Holding

In the absence of any averment or proof that the respondent’s self‑employment earnings were insufficient, the workman is entitled to the 50 % of back wages awarded.

Summary

The respondent, a gate‑keeper at Niranjan Cinema, was alleged to have been absent from work and to have started a betel shop. He claimed that his services were terminated and filed an industrial dispute. The Industrial Tribunal held the termination illegal, ordered reinstatement and back wages, and ruled that his self‑employment did not constitute gainful employment. The Allahabad High Court dismissed the cinema’s writ petition, holding that self‑employment could not be treated as gainful employment and directed the deposit of back wages. On appeal, the Supreme Court observed that the claim petition did not aver or prove that the earnings from the betel shop were insufficient, and therefore the High Court’s view was not legally sustainable. Consequently, the Court directed that the 50 % of back wages already deposited with the Tribunal be released to the respondent. The appeal was partly allowed.

Issues considered

Whether a workman who has taken up self‑employment after alleged termination is entitled to back wages under Section 4K of the Uttar Pradesh Industrial Disputes Act, 1947.
Whether self‑employment can be treated as gainful employment for the purpose of reducing or denying back wages.

Legislation cited

Uttar Pradesh Industrial Disputes Act, 1947s. 4K

Subjects

labour lawback wagesself‑employmentgainful employmentindustrial disputetermination of serviceUttar Pradesh Industrial Disputes Act

Judgment

A NIRANJAN CINEMA ,...
v.
PRAKASH CHANDRA DUBEY AND ANR.
r
DECEMBER 5, 2007
B
[DRARIJITPASAYAT ANDP. SATHASIVAM,JJ.J
~-
Labour Laws-Back wages-Entitlement to-Workman engaged
in self-employment after termination of service-Held: In absence of
c averment in the claim petition that earnings from selfemployment were
not sufficient and in absence of quantum of earning therefrom,
workman entitled to 50% of backwages-Uttar Pradesh Industrial
Disputes Act, 1947-s. 4 K.
Respondent-workman, who had been employed with the
D
appellant, raised an individual dispute, alleging termination of his
service. Reference was made to Industrial Tribunal which held that
'.
termination was illegal and directed his reinstatement with back
wages. It was further held that even if the workman had started a
betel shop, he could not be said to be gainfully employed. Appellant's
E Writ Petition against the award was also dismissed holding that self-
employment could not be treated as gainful employment. Appellant
deposited 50% of the backwages with the Tribunal. Appeal to this
Court was on the limited question of entitlement of the workman to
backwages.
F
Partly allowing the appeal, the Court

HELD: There was no averment in the claim petition that the
earnings from the betel shop were not sufficient to make both ends
meet. Therefore, the view expressed by the High Court in that regard ,.
G is not legally sustainable. In view of the factual position that it has
not been shown as to how much the respondent earned from the betel
shop, it is directed that 50% of the back wages which has been
deposited with the Tribunal, be released to the respondent. His

H 958
...
NIRANJAN CINEMA v. PRAKASH CHANDRA DUBEY 959
[PASAYAT,J.]
-.4. entitlement to the back wages is accordingly determined. A
[Para6] [961-E-F]
North East Karnataka Road Transport Corporation v. M
Nagangouda, AIR (2007) SC 973, relied on.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3960 of B
2006.
From the Judgment and final Order dated 21.4.2005 of the High
Court of Judicature at Allahabad in C.M.W.P. No. 21729/1999.
Sunil Gupta, Vivek Vishnoi, M.R. Shamshad and Rameshwar Prasad c
Goyal for the Appellant
Bharat Sangal for the Respondent No. 1.
Shrish Kumar Mishra, Samir Ali Khan and Pradeep Misra for the
,,. Respondent No.2. D

The Judgment of the Court was delivered by
DR. ARIJIT PASAYAT, J. 1. Challenge in this appeal is to the
judgment of a learned Single Judge of the Allahabad High Court dismissing
the writ petition filed by the appellant. By the said impugned judgment E
learned Single Judge affirmed the view of Presiding Officer, Industrial
Tribunal No.I, U.P., Allahabad.
2. Background facts in a nutshell are as follows:

... Respondent was working as a gate keeper in the appellant Cinema F
Hall. On 6.10.1993 it was noticed that counterfoils of the tickets were
missing and, therefore, First Infonnation Report was lodged with police.
According to the appellant the respondent absented himself from work
but it is a matter of record that he was running a betel shop next to the
Cinema Hall. Respondent raised an industrial dispute before the G
Conciliation Officer alleging termination of services. Appellant filed its reply
~ -' statement stating that there was no tennination and in fact it was open to
the respondent to resume duties whenever he wanted. Reference was
made to the Industrial Tribunal under Section 4K of the U.P. Industrial
Disputes Act, 1947 (in short the 'Act'), on the question as to whether H
'
960 SUPREME COURT REPORTS [2007] 12 S.C.R.

A there was absence from work and no termination. In the claim statement
before the Tribunal, respondent alleged that his services had been
terminated and the manager has illegally dismissed him from service.
Preliminary objections were filed by the appellant taking the stand that
the reference was not maintainable since Government could not have come
B to the conclusion that there has been termination of service. It was
reiterated that there was no termination of service and it was still open to
the respondent to resume work. This preliminary objection was filed on
7.11.1994. On 21.2.1995 respondent filed a reply therein refusing to
resume work. On 25.4.1995 the appellant filed rejoinder against the claim
C statement and again offered that the respondent could rejoin. Evidence
was led to show that there was no termination of service and the
respondent could join at any time. The Tribunal in its award held that the
termination was illegal and reinstatement with back wages was directed
on the ground that even if respondent had started a betel shop, he could
D not be said to be gainfully employed. Subsequent to the award the
appellant again offered respondent the option to resume duty pending \.
\
challenge to the award in the writ petition. Respondent refused to resume
duty. On 8.5.1999 as noted above writ petition was filed before the High
Court challenging the Award. On 26.5.1999 High Court directed the
E appellant to deposit the wages with the Tribunal and the respondent to
report for duty. On 13. 7.1999 appellant asked the respondent to join duty.
Respondent again refused to join duty. Subsequently also the appellant
asked the respondent to resume duty and on 29.7.1999 deposited 50%
of the back wages with the Tribunal. Appellant requested the Deputy
F Labour Commissioner to depute an Inspector with a direction to direct
the respondent to resume duty. On 6.7.2000 the Assistant Labour
Commissioner persuaded the respondent to join duty. The High Court
dismissed the writ petition holding that the termination was illegal and that
the respondent had not been gainfully employed after termination of
G service because self-employment cannot be treated as gainful employment.
3. In support of the appeal learned counsel for the appellant
submitted that contrary to this Court's view the Labour Court and the
High Court have held that self employment is not gainful employment. It
is also pointed out that there was no indication in the claim petition that
H he wa5 not gainfully employed.
J

NIRANJAN CINEMA v. PRAKASH CHANDRA DUBEY 961
[PASAYAT,J.]
4. Learned counsel for the respondent on the other hand submitted A
that after termination the respondent was running a small Betel Shop that
cannot be said to be gainful employment.
5. In North East Karnataka Road Transport Corporation v. M
Nagangouda, AIR (2007) SC 973 it was held as follows:
.. "On the said question, we are unable to accept the reasoning of
B

the Labour Court that the income received by the respondent from
agricultural pursuits could not be equated with income from gainful
employment in any establishment. In our view, "gainful employment"
would also include self-employment wherefrom income is c
generated. Income either from employment in an establishment or
from self-employment merely differentiates the sources from which
income is generated, the end use being the same. Since the
respondent was earning some amount from his agricultural pursuits
to maintain himself, the Labour Court was not justified in holding D
that merely because the respondent was receiving agricultural
income, he could not be treated to be engaged in "gainful
employment".
6. It is also relevant that there was no averment in the claim petition
that the earnings from the betel shop were not sufficient to make both E
ends meet. Therefore, the view expressed by the High Court in that regard
is not legally sustainable. But it has not been shown as to how much the
respondent earned from the betel shop. In view of this factual position,
we direct that 50% of the back wages which has been deposited with
the Tribunal, be released to the respondent. His entitlement is accordingly F
determined. It needs to be noted that the issues in the present appeal were
restricted to the question of back wages. The appeal is allowed to the
aforesaid extent with no order to costs.
K.K.T. Appeal partly allowed. G