JUDGMENT

S.B. SINHA, J :

1. Leave granted.

2. Principles governing grant of back wages is the question involved in this appeal which arises out of a judgment and order dated 17.07.2006 passed by the High Court of Judicature at Allahabad in Civil Misc. Writ Petition No. 22003 of 1999.

3. Appellant used to run a cotton mill. It was taken over in 1976 by National Textile Corporation which was established by the Central Government for augmenting the textile sector and to ensure and facilitate the production and distribution of cloth at affordable price.

4. Respondent Nos. 2, 7, 5, 3, 4 and 6 were engaged as trainee investigators on the basis of the applications submitted to the General Manager of the Mills on 29.07.1980, 10.03.1981, 21.11.1980, 02.01.1981, 10.01.1981 and 30.03.1981, respectively. Appointments were made on monthly stipends. One of the terms and conditions in the letter of engagement as a trainee investigator reads, thus:

"4. That the management shall have no obligation whatsoever to provide you any job in these Mills after completion of the said period of training."

5. Although no assurance was given to them that on completion of the training they would be appointed as trainee investigator, they were appointed as clerks. Allegedly, at that point of time, only the posts of clerks were vacant. Some of the terms of their appointments read as under:

"1. That you shall be paid a basic salary of Rs. 120/- per month in the scale of Rs. 120-8-160-10- 200-EB-13-265-16-345-EB-20-445-24-517. In addition you will be paid other allowances as applicable to other temporary clerks of the Mills.

2. That your appointment is for a period of six months on account of temporary exigency of work and after completion of which your service will stand automatically terminated. However, we reserve the right to terminate your service ever earlier at any time without assigning any reason and without any notice or payment in lieu thereof.

3. That you will have to work against absenteeism/ leave etc. amongst clerks in any of the departments/ sections in the General Office as well as in the Mills.

4. That your other terms and conditions of service will be governed by standing order applicable for clerks in this Mill.

5. *** *** If the above offer is acceptable to you, please sign copy of this letter in token of your acceptance and report for joining immediately." They were offered the scale of pay applicable to a clerk. They accepted the said post without any protest or demur. They were at a later date made permanent clerks also. Yet again, they accepted the said status without any demur whatsoever. The Company, however, became sick in October, 1991. A reference was made to the Board for Industrial and Financial Reconstruction (BIFR) whereupon a proceeding was initiated. Eventually, the Mill was closed, upon obtaining an approval from the Central Government in terms of Section 25O of the Industrial Disputes Act, 1947. Only after closure of the said Mills sometime in October, 1991, the concerned respondents raised a demand through a Union known as Kapda Mills Karamchari Sangh on 1.02.1992 seeking for the post of investigators and that too from the date of their initial appointment with arrears and difference in pay. Pursuant to and in furtherance of the said demand, the State of Uttar Pradesh, in exercise of its power conferred upon it under Section 4(k) of the U.P. Industrial Disputes Act, 1947 made a reference for adjudication thereof before the Tribunal by a notification dated 2.04.1993, which reads as under:

"Whether giving the designation of clerk and pay scale to its 6 workmen mentioned in enclosed Schedule, after imparting training of Investigator to them, is appropriate and legal? If not then what kind of relief, the concerned employees are entitled to get? From which date with any other detail?"

6. Before the Tribunal, the respondents sought for a direction for appointment in the post of investigators from the date of their init