TMI Blog2013 (8) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural justice. She 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 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant have swear false affidavit. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d she was not gainfully employed after the termination of 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 det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re levelled against the Appellant i.e. Respondent No. 3 herein. Therefore, in my opinion, 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant had not taken up any other employment and argued that she could not have been deprived of full 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rules empower the management to suspend an employee with the prior approval of the competent authority. The 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time being in force or was otherwise illegal or improper, the Tribunal may set aside the order of the Management, partially or wholly, and direct the Management,- (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decides to suspend the employee, such employee shall, subject to the provisions of Sub-rule (5) stand suspended with effect from the date of such orders. (2) If the employee tenders resignation while under suspension 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 perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Education Officer or Deputy Director, as the case may be, who shall deduct an equal amount from the non-salary grant that may be due and payable or may become due and payable to the school. 35. Conditions of suspension. (1) In cases where the Management 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyer is ultra vires the relevant statutory provisions or the principles of natural justice, entitles the employee to claim full back wages. If the employer wants to deny back wages to the employee or contest his entitlement to get consequential benefits, then it is for him/her to specifically plead 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 op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his respect. By a suitable legislation, to wit, the U.P. Industrial Disputes Act, 1947, the State has endeavoured to secure work to the workmen. In breach of the statutory obligation the services were terminated and the termination is found to be invalid; the workmen though willing to do the assigned work 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be awarded must be reinstatement with full back wages. That relief must be awarded where no special impediment in the way of awarding the relief is clearly shown. True, occasional hardship may be caused to an employer but we must remember that, more often than not, comparatively far greater hardship is certain to be caused 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of this Court in Hindustan Tin Works (P) Ltd. be it noted that though broad guidelines, as regards payment of back wages, have been laid down by this Court but having regard to the peculiar facts of the matter, this Court directed payment of 75% back wages only. The issue as raised in the matter of back wages has been dealt with by the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. In Indian Railway Construction Company Ltd. v. Ajay Kumar (2003) 4 SCC 579, this Court was called upon to consider whether the services of the Respondent could be terminated by dispensing with the requirement of inquiry enshrined in Indian Railway Construction Company Ltd. (Conduct, Discipline and Appeal) Rules, 1981 read with Article 311(2) of the Constitution. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal gives a finding that the termination of service was in violation of Section 25-F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment i.e. whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short 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, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision Bench on the ground that the State of West Bengal was not the appropriate Government for making the reference. The special leave petition filed by the workman was allowed by this Court and the Division Bench of the High Court was asked to decide the letters patent appeal on merits. In the second round, the Division Bench dismissed the appeal. This Court referred to shift in the approach 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 conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was enrolled as an advocate on 12-12-2000 and continued to be so until the date of his reinstatement (15-6-2004), in our thoughtful consideration, he cannot be held to be entitled to full back wages. That the income received by the Respondent while pursuing legal profession has to be treated as income from gainful employment does not admit of any doubt. In North-East Karnataka RTC v. M. Nagangouda this Court 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, Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that whenever reinstatement is directed, continuity of service and consequential benefits should follow, as a matter of course. The disastrous effect of granting several promotions as a consequential benefit to a person who has not worked for 10 to 15 years and who does not have the benefit of necessary experience for discharging the higher duties and functions of promotional posts, is seldom visualised while granting consequential 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in cases where finding of misconduct is affirmed and only the punishment is interfered with (as contrasted from cases where termination is held to be illegal or void) is that there is no automatic reinstatement; and if reinstatement is directed, it is not automatically with retrospective effect from the date of termination. Therefore, where reinstatement is a consequence of imposition of a lesser punishment, neither back wages nor continuity 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 cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the employer to specifically plead and prove that the employee was gainfully employed and was getting the same or substantially similar emoluments. (iv) The cases in which the Labour Court/Industrial Tribunal exercises power Under Section 11-A of the Industrial Disputes Act, 1947 and finds that even though the enquiry held against the employee/workman is consistent with the rules of natural justice and/or certified standing orders, if any, but holds that the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any rhyme or reason and even though the Division Bench of the High Court declared that she will be deemed to have rejoined her duty on 14.3.2007 and entitled to consequential benefits, the management neither allowed her to join the duty nor paid wages. Rather, after making a show of holding inquiry, the management terminated her service vide order dated 15.6.2007. The Tribunal found that action of the management to be wholly arbitrary and vitiated due to violation of the rules 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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