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Smart Summary

Factual and Procedural Background

The dispute concerns the temporal extent of back wages payable to respondent workmen—whether up to January 1995 or up to January 1999. The Labour Court, Bangalore, by award dated 2-8-2002, directed reinstatement of the workmen with 50% back wages. The appellant-employer challenged this award before the High Court of Karnataka.

By judgment dated 14-3-2008, a learned Single Judge of the High Court declined to interfere with the reinstatement but, noting that the industry was virtually closed by the beginning of January 1995, limited the award of back wages to January 1995, recording a finding that the industry was functioning only till the beginning of 1995 and that the Union had not proved functioning thereafter.

In intra-court appeal, the Division Bench observed that apart from the testimony of MW 3, there was no other evidence that the industry was non-functional after January 1995. Acknowledging that reinstatement was not possible due to closure, the Division Bench extended 50% back wages up to the end of January 1999, along with consequential benefits, closure compensation, and gratuity up to that date.

When the matter reached the Supreme Court, it directed the appellant on 8-7-2013 to file an affidavit indicating the actual year of closure. The appellant’s affidavit dated 11-7-2013 stated the industry became non-functional by the beginning of January 1995 and remained defunct thereafter. The respondents’ counter-affidavit did not establish functioning beyond that time.

Legal Issues Presented

  1. Whether the respondent workmen are entitled to back wages only up to January 1995 or up to January 1999.
  2. Whether, in an intra-court appeal, the Division Bench was justified in disturbing the learned Single Judge’s factual finding regarding the industry’s non-functioning post-January 1995 without additional material and without finding perversity.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court emphasized the standard of appellate review in intra-court appeals: findings of fact reached by a Single Judge should not be disturbed by a Division Bench unless found to be perverse. It stressed that the mere possibility of an alternative or even “better” view does not justify interference with the Single Judge’s factual conclusions, absent consent by both sides for a different approach to relief.

Applying this principle, the Court noted that the learned Single Judge had examined the record and concluded that the industry was not functioning after January 1995. The Division Bench, without any additional material, took a different view on the back-wage period. The Supreme Court held there was no justification for the Division Bench to enter a contrary finding without further material, particularly because the testimony of MW 3 constituted evidence before the Labour Court and formed part of the record considered by the Single Judge.

To clarify factual uncertainty, the Supreme Court directed the filing of an affidavit regarding the actual year of closure. The appellant’s affidavit asserted that the industry became non-functional by the beginning of January 1995 and remained defunct thereafter. The respondents produced nothing to show that the industry functioned beyond that date. This corroborated the Single Judge’s finding and undercut the Division Bench’s extension of back wages to January 1999.

Holding and Implications

HOLDING: The appeal is partly allowed. The order for payment of back wages beyond January 1995 is vacated; in all other respects, the Division Bench’s order is retained. Any unpaid benefits due to the workmen shall be paid within three months from the date of the Supreme Court’s order, failing which the workmen will be entitled to interest at 10% per annum. There is no order as to costs.

IMPLICATIONS: The immediate consequence is that the respondent workmen are entitled to only 50% back wages up to January 1995, with other aspects of the Division Bench’s relief remaining intact. The decision reinforces the principle that in intra-court appeals, factual findings by a Single Judge should not be disturbed absent a finding of perversity or additional material justifying a different conclusion. No new precedent beyond this reaffirmation of the appellate standard is set.

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    Management Of Narendra & Company Private Limited v. Workmen Of Narendra & Company .

    Kurian Joseph, J.— Leave granted. The short question is whether the respondent workmen are entitled to the back wages till the beginning of January 1995 or till January 1999?

    2. The Labour Court, Bangalore by award dated 2-8-2002 directed reinstatement of the workmen with 50 per cent back wages. That award was challenged by the appellant before the High Court of Karnataka at Bangalore by judgment dated 14-3-2008 in Narendra & Co. (P) Ltd. v. Workmen Narendra & Co. P Ltd. v. Workmen, WP No. 41489 of 2002, decided on 14-3-2008 KAR. Though the appellant attacked the award on several grounds, the learned Single Judge declined to interfere with the award on reinstatement. However, taking note of the fact that the industry was virtually closed by the beginning of January 1995, it was ordered that the award on back wages would be limited to January 1995. The learned Single Judge, in fact, had entered a finding in that regard which reads as follows:

    “From the record it shows that the industry was functioning till the beginning of 1995 and the Union though has led the evidence but has not proved as to whether the industry was functioning thereafter or not.”

    3. In appeal, the Division Bench took the view that apart from the sole evidence of MW 3, there was no other evidence on record to prove that the industry was not functional after January 1995. However, there was no dispute with regard to the fact that the industry was closed, and therefore, reinstatement was not possible. In that background, without any further material available on record, the Division Bench took the view that interest of justice would be met by extending the benefit of 50 per cent back wages up to the end of January 1999 and consequential benefits with closure compensation as well as gratuity up to that date.

    4. We may extract the relevant consideration by the Division Bench in the impugned judgment2: (Narendra & Co. case, SCC OnLine Kar para 3)

    “3. … According to MW 3, the machines were operated only till the beginning of January 1995. However, to substantiate that contention, there is no evidence on record. In the light of such evidence on record, it is not possible to record a categorical finding that the industry was closed in the year 1995 itself. Having regard to the fact that the industry was closed, the order of reinstatement has been set aside by the learned Single Judge and the workmen were entitled to retrenchment compensation and only 50% back wages is awarded, we are of the view that justice would be met by extending the benefit of 50% back wages up to the end of January 1999 and they are also entitled to consequential benefits with closure compensation as well as gratuity up to that date.”

    5. Once the learned Single Judge having seen the records had come to the conclusion that the industry was not functioning after January 1995, there is no justification in entering a different finding without any further material before the Division Bench. The Appellate Bench ought to have noticed that the statement of MW 3 is itself part of the evidence before the Labour Court. Be that as it may, in an intra-court appeal, on a finding of fact, unless the Appellate Bench reaches a conclusion that the finding of the Single Bench is perverse, it shall not disturb the same. Merely because another view or a better view is possible, there should be no interference with or disturbance of the order passed by the Single Judge, unless both sides agree for a fairer approach on relief.

    6. When the matter came up before this Court on 8-7-2013, the Court directed the appellant to file an affidavit indicating the actual year of closure of the industry so as to determine the question as to from what date retrenchment compensation should be paid to the workmen. Accordingly, affidavit dated 11-7-2013 was filed wherein it is clearly stated that the industry became non-functional by the beginning of January 1995 and remained defunct thereafter. In the counter-affidavit filed by the respondent workmen also, there is nothing to establish that the industry was functioning thereafter.

    7. Hence, the order for payment of back wages beyond January 1995 is vacated, and in all the other aspects, the order passed by the Division Bench is retained. In case, the workmen have not been paid the benefits which they are entitled to, the same shall be paid within a period of three months from today, failing which, the respondent workmen shall be entitled to interest @ 10 per cent per annum.

    8. The appeal is partly allowed as above. There shall be no order as to costs.

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    Management Of Narendra & Company Private Limited v. Workmen Of Narendra & Company .
    (Jan 4, 2016)