Judgment:
ORDER
Subhash Samvatsar, J.
1. This writ petition came up for hearing before a Division Bench of this Court on 23-1-2009 and the Division Bench vide its order dated 23-1-2009 has referred this case to Full Bench, as the Division Bench was of the opinion that the question whether once the termination order is struck down on the ground that it is in violation of Section 25-F of Industrial Dispute Act (for short 'the Act') then the Court has to strike on the illegality and direct reinstatement.
2. The gist of the question, referred to the Full Bench is whether once the termination order is struck down by holding the same to be violative of Section 25-F of the Act, it is mandatory for the Court to strike on the illegality and direct reinstatement.
3. The Apex Court in the case of Hindustan Tin Works Pvt. Ltd. v. The Employees of Hindustan Tin Works Pvt. Ltd. and Ors. : AIR 1979 SC 75, has laid down in Paragraph 9 of the judgment that:
It is no more open to debate that in the field of industrial jurisprudence a declaration can be given that the termination of service is bad and the workman continues to be in service. The spectre of common law doctrine that contract of personal service cannot be specifically enforced or the doctrine of mitigation of damages does not haunt in this branch of law. The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid. It would mean that the employer has taken away illegally the right to work of the workman contrary to the relevant law or in breach of contract and simultaneously deprived the workman of his earnings. If thus, the employer is found to be in the wrong as a result of which the workman is directed to be reinstated, the employer could not shirk his responsibility of paying the wages which the workman has been deprived of by the illegal or invalid action of the employer. Speaking realistically, where termination of service is questioned as invalid or illegal and the workman has to go through the gamut of litigation, his capacity to sustain himself throughout the protracted litigation is itself such an awesome factor that he may not survive to see the day when relief is granted. More so in our system where the law's proverbial delay has become stupefying. If after such a protracted time and energy consuming litigation during which period the workman just sustains himself, ultimately he is to be told that though he will be reinstated, he will be denied the back wages which would be due to him, the workman would be subjected to a sort of penalty for no fault of his and it is wholly undeserved. Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness. That is the normal rule. Any other view would be a premium on the unwarranted litigative activity of the employer.
4. Thus, in the aforesaid judgment, the Apex Court has held that once the termination order is set aside by holding it to be illegal, the natural consequences of striking down of the order of termination would be reinstatement with full back wages.
5. Another judgment referred by the Apex Court in which the Apex Court has considered this aspect of matter is in the case of Mohan Lal v. The Management of Bharat Electronics Ltd. AIR 1981 SC 1253. The Apex Court in Para 17 of the aforesaid judgment had held that:
If the termination of service is ab initio void and inoperative, there is no question of granting reinstatement because there is no cessation of service and a mere declaration follows that he continues to be in service with all consequential benefits.
6. Similar is the view of the Apex Court in the case of Vikramaditya Pandey v. Industrial Tribunal and Anr. : AIR 2001 SC 672, wherein the Apex Court in Para 6 of the judgment has laid down that:
Once the termination of his service had been held to be illegal and more so when the same was not challenged; ordinarily, once the termination of service of any employee is held to be wrongful or illegal the normal relief of reinstatement with full back wages shall be available to an employee; it is open to the employer to specifically plead and establish that there were special circumstances which warranted either non-reinstatement or nonpayment of back wages. In that case, the Court can deny the back wages or reinstatement to the employee.
7. Similarly, the Apex Court in the case of Ruby General Insurance Company Ltd. v. Chopra (P.P.) 1970 LLJ 63 and in case of Hindustan Steels Ltd., Rourkela v. A.K. Roy and Ors. : AIR 1970 SC 1401, has held that the Court before granting reinstatement must consider facts of each case and exercise its discretion properly whether to grant reinstatement or to award compensation. Thus, in these cases, the Apex Court has held that normal rule is that once termination order is set aside, the employee is entitled to reinstatement with full back wages. However, in special circumstances, the Court can deny or refuse to grant full back wages or reinstatement.
8. Thus, the view of the Apex Court in all these cases was that once the order of termination is held to be illegal retrenchment then the nature of consequence was to reinstatement with full back wages. However, the Apex Court in its subsequent judgments has changed its view.
9. In case of Koran Singh v. Executive Engineer, Haryana State Marketing Board 2007 LLR 1233, the employee whose services were terminated, has approached the Tribunal after a long delay and the Apex Court has held that the delay in approaching the natural Tribunal is no ground to strike down the reference, if the termination order is violative of Section 25-F of the Industrial Dispute Act. It is not proper for the Court to refuse to strike down the termination order. The Court in such a situation finds that termination order is bad in law, the Court can instead of granting reinstatement can award compensation. In that case, the Apex Court has granted compensation to the employee to the tune of Rs. 60,000/-.
10. Another judgment is in the case of Nagar Mahapalika (now Municipal Corporation) v. State of U.P. and Ors. : (2006) 5 SCC 127. In that case, the retrenchment was found to be illegal by the Apex Court. However, considering the provisions of U.P. Nagar Mahapalika Adhiniyam, 1959, the Apex Court has refused to grant reinstatement and held that the order of reinstatement should not be granted as a matter of course but the legality or otherwise of the termination should be considered to be an important factor in the matter of grant of relief.
11. The next judgment is in the case of State of M.P. and Ors. v. Arjunlal Rajak : (2006) 2 SCC 711. In that case, the Apex Court has held that for non-compliance of the provisions of Section 25-F of the I.D. Act, ordinarily workman could be directed to be reinstated with or without back wages, but when a project or scheme or an office itself is abolished, relief by way of reinstatement cannot be granted.
12. In the case of Mahboob Deepak v. Nagar Panchayat, Gajraula and Ors. : (2008) 1 SCC 575, the Apex Court has held that even if the order of termination is illegal, the compensation can be granted as there are allegations against the terminating employee for misconduct and financial irregularities.
13. In the case of Madhya Pradesh Administration v. Tribhuban (2007) 9 SCC 748, the Apex Court has held that consequence of non-compliance of provisions of Section 25-F of I.D. Act is not automatic reinstatement and compensation can be awarded to the employee in appropriate cases.
14. In the case of U.P. State Road Transport Corporation v. Man Singh : (2006) 7 SCC 752, the Apex Court has considered the case of conductor whose services were terminated after a period of one year from his appointment. The Apex Court has refused to direct reinstatement as there was nothing on record to show that the employment was in accordance with rules and awarded compensation of Rs. 50,000/-.
15. Thus, from the cases referred hereinabove, it is clear that the normal rule is that once it is found that the termination order is violative of Section 25-F of Industrial Dispute Act, then the said order is ab initio void and the employee is entitled to reinstatement with full back wages. However, in a particular case, the Court can refuse to grant relief of reinstatement for a particular reason which will depend on the facts and circumstances of each case. Thus, there is no hard and fast rule that the Court should grant the relief of reinstatement with full back wages in each and every case. The same relief shall depend on the facts and circumstances of each case. Hence, the reference is answered accordingly. Now, the case be listed before the appropriate Division Bench.