P.B. Sawant, J.
1. These are two cross petitions against the order dated 19th September, 1969 of the Industrial Court in Appeal (I.C.) No. 100 of 1969.
2. Miscellaneous Petition No. 806 of 1969 was filed by the employer on the original side and it was transferred to this Court for hearing along with the Special Civil Application No. 2871 of 1969 filed by the workman. Since both the petitions seek to challenge different directions arising out of the very same order, they are being disposed of by this common judgment.
3. Briefly, the facts leading to these petitions are as follows : One Sadanand Patankar was in the employment of Messrs. New Prabhat Silk Mills No. 2, since the year 1960. By an order dated 30th July, 1967 he was suspended from service and later on 2nd August, 1967 was served with a charge-sheet alleging three acts of misconduct, viz., (1) that he was found talking and thus whiling away time on 30-7-1967 at about 6 p.m. (ii) that on 31-7-1967 he misbehaved with one of the partners and abused and threatened one Nari Seth, and (iii) that he instigated the workers to stop work from 2nd August, 1967. The employer-mills held an inquiry into the said charges and the enquiry officer in his finding dated the 29th September, 1967, held that the said charges were proved against the employee. As a result of this finding, the employee was dismissed from service with effect from the 29th September, 1967. Thereafter, the employee made an approach to the employer by his letter dated 14th October, 1967 under S. 42(4) of the Bombay Industrial Relations Act, 1946 (hereinafter referred to as the said Act,) and the said approach being of no avail, he filed an application before the Labour Court, being Application No. 7 of 1967, under S. 79 read with S. 42(4) of the said Act, for reinstatement with full back wages.
4. In the said application the Labour Court held that the inquiry conducted by the employer was defective, and, therefore, itself held a fresh inquiry into the charges against the employee. In the said inquiry, the Labour Court came to the conclusion that the charges of misconduct stated at Nos. (i) and (iii) in the charge-sheet were not proved, but the charge No. (ii) was proved. In the result, the Labour Court dismissed the application of the employee, by its order dated the 19th May, 1969.
5. Against the said order of the Labour Court the employee preferred an appeal, being Appeal (I.C.) No. 100 of 1969, before the Industrial Court, Bombay. In the appeal, the employer took a preliminary objection that the appeal was not competent, and also defended, on merit, the order of the Labour Court. The Industrial Court rejected the preliminary objection regarding the non-maintainability of the appeal and on merits held the conclusion of the Labour Court that the second charge of misconduct was proved against the employee suffered from infirmities, and held that there was no reliable evidence to hold that the employee was guilt of the said misconduct. As a result, the Industrial Court by its order dated 19th September, 1969 set aside the order of the Labour Court, and ordered reinstatement of the employee. The Industrial Court, however, held that as the employee had not shown that during all the period of his wrongful dismissal he was not gainfully employed, he was not entitled to any back wages.
6. In Miscellaneous Petition No. 806 of 1969 filed by the employer-mills, the attack is against the order of reinstatement while in Special Civil Application No. 2871 of 1969 filed by the employee, the grievance is against the refusal of back wages.
7. Dealing first with the Miscellaneous Petition No. 806 of 1969, in view of the decision of the Supreme Court in : (1972)ILLJ657SC , M/s. Chhotabhai Jethabhai Patel and Co. v. The Industrial Court, Maharashtra, Nagpur Bench, Nagpur and others, Mr. Shetye appearing for the petitioner-mills has not urged before us the contention regarding the non-maintainability of the appeal before the Industrial Court, since the said point is concluded by that decision. He has, however, strongly urged two contentions on behalf of the petitioner-mills. Firstly, according to him, the finding of the Industrial Court that the employee was not guilty of the misconduct is contrary to the evidence on record and secondly, it is his submission that even if the said finding of the Industrial Court is correct, the Court erred in law in granting reinstatement to the employee automatically after setting aside the order of dismissal, without considering the question as to whether in the circumstances of the case, the order of compensation instead of the order of reinstatement was a proper one.
8. As regards the attack against the finding of the Industrial Court, that the charge of misconduct was not proved against the employee, it must not be forgotten that the jurisdiction which we are exercising is an extraordinary and discretionary jurisdiction, and unless it is shown that the finding of fact is perverse or unreasonable or is unsupported by any evidence on record, we will not be justified in interfering with the same. The Industrial Court was the final Court of fact, and has arrived at the said finding after appreciating the evidence on record. Mr. Shetye could not show us how the conclusion drawn by the said Court was unwarranted. As an indulgence, we went through the entire evidence on record and satisfied ourselves that the finding of the Industrial Court that there was no reliable evidence to prove the misconduct with which the employee was charged, is valid and proper. In the result Mr. Shetye's attack against the said finding must fail.
9. As regards the second submission, viz., that the Industrial Court ought not to have ordered reinstatement of the employee automatically, since the relations between the employer and the employee were strained, Mr. Shetye relied upon three decisions of the Supreme Court. They are : Ruby General Insurance Co. Ltd. v. Chopra : (1970)ILLJ63SC ; Hindustan Steels Ltd., Rourkela v. A. K. Roy and others : (1970)ILLJ228SC , and Binny Ltd. v. Their Workmen : (1972)ILLJ478SC .
10. In Ruby General Insurance Co. Ltd., v. Chopra : (1970)ILLJ63SC it was a case of an employee who was a stenographer working with the appellant Insurance Company. The employee had put in only one year's service and as a stenographer was holding a position of trust and confidence. The appellant-company's establishment was a small one. It was further proved that the employee had surreptitiously retained copies of confidential letters dictated to him with regard to several concerns in which the employer-company was interested, for the purpose of using them for his own purpose. On these facts, the Supreme Court in that case held that the Tribunal ought not to have awarded reinstatement but ought to have awarded, instead, suitable compensation to the employee. While so deciding, the Court, in para 6 of its judgment, observed that 'the normal rule is that in cases of invalid orders of dismissal industrial adjudication would direct reinstatement of a dismissed employee. Nevertheless, there would be cases when it would not be expedient to adopt such a course.' The Court then referred to its earlier decisions in Assam Oil Company Ltd. v. Its Workmen : (1960)ILLJ587SC ; Utkar Machinery Ltd. v. Miss Santi Patnaik : (1966)ILLJ398SC , and Workmen of Charotter Gramodhar Sahakari Mandal Ltd. v. Charotter Gramodhar Sahakari Mandal Ltd., (Civil Appeal No. 382 of 1966 decided on 14th August, 1967) and stated that 'these decisions clearly show that though industrial adjudication may not regard a wrongful dismissal as amounting to termination of service resulting only in a right to damages as under the law of master and servant and would ordinarily order reinstatement, it can refuse to order such reinstatement where such a course, in the circumstances of the case, is not fair or proper. The Tribunal has to examine, therefore, the circumstances of each case to see whether reinstatement of the dismissed employee is not inexpedient or improper.' Adverting to the facts of the case in hand, the Court in para 7 of its judgment then pointed out, among other things, that the position of a stenographer in a small establishment like that of the company in that case, was one of confidence and trust as he would be taking down dictation and typing out all kinds of matters including confidential and secret. On his own admission, the employee had retained copies of as many as 32 communications relating to other concerns in which the company was interested, as an evidence of extra worked for concerns other than the company. The manager under whom he was working might well feel that if the employee was capable of collecting evidence against the company he might in future collect evidence of a more dangerous and harmful nature. If the manager could not repose confidence in him, he could not make any use of his services as a stenographer, if reinstated. The Court, therefore, held that in the circumstances, an order of compensation, instead of that of reinstatement, was a proper order.
11. In Hindustan Steels Ltd. v. A. K. Roy and others. : (1970)ILLJ228SC , the Supreme Court referred to the circumstances on record that in accordance with the practice adopted at the instance of the Government and in pursuance of the directions of the Board of Directors of the company to that effect, antecedents of all workmen were verified by calling for reports from the Police. The company ordered the termination of the service of the employee in question, only because of the adverse report received against him from the Police. The letter of the Deputy-General of Police communicating the report was produced, but the report itself could not be produced for reasons of security. The Tribunal had found that the termination was not due to victimization or unfair labour practice. The evidence of the Senior Personnel Officer of the company that the termination of the service was on account of the recommendation of the Security Officer based on the adverse report from the Police was not challenged in cross-examination. The concerned employee was further posted in the blast furnace which was a crucial part of the company's works and in respect of which the company could not hazard any risk. The Court then addressed itself to the question as to whether, in these circumstances, the relief of reinstatement granted by the Tribunal was proper. For this purpose the Court in paragraphs 9 and 10 of its judgment referred to the history of reliefs granted by industrial adjudication whenever an order of termination of service was set aside, in the following words :
'There can be no doubt that the right of an employer to discharge or dismiss an employee is no longer absolute as it is subjected to severe restrictions. In cases of both termination of service and dismissal industrial adjudication is competent to grant relief, in the former case on the ground that the exercise of power was mala fide or colourable and in the latter case if it amounts to victimization or unfair labour practice or is in violation of the principles of natural justice or is otherwise not legal or justified. In such cases, a tribunal can award by way of relief to the concerned employee either reinstatement or compensation. In the earlier stages the question whether one or the other of the two reliefs should be granted was held to be a matter of discretion for the Tribunal : see Western India Automobile Association v. Industrial Tribunal, Bombay and others 1949 L.L.J. 245, and United Commercial Bank Ltd. v. U.P. Bank Employees' Union and others 1952 II L.L.J 577. The view then was that to lay down a general rule of reinstatement being the remedy in such cases would itself fetter the discretion of the Tribunal which has to act in the interests of industrial harmony and peace and that it might well be that in some cases imposition of the service of a workman on an unwilling employer might not be conducive to such harmony and peace. Later on, however, the earlier flexibility appears to have been abandoned and it was ruled that although no hard and fast rule could be laid down and the Tribunal would have to reconcile each case on its own merits and attempt to reconcile the conflicting interests of the employer and the employee, the employee being entitled to security of service and protection against wrongful dismissal, the normal rule in such cases should be reinstatement : see Punjab National Bank Ltd. v. Their Workmen : (1959)IILLJ666SC . This conclusion was adhered to in some of the subsequent decisions. But in the case of Punjab National Bank Ltd. : (1959)IILLJ666SC , itself, as also in other subsequent cases, the rule was qualified to mean that in unusual or exceptional case, where it is not expedient to grant the normal relief of reinstatement, the proper relief would be compensation and that would meet the ends of justice. The problem confronting industrial adjudication is to promote its two objectives, the security of employment and protection against wrongful discharge or dismissal on the one hand, and industrial peace and harmony on the other, both leading ultimately to the goal of maximum possible production.
As exceptions to the general rule of reinstatement, there have been cases where reinstatement has not been considered as either desirable or expedient. These were the cases where there had been strained relations between the employer and the employee, where the post held by the aggrieved employee had been one of trust and confidence or where though dismissal or discharge was unsustainable owing to some infirmity in the impugned order the employee was found to have been guilty of an activity subversive of or prejudicial to the interests of the industry. These cases are to be found in Assam Oil Company Ltd. v. Its Workmen : (1960)ILLJ587SC ; Workmen of Charottar Gramodhar Sahakari Mandal Ltd., v. Charottar Gramodhar Sahakari Mandal Ltd., (Civil Appeal No. 382 of 1966 decided on 14th August, 1967), Doour Dulung Tea Estate v. Its Workmen (Civil Appeal No. 516 of 1966, decided on 26th October, 1967) and Ruby General Insurance Company Ltd. v. P. P. Chopra : (1970)ILLJ63SC . These are, however, illustrative cases where an exception was made to the general rule. No hard and fast rule as to which circumstances would in a given case constitute an exception to the general rule can possibly be laid down as the Tribunal in each case, keeping the objectives of industrial adjudication in mind, must in a spirit of fairness and justice confront the question whether the circumstances of the case require that an exception should be made and compensation would meet the ends of justice.'
12. The Court then laid down the procedure to be followed by the Industrial Adjudicator, and by the High Court while exercising its writ jurisdiction in such matters, in paragraph 14, as follows :
'It is true some of the decisions of this Court have laid down that where the discharge or dismissal of a workman is not legal or justified, the relief which would ordinarily follow would be reinstatement.
The Tribunal, however, has the discretion to award compensation instead of reinstatement if the circumstances of a particular case are unusual or exceptional so as to make reinstatement inexpedient or improper. The tribunal has, therefore, to exercise its discretion judicially and in accordance with well-recognized principles in that regard and has to examine carefully the circumstances of each case and decide whether such a case is one of those exceptions to the general rule. If the Tribunal were to exercise its discretion in disregard of such circumstances or the principles laid down by this Court it would be a case either of no exercise of discretion or of one not legally exercised. In either case the High Court in exercise of its writ jurisdiction can interfere and cannot be content by simply saying that since the Tribunal has exercised its discretion it will not examine the circumstances of the case to ascertain whether or not such exercise was properly and in accordance with the well-recognised principles made. If the High Court were to do so, it would be a refusal on its part to exercise jurisdiction.'
Reverting thereafter to the facts of the case in hand, the Court made the following observations :
'But what was relevant, at the stage when the Tribunal came to decide what relief the workman was entitled to, was the question whether the management genuinely apprehended as a result of the report that it would be risky to retain the workman in the company's service. They may have gone wrong in the manner of terminating the workman's service as held by the Tribunal. But, if the management truly believed that it was not possible to retain the workman in the company's service on grounds of security and consequently could not place confidence in him any longer, the present case would be one of those exceptional cases where the general rule as to reinstatement could not properly be supplied. This of course does not mean that in every case, where the employer says that he has lost confidence in the workman, and, therefore, has terminated his service, reinstatement cannot be granted and the Tribunal has to award compensation. On the other hand, if on an examination of all the circumstances of the case, the Tribunal comes to the conclusion that the apprehensions of the employer were genuine and the employer truly felt that it was hazardous or prejudicial to the interests of the industry to retain the workman in his service on grounds of security, the case would be properly one where compensation would meet the ends of justice.'
On the facts, and in the circumstances of the case, the Court, therefore, set aside the order of reinstatement and granted compensation to the employee.
13. In the case of Binny Ltd. v. Their Workmen, : (1972)ILLJ478SC , the question raised before the Court was again whether in the circumstances of the case, compensation in lieu of reinstatement ought to have been awarded to the employee. Two grounds were urged on behalf of the employer for denying reinstatement to the workman. One was the lapse of time between the date of termination of service and the date of the order of reinstatement, and the other was loss of confidence. In support of the first ground, reliance was placed on the decision of the Supreme Court in Shalimar Works Limited v. Their Workmen : (1959)IILLJ26SC . In the said case no less than 250 workmen were discharged in April, 1948 and the first order of reference was made in October, 52. On the discharge of the workmen, the industry was closed and thereafter it was reopened and there was a fresh recruitment of labour. The Appellate Tribunal had ordered reinstatement of 15 of the workmen whose case was similar to that of the rest. On these facts the Court distinguished the decisions in Shalimar Works case (supra) and held that when a large number of workmen were employed in an industry reinstatement of one workman would not create serious dislocation of work. The Court further held that :
'Normally it will be months before an order of reference is made by Government and one or two years elapse in almost all cases before the adjudication by an Industrial Tribunal is complete. If mere lapse of time be enough to lead the Industrial Tribunal to hold that there should be no reinstatement of service the power of reinstatement will become obsolete. In any case the management must try to show that reinstatement will cause dislocation of work and the Tribunal must take that into consideration. In this case we find no such compelling circumstances.'
14. In support of the other ground reliance was placed on behalf of the employer on the decision in the case of Hindustan Steels v. A. K. Roy (supra). Negativing the contention advanced on behalf of the employer, the Court observed as follows :
'On the question as to whether compensation should have been awarded in lieu of reinstatement, we were referred to the case of Hindustan Steels v. A. K. Roy : (1970)ILLJ228SC , where it was said that it was in the discretion of the tribunal to make an order of reinstatement or to award compensation in lieu thereof and it is only when the Tribunal exercises its jurisdiction in disregard of the circumstances or the relevant principles laid down in regard thereto that this Court would interfere with their discretion. It has become almost a settled principle that reinstatement should not be awarded where the management justifiably alleged that they have ceased to have confidence in the dismissed employee. In other cases the Tribunal must consider carefully the circumstances of the case to come to a finding that justice and fairplay require that reinstatement should be awarded. In this case, there is no allegation that the management had lost confidence in Kuppuswamy. It is extremely doubtful whether the manager would have ordered dismissal if Veeraraghavan had not drawn his attention to the past lapses of the respondent about which he was not allowed to have a say. We do not, therefore, feel that we must interfere with the award of reinstatement of the respondent'.
What emerges from the aforesaid decisions is that the normal rule, once an order of termination of service is set aside, is to reinstate the employee in service. An employer who claims a departure from this rule must satisfy the industrial adjudicator by producing before him the necessary material in that behalf, that the employee is disentitled to the said normal relief. It is not further enough that the employer makes allegations in his pleadings. The allegations must be justifiable and it is his duty to get the necessary point framed for determination in the adjudication proceedings. When so requested, the industrial adjudicator should set down such point for decision and give opportunity to both the parties to lead the necessary evidence and to contest the same. It is neither fair nor legal to expect an industrial adjudicator to deny the normal relief to a workman on mere allegations and in the absence of the relevant material on record. If an employer fails in his duty to get the necessary point raised for decision, he cannot thereafter be permitted to make a grievance against the relief of reinstatement granted to the employee.
15. In the present case, the employer-mills had not even pleaded either before the Labour Court or the Appellate Industrial Court that in the event the employee succeeded he should be denied the relief of reinstatement. Much less was any material placed on record before the said authorities to disentitle the employee to the said relief. The contention is that behalf is raised for the first time in this petition. Mr. Shetye's argument that the allegation of misconduct against the employee should be deemed to have stained the relations between the parties, if accepted, will set at naught the right to the security of employment, which the workmen have otherwise come to acquire. For then it will be open for an employer to get rid of an employee, by merely alleging some misconduct against him. The argument, therefore, is merely to be stated to be rejected.
16. In the result, we do not find any substance in this petition and it must fail.
17. In Special Civil Application No. 2871 of 1969 which is filed by the employee, the grievance is that the Industrial Court while granting reinstatement has refused payment of back wages on an improper ground, viz., that the employee had not shown that during all these years he was not gainfully employed. Mr. Warke, who appears for the petitioner in this petition, has rightly urged that no such point was framed for determination either before the Labour Court or before the Industrial Court and consequently the employee had no opportunity to show that he was not gainfully employed during the said period and hence the observation by the Industrial Court that the appellant had not shown that he was during all those years not gainfully employed was unwarranted and without any evidence to that effect on record. In this connection, his submission was that when reinstatement is granted, the relief for payment of arrears of wages should follow as a matter of course. In the alternative, he urged that in any case the employee should be given a proper opportunity to prove that he was not employed during the relevant period in order to entitle him to claim the arrears of wages. In support of his contentions, Mr. Warke relied upon a decision of this Court in Lalit Gopal Berry v. M. V. Hirway 75 B.L.R.P. 73. As against this Mr. Shetye who appears for the respondent-mills urged that the burden of proving that the employee was unemployed during the entire period and that he made diligent efforts to secure gainful employment but did not succeed in his efforts lies upon the employee and it is only if he discharges the burden that the Court is justified in granting arrears of wages. In this connection, he relied upon three reported decisions in Rakeshwar Dayal v. Labour Court : (1962)ILLJ5All ; Malik Dairy Farms v. Its Workers' Union : (1968)IILLJ523Bom , and Bharat Textile Engineering Works, Bombay v. Industrial Tribunal (N. A. Athalye), Maharashtra and others : (1966)ILLJ582Bom , and two unreported decisions of this Court in Special Civil Application No. 2640 of 1970 decided on the 15th April, 1971 and Special Civil Application No. 2823 of 1973 decided on 5th February, 1974.
18. It will first be convenient to consider the effect of the authorities cited at the Bar. In Rakeshwar Dayal v. Labour Court : (1962)ILLJ5All , the Labour Court had directed reinstatement of a workman but had awarded only half of the back wages. The employee in his writ petition before the High Court challenged the correctness of the award denying him the balance of the wages. The single Judge of the Allahabad High Court, who decided the said case observed that there was nothing to show what the petitioner had been doing during his period of enforced idleness and the Tribunal did not exclude the possibility of the petitioner having gained something by gainful employment elsewhere. The petitioner had not assailed that part of the reasoning nor had he asserted in his affidavit that he remained idle in spite of his best efforts to minimise his losses. A servant who sues his employer for wrongful dismissal must show that he made efforts to minimise his loss. The petitioner had not stated that he made any effort to minimise his loss during his period of enforced idleness. It appears from the side judgment that the employee had sought to contend before the High Court that he was entitled to full back wages because the Tribunal had used the word 'reinstatement'. The learned Judge, therefore, observed that an employee does not become entitled to full salary for the interim period because the Tribunal used the word reinstatement in its order and that it was within the powers of the tribunal to grant full reinstatement or partial reinstatement (sic) at its discretion. The Court, therefore, refused to interfere with the order of the Tribunal granting the employee reinstatement with only half the back wages.
19. In Bharat Textile Engineering Works, Bombay v. Industrial Tribunal (N. A. Athalye, Maharashtra and others : (1966)ILLJ582Bom the Industrial Tribunal had awarded compensation in lieu of reinstatement, to a dismissed workman. The compensation directed to be paid was equal to wages from the date of dismissal to the date of publication of the award and also two months' wages in addition. The employer in his writ petition made a grievance before this Court that the employee was employed in some other firm during the period, and the Tribunal had not taken into consideration the said fact while awarding the compensation. The Court, therefore, held in that case that if the employee was actually employed then the compensation which may reasonably be paid to him would naturally be less than what may be awarded if he was unemployed after the date of his dismissal, and directed the Industrial Tribunal to ascertain whether the employee was employed during the period and decide how much compensation should be awarded to him for wrongful dismissal in the light of its finding on the said issue.
20. In Malik Dairy Farms v. Its Workers' Union, : (1961)IILLJ523All , it was a case of an ex parte award made by the Labour Court reinstating an employee with full back wages. The employer had in a writ petition before this Court contended that the order relating to the payment of full back wages to the employee on reinstatement was not proper since it was not shown that the employee was unemployed during the period of his dismissal. Accepting the said contention, this Court observed in that case that the Court was inclined to agree with the views expressed by the Allahabad High Court in Rakeshwar Dayal v. Labour Court (supra) and was of the view that further opportunity should be given to the union to show that the employee made necessary efforts to find gainful employment during the period of dismissal and was unable to get it. This Court further observed that it was desirable that the Labour Court should allow both the parties to lead such further evidence as they desired on the question of the quantum of back wages which should be allowed to the employee and the Labour Court should decide in the light of such evidence the amount of back wages to be allowed to the employee.
21. In Special Civil Application No. 2640 of 1970 which was decided on the 15th April, 1971 by a Division Bench of this Court consisting of Kotwal, C.J., and Tulzapurkar, J., the Labour Court had awarded to the employee all back wages inclusive of all allowances from the date of his suspension till the date of his superannuation with all benefits of retirement. In appeal, the Industrial Court directed the Labour Court to calculate and specify the exact amount payable to the employee and for that limited purpose remanded the matter to the Labour Court. In the writ petition before this Court, the grievance of the employers was that the Courts below had not considered the question as to whether the employee was during the period of his termination of service gainfully employed or not while directing payment of all back wages. While accepting the said contention advanced on behalf of the employers, this court observed that although the case was governed by the provisions of S. 78(1)D(a) of the Bombay Industrial Relations Act, 1946 which gave power to the Labour Court to direct payment of wages for the entire period of dismissal, and had not provided for deduction of income earned elsewhere, it would be entirely inequitable to order the employer to pay back wages for a period during which an employee was employed and earning wages in some other employment although the employer may have initially wrongly terminated his services. According to the Court, the principle was merely a corollary to the normal rule governing the award of damages under the general law and the same was recognised by this Court in Bharat Textile Engineering Works v. Industrial Tribunal (N. A. Athalye), Maharashtra and others and Malik Dairy Farms v. Its Workers' Union (supra). The Court, however, did not countenance the further argument advanced on behalf of the employer that merely because the employee had not anywhere pleader or proved that he was not earning any income during the time his services stood terminated, the employee's application should have been dismissed. The Court observed that the said issue was never tried at all before the Labour Court and the Labour Court without applying its mind to the said question had merely ordered generally that the employer should pay the employee his back wages. The Industrial Court had equally not taken into consideration the said principle for fixing the damages. This court, therefore, directed the Labour Court to take into account the additional factor, viz., whether the employee was during the period of the termination of his service employed elsewhere and earned income, while computing the back wages. The Court also further added that it would, of course, be for the employee first of all to prove that he was not earning an income during the relevant period and the Labour Court was to allow both the parties to lead necessary evidence on the question.
22. Similar is the effect of the decision in Special Civil Application No. 2823 of 1973, decided on the 5th February, 1974 by a Division Bench of this Court consisting of Deshpande and Dudhia, JJ. While allowing the writ petition of the employee against the award of the Labour Court and setting aside the order of her dismissal, this Court had to consider the question of back wages payable to the employee on her reinstatement. The court observed that the employee had in her statement before the Labour Court made an averment that she was unemployed since her services were terminated by the employer. The employer had not in terms denied the said specific averment of the employee. However, an affidavit was placed before the Court during the writ proceedings by the employer indicating therein that the employee was employed with some concern during the writ proceedings by the employer indicating therein that the employee was employed with some concern during the relevant period. The Court, therefore, found that it was not possible to determine the said controversy on the basis of scanty material before it and held that it needed a thorough inquiry. The Court, therefore, remanded the matter back to the Labour Court to determine what amount of back wages the employee should be held to be entitled to, having regard to the income that she might have earned during the relevant period.
23. In Lalit Gopal Berry v. M. V. Hirway 75 B.L.R.P. 73 it was a case of an employee who was granted reinstatement with full back wages, by the Labour court. The employer had filed a writ petition in this Court on its original side challenging the said decision. The said petition was dismissed, and this Court in the Letters Patent Appeal filed by the employer, while considering the question with regard to the back wages, held that :
'The question whether an employee had been gainfully employed during the relevant period must ordinarily be raised and agitated not by the employee but by the employer in the proceedings before the Industrial Tribunal and or the Labour Court. It cannot be expected of an unlearned and a simple workman that he should remember to lead evidence to prove before such Tribunals about the facts of efforts made by him during the relevant period for procuring employment. In the present case, to succeed in his arguments, the appellant was bound to tender before the learned single Judge the record of evidence led by the parties on this question. The award of the Labour Court appears to us to be on the footing that there was sufficient evidence to show that in spite of the efforts made by him respondent No. 1 had remained unemployed during the relevant period. That is the finding of the learned single Judge. In connection with this question, the appellant must fail, because an effort to bring relevant evidence recorded by the Labour Court on the record of the miscellaneous petition on the original side had never been made on behalf of the appellant. The record of the proceedings in the miscellaneous petition is the only record which we can read in this appeal. The record in this appeal does not include the evidence on the record of the Labour Court and we are not in a position to investigate the quantum of evidence led on this question on behalf of respondent No. 1 and the cross-examination thereof on behalf of the appellant; similarly, we do not know the evidence led by the appellant in this connection. We are for this reason unable to appreciate the strong efforts made on behalf of the appellant to argue that respondent No. 1 had failed to prove necessary facts to entitle the Labour Court to make its award in respect of the back wages.'
In the result this Court confirmed the award of the Labour Court, directing payment of full back wages.
24. In this connection it is worthwhile to note two other decisions, one of the Madras High Court and the other of the Allahabad High Court. A single Judge of the Madras High Court in United Bleachers (P) Ltd. v. Labour Court, 1964 II L.L.J. 56, held that the allegation that the concerned workman was employed elsewhere and was earning during the period of his unemployment has to be proved by the employer and it is not sufficient to take the plea in the written statement but it has to be proved by leading evidence or cross-examining the workman before the Tribunal for enabling it to assess the quantum of back wages.
25. In a later decision, a Division Bench of the Allahabad High Court in Postal Seal Industrial Co-operative Society v. Labour Court 1971 I L.L.J. 327, dissented from the earlier decision of its single Judge in Rakeshwar Dayal's case (supra) and the cases in which it was followed, and held that it is for the employer to plead and prove to the satisfaction of the Tribunal that the workman had made some earnings during the period of his enforced idleness or he has refused to seek or accept alternative jobs and it is not for the workman to plead and prove that he had tried to minimise the loss during his enforced idleness. The Court further observed that if the employer pleads that the workman is not entitled to full wages, as he has willfully failed to seek and accept alternative jobs, it will be for the workman them to offer due explanation as to why he did not seek and accept alternative jobs or that he did seek alternative job, but failed.
26. The position of law which emerges from the aforesaid decisions may be summarised as follows : The effect of reinstatement is to restore an employee to his former capacity, status and emoluments, as if his services had never been terminated and the employee gets the benefit of continuity of service. The general rule in industrial adjudication is that on reinstatement, the employee is to be duly compensated for the loss of earning during the period of his enforced idleness or unemployment. In the absence of cogent reasons to the contrary such compensation should normally be equal to the full wages or remuneration which the employee would have received had he continued in service but for the order of termination of his service. One such reason will be the extent of the income if any, earned by the employee elsewhere during the period of his enforced unemployment and or the mature of the efforts or the absence thereof, on his part, to secure alternative gainful employment. Once the relevant facts are brought on record there will be no difficulty in calculating the income, if any, earned by the employee elsewhere. The assessment of efforts made by the employee or of his inability to make the same is bound to present difficulties, it being dependent upon several factors including the nature of employment sought and the general conditions of employment in the country. Since the facts about the employment or non-employment and/or the efforts made or not made to secure an alternative employment during the period of enforced idleness, are within the special knowledge of the employee it is only fair and proper that he should first state whether he was employed or not, and during what period, the amount of income earned by him if any, the nature of efforts made by him for securing alternate employment or the circumstances which prevented him from making such efforts. It is in that sense that the burden of proving the said facts lies on the employee. Once, however, the said burden is discharged it is for the employer to prove facts to the contrary.
27. As things stand today, a majority of the employees are either unrepresented or inadequately represented in the adjudication proceedings. It is, therefore, unfair either to insist or to expect that the employee should raise the relevant point. It is the duty of the industrial adjudicator himself to frame the necessary point for determination in each and every case and allow parties to lead evidence with regard to it and to contest the same as in the case of the other points in the adjudication. A failure to do so will, according to us, be tantamount to failure to exercise jurisdiction and an order either granting or refusing back wages, in the absence of such determination, will be avoid being an improper exercise of jurisdiction. In many cases, the direction with regard to the payment or non-payment of back wages is as important as, if not more than, the order of reinstatement itself, both from the point of view of the employer as well as the employee. The casual manner in which very often the said direction is given, at present, must be discouraged. We are, therefore, of the view that it is obligatory on the industrial adjudicator to frame and decide the point about the payment of back wages like any other point irrespective of whether the parties have raised the same or not.
28. In the present case, we find a similar situation. Neither the Labour Court, nor the Industrial Court had framed the point for determination as to whether the employee was entitled to back wages or not. The employee was not given any opportunity to show that he was so entitled, and in the absence of any material on record either way the Court denied back wages to the employee on the ground that the employee had not ('shown') that he was not gainfully employed during the period. In the view which we have taken, therefore, that part of the award will have to be quashed and the matter will have to be remanded to the Labour Court for determination of the question of back wages.
29. In the result, while we confirm the order of the Industrial Court granting reinstatement to the employee, we remand the matter to the Labour Court for inquiry into the limited question with regard to the payment of back wages between the period from the 29th September, 1967, which is the date of the order of dismissal, to 19th September, 1969 which is the order of the Industrial Court granting reinstatement. The Labour Court will decide the question in the light of what we have stated earlier. We make it further clear that since the order of reinstatement is confirmed the employee should be reinstated forthwith and he will be entitled to all wages from the 19th September, 1969 onwards. The inquiry which the Labour Court will hold will be limited to the period from the 29th September, 1967 to 19th September, 1969. The Labour Court will complete the inquiry and finalize its decision within two months of the writ reaching the Court.
30. In the result, we dismiss Miscellaneous Petition No. 806 of 1969 and the rule granted therein is discharged. The petitioner will pay cost of the petition to respondent No. 1 which is quantified at Rs. 225. The Special Civil Application No. 2871 of 1969 is allowed and the rule granted therein is made absolute in terms of prayer (a) thereof. There will, however, be no order as to cost in the said application.