former, several considerations are required to be taken into account for its determination such as his loss of salary including its rise which he would have otherwise got from time to time till he had attained the age of superannuation, his right to get promotions during his remaining tenure and consequential rise in his salary on account of award of promotions, further loss of several statutory/non-statutory perks/emoluments which are given to every employee while in service etc. These are the direct losses a workman suffers on account of award of compensation to him in lieu of his giving up the claim of reinstatement. The reason is that once the compensation is granted, the concern workman severs all his relations with his employer thereby gives up his claim on all such benefits that he would have otherwise got had he remained in service consequent upon the implementation of orders of reinstatement passed by Courts. However, in the case of later i.e. awarding of the back wages, the employee/workman secure the reinstatement along with the relief of back wages and hence the courts have held that it is necessary to also take into consideration whether he was working for gains during the period when he was out of employment and if so the amount earned to that extent has to be adjusted while awarding back wages along with the relief of reinstatement.

13. In our opinion the writ court in this case, while determining the amount of compensation of Rs.1,45,000/- took into consideration all these factors that were not taken into consideration by the Labour Court. In fact, the Writ Court also took into consideration the amount earned by the respondent while he was out of employment as would be clear from perusal of impugned order. 7

14. In the light of foregoing discussion, it cannot be held that Writ Court committed any jurisdictional error while enhancing the amount of compensation from Rs.32,000/- to Rs.1,45,000/- in lieu of respondent's claim of reinstatement and back wages or exercised arbitrary discretion under Article 226/227 of the Constitution of India.

15. So far as two decisions relied on by learned counsel for the appellant is concerned, they essentially relate to grant of back wages to the workman and hence are not applicable fully to the case in hand.

16. In view of foregoing discussion, we are unable to notice any kind of infirmity either factual or legal in the impugned order of the writ court. As a result, the appeal fails and is accordingly dismissed. [NISHA GUPTA], J. [A.M. SAPRE], J. /tarun/