MANU/WB/3144/2019

Equivalent/Neutral Citation: 2019(4) C HN (C AL) 785

IN THE HIGH COURT OF CALCUTTA

W.P. No. 8679(W) of 2019
Decided On: 10.07.2019
Dulichand Finance and Leasing Limited Vs. State of West Bengal
Hon'ble Judges/Coram:
Shekhar B. Saraf, J.
Counsels:
For Appellant/Petitioner/Plaintiff: Soma Kar Ghosh, Sanjan Kr. Ghosh and Abhishek
Banerjee
For Respondents/Defendant: Narayan Bhattacharya and Sujata Ghosh
DECISION
Shekhar B. Saraf, J.
1. This is an application under Article 226 of the Constitution of India wherein the writ
petitioners are aggrieved by an order dated July 9, 2018 passed by the 7th Industrial
Tribunal, Kolkata.
2. The petitioners in this writ petition are the employers who are aggrieved by the order
passed by the Industrial Tribunal that had directed as follows:-
ORDERED
(i) That, the order of termination dated 31-07-2013 w.e.f. 01-08-2013 of the
workman issued by the OP/Company is found and held to be unjustified and
unlawful, and is hereby set aside for it being illegal and unsustainable in terms
of section 25F and such other provisions of the Industrial Disputes Act, 1947;
(ii) That, there shall be no order of reinstatement of the workman, however he
shall be paid compensation in lieu thereof, and for calculation of such
compensation/monetary relief, the workman shall be deemed to have continued
in his service al along till the end of the month of his retirement i.e. 31.01.2016
and accordingly, he shall be paid full back- wages from the month of July 2013
till January 2016 (both inclusive), by the OP/Company, with consequential
benefits, including increment at the same rate at which it was granted w.e.f.
01.04.2013, over and above the annual earnings of the workman for the
previous fiscal; The OP/Company is directed to pay the entire amount of
compensation, as aforesaid, to the workman, within four weeks from the date
of publication of the Award.
All the Issues in the instant proceedings are answered in the aforesaid terms.
The aforesaid shall constitute the Award of this Tribunal, in the instant Case No.
37/2A(2)/2013, which shall stand disposed of, on contest."

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3 . Ms. Soma Kar Ghosh, Counsel appearing on behalf of the petitioners assailed the
impugned order on two fundamental issues; firstly, she argued that in the present case
the employee's service had been terminated due to inefficiency and bad attitude and
misbehaviour. Therefore, she contended that such a termination would not fall within
section 2(oo) of the Industrial Disputes Act, 1947.
4 . Secondly, Ms. Kar Ghosh argued the order of the Tribunal directing back-wages is
based on perverse findings of the Tribunal and could not have been ordered based on
the ratio of the Supreme Court judgements that require the employee to furnish proof of
lack of gainful employment during the period of termination.
5 . Ms. Kar Ghosh relied on Hariprasad Shivshankar Shukla and anr. vs. A.D. Divelkar
and ors, Barsi Light Railway Co. Ltd. vs. K.N. Joglekar and ors., reported in
MANU/SC/0132/1956 : AIR 1957 SC 121 and referred to scope of the definition of
'retrenchment' decided in the said judgement. She placed paragraph 19 of the said
judgement which is delineated below:
"19. For the reasons given above, we hold, contrary to the view expressed by
the Bombay High Court, that retrenchment as defined in s. 2(oo) and as used in
S. 25-F has no wider meaning than the ordinary, accepted connotation of the
word; it means the discharge of surplus labour or staff by the employer for any
reasons whatsoever, otherwise than as a punishment inflicted by way of
disciplinary action, and it has no application where the services of all workmen
have been terminated by the employer on a real and bona fide closure of
business as in the case of Shri Dinesh Mills Ltd. or where the services of all
workmen have been terminated by the employer on the business or undertaking
being taken over by another employer in circumstances like those of the
Railway Company. Mr. Mehta, appearing for respondents Nos. 4 and 5 in Civil
Appeal No. 105 of 1956, tried to make a distinction between transfer of
ownership with continuation of employment (which according to him did not
come within the definitions and termination of service on closure of business.
There is in fact a distinction between transfer of business and closure of
business; but so far as the definition clause is concerned, both stand on the
same footing if they involve termination of service of the workmen by the
employer for any reason whatsoever, otherwise than as a punishment by way of
disciplinary action. On our interpretation, in no case is there any retrenchment,
unless there is discharge of surplus labour or staff in a continuing or running
industry."
6. Counsel submitted that upon reading of the above judgement it is clear that no case
for retrenchment can be made out unless there is discharge of surplus labour or staff in
a continuing or running industry. On the second issue, with regard to payment of back-
wages, she placed reliance on Novartis India Limited vs. State of West Bengal, reported
in MANU/SC/8408/2008 : (2009) 3 SCC 124 and specifically placed paragraphs 21 and
22 of the said judgement that are delineated below:
"21. There can, however, be no doubt whatsoever that there has been a shift in
the approach of this Court in regard to payment of back wages. Back wages
cannot be granted almost automatically upon setting aside an order of
termination inter alia on the premise that the burden to show that the workman
was gainfully employed during interregnum period was on the employer. This
Court, in a number of decisions opined that grant of back wages is not
automatic. The burden of proof that he remained unemployed would be on the

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 workmen keeping in view the provisions contained in section 106 of the
Evidence Act, 1872. This Court in the matter of grant of back wages has laid
down certain guidelines stating that therefor several factors are required to be
considered including the nature of appointment; the mode of recruitment; the
length of service; and whether the appointment was in consonance with Articles
14 and 16 of the Constitution of India in cases of public employment, etc.
22. It is also trite that for the purpose of grant of back wages, conduct of the
workman concerned also plays a vital role. Each decision, as regards grant of
back wages or the quantum thereof, would, therefore, depend on the fact of
each case. Back wages are ordinarily to be granted, keeping in view the
principles of grant of damages in mind. It cannot be claimed as a matter or
right."
7 . Counsel further placed reliance on Hindustan Motor Ltd. vs. Tapan Kumar
Bhattacharya, reported in MANU/SC/0584/2002 : (2002) 6 SCC 41 and specifically
relied on paragraph 16 of the said judgement, that is delineated below:-
"16. As already noted, there was no application of mind to the question of back
wages by the Labour Court. There was no pleading or evidence whatsoever on
the aspect whether the respondent was employed elsewhere during this long
interregnum. Instead of remitting the matter to the Labour Court or the High
Court for fresh consideration at this distance of time, we feel that the issue
relating to payment of back wages should be settled finally. On consideration of
the entire matter in the light of the observations referred to supra in the matter
of awarding back wages, we are of the view that in the context of the facts of
this particular case including the vicissitudes of long-drawn litigation, it will
serve the ends of justice if the respondent is paid 50% of the back wages till
the date of reinstatement. The amount already paid as wages or subsistence
allowance during the pendency of the various proceedings shall: be deducted
from the back wages now directed to be paid. The appellant will calculate the
amount of back wages as directed herein and pay the same to the respondent
within three months, failing which the amount will carry interest at the rate of
9% per annum. The award of the Labour Court which has been confirmed by
the Division Bench of the High Court stands modified to this extent. The appeal
is disposed of on the above terms. There will be no order as to costs".
8. Counsel further relied on an unreported decision of the Supreme Court in the case of
Rajasthan State Road Transport Corporation, Jaipur vs. Shri Phool Chand (Dead)
Through L.Rs., (Civil Appeal No. 1756 of 2010), to emphasise, that a workman has no
right to claim back-wages from his employer as a matter of right only because the Court
had set aside his dismissal order in his favour and directed his reinstatement in service.
9. Counsel appearing on behalf of the employee, on the other hand, distinguished the
Supreme Court judgement of Hariprasad Shivshankar Shukla (supra) and submitted that
the definition of 'retrenchment' has evolved and undergone a sea-change. He submitted
that the narrow pedantic view taken by the Supreme Court has been broadened and
expanded in a manner that the definition of 'retrenchment', now includes all kinds of
terminations except ones that are legally done by way of disciplinary action. He relied
on the Supreme Court judgement in The State Bank of India vs. Shri N. Sundara Money,
reported in MANU/SC/0315/1976 : (1976) 1 SCC 822.
10. On the second issue of payment of back-wages, Counsel for the employee referred

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to page 64 of the writ petition to indicate that the employee had specifically in his
examination/cross-examination submitted that he was unemployed. He further
submitted that the burden of proof to prove that he was unemployed shifts upon his
making the statement that he is unemployed and not gainfully employed. He further
submitted that it is not possible for a person to provide specific proof of non-
employment. He submitted that the burden of proof had shifted on the employer to
show that the employee was gainfully employed and, in the present case, no such proof
has been brought forward by the employer. He accordingly, prayed before this Court
that since the order of the Industrial Disputes Tribunal is a well-reasoned order, no
interference is called for by the High Court.
11. I have heard learned Counsel for the appearing parties and perused the various
judgement and materials placed by them before me. The question that arises now is
that in cases of such a termination, whether the employee is 'retrenched' under section
2(oo) of the Act and entitled to the benefit under section 25F of the Industrial Disputes
Act, 1947. Justice Krishna Iyer has in his unique manner in Sundara Money (supra) held
that "Without speculating on possibilities, we may agree that 'retrenchment' is no longer
terra incognita but area covered by an expansive definition. It means 'to end, conclude,
cease'." For a proper broader understanding of the discussion, paragraph 9 of the said
judgement is delineated below:
"9. A break-down of sec. 2(oo) unmistakably expands the semantics of
retrenchment. Termination... for any reason whatsoever' are the key words.
Whatever the reason, every termination spells retrenchment. So the sole
question is has the employee's service been terminated? Verbal apparel apart,
the substance is decisive. A termination takes place where a term expires either
by the active step of the master or the running out of the stipulated term. To
protect the weak against the strong this policy of comprehensive definition has
been effectuated. Termination embraces not merely the act of termination by
the employer, but the fact of termination howsoever produced. Maybe, the
present may be a hard case, but we can visualise abuses by employers, by
suitable verbal devices, circumventing the armour of section 25F and section
2(oo). Without speculating on possibilities, we may agree that 'retrenchment' is
no longer terra incognita but area covered by an expansive definition. It means
'to end, conclude, cease.' In the present case the employment ceased,
concluded ended on the expiration of nine days - automatically maybe, but
cessation all the same. That to write into the order of appointment the date of
termination confers no moksha from sec. 25F(b) is inferable from the proviso to
section 25F(1) (sic) (section 25F(a)(sic). True, the section speaks of
retrenchment by the employer and it is urged that some act of volition by the
employer to bring about the termination is essential to attract section 25F and
automatic extinguishment of service by effluxion of time cannot be sufficient.
An English case R. vs. Secretary of State, (1973) 2 All ER 103 was relied on,
where Lord Denning, M. R. observed:
'I think that the word 'terminate' or 'termination' is by itself ambiguous.
It can refer to either of two things - either to termination by notice or
to termination by effluxion of time. It is often used in that dual sense in
landlord and tenant and in master and servant cases. But there are
several indications in this paragraph to show that it refers here only to
termination by notice.' Buckley L. J., concurred and said:
'In my judgment the words are not capable of bearing that

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 meaning. As counsel for the Secretary of State has pointed out,
the verb 'terminate' can be used either transitively or
intransitively. A contract may be said to terminate when it
comes to an end by effluxion of time, or it may be said to be
terminated when it is determined at notice or otherwise by
some act of one of the parties. Here in my judgment the word
'terminated' is used in this passage in para 190 in the transitive
sense, and it postulates some act by somebody which is to
bring the appointment to an end, and is not applicable to a
case in which the appointment comes to an end merely by
effluxion of time.'
Words of multiple import have to be winnowed judicially to suit the
social philosophy of the statute. So screened, we hold that the
transitive and intransitive senses are covered in the current context.
Moreover, an employer terminates employment not merely by passing
an order as the service runs. He can do so by writing a composite
order, one giving employment and the other ending or limiting it. A
separate, subsequent determination is not the sole magnetic pull of the
provision. A pre-emptive provision to terminate is struck by the same
vice as the post-appointment termination. Dexterity of diction cannot
defeat the articulated conscience of the provision."
1 2 . On the first aspect with regard to dismissal of the employee on the ground of
discipline, I find that the employer had simpliciter terminated the service of the
employee by way of a letter dated 31st July, 2013. This letter contained vague and
ambiguous allegations with regard to his efficiency and his attitude. It is to be noted
that neither any domestic enquiry was carried out nor any opportunity was given to the
employee to present his case. Under these circumstances, I am of the view that the
Tribunal has correctly come to a finding that the said termination order was illegal. As
such the termination would amount to 'retrenchment' under section 2(oo) of the Act and
compensation as per section 25F of the Act would become payable.
1 3 . In my view, cases of termination, even on the ground of disciplinary action,
wherein it is found that the termination was illegal, would fall under the definition of
'retrenchment' under section 2(oo) of the Act. That being the case, a retrenchment done
without complying with the provisions of section 25F, would be illegal.
14. Coming to the next question of payment of back-wages, I have perused the order of
the Tribunal as also the evidence put forward by the employee and am satisfied that the
employee had made out a case of not having been gainfully employed during the period
of termination. The Supreme Court judgements cited by the petitioner are accordingly,
distinguishable and do not apply to the facts and circumstances of the instant case.
15. Ms. Soma Kar Ghosh lastly submitted that as the employer is no longer in business
and is suffering from financial incapacity, the quantum of backwages should be reduced
to 50 per cent. I have gone through the discussion in the impugned order and found
that the tribunal upon carefully examining the materials on record had come to a
categorical finding that the employer had not closed his business and/or was in any
financial incapacity.
16. In light of the above, this writ petition is dismissed.
17. Since no affidavit is called for, all allegations made in the writ petition are deemed

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not to have been admitted.
18. Urgent photostat certified copy of this order, if applied for, be handed over to the
parties on usual undertaking.
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