IMPORTANT POINT
The main legal point established is that in cases of illegal termination, reinstatement is not automatic and may be replaced by compensation, taking into account the circumstances and the interest of justice.

JUDGMENT

Satish Chandra Sharma, C.J. (Oral)

1. The present LPA is arising out of judgment dated 31.08.2023 passed in W.P.(C.) No. 2623/2015 titled Balbir Singh Bisht V. M/s A.V. Workshop Limited & ORS whereby the Learned Single Judge enhanced the retrenchment compensation payable to the Respondent by the Appellant from INR 2,50,000/- to INR 4,00,000/- (the `Impugned Order').

2. The facts of the case reveal that the Respondent was appointed by the Appellant Company as a technician in 1988. Thereafter, in June 2011, the Respondent suffered a brain hemorrhage and proceeded on leave for a month until 01.07.2011. The Respondent continued to work for a week thereafter. However, his condition deteriorated and hence, the Respondent went back on leave. Subsequently, the services of the Respondent were abruptly terminated vide order dated 30.07.2011 with effect from 21.07.2011, and he was paid nine days' salary for the month of July, 2011.

3. Aggrieved by the actions of the Appellant Company, the Respondent raised an industrial dispute under Section 10(4A) of the Industrial Disputes Act, 1947 (`IDA'), and claimed continuity of service and INR 40,00,000/- towards Provident Fund, Bonus and other benefits.

4. A statement of claim was filed by the Respondent and the Appellant Company also preferred a reply in the mater. Accordingly, three issues were framed before the Labour Court which are as follows:

i. "Whether the services of the claimant were terminated illegally and / or unjustifiably by the management? Onus on Parties.

ii. Whether the claimant is not a workman within its definition U/S Section 2(s) of the ID Act?

iii. Whether the claimant is entitled to the monetary relief as claimed? OPW.

iv. Relief."

5. Vide award dated 09.01.2015, the Labour Court held that the Respondent was illegally terminated on vague grounds without affording him a right to hearing and without following the statutory provisions as contained under Section 25F (a) & (b) of the IDA. Based on this finding, the Labour Court awarded the Respondent a lump sum of INR 2,50,000 towards retrenchment compensation. The Labour Court held that the Provident Fund, bonus and other benefits could not be claimed in a labour dispute. On the question of reinstatement, the Labour Court held that the Respondent had not prayed for reinstatement in his statement of claim and never led evidence to that effect and hence could not be granted suo motu.

6. Being aggrieved by the Award passed by the Labour Court, the Respondent preferred the underlying writ petition praying for reinstatement. The Learned Single Judge rejected the claim of the Respondent and held that a mere finding of illegal termination does not result in automatic reinstatement. However, in consideration of the long duration of service provided by the Respondent and to meet the ends of justice, the Ld. Single Judge enhanced the retrenchment compensation from INR 2,50,000 to INR 4,00,000/-. The operative paragraphs of the Impugned Order as contained under Paragraph Nos. 7 to 12 read as under:

"7.0. It is seen that in his claim petition before the Ld. Labour Court, the petitioner inter alia, submitted that he was illegally terminated from service and sought continuity of service besides other reliefs of provident fund, bonus etc. Thus, in effect, the petitioner sought his reinstatement.

8.0. Suffice it to state that finding of illegal termination does not mean reinstatement has to follow automatically. There has been a shift in the legal position. The Hon'ble Supreme Court in catena of cases has consistently taken the view that the relief by way of reinstatement with back wages is not automatic and may rather be wholly inoperative in a given fact/situation, even though, termination of an employee is in contravention of the prescribed procedure. Apex Court has observed that compensation instead of reinstatement in such situation would rather meet the ends of justice. In Uttaranchal Forest Development Corpn. Vs. M.C. Joshi (2007) 9 SCC