Gujarat State Road Transport Corpn. And Another v. Mulu Amra ., Supreme Court Of India, Judgment, Law, casemine.com

Factual and Procedural Background

The respondent, an employee of the appellant-Corporation, was dismissed from service on 17 November 1967. Decades later, the High Court ordered his reinstatement with full back wages. The Corporation challenged that order in the present appeal. During the Supreme Court proceedings (special leave having been granted), both sides were heard on the appropriate relief given the long lapse of time since dismissal.

Arguments of the Parties

Respondent’s Arguments

Suggested that compensation be fixed at 75 per cent of the back wages that would have accrued had he been reinstated.

Appellant-Corporation’s Arguments

Did not accept the respondent’s proposal of 75 per cent back wages as compensation.

Ultimately agreed to the Court’s suggestion of a lump-sum figure determined by the Bench.

Court's Reasoning and Analysis

The Court considered the extraordinary time gap—more than two decades—between the respondent’s dismissal and the current date. Observing that reinstatement at such a late stage would be impracticable, it viewed a lump-sum payment as the “most suitable solution.” Lacking precise salary data, the Bench performed an approximate calculation based on typical public-sector pay scales and revisions since 1967. Weighing the rival contentions, it arrived at Rs 75,000 as fair compensation. Both counsel accepted this figure. The Court also acknowledged the respondent’s disadvantaged economic background and sought to protect the compensation from immediate dissipation by directing that Rs 50,000 be placed in a long-term, interest-bearing instrument, with the remaining Rs 25,000 paid directly to him. Provision was made for refund of any outstanding provident-fund dues, and a two-month deadline was fixed for payment, after which interest at 18 percent per annum would accrue.

Holding and Implications

APPEAL ALLOWED; High Court’s order of reinstatement with full back wages set aside. The appellant-Corporation must pay the respondent Rs 75,000 within two months, allocate Rs 50,000 to a secure long-term deposit, and release Rs 25,000 directly to the respondent; provident-fund amounts, if any, are also to be refunded. Interest at 18 percent per annum will apply on default.

Implications are confined to the parties: reinstatement is replaced by a monetary settlement with protective directions for fund management. The opinion does not purport to establish a broader legal precedent.

Gujarat State Road Transport Corpn. And Another v. Mulu Amra .

Order

1. Special leave granted.

2. We have heard counsel on both sides. Having regard to the fact that the respondent was dismissed way back on 17-11-1967 and we are now in March 1992, we thought it would be proper if the respondent is paid a lump sum compensation in lieu of reinstatement. That was also the suggestion which came from counsel for the respondent, but she stated that the respondent should be paid 75 per cent of the back wages by way of compensation. That suggestion was not acceptable to the learned counsel for the appellant. We, however, thought that a lump sum payment is the most suitable solution to this dispute between the parties. Unfortunately, the counsel for the parties were not in possession of the relevant material concerning the salary of the respondent and its revision from time to time. We, therefore, have to do some amount of guess work. Keeping in mind what were the salaries in 1967 and the revisions that took place thereafter in State services, similar revisions also took place in the services of the public sector corporations, we worked out the compensation keeping in view the rival contentions of the parties. We suggested that on our working the compensation comes to Rs 75,000. Both the learned counsel have agreed to the suggestion that the matter may be closed on payment of Rs 75,000 by way of compensation.

3. In the result, we allow this appeal, set aside the order of the High Court directing reinstatement in service with full back wages and instead direct that the appellant-Corporation shall pay a sum of Rs 75,000 to the respondent in lieu of reinstatement with back wages and in full and final satisfaction of all his claims. We may, however, clarify that if he has any claim in regard to provident fund, the same may be refunded to him, if not done so far. The amount of compensation will be paid within two months from today, failing which interest will run at 18 per cent per annum.

4. We find that the respondent belongs to the underprivileged class. He comes from a strata of society which lacks in financial discipline and the respondent would not be in a position to deal with this large amount. We, therefore, think it necessary to give certain directions in this behalf in his own interest so that the amount is not frittered away. We, therefore, direct that the appellant-Corporation will assist the respondent in depositing a sum of Rs 50,000 in a long-term fixed deposit with a scheduled bank or in the National Savings Certificate so that the respondent may earn interest which may be paid to him quarterly. The remaining amount of Rs 25,000 may be paid to him personally either in cash or by cheque, as he may desire. With these observations, the appeal stands allowed with no order as to costs.

Civil Appeal No. 1099 of 1992, decided on March 10, 1992