Yanger Jamir T. and Another vs Nagaland Plantation Crop Development Corpn. Ltd. and Others

Patnaik, J.—This is an appeal against the judgment dated February 24, 1993 of the learned single Judge in Civil Rule No. 15(K)92 of the Kohima Bench of this Court.

2-3. The facts briefly are that on February 3, 1982, the two appellants were appointed as Assistant Plantation Managers under the Nagaland Plantation Crops Development Corporation Limited (for short "the Corporation"). But their services were sought to be terminated with effect from May 10, 1988 by a month''s notice issued by the Chairman of the Corporation on April 6, 1988. The appellants challenged the said notice of termination in Civil Rule No. 1238/88 which was renumbered in the Kohima Bench of this Court as Civil Rule No. 68(K)89 and by judgment dated September 30, 1991 of this Court, the said notice of termination dated April 6, 1988 was set aside and the Corporation was directed to reinstate the appellants in service. Pursuant to the said judgment dated September 30, 1991 of this Court, the two appellants were reinstated in service with effect from January 16, 1991 by order dated January 12, 1991 of the Managing Director of the Corporation. Since the appellants were not given the benefits of service from the date of termination till their reinstatement, they filed another Civil Rule being Civil Rule No. 59 (K) 92 praying, inter alia, that the respondents be directed to reinstate the appellants with effect from May 10, 1988 and to grant all consequential service benefits including seniority, pay, allowance, arrear, etc. The aforesaid Civil Rule No.59(K)92 was disposed of by the learned single Judge by the impugned judgment dated February 24, 1993 directing the respondents to reinstate the appellants with effect from May 10, 1988 to January 15, 1992 for the purpose of pay fixation, pension, seniority etc., but were not allowed back wages for the said period. This, appeal is against the said judgment of the learned single Judge in so far as it has refused the relief of back wages.

At the hearing of this appeal, Dr. Y.K. Phukan, learned counsel for the appellants, submitted that ordinarily when an order of termination is set aside by the Court and the employer is directed to reinstate the employee in service, the Court allows back wages from the date of termination of service till his reinstatement and there is no reason as to why the learned single Judge ought to have departed from the aforesaid principle and refused the relief of back wages to the appellants. Dr. Phukan brought to our notice the provisions of Article 43A of the Constitution in which a directive has been given to the State to secure participation of the workers in the management of industry and submitted that after the introduction of the said Art. 43-A in the Constitution, the Apex Court has taken a view that the workers cannot be denied the benefits of back wages in case their services were terminated illegally. In support of his submissions, Dr. Phukan relied on the decisions of the Supreme Court in the case of Gujarat Steel Tubes Limited v. Its Majdoor Sabha, 1980 LLJ 137 Surendra Kumar v. Industrial Tribunal, 1981 LLJ 386 P. Kasilingam v. PSG College of Technology, 1981 LLJ 358 Sant Raj v. O.P. Singla, 1985 LLJ 19 Shephard v. Union of India 1988 LLJ 162 Central Co-operative Consumers Stores Limited v. Labour Court H.P. 1993 LLJ 563 and Indrani Bai v. Union of India 1995 LLJ 431 as well as the decision of this Court in the case of D.K.Saha v. Union of India reported in 1993 Su (1) Gau 340 and the unreported judgment dated August 1, 1995 of this Court in Civil Rule No.2490/94.

Mr. P. Khataniar, learned counsel for the respondents, in reply, contended that in the earlier Civil Rule No. 68(K)89, the Court while setting aside the impugned notice of termination dated April 6, 1988 did not direct payment of back wages. Further, it would be evident from the impugned judgment of the learned single Judge that as the Corporation had been wound up and the State of Nagaland was facing financial constraint, the learned single Judge did not grant the relief of back wages to the appellants. The learned single Judge had, therefore, taken into consideration the peculiar facts and circumstances of the case and denied the relief of back wages. He cited the judgment of the Apex Court in the case of R.L. Sarma v. Managing Committee (Dr. Hariram Coeducation) H.S. School, in which on account of financial difficulties pleaded by the respondents, the Court did not think it proper to compel the management to pay full back wages to an employee illegally dismissed from service after setting aside the order of dismissal passed by the Managing Committee of the School.

We have carefully applied our mind to the decisions cited by the learned counsel for the parties and we find that the law that has been laid down by the Apex Court is that ordinarily when an order of termination or dismissal is set aside by the Court or Tribunal, the relief of back wages is granted to the employee but in exceptional circumstances, the Court may also refuse to grant such relief of back wages to an employee even after setting aside the order of dismissal or termination or may grant only part of the back wages. The law on the subject as has been explained by Chinnappa Reddy J. in the case of Surendra Kumar v. Industrial Tribunal, (Supra) at p. 389 is as follows :

"Plain common sense dictates that removal of an order terminating the services of workmen must ordinarily lead to the reinstatement of the services of the workmen. It is as if the order has never been, and so it must ordinarily lead to back wages too. But there may be exceptional circumstances which make it impossible or wholly inequitable vis-a-vis the employer and workman to direct reinstatement with full back wages. For instance, the industry might have closed down or might be in severe financial doldrums; the workmen concerned might have secured better or other employment elsewhere and so on. In such situations, there is a vestige of discretion left in the Court to make appropriate consequential orders. The Court may deny the relief of reinstatement where reinstatement is impossible because the industry has closed down. The Court may deny relief of award of full back wages where that would place an impossible burden on the employer. In such and other exceptional cases, the Court may mould the relief, but ordinarily the relief to be awarded must be reinstatement with full back wages. That relief must be awarded where no special impediment in the way of the awarding the relief is clearly shown. True, occasional hardship may be caused to an employer but we must remember that, more often than not, comparatively far greater hardship is certain to be caused to the workmen if the relief is denied than to the employer if the relief is granted."

In the instant case, we find that the reason given by the learned single Judge in the impugned judgment for refusing to grant the relief of the back wages is that the Corporation has been wound up with effect from April 1, 1992 on account of financial crisis and the appellants were absorbed in service under the Government of Nagaland which was faced with financial constraint. We are of the opinion that the ground given by the learned single Judge for not granting the relief of back wages to the appellants fell within the exceptional circumstances as I explained by the Apex Court in the aforesaid I judgment and the learned single Judge exercised his discretion in a sound and reasonable manner by denying the relief of back wages to the appellants.

In the result, we find no merit in this appeal and accordingly dismiss the same. But considering the facts and circumstances of the case, the parties shall bear their own costs.