Rama Jois, J.
1.The first of the two Writ Petitions is by a workman and the second by the Management of New Chitra Talkies, Mangalore, which have been presented aggrieved by the same Award of the Labour Court, Mangalore, in Ref No. ID LCM 25/77.
2. The facts of the case, in brief, are as follows: The Petitioner in W, P. No. 13009 of 1978 (hereinafter referred to as 'the workman') was in the employment of the 1stRespondent. New Chitra Talkies, Mangalore (hereinafter referred to as 'the employer'). An industrial dispute was raised by the workman alleging that the employer had refused employment to him, but had taken the stand that the workman himself had abandoned the employment, though it was not true. As the conciliation proceedings failed, theConciliation Officer made a failure report to the State Government. Thereafter the State Government made an order dated 14th December 1977 referring the following points of dispute for industrial adjudication ;
'1. Whether the Management of M/s. New Chitra Talkies, Basavanagudi, Mangalore, is justified in saying that Sri B. Veeranarayana , former Chief Operator, has abandoned their services with effect from 1-1-1976 due to the petitioner's detention under D.I.R. ?
2. If not to what relief Sri B. Veeranarayana, former Chief Operator is entitled ?'
On this reference, the Labour Court made its Award on 30th June 1978. In the Award, the Labour Court came to the conclusion that the employer denied employment to the workman from January 1976 till the end of April 1976 and impliedly terminated the services of the workman at the end of April 1976. On that basis awarded the payment of RS- 1,059/- to the workman, but however, stated at paragraph No. 17 that the workman may raise another dispute regarding termination of service. The said view was taken by the Labour Court on the ground that the denial of employment to the workman after April 1976 which might amount to termination of service of the workman by the employer was not the subject matter referred for adjudication. Both the workman and the employer are aggrieved by the award and, therefore, they have presented these Petitions.
3. Sri K. Subba Rao, Learned Counsel appearing for the workman, in support of his case submitted as follows : The workman has been in the service of the employer continuously for about 28 years. Except that there has been change of management, the workman has been in the service of the employer since 1953. On 1-1-1976 while the workman was on duty, he was taken by the Police and was kept in their custody till 11-1-1976. Immediately after his release on 11-1-1976 he reported for duty, but the employer did not take him on duty stating that the Police had warned the employer against continuing the workman in employment, but only paid him a sum of Rs. 25/-.Inspire of repeated requests made in person, the employer did not take him to duty. Having waited for more than three months, the work- man addressed a registered letter dated 27-4-1976 to the employer demanding that he should be provided withemployment. To the said letter, the management sent a reply dated 3-5-1976. In the said letter, for the first time, the employer took the stand that the workman himself had sent a word to the employer that he had left the job, though it was not true. Thereafter the workman raised a dispute before the Conciliation Officer on 12-5-1976 (vide Exhibit-A in W. P. No. 13369 of 1978) The management gave its reply dated 4-6-1976 (Exhibit-B in W. P. No. 13369 of 1978) refuting the claim of the workman. The conciliationproceedings got interrupted as the workman was arrested under the provisions of the D.I. R. on 14-9-1976 and he was released only on 21-3-1977. Thereafter on consideration of the failure report sent by the Conciliation Officer, the StateGovernment made the order of reference on 12/14-12-1977 (Exhibit-C in W.P. 13369/78). On consideration of the evidence adduced by the parties, the Labour Court recorded a finding on the first point in favour of the workman, but nevertheless gave relief only to the extent of salary from 1st January 1976 till the end of April 1976 and observed that the workman was entitled to raise another dispute regarding termination of service. Such a view taken by the Labour Court wasuntenable. The dispute itself related to the termination of the service of the workman by the employer and, therefore, and in view of the finding recorded by the Labour Court itself to the effect that the management was not justified in taking the stand that the workman had abandoned the services, the relief of reinstatement with back wages ought to have been given.
4. As against the plea of the workman, the case of the employer, as put forward by Sri U.P. Mallya, Learned Counsel for the employer was as follows :
(i) It has never been the stand of the employer that the workman abandoned his service with effect from 1-1-1976 due to his detention under the DIR. That being the position, the reference itself was incompetent and bad.
(ii) Alternatively the evidence in the case establishes that the workman himself was unable to join duty in view of his being in police custody and detention and, therefore, there was no question of the employer either denyingemployment or terminating the services of the workman. Therefore the Award even to the extent of directing salary from 1-1-1976 till April 1976 is liable to be set aside,
5, In view of the first point urged for the employer, it is necessary for me, in the first instance, to find out as to whether the stand taken by the employer that as it was not the case of either of the parties that the workman hadabandoned the service from 1-1-1976, whether the reference itself was bad and incapable of being answered. From the evidence on record, the following facts are undisputed and/or cannot becontroverter. The workman was the Chief Operator in the service of the employer. He was on duty on 1-1-1976. In the afternoon, on the said date, the workman was taken by the police, Thereafter he was in custody of the police till 3 P.M. on 11-1-1976, when he was released from custody. On 27-4-1976 the workman issued a registered notice to the employer. In the said letter the workman stated that he was denied employment from 1-1-1976 and requested the employer to pay his salary from 1-1-1976. It reads :
'Sub ; Refusal of employment w.e.f. 1st January 1976.
I am working with you as Chief Operator since about 28 years. I am a licence holder for Cinema Operations. I am drawing a salary ofRs. 274/-per month over and above morning show allowance. I have rendered 28 years of unblemished service in your establishment.
It is unfortunate to note that since 1st January 1976 you have refused me employment without assigning any reason. Whenever I approached you asking for employment you are unnecessarily prolonging the issue saying that a few days I will be given employment. But so far I have not been provided with employment and my salary is also not paid from 1st January 1976.
I hereby demand with you to provide me employment as Chief Operator immediately and pay me my salary from 1st January 1976 upto date. If you fail to concede my demands I will be constrained to complain to the proper authorities seaking legal remedy. Hope you will not give room for unwarranted litigations.'
To the said letter, the employer gave their reply dated 3-5-1976. Relevant part of the said letter reads :
'Your allegation that I have refused employment to you is false. You have never approached me for employment and on the other hand you had sent word that you had left the job of your own accord and I have seat word to you to send in your resignation. Though you have promised to send your resignation you have failed to do so, but surprisingly you have sent the notice under reply in order to extort money from me illegally.
From 1-1-1976 you never came to the theatre and you had reported to have gone underground to indulge in anti-national activities along with your son and hence toescape arrest by the police you had resigned your job voluntarily.
Since you had resigned of your own accord, questions of either giving you employment or paying wages do not arise. If you institute any speculative proceedings thesame will be defended at your own risks as to all costs and consequences thereof, which please take notice.'
As can be seen from the contents of the letter, the employer took the stand that the workman remained absent from 1-1-1976 and had sent a word that he had resigned from service and added that as the workman had resigned from service, there was no question of the employer giving wages or employment.
6. Learned Counsel for the employer pointed out that the workman in his letter dated 27-4-1976 had alleged that he was denied employment from 1-1-1976, but on his ownevidence he was taken by the police on 1-1-1976 and was released only on 11-1-1976 and therefore question of denyingemployment to him from 1-1-1976 did not arise.
7. After the reference was made, before the Labour Court the workman filed his claim statement. Relevant part of it reads :
'4. That on 1-1-1976 when he was on duty at the cabin of New Chitra Talkies (this was during emergency) the police came andapprehended and took him into custody. The proprietors of the theatre have full knowledge of this. Later he was taken to the Pandeshwar Police Station, Mangalore and detained for eleven days. During this period he was questioned by the police about his involvement in the activities of the Lok Sangharsh Samiti which was agitating against the Emergency. They also questioned about his son's activity. After thus keeping him in their custody for 11 days he was let free.
5. That thereafter several times he approached the 2nd party to take him back into employment. He was told that they wanted to consult the police before allowing him to join his job. Nearly three months elapsed like this and at last on 27-4-1976 he sent to the 2nd party a registered letter demanding that he should be provided employment as Chief Operator immediately and that his salary for the intervening period should be paid.
6. That the said letter was replied by the 2nd party by its letter dated 3rd May 1976. In the said letter they have admitted that I party was taken into police custody on 1-1-1976 during duty hours and detained. They further seem to have come to know that he was involved in anti-National activity. They have further alleged that he had sent a word that he had left the job of his own accord and promised to send the resignation letter. These allegations are totally false and are denied. The 2nd party is put to strict proof in this regard.
7. That later the matter was pursued with the Labour and Conciliation Officer, Mangalore. Meanwhile the 1st Party was once again arrested under DIR en 14-9-1976. He was produced before the Magistrate on 27-9-1976 and sent to Judicial Custody. A case was registered in C.C. No. 309/76. He was released on bail on 21-3-1977 after the LokSabha Election and later the case against him was withdrawn by the Government.
8.That the 2nd party has all along refused to take him back into service. Even when the circular of the present Central Government declaring its policy to reinstate all the employees who were terminated during emergency for activities against emergency and also advising the private sector employers also to de likewise was brought to their notice they refused to change their attitude.'
7. It may be seen, at para-4, the workman stated that he was taken to the custody of the police on 1-1-1976 and he was relieved after 11 days and thereafter he approached the employer several times requesting that to take him to employment, but the same was denied and, therefore, an industrial dispute was raised. In the said statement the workman has also stated that he was again arrested under the D.I.R. on 14-9-1976 and he was in jail till 21-3-1977. From the above statement it is clear that from 12-1-1976 upto 14-9-1976 atleast the workman was in a position to attend to his duties with the employer, but he was not taken to duty as the employer took the stand in their reply dated 3-5-1976 that the workman himself had abandoned the employment from 1-1-1976.
8. To the above claim statement, the employer filed their objections. Even according to the said statement, the workman had been released by the police but he did not report for duty at all and, therefore, according to the employer, there was no refusal of employment. Paras 7 and 8 of the objections filed by the employer are very relevant. They read:
'7. That it is false to allege that the 2nd Party refused employment to workman from 1-1-1976. No question of refusal of employment arises when it was the Police who took him into custody. That as the workman did not turn up for work for a long time after his release by the police, the 2nd party came to the conclusion that the worker has abandoned service under them. It was then that the 2nd party confirmed the other licensed Operator as Chief Operator.
8. It was only some time in April 1976, that the 2nd party heard that the workman was in Mangalore all along and that he was dismissing from service for which he wanted monetary benefits. Though the 2nd party had already treated that the workman has already abandoned service under them they were willing to pay him compensation for the service rendered by him under them.'
9. It is true that there is some inaccurate statement made by the workman in the letter dated 27-4 1976. Instead of saying that he was not taken back to duty on 11-1-1976 and thereafter, he had said that he was denied employment from 11-1-1976. But as can be seen from his claim statement and the evidence, his case has been that he was not taken back to duty by the employer and when he went to the talkies after he was released on 11-1-1976 at about 3 p.m. the employer took the stand that the workman had resigned from service. The stand taken by the employer in their reply dated 3-5-1976 extracted earlier is clear and unambiguous. The stand was that the workman had resigned of his own accord from 1-1-197.6. It is for the first time in its statement before the Labour Court the employer made asomersault and stated as follows :
'1. That the reference is clearly defective inasmuch as it is neither the Case of the 2nd Party nor of the 1st Party worker that Sri B. Veera-narayana was detained under D.I.R. on 1.1.1976 or that he abandoned his service with effect from 1.1.1976. Actually he was detained under D.I.R. with effect from 14-9-1976. Hence on this ground alone the reference is liable to be rejected as infructuous.'
But the fact remains that the employer, had taken the stand in its letter dated 3-5-1976 that the workman had sent word that he had resigned the post from 1-1-1976 i e., the date on which he was taken to police custody. It is on consideration of the conciliation records which included the above letter, the Government had made the reference formulating the point of dispute. Therefore, 1 find no substance in the first submission made for the employer.
10. Now coming to the merits of the case, the Labour Court has recorded a finding as follows :
'9. In view of the foregoing discussion and the nature of the evidence, I hold that if the management were to say that Sri B. Veeranarayana, former Chief Operator, has abandoned their services with effect from 1st January 1976 they would not be justified in saying so.
10. Again having regard to the evidence of WW1 in para 7 of his deposition that on 1st January 1976 he was not informed by the police that he was arrested under the D.I.R. and in para-3 that during the period (of his detention) he was not produced before any Magistrate coupled with the absence of any reference in Exhibit-M2 to his detention under the D.I.R. it is apparent that if the manage meat were to say that B. Veeranarayana abandoned their services with effect from 1st January 1976 due to his detention under D.I.R. they would not be justified, in doing so. Consequently, my finding on the 1st point of dispute referred by the Government is in the negative.
11. The 2nd point relates to relief to be given to the I Party in view of the finding negative on the 1st point. In view of my finding in the negative on Point No. 1, I hold that the I Party must be deemed to have continued in the service of the II Party on and after 1st January 1976 .He would therefore be entitled to recover his salary from 1st January 1976 as his being taken into custody while he was on duty at the theatre of the Responder and his subsequent absence from duty with the intention of abandoning his services under the 2nd party. The action of themanagement as admitted by MW4, in engaging the services of Narayana Shetty, temporary, could not affect the right of the I Party to recover his salary for the period from 1-1-1976 to 11-l-1976.'
The above findings are based on consideration of the oral and documentary evidence on record and, thereforeunassailable.
11. On recording the above finding, the relief of reinstatement and back-wages must have been granted to the workman as of course unless there were valid reasons to deny a part of the relief. It is here the Labour Court has misdirected itself by making a distinction between the denial ofemployment to the workman by theemployer by taking the stand that he himself had abandoned the employment andtermination of service of the workman by the employer though the former also amounted to termination of service by way of retrenchment within the meaning of that expression in Section 2(oo) of the Industrial Disputes Act and said that the workman was at liberty to raise a fresh dispute. The relevant portion of the order of the Labour Court at paragraphs 12 and 13 reads --
'Consequently, I hold that the I Party B. Veeranarayana is entitled to be deemed to have continued in the employment of the II Party as the Chief Operator of New Chitra Talkies, till the end of April 1976 when the II Party must be deemed to have finally decided to and in fact impliedly purported to terminate his services. Consequently, I hold that the II Party management is liable to pay the I Party salary at the rate at which he wasbeing paid before 1-1-1976, till the end of April 1976,
13. The question granting the other benefits claimed by the 1st party in his statement of claims depends upon a consideration of the validity of termination of the services of the I Party under the It Party Management and allied questions which are matters clearly beyond the scope of the present reference.'
It is in view of the non-existing differentiation made by the Labour Court, it stated at paragraph 17 as follows :
'17. Before parting with this case, I wish to and do clarify that the determination of this reference shall not in any way prejudice the right of the I party to seek fresh reference in regard to his other claims which depend upon the determination of the validity of the termination of his services under the II Party.'
12. The view taken by the Labour Court as above, and reserving liberty for raising another dispute is untenable. Once the conclusion is reached that the employer was not justified in saying that the workman had abandoned his employment, such a stand of the employer itself amounts to retrenchment. Now it is too well established, whatever be the form in which termination of service of a workman is brought about, it amounts to retrenchment (see : State Bank of India -v.- Sunder Money, 1976(1) LL.J. 478 (S.C.)) and further that if the same had been brought about in violation of Section 25-F of the I. D. Act it is void and as a consequence an order of reinstatement with back-wages has to be issued unless of course there are very valid grounds for denying any part of such reliefs. As far as non-compliance with the mandatory requirement of Section 25-F is concerned, it is admitted. In fact in paragraph-10 of its statement before the Labour Court, the employer stated as follows :
'That the 2nd Party has no objection for payment of exgratiacompensation equivalent to retrenchment compensation in lieu ofreinstatement,
Though the employer has chosen to characterise the compensation which it agreed to pay as'exgratia' actually it is no bounty but what the employer was bound to pay in law.
13. For the reasons set out earlier. I hold that the view taken by the Labour Court that there was denial ofemployment to the workman till the end of April 1976 and implied termination of his service at the end of April 1976 and that the latter did not form the subject matter of dispute and therefore the workman should raise another dispute ispatently - untenable . I hold that the clear effect of the finding on the first point referred for adjudication, is that the services of the workman were terminated by the employer with effect from 1-1-1976 in violation of Section 25-F of the I.D. Act and therefore void.
14. Now the only other question for consideration is whether this is a fit case in which reinstatement should be granted. It is admitted by the workman that he was detained under D.I.R. between 14-9-1976 to 21-3-1977. Therefore, it is clear that though the employer was not justified in denying employment till 14-9-1976 on and after that date even if the employer wanted to agree to take the workman back to service in the course of conciliation, it was not possible. Further the management could not keep the post of Chief Operator vacant, for an indefinite period, as the period of detention of the workman was not known. In this situation, the employer had no other alternative than to appoint another Chief Operator and accordingly appointed one Narayana Setty. In view of the detention of the workman there was delay in making the reference for which the employer was not responsible. It is well settled by long line of decisions that in such cases awarding of compensation in lieu of reinstatement would be justified, The Law of Industrial Disputes by O.P. Malhotra & K.R. Malhotra, Third Edition, Vol. 1 pp 939-940.. it is also pertinent to note that reinstatement of the workman might also result in the replacement from service of Narayana Setty. The workman, who was 47 years of age in 1977 as seen from his deposition, is now aged 54 years. Taking all these circumstances, I see force in the plea of the employer that this is not a fit case in which reinstatement should be granted to the workman.
15.The next question for consideration is the quantum of compensation. Admittedly the salary of the workman was Rs. 271/- per month, In January 1976 he had a balance of about 11 years of service taking 58 years as the age ofsuperannuating. If the employer had taken the workman on duty on 11-1-1976, he would have certainly been in a position to attend to his duties till 14-9-1976, i.e., for eight months on which date he was detained under D.I.R. The salary for this period comes to Rs. 2.168/-. While,according to the workman, he had put in 28 years of service, even according to the employer, the workman had put in 8 years of service. Therefore even on that basis, if the employer had proceeded to terminate the services of the the workman on or after 14-9-1976, the employer was under an obligation to terminate the services only after paying one month's salary in lieu of notice and 15 days' salary for every completed year of service as required Under Section 25-F(a) and (b) of the I.D.Act. On this count, the employer was liable to pay five months salary which comes to Rs. 1,355/-. The total of the two items comes to Rs. 3,523/-, Its present value should atleast be double having regard to the fall of value of the rupee or having regard to the interest which could have been earned on the said amount. Therefore even on the basis of retrenchment compensation payable, for which themanagement bad agreed and the salary upto 14-9-J976 with interest comes to Rs- 7,000/-.
16. The principles governing awarding of compensation in lieu of reinstatement have been laid down by the Supreme Court in the following cases --
(i) S.S. Shetty -v.- Bharat Nidhi Ltd., : (1957)IILLJ696SC , 1957 II I.L. J. 696
(ii) Hindustan Steel -v.- A.K. Roy., 1970 (1) L.L.J. 228
(iii) M.S. Dantwal -v.- Hindustan Motors, 1970 (2) L.L.J. 259
Bearing in mind the principles laid down in the above cases, I proceed to determine the amount of compensation which should be awarded to the workman. According to the workman, he had put in 28 years of service. According to the employer he had put in 8 years of service with them and his earlier service was with different management. It was not disputed that the age of retirement of the workman was 58 years in view of the provisions of Payment of Gratuity Act. Therefore it is clear that the workman had about 11 years of service in 1977 as he was then aged 47 years. Considering the length of his past service and the balance of service he had in 1977, I consider that compensation should atleast be the salary for one third of the period of balance of service i.e., for three and half years at the rate at which he was getting salary i.e., Rs. 271/- per month. This comes to Rs. 11,382/-. Therefore I am of the view that the management should be directed to pay the wages of the workman upto 14-9-1976 which comes to Rs. 2,168/- and an equal amount as interest thereon as eight years had already elapsed, which together comes to Rs. 4,336/- and also a compensation of Rs. 11,382/- The total of these two items comes to Rs. 15.718/-.
17. Accordingly, I make the following order :
(i) W.P. 13369 / 78 :
(a) Rule discharged.
(b) Petition dismissed.
(c) No Costs.
(a) Rule made absolute.
(b) The impugned award of the Labour Court is set aside and in its place I direct that Respondent No. 1 -- management shall be liable to pay a sum of Rs. 15,718/- to the Petitioner and the said amount should be paid to the workman within two months, from to-day and if the same is not paid within the said date, the workman would be entited to recover the said amount in accordance with law.
(c) The employer shall be entitled to deduct any amount already paid to the Petitioner pursuant to the award and the Petitioner shall be entitled to recover gratuity, if he is entitled to do so in law.
(d) No Costs.