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2007 Supreme(SC) 168
2007(2) Supreme 298
SUPREME COURT OF INDIA
(From Gujarat High Court)
Dr. Arijit Pasayat and S.H. Kapadia, JJ.
Divisional Controller, G.S.R.T.C.—Appellant
versus
Kadarbhai J. Suthar—Respondent
Civil Appeal No. 3212 of 2002
Decided on 13-2-2007
Counsel for the Parties :
For the Appellant : Ramesh P. Bhatt, Sr. Advocate, Mrs. Mahima C. Shroff, Mukesh Kumar and Chirag M. Shroff, Advocates.
For the Respondent : A. Rasheed Qureshi and Mohd. Irshad Hanif, Advocates.
IMPORTANT POINT
On the finding the termination was not lawful there is no automatic entitlement to full back wages as for fixing back wages several factors need to be noted.
Headnote:LABOUR LAW—Dismissal from service—Respondent workman employed as driver caused accident wherein an 8 years old child was killed—In departmental proceedings he was found guilty—Labour Court held that since workman was acquitted in criminal case, contrary view in departmental proceedings was not permissible—Court directed reinstatement but without back wages—Appellant did not challenge the order and respondent was reinstated—Respondent filed writ questioning award denying back wages—High Court allowed writ and directed full back wages with interest—Division Bench in appeal reduced back wages to 75%—Appeal—Mere acquittal in criminal case would not have effect of nullifying the decision taken in departmental proceedings—On the finding that termination was not lawful there was no automatic entitlement to full back wages—For fixing back wages several factors needed to be considered—Labour Court had taken note of previous acts of misconduct by workman while denying back wages—High Court failed to take note of that—Impugned order was liable to be set aside.
Held : 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.(Paras 5 & 6)
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 against him.(Para 8)
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.(Para 9)
JUDGMENT
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 present appellant.
2. 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.
3. 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.
4. 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.
5. 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).
6. 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 Pvt. Ltd. v. The Employee of Hindustan Tin Works Pvt. Ltd. and Ors. (1979 (2) SCC 80), a three
