SANT RAJ & ANR. versus O.P. SINGLA & ANR.

Citation: [1985] 3 S.C.R. 623 · Decided: 09-04-1985 · Supreme Court of India · Bench: D.A. DESAI · Disposal: Case Partly allowed

Cited by 2 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

623 
SANT RAJ & ANR. 
v. 
O.P. SINGLA & ANR. 
April 9, 1985 
(D,A. DESAI AND RANGANATH MISRA, JJ.] 
Industrial Disputes Act, 19-17, Section 25Fread with section 2(00)-Tenni-' 
nation from. service-Validity of-Termination 1f held illegal-Reinstatement 
follows-Inexpedient and i1nproper to order reinstaternent-Discretion of Court 
to grant compensation. 
B 
c 
Income Tax Act, 1961, Section 89 and lnco1ne Tax Rules, 1962, Rulr, 2 !(A) 
D 
Compensation and back wages-Caurt ordered payment in· lump sum -Reiief of 
Income Tax-Power f!f Court. 
The services of the appellants-workmen who were employed as loaders in 
a foreign air-transport company was terminated by the respondent-employer. On 
a reference made by the Secretary (Labour) Delhi Administration the Labour 
Court held that the termination of services of the appellants constituted retrench. 
ment within the meaning of s. 25F read with Section 2(oo) of the Industrial 
Disputes Act, 1947 and as the provisions of s. 25F have not been comi:)iied with 
the termination of service would be bad and illegal. It was further held that 
even where s. 25F of the Act is not complied with and the termination of serviCe 
is illegal and invalid, there is certainly a discretion with the Labour Court 
whether to order rein~tatement of the w'orkmen or not. 
While quantifying the 
compensation, the Labour Court observed 1hat the termination of services 
of the two workmen was bonaftde and not a colourable exercise of power in 
accordance with the service rules and awarded one year's wages as compensa-
tion for the failure of the employer to comply with the requirements of s. 25F. 
The workmen appealed to this Court. 
Partly allowing the Appeal. 
HELD ; 1. Ordinarily, where the termination of service is found to be 
bad and illegal, in the field of industrial relations a declaration follows that the 
workman continues to be in service and has to be reinstated in service With full 
backwages. The Labour Court has however, the-discretion to award compensa-
tion in respect or reinstatement if the circu1nstances of a particular case are 
E 
F 
G 
\J.Oµsual or exceptional so as to make reinstatement inexpedient or improper. 
H 
(625H; 626A-BJ 
624 
SUPREME COURT REPORTS 
[1985) 3 s.c.R. 
A 
2. Whenever il is said that something has to be done within the discre· 
B 
c 
D 
E 
F 
tion of the authority then that something has to be done according to the rules 
of reason and Justice and not according to private opinion, according to Jaw and 
not humour. It must not be arbitrary vague and fanciful. [6260] 
Hindustan Tin Works Pyt, Ltd. v. Employees of Hindustan Tin ff'orks 
Pvt, Ltd. [1979] I SCR 563, 
M/s. Hindustan Steels Ltd., Rourke/av. AX. Roy 
& Ors. [1970] 3 SCR 343, Sharp v. Wekfie/d, [1891] AC 173 & S.D. Jaisinghani 
v. Union of India & Ors. [1967] 2 SCR 703, relied on. 
3. Having regard to the facts and circumstances of the instant case, the 
reasons given by the Labour Court for declining to grant the normal relief of 
reinstatement are not tenable. The order of the Labour Court is, however, 
upheld. The award giving one year wages as compensation is modified to 
the effect that each appellant should be paid Rs, 2,00,000 as and by way of 
back-wages in lieu of relief of reinstatement. [626B·C] 
4. The Labour Court while declining to grant the relfof of reinstatement 
which should have ordinarily followed, consequent upon its finding that the ter-
mination of service was bad and illegal, in exercise of its discretion awarded one 
year's wages as compensation in lieu of reinstatement on the ground that 'the 
termination Or service of each of the appellant was bonafide and not a colour-
able exercise of power in accordance with service rules'. There is thus an error 
apparent on the face of the record, inasmuch as if termination of service was 
according to service rules and was bonafide it could not be simultaneously held 
to be illegal and invalid. Therefore, th;! discretion was exi~rcised on irrelevant 
and extraneous considerations or considerations not gern1aine to the tC"rmina-
tion. [626P·H; 627A) 
5. The appellants are entitled to relief under s. 89 of the Income Tait 
Act, !96l read with Rule 2l(A) of the Income Tax Rules, 1962 because com-
pensation herein awarded includes salary which was in arrears for 12 years 
arid is being paid in one lump sum under orders of Court. Respondent cn1p~ 
toyer shall assist the appellants for obtaining the relief. [628E·F] 
CIVIL APPELLATE JURISD

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