M.P. STATE ELECTRICITY BOARDversusSMT. JARINA BEE

                     M.P. STATE ELECTRICITY BOARD                                 A
                                       v.
                             SMT. JARINA BEE

                               JULY 15, 2003

            [DORAISWAMY RAJU ANDARIJITPASAYAT,JJ.]                                B


      labour laws:

       Dismissal of Employee-Allegation of theft-Dismissal set aside by
labour Court with direction to reinstate-Industrial Court and High Court          C
holding him entitled to full back wages-In the meantime death of employee
rendering the order of reinstatement infructuous-On appeal-Held, award
offull back wages is not the natural consequence when an order of dismissal
is set aside-However, in the facts of the case payment of Rs. 85,000 towards
back wages would meet the ends of justice.                                        D
       Husband of respondent was employed with the appellant-Board. His
services were terminated on the allegation of theft The removal was challenged
before labour court who held that since departmental enquiry was not
conducted in accordance with the principles of natural justice the dismissal
was bad. Direction was given for his reinstatement and Board was granted          E
opportunity to prove his misconduct. Both the Board and the employee
preferred appeals before Industrial Court, which allowed the appeal of employee
holding that when an order of dismissal was set aside, entitlement for full
back wages was automatic. During pendency of the case before Industrial
Court, the employee died .and hence direction for his reinstatement became        F
infructuous. On challenge of the order of Industrial Court, High Court held
that when a charge was not established at all and the order of removal was set
aside, award of back wages was the natural consequence. Hence the present
appeal.

      Allowing the appeal, the Court
                                                                                  G
      HELD: l. High Court committed an error in holding that the award of
full back wages was the natural consequence when an order of dismbsal is
set aside. 1537-DI

                                     535                                          H
     536                     SUPREME COURT REPORTS [2003) SUPP. I S.C.R.

A          P.G.l. of Medical Education and Research, Chandigarh v. Raj Kumar,
     JT (2001) I SC 336; Hindustan Motors ltd v. Tapan Kumar Bhattacharya
     and Anr., (2002) AIR SCW 3008 and Indian Railway Construction Co. ltd.
     v. Ajay Kumar, JT (2003) SC 295, relied on.
 B
        2. Considering the background of the case and the fact that the order
  of dismissal was found to be defective as the principles of natural justice were
  not properly followed, and an opportunity was granted to the Board to proceed
C in accordance with law, and the fact that the employee has expired in the
  meantime, payment of Rs. 85,000 towards back wages would meet the ends of
  justice. (538-C-DI

           CIVIL APPELLATE JURISDICTION : Civil Appeal No. 460 I of2003.

D         From the Judgment and Order dated 8.10.2002 of the Madhya Pradesh
     High Court in W.P. No. 2350 of2002.

           Satish K. Agnihotri, for the Appellant.

           B.S. Banthia for the Respondent.

E          The Judgment of the Court was delivered by

           ARIJIT PASAYAT, J. Leave granted.

       The primal issue involved in this appeal is whether award of full back
  wages is the natural consequence when an order of dismissal is set aside. The
F High Court of Madhya Pradesh at Jabalpur held it to be so, and that is why
  the Madhya Pradesh State Electricity Board (hereinafter referred to as 'the
  Board') filed this appeal.

           Factual background which is almost undisputed is as follows :-

G          One Habib Khan (hereinafter referred to as the 'employee'). husband of
     respondent Smt. Jarina Bee, was employed as a Line Attendant, Grade-II in
     the Board. On the allegation that he was responsible for theft of large quantity
     of aluminum wire, criminal case was lodged and departmental proceedings
     were initiated. In the departmental inquiry he was found guilty and was
H    removed from service on 20.1.1996. Such removal was challenged by him
     before the Labour Court-I, Bhopal. The said Court held that since departmental
     inquiry was not conducted in accordance with the principles of natural justice,
     the dismissal was bad. Direction was given for reinstatement of employee by
       M.P. STATE ELECTRICITY BOARD v. .I ARIN A BEE [PASA YAT . .I.]       537
granting opportunity to the Board to prove his misconduct. While directing          A
reinstatement, it was held that he was not entitled to any back wages. Both
the Board and the employee preferred appeals before the Industrial Court,
Bench at Bhopal. By order dated 11.2.2002, the Industrial Court allowed the
appeal filed by the employee, while dismissing the one filed by the Board. It
was held that when an order of dismissal was set aside, entitlement for full        B
back wages was automatic.

     During the pendency of the matter before tl~P lrdlJstrial Court the
employee breathed his last. Therefore, the direction for re-instatement has
become infructuous.

     The Board challenged the order of the Industrial Court before the High         C
Court which by the impugned judgment dated 8th October 2002 held that
when a charge was not established at all and the order of removal is set aside
award of back wages was the natural consequence.

       Shri S.K. Agnihotri, learned counsel appearing for the Board, submitted      D
that the Industrial Court as well as the High Court fell in grave error by
holding that the award of back wages was the natural consequence in .all
cases where the order of removal was set aside. Mr. B.S. Banthia, learned
counsel appearing for the respondent (widow of the employee) submitted that
the High Court was justified in its conclusion considering the fact that the
order of dismissal was without sanctity in law. Alternatively, it was submitted     E
that full back wages are to be paid, considering the nature of the allegations
and findings recorded by the Labour Court, Industrial Court and the High
Court and the directions cannot be faulted on the facts of the case.

      In P.G.I. of Medical Education and Research, Chandigarh v. Raj Kumar
(JT 200l(I) SC 336), this Court found fault with ttfe High Court in setting aside   F
the award of the Labour Court which restricted the back wages to 60% and
directing payment of full back wages. It was observed thus:

        "The labour court being the final court of facts came to a conclusion
        that payment of 60% wages would comply with the requirement of law.         G
        The finding of perversity or being erroneous or not in accordance
        with law shall have to be recorded with reasons in order to assail the
        finding of the Tribunal or the labour Court. It is not for the High Court
        to go into the factual aspects of the matter and there is an existing
        limitation on the High Court to that effect."
                                                                                    H
    538                      SUPREME COURT REPORTS [2003) SUPP. I S.C.R.

A           Again at paragraph 12, this Court observed:

             "Payment of back wages having a discretionary element involved in
             it has to be dealt with, in the facts and circumstances of each case
             and no straight-jacket formula can be evolved, though, however, there
             is statutory sanction to direct payment of back wages in its entirety."
B
         The position was reiterated in Hindustan Motors Ltd v. Tapan Kumar
    Bhattacharya and Anr., (2002) AIR SCW 3008 and Indian Railway
    Construction Co. ltd v. Ajay Kumar, JT (2003) 2 SC 295.

            Applying the legal principles, the inevitable conclusion is that the High
C Court committed an error in holding that the award of full back wages was
    the natural consequence.

           That brings us to the alternate submission of the learned counsel for
    the respondent. Considering the background of the case and the fact that the
    order of dismissal was found to be defective as the principles of natural
D   justice were not properly followed, and an opportunity was granted to the
    Board to proceed in accordance with law, and the fact that the employee has
    expired in the meantime, we feel the payment of Rs. 85,000 towards back
    wages would meet the ends of justice. The payment is to be made within a
    period of 8 weeks from today. If any amount has been paid pursuant to the
E   directions given by the Industrial Court and/or the High Court, the same shall
    be adjusted from the aforesaid sum. If any payment has been made in excess
    of the amount, the Board shall be entitled to refund thereof.

                The appeal is allowed to the extent indicated above. Costs made
    easy.

    K.K.T.
                                 •                                  Appeal allowed.