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2023 Supreme(Del) 1543

IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, J.
M/s Mirc Electronics Limited – Appellant
Versus
Shashank Gupta & Anr. – Respondents
W.P.(C) 279 of 2014, CM APPL. 43718 of 2021 and W.P.(C) 2410 of 2015, CM APPL. 43489 of 2021
Decided On : 04-05-2023

Advocates appeared:
Mr. Birendra Mishra, Advocate with Ms. Poonam Atey and Md. Ziyaul Rahman, Advocates, for the Petitioner in W.P.(C) 279 of 2014, CM APPL. 43718 of 2021 & for the Respondent in W.P.(C) 2410/2015, CM APPL. 43489/2021.
Mr. Atul Nagarajan, Mr. Rajat & Ms. K. Pallavi, Advocates with Respondent-1 in Person, for the Respondent in W.P.(C) 279 of 2014, CM APPL. 43718 of 2021 & for the Petitioner in W.P.(C) 2410/2015, CM APPL. 43489/2021.

Headnote:

LABOUR LAW - INDUSTRIAL DISPUTES ACT, 1947 - SECTION 2(S) - WORKMAN - SECTION 25F - TERMINATION OF SERVICES - SECTION 9A - REINSTATEMENT - SECTION 25N & 25O - CLOSURE OF UNIT - SECTION 25G - DISCRIMINATION - COMPENSATION IN LIEU OF REINSTATEMENT - PRINCIPLES.

Fact of the Case:

The employee was appointed as a Computer Operator in 1992 and was promoted to Senior Executive in the IT department. In 2008, his services were terminated due to cost-cutting measures and the closure of the Noida unit of the company. The employee challenged the termination before the Labour Court, which held that the termination was illegal and awarded him a compensation of Rs.5 lakh in lieu of reinstatement and back wages.

Finding of the Court:

The Labour Court erred in placing the onus of proving that the employee was a workman on the company instead of the employee. The Labour Court's finding that the employee was a workman was based on the evidence and was not perverse. The termination of the employee's services was illegal as the company did not follow the principles of natural justice and the provisions of Sections 25(G), 25N, and 25(O) of the Industrial Disputes Act, 1947. The Labour Court was justified in granting compensation to the employee in lieu of reinstatement, as reinstatement was not an appropriate remedy in this case.

Issues: 1. Whether the employee was a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947? 2. Whether the termination of the employee's services was justified? 3. Whether the Labour Court was justified in granting compensation to the employee in lieu of reinstatement?

Ratio Decidendi: 1. The onus of proving that an employee is a workman lies on the employee, not the employer. 2. The termination of an employee's services is illegal if the employer does not follow the principles of natural justice and the provisions of Sections 25(G), 25N, and 25(O) of the Industrial Disputes Act, 1947. 3. Compensation in lieu of reinstatement is an appropriate remedy when reinstatement is not an appropriate remedy.

Final Decision: Both writ petitions are dismissed.

JUDGMENT

V. Kameswar Rao, J. By this common order, I shall decide the titled writ petitions, as they both arise from the same factual matrix assailing the order/award dated August 03, 2013 (`impugned order', hereinafter) passed by the Labour Court, Karkardooma, Delhi in LC No. 84/2010.

2. For the sake of convenience and brevity, the petitioner company in W.P.(C) 279/2014, who is the respondent in W.P.(C) 2410/2015 shall be referred to as `the company' hereinafter. Similarly, the respondent in W.P.(C) 279/2014, who is the petitioner in W.P.(C) 2410/2015 shall be referred to as the `employee' hereinafter. The company in its petition has challenged the impugned order whereby the Labour Court has awarded a sum of Rs.5 lakh to the employee as lump sum compensation in lieu of reinstatement and back wages. The employee in his petition has prayed for, inter alia, reinstatement with continuity of service, full back wages and all consequential benefits along with interest on withheld payments.

3. It is an admitted fact that the employee was initially appointed as a Computer Operator with effect from April 20, 1992 to perform typing and clerical services in corporate taxation department of Onida group of companies, manufacturing consumer electronic goods on the rolls of group company Onida Savak Limited. Thereafter on April 01, 2005, the said company merged with its parent company, i.e., MIRC Electronics Limited, and he become employee of the company with continuity of service and all benefits of the previous employment with other group companies.

4. It is the case of the company that on April 30, 2008, the services of the employee were terminated as a measure of cost cutting, due to prevalent recession, and for the reason that his services were no longer required as a result of shifting of the electronics unit of the company from Noida to Roorkee. While terminating the services of the employee, he was offered the salary of one month in lieu of notice as per the terms and conditions of his employment. However, the employee refused to accept the notice, which was then sent to him by registered post. Thereafter, he sought clarification regarding the same vide letter dated August 29, 2008, in reply whereto, the company vide letter dated September 23, 3008 informed him that his services have already been terminated and he was requested to obtain full and final settlement. As the employee failed to comply with the said request, the company sent the cheques of dues/payables towards the full and final settlement as well as gratuity, which he duly received, en-cashed and utilised.

5. Thereafter, the employee through legal notice dated November 28, 2008 disputed the termination, and further on March 24, 2009 filed a statement of claim before the Labour Court bearing DID No. 61/2009. Though the company had filed reply to the statement of claim, to avoid litigation, the employee was offered employment at Thane site of the company. However, the employee refused the said offer. On August 8, 2013, the Labour Court passed the impugned award.

6. Mr. Birendra Kumar Mishra, learned counsel appearing for the company has submitted that the Labour Court erred in passing the impugned award, insofar as the onus to prove that the employee was, in fact a workman was wrongly placed upon the management, which is contrary to the law laid down by the Supreme Court in the case of Workmen of Nilgiri Co-op Marketing Society v. State of Tamil Nadu, (2004) 3 SCC 514 wherein it was held that the onus to prove that the claimant is a workman is on the claimant and not on the management. He has also placed reliance on the judgments in Kirloskar Brothers 6) Ltd. v. The Presiding Officer, ILR 1976 (1) Delhi 565; Burmah Shell Oil Storage v. Burmah Shell Management Staff, AIR 1971 SC 922, and HR Adyanthaya v. Sandoz (India) Ltd., (1994) 5 SCC 737.

7. The prime contention of Mr. Mishra is that the Labour Court has failed to appreciate the fact that the employee was employed

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