M.P. State Electricity Board vs Smt. Jarina Bee

The primal issue involved in this appeal is whether

award of full back wages is the natural consequence when an

order of dismissal is set aside. The High Court of Madhya

Pradesh at Jabalpur held it to be so, and that is why the

Madhya Pradesh State Electricity Board (hereinafter referred

to as 'the Board') filed this appeal.

Factual background which is almost undisputed is as

follows :-

One Habib Khan (hereinafter referred to as the

'employee') husband of respondent Smt. Jarina Bee, was

employed as a Line Attendant, Grade-II in the Board. On the

allegation that he was responsible for theft of large

quantity of aluminum wire, criminal case was lodged and

departmental proceedings were initiated. In the departmental

inquiry he was found guilty and was removed from service on

20.1.1996. Such removal was challenged by him before the

Labour Court-I, Bhopal. The said Court held that since

departmental inquiry was not conducted in accordance with

the principles of natural justice, the dismissal was bad.

Direction was given for reinstatement of employee by

granting opportunity to the Board to prove his misconduct.

While directing reinstatement, it was held that he was not

entitled to any back wages. Both the Board and the employee

preferred appeals before the Industrial Court, Bench at

Bhopal. By order dated 11.2.2002, the Industrial Court

allowed the appeal filed by the employee, while dismissing

the one filed by the Board. It was held that when an order

of dismissal was set aside, entitlement for full back wages

was automatic.

During the pendency of the matter before the Industrial

Court the employee breathed his last. Therefore, the

direction for re-instatement has become infructuous.

The Board challenged the order of the Industrial Court

before the High Court which by the impugned judgment dated

8th October 2002 held that when a charge was not

established at all and the order of removal is set aside

award of back wages was the natural consequence.

Shri S.K. Agnihotri, learned counsel appearing for the

Board, submitted that the Industrial Court as well as the

High Court fell in grave error by holding that the award of

back wages was the natural consequence in all cases where

the order of removal was set aside. Mr. B.S. Banthia,

learned counsel appearing for the respondent (widow of the

employee) submitted that the High Court was justified in its

conclusion considering the fact that the order of dismissal

was without sanctity in law. Alternatively, it was

submitted that full back wages are to be paid, considering

the nature of the allegations and findings recorded by the

Labour Court, Industrial Court and the High Court and the

directions cannot be faulted on the facts of the case.

In P.G.I. of Medical Education and Research, Chandigarh

v. Raj Kumar (JT 2001(1) SC 336), this Court found fault

with the High Court in setting aside the award of the Labour

Court which restricted the back wages to 60% and directing

payment of full back wages. It was observed thus:

"The labour court being the final

court of facts came to a conclusion

that payment of 60% wages would comply

with the requirement of law. The

finding of perversity or being

erroneous or not in accordance with

law shall have to be recorded with

reasons in order to assail the finding

of the Tribunal or the labour Court.

It is not for the High Court to go

into the factual aspects of the matter

and there is an existing limitation on

the High Court to that effect."

Again at paragraph 12, this Court observed:

"Payment of back wages having a

discretionary element involved in it

has to be dealt with, in the facts and

circumstances of each case and no

straight-jacket formula can be

evolved, though, however, there is

statutory sanction to direct payment

of back wages in its entirety."

The position was reiterated in Hindustan Motors Ltd.

v. Tapan Kumar Bhattacharya and Another (2002 AIR SCW 3008)

and Indian Railway Construction Co. Ltd. v. Ajay Kumar (JT

2003(2) SC 295.

Applying the legal principles, the inevitable

conclusion is that the High Court committed an error in

holding that the award of full back wages was the natural

consequence.

That brings us to the alternate submission of the

learned counsel for the respondent. Considering the

background of the case and the fact that the order of

dismissal was found to be defective as the principles of

natural justice were not properly followed, and an

opportunity was granted to the Board to proceed in

accordance with law, and the fact that the employee has

expired in the meantime, we feel the payment of Rs.85,000/-

towards back wages would meet the ends of justice. The

payment is to be made within a period of 8 weeks from today.

If any amount has been paid pursuant to the directions given

by the Industrial Court and/or the High Court, the same

shall be adjusted from the aforesaid sum. If any payment

has been made in excess of the amount, the Board shall be

entitled to refund thereof.

The appeal is allowed to the extent indicated above.

Costs made easy.