TALWARA COOP. CREDIT & SERVICE S0CIETY LTD. versus SUSHIL KUMAR

Citation: [2008] 14 S.C.R. 53 · Decided: 01-10-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed
Cited by 1 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

=-
[2008] 14 S.C.R. 53 
--\ 
TALWARA COOP. CREDIT & SERVICE S0CIETY LTD. 
A 
v. 
SUSHIL KUMAR 
(Civil Appeal No. 5951 of 2008) 
OCTOBER 1, 2008 
B 
[S.8. SINHA AND CYRIAC JOSEPH, JJ.] 
) 
Industrial Disputes Act, 1947 - ss. 11A and 25 F - Ter-
--....,_ 
mination of employee - As a result of loss occurred to the 
employer concern - Courts below setting aside termination c 
and directing reinstatement of the employee with back wages 
- Burden to prove gainful employment placed on the employ-
ers - On appeal, held: In view of the facts that the employer 
was running losses and the employment of the employee was 
only for a short period, order of termination correct - Grant of D 
relief of reinstatement should be on consideration of nature of 
service and mode of recruitment - Back wages should be di-
reefed to be paid only after considering the question of gainful 
employment of the employee - Courts below failed to con-
sider such questions - Courts below were also wrong in plac-
E 
ing the burden of proof of gainful employment on the employer 
- Onus to prove such question is on the employee - Where 
the termination is on account of financial losses, the court 
should pass such award adjusting the equities between the 
'\ 
parties - Interest of justice would be served if a compensation 
of Rs. 2, 00, 000 is paid in place of reinstatement and back 
F 
wages - Evidence Act, 1872 - s. 106. 
Services of the respondent-employee were termi-
nated by the appellant-employer after about three years 
of his service. Labour Court had passed the award to re-
G 
instate him. Thereafter in the meeting of Board of Direc-
tors of the appellant-employer a resolution was passed 
to dispense with the services of some employees since 
the concern was suffering losses. Consequently services 
53 
H 
54 
SUPREME COURT REPORTS 
[2008) 14 S.C.R. 
,,.. 
A 
of the respondent amongst others was again terminated. 
t-· 
In the industrial dispute, the labour court passed the 
award setting aside the termination order and directing 
to reinstate him with back wages with continuity and· all 
other consequential benefits. Writ petition thereagainst 
B was dismissed by High Court. Hence the present appeal. 
Allowing the appeal, the Court 
\-
HELD: 1.1 Grant of a relief of reinstatement, 'it is trite, 
is not automatic. Grant of back wages is also not auto-
c matic. The Industrial Courts while exercising their power 
u/s. 11A of the Industrial Disputes Act, 1947, are required 
to strike a balance in a situation of this nature. For the 
said purpose, certain relevant factors, as for example, 
nature of service, the mode and manner of recruitment, 
D viz., whether the appointment had been made in accor-
dance with the statutory rules so far as public sector un-
dertaking is concerned etc., should be taken into consid-
eration. For the purpose of grant of back wages, one of 
the relevant factors would indisputably be as to whether 
.E the workman had been able to discharge his burden that 
he had not been gainfully employed after termination of 
his service. In the instant case, the Industrial court failed 
and/or neglected to take the aforementioned factors into 
consideration. The High Court also fell into the same er-
ror. [Paras 11 and 12] [58-E-G, 60-H, 61-A] 
F 
r· 
G.M. Haryana Roadways v. Rudhan Singh 2005 (5) sec 
59; Correspondent, St. Michael's TT/. v. VN. Karpaga Mary 
and Ors. 2008 (6) SCALE 621; U.PS.R. TC. Ltd. v. sarada 
Prasad Misra and Anr. 2006 (4) SCC 733; Municipal Council, 
G Sujanpur VS. Surinder Kumar 2006 (5) sec 173 - relied on. 
1.2 When the question arises as to how and in what 
manner balance should be struck, it is necessary for the 
\-
I 
Industrial Courts, also to consider as to whether the in-
' 
dustry has been sick or not. If it is found that the industry 
H is not in a position to bear the financial burden, an appro-
TALWARA COOP. CREDIT & SERVICE SOCIETY LTD. 55 
v. SUSHIL KUMAR 
-\ 
priate award, as a result whereof the equities between the A 
parties can be adjusted, should be passed. In the instant 
case, the respondent was employed for a short period 
and that too in two different spells, viz., from 1987 to 1990 
and from 1995 to 1997. Having regard to the fact that the 
~ 
respondent has not worked for a long period and the ap-
B 
( 
pellant does not have any capacity to pay as it is a sick 
--; 
unit, interest of justice would be subserved if instead and 
in place of an award of reinstatement with full back wages,
Excerpt shown. Read the full judgment & AI analysis in Lexace.