Divisional Controller, G.S.R.T.C. Vs. Kadarbhai J. Suthar  Insc 126 (13 February 2007)
Dr. ARIJIT PASAYAT & S.H. KAPADIA
Dr. ARIJIT PASAYAT, J.
Challenge in this appeal is to the judgment rendered by a Division Bench of
the Gujarat High Court partly allowing the Letters Patent Appeal filed by the
Background facts in a nutshell are as follows:
The respondent (hereinafter referred to the 'workman') was employed with the
appellant-Gujarat State Road Transport Corporation (hereinafter referred to as
the 'Corporation') as a driver. While driving a corporation vehicle respondent
caused an accident as a result of which a child aged about 8 years died.
Criminal proceedings were initiated against the workman but he was acquitted. A
claim petition claiming compensation was filed under the Motor Vehicles Act,
1988 (in short 'M.V. Act') and the Corporation paid compensation of about
Rs.45,000/- to the claimants.
Departmental proceedings were initiated against the workman and he was found
guilty. His negligence of duty as well as charge of misconduct were held to
have been proved.
Accordingly, he was dismissed from service. A reference was made under
Section 10(1)(c) of the Industrial Disputes Act, 1947 (in short 'Act') to the
Labour Court, Ahmedabad. The Presiding Officer came to hold that since the
workman was acquitted in the criminal case, a contrary view in the departmental
proceedings was not permissible. Accordingly, reinstatement was directed
without back wages by order dated 11.5.1990. Immediately thereafter
respondent-workman was reinstated and the Award of the Labour Court was not
challenged by the Corporation. Subsequently, in November, 1991, the workman
filed writ petition before the High Court, questioning correctness of the refusal
of back wages. By order dated 21.9.2000 writ petition was allowed by a learned
Single Judge who directed payment of full back wages from the due date till the
date from which he was reinstated along with running interest @ 6% p.a.
Corporation filed Letters Patent Appeal before the High Court. By the impugned
judgment the Division Bench reduced back wages to 75% instead of full back
wages as directed by the learned Single Judge.
Learned counsel for the appellant submitted that the view taken by the Labour
Court about the effect of acquittal is clearly contrary to law. The Corporation
had to pay compensation of about Rs.45,000/- to the claimants. The respondent
was earlier also responsible for several acts of misconduct. In fact, there
were more than two dozen proceedings. The Labour Court while deciding on the
question of entitlement of back wages had taken note of this aspect.
Unfortunately, neither the learned Single Judge nor the Division Bench took
note of it. Further, conclusions that whenever reinstatement is directed,
payment of back wages is the natural corollary is contrary to law.
Learned counsel for the respondent on the other hand submitted that though
neither the learned Single Judge nor the Division Bench has referred to the
earlier acts of misconduct, that has no relevance. The accident occurred
because of inaction by the authorities to take note of the intimation by the
respondent-workman about the defect in the several vital parts of the vehicle.
The orders of both the learned Single Judge and the Division Bench suffer
from several infirmities. First and foremost, mere acquittal in a criminal case
does not have the effect of nullifying the decision taken in the departmental
proceedings. They operate in different areas of considerations.
This position was recently highlighted by a three-Judge Bench of this Court
in Noida Entrepreneurs' Association v. Noida and Ors. (W.P. (C) No.150 of 1997
with W.P. (C) 529 of 1998 decided on 15.1.2007).
When fixing the back wages several factors need to be noted. It is a well
settled position in law that on the finding that termination was not lawful
there is no automatic entitlement to full back wages. In Hindustan Tin Works
Ltd. v. The Employee of Hindustan Tin Works Pvt. Ltd. and Ors. (1979 (2) SCC
80), a three three-judge Bench of this Court laid down:
"In the very nature of things there cannot be a straight-jacket formula
for awarding relief of back wages. All relevant considerations will enter the
verdict. More or less, it would be a motion addressed to the discretion of the
Tribunal. Full back wages would be the normal rule and the party objecting to
it must establish the circumstances necessitating departure. At that stage the
Tribunal will exercise its discretion keeping in view all the relevant
circumstances. But the discretion must be exercised in a judicial and judicious
manner. The reason for exercising discretion must be cogent and convincing and
must appear on the face of the record. When it is said that something is to be
done within the discretion of the authority, that something is to be done
according to the rules of reason and justice, according to law and not humour.
It is not to be arbitrary, vague and fanciful but legal and regular (See
Susannah Sharp v.
Wakefield,  AC 173, 179)".
In P.G.I. of Medical Education and Research, Chandigarh v. Raj Kumar (2001
 SCC 54), 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
Again at paragraph 12, this Court observed:
"Payment of back wages having a discretionary element involvement 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."
[See: Hindustan Motors Ltd. v. Tapan Kumar Bhattacharya and Anr. (2002 AIR
Additionally, the Labour Court had taken note of the previous acts of
misconduct by the workman while denying the back wages. That aspect was
completely lost sight of by the learned Single Judge as well as the Division
Bench. Merely because the Corporation did not challenge the order of
reinstatement that does not lead to a conclusion that it accepted any illegality
in the departmental proceedings. As a matter of fact, the Labour Court clearly
noted that the workman admitted the legality and propriety of the inquiry held
In the aforesaid circumstances, the inevitable conclusion is that the
direction of payment of back wages cannot be sustained. The orders passed by
the learned Single Judge as partly modified by the Division Bench stand set
aside to the aforesaid extent.
The appeal is allowed without any order as to costs.