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Maharashtra State Road Transport Corporation, Akola v. Nanuram

Bombay High Court
Oct 31, 2007
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Structured Summary of the Legal Opinion

Factual and Procedural Background

The petitioner (MSRTC) challenged the Industrial Court's judgment dated 19-12-2006 in Revision Application No. 103 of 2003, which confirmed the Labour Court, Akola's judgment dated 20-11-2003 in Complaint (ULP) No. 155 of 1992. The respondent had been employed as a clerk by MSRTC and was dismissed on 28-2-1990 after a departmental enquiry found him guilty of riotous behaviour during working hours and during conduct of another enquiry. The respondent filed a complaint before the Labour Court challenging his dismissal. The Labour Court held that the enquiry was not fair and proper, found the respondent to be a protected workman and not proven guilty of the charges, and awarded full backwages from dismissal to superannuation. The Industrial Court dismissed the employer's revision, and the present writ petition by MSRTC was filed challenging only the award of backwages (the petitioner did not press against the finding on validity of dismissal because the respondent had attained superannuation).

Legal Issues Presented

  1. Whether the award of full backwages to the respondent should be sustained despite the employer's contention that the respondent failed to plead or prove that he was not gainfully employed after dismissal.
  2. What is the burden of proof regarding "gainful employment" when awarding backwages — specifically, whether the employee must plead and place materials to show non-gainful employment and, if so, whether the burden then shifts to the employer.
  3. Whether there was material to justify a finding of bias or victimisation in the departmental enquiry such that award of backwages should stand on that ground.

Arguments of the Parties

Appellant (Petitioner-MSRTC) — Mr. S.C. Mehadia

  • The petition is pressed only against the award of backwages (not against the dismissal finding, since the respondent attained superannuation); if the award is set aside, the respondent must repay amounts already received.
  • The respondent did not plead in his original complaint that he was not gainfully employed; absent such pleading, evidence on non-gainful employment should be ignored.
  • In his cross-examination, the respondent admitted doing work for the Union representing employees in various courts, implying possible gainful activity.
  • It is a matter of record that the respondent regularly appeared in Labour, Industrial and High Court proceedings for employees of MSRTC after dismissal; thus he should have produced documentary or oral evidence (e.g., Union office-bearers, employees he represented) to rebut a claim of gainful employment, but he did not do so.
  • Relied on J.K. Synthetics Ltd. v. K.P. Agrawal (2007) 2 SCC 433 to argue that the law supports reversal of the award of full backwages insofar as the employee failed to discharge the initial burden or plead appropriately.

Respondent (in person)

  • Although the complaint did not contain explicit averments about gainful employment, the respondent deposed in evidence that after 1990 he was not employed by anyone nor in any private establishment; he argued that this evidence discharged his burden and put the onus on the employer to rebut.
  • Relied on Hindustan Tin Works (P) Ltd. v. Employees ((1979) 2 SCC 80) for the proposition that the burden to prove gainful employment lies on the employer.
  • The Labour Court found dismissal illegal because the respondent was a protected workman and charges were not proved; therefore respondent should not be deprived of backwages.
  • There was a finding by the Labour Court regarding victimisation and bias during the enquiry; this supported the award of full backwages.
  • The respondent acknowledged that he represented employees and worked for the Union but asserted such work was not of a perennial/gainful nature and that he did not receive remuneration from employees he represented; thus the awards below should be upheld.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
J.K. Synthetics Ltd. v. K.P. Agrawal, (2007) 2 SCC 433 Noted a shift in placing the burden of proof regarding entitlement to backwages: the employee must show he was not gainfully employed; once he places material, employer may rebut. The Court relied on J.K. Synthetics as authoritative on the current law about burden of proof for backwages and used it to conclude that the respondent failed to meet pleading and evidentiary requirements to establish non-gainful employment.
Hindustan Tin Works (P) Ltd. v. Employees, (1979) 2 SCC 80 Earlier authority cited by respondent to contend that burden to prove gainful employment is on the employer. The Court observed that the principle relied upon by the respondent was considered and clarified by J.K. Synthetics; the Court held J.K. Synthetics resolved the issue against the respondent’s narrow reliance on Hindustan Tin Works.
Kendriya Vidyalaya Sangathan (as quoted in J.K. Synthetics) Expresses that when determining entitlement to backwages, the initial burden is on the employee to show he was not gainfully employed; if he places materials, employer may rebut. The Court quoted this proposition (as summarized in J.K. Synthetics) and applied it to find that the respondent had not pleaded or placed material to show non-gainful employment.
U.P. State Brassware Corpn. Ltd. (as cited) Observed that a plea that the workman was gainfully employed should be raised by the workman (with reference to the effect of section 106 Evidence Act analogues). The Court relied on this observation to support its view that the respondent needed to plead non-gainful employment and that absence of such pleading was fatal to his claim for full backwages.
Shankar Chakravarti v. Britannia Biscuit Co. Ltd., (1979) 3 SCC 371 (AIR 1979 SC 1652) Explains the obligation on parties before industrial tribunals to plead and lead evidence for contentions they wish the tribunal to decide; tribunal is not obliged to advise parties what to plead. The Court cited this decision to emphasise that the respondent was required to plead the non-gainful employment contention and lead evidence; absence of pleading meant the issue could not be fairly examined.
Tin Printers Pvt. Ltd. v. Industrial Tribunal, (1967) 2 Lab. L.J. 677 (referenced) Supports the proposition that pleadings before tribunals must give sufficient notice to the other party of the case to be met. Cited (via Shankar Chakravarti) as supportive authority for requiring proper pleading and notice; used to buttress the Court’s view about pleading obligations.
Rudhan Singh and Uday Narain Pandey (referenced) Identifies factors to consider when awarding backwages, including any income from alternative employment/business during the relevant period. The Court referred to these authorities to note that any income from alternative employment is relevant when deciding full or partial backwages, underscoring the need for pleading and proof about such income.

Court's Reasoning and Analysis

The Court's analysis proceeded by first identifying the limited scope of the writ petition — it was confined to the award of backwages, not the validity of dismissal (the respondent had attained superannuation). The Court reviewed the law on burden of proof concerning backwages, particularly the shift recognised in J.K. Synthetics and related decisions (Kendriya Vidyalaya Sangathan, U.P. State Brassware Corpn., Rudhan Singh and Uday Narain Pandey), which place an initial obligation on the employee to assert and place material showing he was not gainfully employed. Once the employee so places material, the employer may rebut.

Applying those principles to the record, the Court found there was "absolutely no pleading anywhere in the complaint" that the respondent was not gainfully employed. The Court catalogued specific omissions in the respondent's pleading and proof: no pleading of non-gainful employment; no pleading that he represented union or individual employees in courts; no pleading or evidence that he received no remuneration from such representation; no documentary or oral evidence from Union office-bearers or employees he purportedly represented; no accounts or statements of Union withdrawals or litigation expenses; no evidence about number of cases handled or outcomes; no evidence showing how the respondent and family survived since 1990.

The Court also took note of admissions in the record that the respondent had represented employees and appeared in courts on numerous occasions (including some reported cases), concluding that because those admissions existed, it was incumbent on the respondent to have honestly pleaded the relevant facts in his complaint so MSRTC could test those assertions. The Court relied on Shankar Chakravarti for the proposition that a party must plead and lead evidence for facts it wants decided; tribunals are not required to advise parties what to plead.

Because the respondent neither pleaded non-gainful employment nor led supporting evidence (and in light of admissions suggesting alternative activity), the Court concluded the respondent failed to discharge the initial burden and engaged in suppressio veri / suggestio falsi by omission. The Court further evaluated the claim of bias/victimisation and found no material on record to support a proper finding of bias; it held the interlocutory order relied upon did not understand the concept of bias properly and thus could not justify the award of backwages.

Given these findings, the Court held the award of full backwages could not stand. The Court proceeded to quash and set aside the impugned orders insofar as they awarded full backwages and directed repayment and other consequential directions (see holding and consequences).

Holding and Implications

Holding:

Writ petition allowed. The impugned order dated 20-11-2003 (Labour Court, Akola) and the impugned judgment and order dated 19-12-2006 (Industrial Court) are quashed and set aside insofar as the award of full backwages is concerned.

Direct Consequences for Parties:

  • The respondent is directed to deposit the entire amount of backwages already received (stated by petitioner’s counsel to be about Rs. Eight lacs) in the Court within ten weeks from the date of the judgment.
  • The respondent is directed to pay costs of Rs. 5,000 to the petitioner within four weeks from the date of the judgment.
  • Petitioner-MSRTC is directed to hold an enquiry and recover interest on the backwages from those responsible for failing to resist the payment of backwages.
  • The judgment is suspended for six weeks at the respondent’s request (suspension opposed by counsel for petitioner), i.e., the operation of the judgment stayed for six weeks.

Broader Implications:

The Court's decision applies the then-prevailing Supreme Court line of authority (notably J.K. Synthetics and related cases) about the allocation of the initial burden on the employee to plead and place material about non-gainful employment before an award of backwages can be made in full. The opinion does not purport to lay down a new precedent; it applies and reconciles existing Supreme Court jurisprudence to the facts of the case and reverses the awards below on that basis.

Writ petition allowed.
Show all summary ...

1. By the present petition, the petitioner-MSRTC has challenged the judgment and order dated 19-12-2006 passed by the Industrial Court in Revision Application No. 103 of 2003 confirming the judgment and order dated 20-11-2003 made by the Labour Court, Akola, in Complaint (ULP) No. 155 of 1992.

Facts:

2. The respondent was working as a clerk on the establishment of the petitioner. Due to his riotous attitude during working time and during the course of departmental enquiry being conducted against one employee, he was served with a charge-sheet and a regular departmental enquiry was held in which he was found guilty and consequently on 28-2-1990 he was dismissed from service.

3. The respondent filed a complaint before the Labour Court, Akola, questioning his dismissal from service. On the preliminary issue, Labour Court held that the enquiry held against the complainant was not fair and proper and evidence was laid before the Labour Court by the petitioner-employer for proving the misconduct. Finally on 20-11-2003 the Labour Court allowed the complaint and held that the respondent being protected workman and the charges levelled against him being not proved, in view of his attaining the age of superannuation, he would be entitled to full backwages from the date of his dismissal till the date of his superannuation. Against that decision of Labour Court, the petitioner filed revision before the Industrial Court. The revision was also dismissed and hence this writ petition which is restricted to the award of backwages of the respondent.

Arguments:

4. Mr. S.C Mehadia, learned counsel, for the petitioner-MSRTC made the following submissions:

(i) Since the respondent has attained the age of superannuation, the petition is not being pressed in respect of findings about validity of dismissal from service and now it is restrictively pressed as regards the order awarding full backwages to the respondent which he received under interlocutory orders made by this Court, and of course subject to the result of the present litigation. He, therefore, argued that if the petition succeeds the respondent will have to repay the entire amount received by him to the petitioner.

(ii) That, in the complaint that was filed by the respondent not a single word is mentioned about gainful employment, i.e the respondent was not gainfully employed anywhere and, therefore, was entitled to backwages. In other words, there was no pleading to that effect and, therefore, in absence of any pleading, evidence of any kind will have to be ignored.

(iii) That, in the evidence the respondent admitted in cross-examination that he has been doing work of Union to represent the cases.

(iv) That, it is a matter of record that in various Courts - Labour, Industrial as well as this Court, the respondent has been regularly appearing in various Courts for the employees of the petitioner-MSRTC for number of years, at least after his dismissal from service.

5. Mr. Mehadia also invited my attention to the reply and written statement to the writ petition, in particular internal page 20 thereof, and pointed out that the respondent has candidly admitted his appearances in this Court as well. He continued his arguments by submitting that in that case it was for the respondent to adduce oral as well as documentary evidence of the office bearers of the Union and the employees whom he represented in various Courts, but he did not do so.

6. In support of above submissions, Mr. Mehadia relied on the decision of Apex Court in J.K Synthetics Ltd. v. K.P Agrawal, reported in (2007) 2 SCC 433 and prayed for reversal of the impugned orders only insofar as award of backwages is concerned.

5A. Respondent appeared in person and made the following submissions:

(i) Though there was no averment in the complaint regarding the aspect of gainful employment, the respondent in his evidence specifically deposed that after 1990 he was not in employment of anybody nor in any private establishment and with this evidence he has discharged the burden and it was for the petitioner-MSRTC to produce the evidence showing that the respondent was employed gainfully.

(ii) Placing reliance on the decision of Supreme Court in Hindustan Tin Works (P) Ltd. v. Employees, (1979) 2 SCC 80 he argued that the burden to prove whether the employee was in gainful employment is not on the employee but on the employer and therefore the Courts below have rightly followed the aforesaid decision and awarded backwages to him.

(iii) That, dismissal from service was found to be illegal as the respondent was a protected workman and further the charges levelled against him were not proved and therefore the respondent could not be deprived of backwages.

(iv) That, there is a finding recorded by the Labour Court about victimisation and bias during enquiry by the Enquiry Officer in the order and the enquiry was found to be not fair and proper, and considering that finding the respondent was entitled to full backwages.

(v) That, the respondent worked for the Union and also represented the cases of some of the employees, but that was not the work of perennial nature and no employee whose case was represented paid him any remuneration and, therefore, the impugned orders are liable to be upheld.

Consideration:

7. Having heard the learned counsel for petitioner and the respondent in person, at the outset, the law laid down by the Supreme Court in J.K Synthetics, supra, after conspectus and review of almost all its earlier decisions including the case of Hindustan Tin Works Pvt. Ltd. (supra), the following proposition of law will have to be quoted for convenience—

“16. There has also been a noticeable shift in placing the burden of proof in regard to backwages. In Kendriya Vidyalaya Sangathan this Court held (SCC p. 366, para 16)

“When the question of determining the entitlement of a person to backwages is concerned, the employee has to show that he was not gainfully employed. The initial burden is on him. After and if he places materials in that regard, the employer can bring on record materials to rebut the claim. In the instant case, the respondent had neither pleaded nor placed any material in that regard.”

8. In U.P State Brassware Corpn. Ltd., this Court observed: (SCC p. 495, para 61)

“61. It is not in dispute that the respondent did not raise any plea in his written statement that he was not gainfully employed during the said period. It is now well settled by various decisions of this Court that although earlier this Court insisted that it was for the employer to raise the aforementioned plea but having regard to the provisions of section 106 of the Evidence Act or the provisions analogous thereto, such a plea should be raised by the workman.”

“18. Coming back to backwages, even if the Court finds it necessary to award backwages, the question will be whether backwages should be awarded fully or partially (and if so the percentage). That depends upon the facts and circumstances of each case. Any income received by the employee during the relevant period on account of alternative employment or business is a relevant factor to be taken note of while awarding backwages in addition to the several factors mentioned in Rudhan Singh and Uday Narain Pandey. Therefore, it is necessary for the employee to plead that he was not gainfully employed from the date of his termination. While an employee cannot be asked to prove the negative, he has to at least assert on oath that he was neither employed nor engaged in any gainful business or venture and that he did not have any income. Then the burden will shift to the employer.”

9. Keeping in mind the above proposition of law, I propose to decide the controversy in the present writ petition.

10. At the outset, reading of the complaint filed by the respondent clearly shows that there is absolutely no pleading anywhere in the complaint that the respondent was not gainfully employed. There is no pleading that the respondent represented Union or the individual employee in various Courts, i.e Labour, Industrial and this Court in various cases. There is no pleading that the respondent never received remuneration from individual employees whom he represented in various Courts. There is no pleading that he did not receive a single rupee towards expenditure or remuneration from the Union as well. There is no pleading as to number of cases handled by him right after his dismissal in various Courts and the number of cases in which he succeeded or lost. There is no pleading as to in how many cases backwages were awarded and paid to his client and how much amount he shared from the backwages as the said practice exists. There is no pleading or oral or documentary evidence as to how he and his entire family survived right since 1990. No accounts of Union were placed by him before the Labour Court to show the amount that was withdrawn from the account of the Union for meeting the expenses of litigation in various cases in various Courts and the amount withdrawn by him and spent by him. The respondent did not examine a single employee or office bearer of the Union whom he represented or other employees whom he represented in various Courts in support of his theory stated by him for the first time in his evidence that he did not receive any remuneration. The respondent did not bring any statement on record to show the number of cases he handled in various Courts including High Court. It cannot be believed that the respondent did not utilize any amount from the account of the Union or did not collect any amount in cash from the Union or did not collect any amount from the individual employees whom he represented in various Courts for defending or prosecuting his case either towards the expenses of the litigation or for his remuneration. It cannot be believed in the light of the fact that the Union representative who represents the employees in Labour Court or Industrial Court for the individual employees charges no amount of remuneration from them.

11. Insofar as respondent is concerned, it is a matter of record that he has been appearing in this Court also on number of occasions and this Court has recently decided some cases where the respondent appeared in person for the Union and individual employees, and some are reported decisions. The respondent himself argued number of cases before this Court, which is a matter of record. In the wake of admissions given by the respondent about his working for the Union and the individual employees in various Courts, it was imperative for him to honestly plead before the Labour Court in his complaint, which was pending for about 13 years, and disclose the correct facts so that the MSRTC could have a notice thereof and in the event of appropriate pleadings in the complaint the MSRTC would have had an opportunity to plead in the written statement and also prove by documentary as well as oral evidence on the aspect of gainful employment of the respondent. It is in this light that the issue regarding burden of proof will have to be examined.

12. In Shankar Chakravarti v. Britannia Biscuit Co. Ltd., (1979) 3 SCC 371 : AIR 1979 SC 1652, in para 31, the Apex Court observed thus:

“If such be the duties and functions of the Industrial Tribunal or the Labour Court, any party appearing before it must make a claim or demur the claim of the other side and when there is a burden upon it to prove or establish the fact so as to invite a decision in its favour, it has to lead evidence. The quasi-judicial tribunal is not required to advise the party either about its rights or what it should do or omit to do. Obligation to lead evidence to establish an allegation made by a party is on the party making the allegation. The test would be who would fail if no evidence is led. It must seek an opportunity to lead evidence and lead evidence. A contention to substantiate which evidence is necessary has to be pleaded. If there is no pleading raising a contention there is no question of substantiating such a non-existing contention by evidence. It is well settled that allegation which is not pleaded, even if there is evidence in support of it, cannot be examined because the other side has no notice of it and if entertained it would tantamount to granting an unfair advantage to the first mentioned party. We are not unmindful of the fact that pleadings before such bodies have not to be read strictly, but it is equally true that the pleadings must be such as to give sufficient notice to the other party of the case it is called upon to meet. This view expressed in Tin Printers Pvt. Ltd. v. Industrial Tribunal (1967) 2 Lab. L.J 677 at p. 680 (Punj), commends to us. The rules of fair play demand that where a party seeks to establish a contention which if proved would be sufficient to deny relief to the opposite side, such a contention has to be specifically pleaded and then proved. But if there is no pleading there is no question of proving something which is not pleaded. This is very elementary.”

13. In my opinion, the respondent did not honestly come forward with the above pleadings if he really wanted to come clean. The respondent did not plead about the gainful employment which is a clear cut requirement in the light of the law laid down by the Supreme Court in the above decisions. In my opinion, the respondent has played the game of hide and seek which cannot be allowed in the Courts of law. The respondent is clearly guilty of suppressio vari, suggestio falsi.

14. The submission made by the respondent regarding the law laid down in Hindustan Tin Works Pvt. Ltd. (supra), regarding burden of proof is thus clearly answered in J.K Synthetics Ltd. and there is no need to dilate on the said issue.

15. Insofar as the alleged finding regarding bias and victimisation is concerned, in my opinion, the said interlocutory order dated 14-8-2003 on which reliance is placed by the respondent cannot be pressed into service by the respondent as the Labour Court while recording the said order did not at all understand the concept of bias and victimisation. There is no material on record to show that the enquiry was biased or by way of victimisation. In the absence of proper material and proper finding about bias and victimisation, it is not possible to accept such a contention. That apart, since I have decided the issue in question in the light of the facts and material on record, as discussed above, I do not think the alleged bias or victimisation has any relevance now. For all the reasons, therefore, I have come to the conclusion that the respondent did not discharge the burden of proof by framing appropriate pleadings in his complaint and, on the contrary, he suppressed the material pleadings with a view to gain unfair advantage over the petitioner. After all, it is public money that is involved and Mr. Mehadia informed me that an amount of about Rs. Eight lacs towards backwages was paid to the respondent. It appears that petitioner-MSRTC which is a loss making public corporation without proper resistance made over the said huge amount to the respondent and that appears to be as a result of collusion since in other cases award of backwages even to the smallest extent are being promptly challenged based on the judgment of Supreme Court in the case of J.K Synthetics Ltd.

16. In the result, writ petition is allowed. Impugned order dated 20-11-2003 passed by the Labour Court, Akola, in Complaint ULP No. 155/92 and impugned judgment and order dated 19-12-2006 in Revision Appln. (ULP) No. 103/03 are quashed and set aside insofar as the award of full backwages is concerned. Respondent is directed to deposit the entire amount of backwages which he has received, which according to learned counsel for petitioner is about Rs. Eight lacs, in this Court within ten weeks from today. Respondent to pay costs of Rs. Five thousand to the petitioner within four weeks from today. Petitioner-MSRTC is directed to hold enquiry in the matter and recover the amount by way of interest on the said amount of backwages from all those who are responsible for not resisting the payment of backwages.

17. Respondent in person requests for suspension of this judgment for six weeks. Judgment is suspended for six weeks, though opposed by the counsel for petitioner.

Writ petition allowed.