M/S. Nicks (India) Tools
Vs. Ram Surat & ANR  Insc 481 (25 August 2004)
N. Santosh Hegde & S.B.
Sinha Santosh Hegde, J.
The Government of Punjab referred the following industrial dispute between
the workman and management of the appellant herein for adjudication under
Section 10 (1) (c) of the Industrial
Disputes Act, 1947 to adjudication by the Labour Court, Ludhiana in
1145/1993 :- (1) Whether termination of Services of Shri Ram Surat, workman,
is justified and in order? If not, to what relief/exact amount of compensation
The above dispute arose on a complaint made by the 1st respondent workman
that he was working under the appellant management for a period of 12 years and
his services were terminated on 12th May, 1993 without any notice, charge-sheet
or inquiry. He also contended that he was drawing Rs. 2,750/- per month as his
wages at the time of the termination of his services. He prayed for his reinstatement
with full back wages and continuity of service.
The appellant management in the said reference filed a written statement
contending that there was no relationship of employee and employer between the
1st respondent herein and the appellant from 12th of May, 1993. Since on the
said date the workman voluntarily discontinued his services with the appellant
after receiving all his dues in full and final settlement. Certain other
preliminary objections, like maintainability of the reference on the ground
that the 1st respondent was holding a supervisory post hence an industrial
dispute was not maintainable, were also raised. The workman filed his rejoinder
to the said written statement Based on the pleadings before it the Labour Court
framed the following issues :- 1) Whether relationship of master and servant
existed between the parties on the alleged date of termination ? 2) Whether the
reference is not maintainable, as alleged ? 3) Whether the claimant is not a
'Workman as defined under the Industrial Act? 4) Whether termination of the
services of the workman is justified and in order? The Labour Court by its
award dated 18th of May, 1998 held in regard to the first question that there
existed a relationship of master and servant between the parties at the time of
termination of services of the workman.
In regard to issues 2 and 3, the Labour Court held that the contention of
the appellant management that the respondent No. 1 was not a workman as defined
under the Industrial
Disputes Act cannot be sustained, hence the reference was valid.
In regard to issue No. 4 the Labour Court held that on the relevant date 1st
respondent being in the service of the appellant management his services were
wrongfully terminated. Hence, he was entitled for re- instatement, however,
with regard to back wages it following a judgment of the Punjab & Haryana
High Court reported in 1997 (2) LLN Page 299, confined the same to 25% of the
wages from the time his services were terminated till he was reinstated.
Being aggrieved by the said order of the Labour Court both the management as
well as the appellant preferred writ petitions before the High Court of Punjab
& Haryana at Chandigarh. So far as the management is concerned, it
questioned the finding of the Labour Court that the services of the respondent
workman were illegally terminated and the consequential awarding of back wages
at the rate of 25% of the wages.
While the workman being aggrieved by the restricted back wages awarded by
the Labour Court challenged that part of the award claiming the entire wages
due to him for his wrongful termination of service since he was unemployed
during the said period.
The High Court by the impugned judgment while dismissing the petition of the
management agreed with the contention of the respondent workman and allowed his
petition directing the payment of full back wages because of which the
appellant has now become liable to not only to reinstate the respondent workman
but also to pay the full back wages as claimed by the workman in his claim
Shri U.U. Lalit, learned senior counsel appearing for the appellant in these
appeals contended that the management had produced sufficient evidence to
establish the fact that the workman had voluntarily left the services of the
management after receiving his dues as a full and final settlement which can be
seen from the receipt executed by the workman dated 22nd of April, 1993 marked
by the Labour Court as M/X (M3). He also submitted that the said factum of his
voluntary retirement and his receipt of dues in full and final settlement is
established beyond reasonable doubt from the oral evidence led by the
management, as also by documentary evidence produced by way of the payment
receipt as well as the bonus register Ex. M/X.
He pointed out from the judgment of the Labour Court that the only ground on
which the documentary evidence, especially, that of the receipt M/X (M3) was
rejected by the courts below was on the ground that the same was not confronted
to the workman when he was in the witness box, therefore, they held since the
workman did not have an opportunity of either accepting or denying the contents
and the signature of the said document, the courts below rejected the said
evidence adduced on behalf of the appellant which according to the learned
counsel is erroneous because strict rules of evidence are not applicable to a
proceedings before the Labour Court. He endeavoured to submit that the workman
had sufficient opportunity of cross examining the management witness and could
have established the fact that the receipt relied upon by the appellant was not
executed by him. He not having done the same when the management witness was in
the witness box, the courts below should not have drawn an adverse inference.
Alternatively, he contended, at any rate the High Court was not justified in
enhancing the back wages from 25% to 100% when the management has established
that the workman was gainfully employed during the period when he was not in
the service of the appellant.
Learned counsel appearing for the respondent understandably supported the
finding of the Labour Court in regard to the evidentiary value of the receipt
produced by the management. He further contended that the High Court was
justified in enhancing the back wages to 100%, since the material produced by
the appellant for the first time in the writ court showing that the respondent
workman was gainfully employed could not have been accepted in evidence or
relied upon for denying the workman his legitimate right to claim full back
wages. He also submitted the said evidence was not reliable and in fact the
workman was not gainfully employed.
Having heard the learned counsel for the parties and having perused the
records we notice that the factum that the workman was in the service of the
management till 22nd of April, 1993 is not disputed .
While, the workman contends that his services from that day were wrongfully
terminated, the appellant contends that the workman voluntarily left the
services of the appellant having taken all his dues.
Since the respondent workman was in the service of the appellant management
at least up to the 22nd of the April, 1993, the burden of proving that he
voluntarily left the services then falls on appellant management. This the
appellant contends is satisfied by the oral evidence adduced by the management
and the documentary evidence produced in the form of the receipt M/X (M3)
purportedly executed by the workman and the entries in the bonus register M/X.
The Labour Court considering the said document, which is said to be a receipt
executed by the respondent, noticed the fact that the original of this document
was never produced by the appellant and what was produced was only a photocopy.
Even this photocopy was not confronted to the workman when he was in the
witness box and the signature found in the said photocopy as also in the
photocopy of the bonus register shows that though two documents came into
existence simultaneously the ink with which the respondent workman is supposed
to have signed the two documents was different. In such circumstances, it held
that it was not safe to rely upon the said document to accept the case of the
The High Court in this regard held though it may not be necessary to apply
the strict rule of evidence in regard to production and proof of a document
still the workman ought to have been provided with an opportunity to explain
his version as to the alleged receipt having been executed by him and such
opportunity not having been offered by confronting the document to the workman
the appellant in effect has violated the principles of natural justice and
hence by its act of default the workman's case can not be prejudiced.
However, as stated above Shri U.U. Lalit, learned senior counsel contended
that the workman was aware of the contents of the document because he had the
photocopy of the document served on him, based on which he had cross examined
the management witness. He further contended that since the workman had been
unable to establish through his cross examination of the management witness
that the receipt in question was not executed by him, it should be held that
the document in question stands proved and the case of the management as to the
voluntarily abandonment of service by the respondent after taking all his dues
is also established.
We are unable to accept this argument because if we look into the overall
proceedings before the Labour Court, we notice that though the management did
take the stand that the workman had left the services of the appellant
management voluntarily by receiving his total dues in full and final settlement
it did not, at the stage of filing of its written statement, contend that the
workman has executed a receipt which is now sought to be produced as Ex. M/X
(M3). This coupled with the fact that the said document was not confronted to
the respondent workman, in our opinion is sufficient to hold that this document
cannot be relied upon for establishing the fact that the management has proved
its case that the workman had voluntarily left his services. The Trial Court
has further buttressed this finding by noticing the difference in the ink in
the receipt as well as the bonus register as also the absence of revenue stamp
in the receipt from which it drew an inference that the receipt in question may
have been signed previously but was filled up subsequently.
This finding of the Labour Court has been accepted by the High Court and
this being a finding of fact and which cannot be said to be perverse, we are
not inclined to interfere with the same in this appeal.
This leaves us to consider the next limb of the argument of Shri U.U. Lalit,
learned senior counsel who contended that the Labour Court having come to the
conclusion that in Ludhiana where the appellant's factory is situated, there
are large number of other industries hence it was always possible for the
respondent workman to have obtained a gainful employment on that basis, was
justified in confining the back wages to only 25% of the full back wages, and
the High Court in this regard erred in reversing that finding by not taking
into consideration the additional material produced by the management in regard
to this aspect of the case, i.e., of the respondent being gainfully employed
during the relevant period. He also relied on two judgments of this Court in
the case of P.G.I. of Medical Education & Research, Chandigarh vs. Raj
Kumar 2001 (2) SCC 54 and M.P. State Electricity Board vs. Jarina Bee (SMT)
2003 (6) SCC 141 .
In this regard, we notice that the Labour Court awarded only 25% of the back
wages primarily relying on a judgment of the Punjab & Haryana High Court in
the case of M.K. Kholi vs. Afadeal Chemicals, Faridabad and Anr. 1997 (2) LLN
299, the High Court in its judgment has noticed the fact that the said judgment
was reversed by a Division Bench of the very same court in a subsequent
judgment delivered in civil writ petition No. 8665 of 2000, in the matter of
State of Haryana vs. Ram Kumar and Anr., hence it found that the reliance
placed by the Labour Court on the above said judgment of M.K. Kholi vs. Afadeal
Chemicals, Faridabad and Anr. was not sustainable.
Reliance placed by the learned counsel for the appellant in the case of P.G.I.
of Medical Education & Research, Chandigarh (supra), in our opinion, does
not take the case of the appellant any further. In that case, this Court held
that the Labour Court being the final court of facts the superior courts do not
normally interfere with such finding of facts unless the said finding of fact
is perverse or erroneous or not in accordance with law. In the instant case, we
have already noticed the basic ground on which the Labour Court reduced the
back wages was based on a judgment of the High Court of Punjab & Haryana
which, as further noticed by us, was overruled by a subsequent judgment of a
Division Bench. Therefore, the very foundation of the conclusion of the Labour
Court having been destroyed, the appellant could not derive any support from
the above cited judgments of that Court. Similarly, in the case of M.P. State
Electricity Board (supra), this Court only said that it is not an inevitable
conclusion that every time a reinstatement is ordered, full back wages was the
only consequence. This Court, in our opinion, did not preclude that even in
cases where full back wages are legally due, the superior courts are precluded
from doing so merely because the Labour Court has on an erroneous ground has
reduced such back wages. In the instant case, we have noticed that the trial
court apart from generally observing that in Ludhiana, there must have been job
opportunities available, on facts it did not rely upon any particular material
to hold either such job was in fact available to the respondent and he refused
to accept the same or he was otherwise gainfully employed during the period he
was kept out of work.
On the contrary, it is for the first time before the writ court the
appellant tried to produce additional evidence which was rightly not considered
by the High Court because the same was not brought on record in a manner known
to law. Be that as it may, in the instant case we are satisfied that the High
Court was justified in coming to the conclusion that the appellant is entitled
to full back wages.
For the reasons stated above these appeals fail and the same are dismissed.