Holding

Back wages are not automatic; the workman must first prove unemployment, after which the employer must disprove it, and the Tribunal’s award calculated on the last drawn wages stands without interference under Article 142.

Summary

Novartis India Ltd. transferred three senior sales representatives to distant locations; they refused to report, filed representations and civil suits, and were terminated without a domestic inquiry. The workmen raised an industrial dispute; the Industrial Tribunal held the termination illegal, denied reinstatement because they had superannuated, and awarded back wages calculated on the last pay drawn. On appeal, the Supreme Court examined whether back wages could be granted automatically, who bears the burden of proving unemployment, and whether the award could be altered under Article 142. The Court held that back wages are not a matter of right and are not automatic; the workmen must first prove they remained unemployed, after which the employer must disprove it. Since the Tribunal’s award was final and calculated on the last drawn wages, the Court will not interfere or re‑calculate on the basis of revised pay scales, and dismissed the appeal.

Issues considered

Whether back wages can be granted automatically upon setting aside an order of termination.
Who bears the burden of proof to show gainful employment or unemployment during the interregnum.
Whether the award of back wages should be calculated on the last pay drawn or on the revised pay scale.
Whether termination without a domestic inquiry is void and whether the order of transfer was valid.
Whether the Supreme Court can exercise jurisdiction under Article 142 to modify the Tribunal’s award after it has attained finality.

Legislation cited

Indian Evidence Act, 1872s. 106
Industrial Disputes Act, 1947s. 17-B, s. 25-F

Subjects

back wagesindustrial disputetransfer of employeestermination without inquiryburden of proofEvidence Act 106Industrial Disputes ActArticle 142reinstatementsuperannuationcompensation

Judgment

'
~
[2008] 16 S.C.R. 918

A NOVARTIS INDIA LTD.
II.
....
_,

STATE OFWEST BENGAL AND ORS.
(Civil Appeal No. 7011 of 2008)

DECEMBER 2, 2008
B
[S.B. SINHA· AND CYRIAC JOSEPH, JJ.]

+ ·~'
Labour laws: I
r
c Back wages - Grant of- Entitlement - Held: Back wages
fI
cannot be granted automatically upon setting aside an order
of termination -1t would depend on the fact situation obtaining
in each case - Burden of proof is on workman that he
remained unemployed - Once he discharged the same, the
D burden would shift on to the employer to show that workman
was gainfully employed - On facts, workmen deposed that
they remained unemployed - Award of re-instatement in i
service was denied to them as meanwhile they had attained r
age of superannuation - Jn such situation, back wages should ..
f
be granted byway of compensation - Evidence Act, 1872 -
E
s.106. .
~
Transfer order - Non-compliance with, by workmen -
Held: Amounts to misconduct However, employer required
to conduct domestic inquiry 7- Order of discharge passed
F without giving opportunity of hearing to workmen, bad in Jaw '~"
- Natural justice - Principle' of.
--f
Transfer order - Challenge to - Held· Transfer is an ',.
incidence of service - Order of transfer cannot be interfered
with if passed in terms of statutory rule or settlement.
G
Constitution of India, 1950: Article 142 - Jurisdiction
under - Industrial Court granted back wages - Wages A I
meanwhile' revised - Claim for back wages based on revised
[
H 918
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 919
AND ORS.

-
-+ pay scale not made before Industrial Court - Claim made A
before Supreme Court - Held: On the date of superannuation, .
workmen were entitled t6 revised wages - However, in view of
the fact. that decision of Industrial court had attained finality,
case not fit for exercising jurisdiction under Article 142 and
for interfering with the impugned order - Labour laws. B

The respondents were appointed as sales
representatives by the appellant-Company. In terms of the
offers of appointment, they could be transferred from one
place to another. In October 1994, respondent Nos.2 to 4 C
were transferred. They were relieved from their duties
and were directed to report at the transferred places.
They filed representations requesting for withdrawal/
cancellation of their respective orders of transfer. They
also filed civil suits questioning the policy of transfer of
the company. The company however asked them to 8
report for duties at their respective transferred places.
Reminders were also sent by the company. As the
respondents did not join at the transferred places, they
were discharged from service, with immediate effect with
one month pay in lieu of notice. The workmen E
approached Labour Commissioner for conciliation but
the company refused to participate therein.

Questioning the orders of termination, workmen
raised an industrial dispute. The industrial court made an p
award holding that since no domestic inquiry was
conducted before passing the orders of termination, the
same were bad in law; and that since the workmen had
superannuated in the meantime, the question of directing
their reinstatement did not arise. Further it held that the G
workmen were entitled to back wages from the date of
termination till the date of attaining their normal
superannuation based on the last pay drawn. The
appellant-company filed writ petition before the High
Court which was dismissed. Aggrieved, the employer H
920 SUPREME COURT REPORTS [2008] 16 S.C.R.

· A ·filed the instant appeal.

Dismissing the appeal, the Court

HELD: 1. When an employee does not join at his
transferred place, he commits a misconduct. A
B disciplinary proceeding is, then required to be initiated.
The order of discharge is not a substitute for an order of
punishment. If an employee is to be dismissed from -+
(
service on the ground that he had·. committed a
misconduct, he is entitled to an opportunity of hearing.
C In the instant case, had such an opportunity of hearing
been given to workmen, they could have shown that
there were compelling. reasons for their not joining at the
transferred places. There did not exist any justifiable \
reason as to why such a post haste· decision was taken.
D Admittedly the respondents were challenging the right of
the employer to order transfer of the employee
particularly. when · t.hey hold some posts in the
association. The dispute was subjudice. They were in their
late fifties. They· had served the company for a period of
E more than 25 years. It is true that they did not join at their
·transferred posts within a reasonable time. It may also in
an ordinary situation be held that seven. months is too
long a period to join at the transferred place. There cannot
furthermore be any doubt that the transfer is an incidence
F of service. Unless an order of transfer is passed contrary
to the· provisions of the statutory rule or settlement, the
same should not be interfered with. However, the
Industrial Tribunal held that the order of termination
passed by the company was not valid. It had attained
G finality. [Paras 16, 34 and 35] [930-E, F; 940-E-H]

Bikash Bhushan Ghosh and Ors. v. Novartis India Ltd.
and Anr. (2007) 5 SCC 591, referred to.

2.1. Back wages cannot be granted automatically
H upon setting aside an order of termination on the
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 921
AND ORS.

__,,. premises that the burden to show that the workman was A
"""" gainfully employed during interregnum period was on the
employer. The burden of proof that workman remained
unemployed would be on him keeping in view the
provisions contained in Section 106 of the Evidence Act,
1972. [Para 19] [931-G-H; 932-A] B
M.P. State Electricity Board v. Jarina Bee (2003) 6 SCC
... 579; Allahabad Jal Sansthan v. Daya Shankar Rai and Anr.
\
(2005) 5 SCC 124; UP. State Brassware Corporation Ltd. v.
Uday Narain Pandey (2006) 1 SCC 479; G.M. Haryana
Roadways v. Rudhan Singh (2005) 5 SCC 591; UP. S.R. T. C.
c
Ltd. v. Sarada Prasad Misra and Anr: (2006) 4 SCC 733;
'>(
A.P. S.R. T. C. and Anr. v. B. S. David Paul (2006) 2 SCC 282;
A.P. State Road Transport Corporation and Ors. v. Abdul
Kareem (2005) 6 SCC 36; Rajasthan State Road Transport
Corporation and Ors. v. Shyam Bihari Lal Gupta (2005) 7 D
SCC 406; Muir Mills Unit of NITC (UP.) Ltd. v. Swayam
., Prakash Srivastava and Anr. (2007) 1 SCC 491; J.K.
> Synthetics Ltd. v. K.P. Agrawal and Anr. (2007) 2 SCC 433,
relied on.
E
2.2. For the purpose of grant of back wages, conduct
of the workman concerned also pl~.ys a yital role. Each
decision, as regards grant of back wages or the quantum
thereof would, theretore, depend on the fact of each
case. Back wages are ordinarily to be granted, keeping F
in view the principles of grant of damages. It cannot be
t· claimed as a matter of right. [Paras 20 and 30] (932-C-D]

2.3. In the instant case, the workmen ,had deposed
that they remained unemployed. Burden of proof was
undoubtedly upon the workmen. The said burden, G
however, was a negative one. Once they discharged their
A burden by deposing before the Tribunal, it shifted to the
employer to show that their contention that they had not
been employed, was incorrect. No witness was examined
H
922 SUPREME COURT REPORTS (2008] 16 S.C.R.

A on behalf of the employer. Even. there was. no pleading
in that behalf. Respondents were in private employment
an.d not in· public employment. Their services were
permanent in nature. The termination of their services
was held to be illegal as prior to issuance of the orders,
B no enquiry had been conducted. The order of discharge
was, thus, void ab initio. An award of reinstatement in
service was denied to them only. because in the -f
{
meanwhile, they attained their age of superannuation.
Back wages in a situation of this nature had to be granted
c to respondents by way of compensation. If the principle
of grant of compensation in a case of this nature is to be
applied, indisputably having regard to the fact situation
obtaining herein, name.ly, that the workmen were doing
a specialized job and were to reach their age of
superannuation within a few years, grant of back wages
0
was the only relief which could have been granted. Back
wages, therefore, could have been granted from the date
of termination of service. [Paras 36 and 38] [941-B, G-H]
Navin J. Surti v. Modi Rubber Ltd. and Anr. (2004) II CLR
E 46; Dena Bank v. Kirti Kumar T. Patel (1999) 2 SCC 106;
State Bank of India v. Anjan Sanyal and Ors. JT (2001) 5 SC
203; Nicks (India) Tools v. Ram Surat (2004) 8 SCC 222;
Jasbir Singh v. Punjab and Ors. (~007) 1 SCC 566 and
Madhya Pradesh Administration V; Tribhuvan (2007) 9 SCC
F 748, referred to
3. As regards the claim of the workmen for back
wages on the basis of revised pay scales, the Industrial
Court had directed calculation of back wages on the last
pay drawn. Its attention was not drawn to the fact that in
G the mean 'time revision in wages had taken place. On the
date of their superannuation, the workmen were entitled
to a much higher pay as the revision in wages had taken
place to which the workman were entitled. However, in
view of the fact that the decision of the Industrial court
H has attained finality, this Court is not inclined to exercise
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 923
AND ORS.

' _,. its jurisdiction under Article 142 of the Constitution of A
India for the purpose directing payment of back wages
on the basis of revised scale of pay and, thus, it will not
be fit and proper to interfere with the impugned judgment
while noticing the law in this behalf. [Para 41] [943-E-F]

Case Law Reference:
B

~ c2001) 5 sec 591 referred to Paras 9, 17
\
c2003) 6 sec 579 relied on Para 22
c2005) 5 sec 124 relied on Para 23 c
c2006) 1 sec 479 relied on Para 24
(2005) 5 sec 591 relied on Para 25
(2006) 4 sec 733 relied on Para 26 D
(2006) 2 sec 2s2 relied on Para 27
~ (2005) 6 sec 36 relied on Para 27
>
c2oos) 1 sec 406 relied on Para 27
E
c2001) 1 sec 491 relied on Para 28
(2007) 2 sec 433 relied on Para 29
(2004) II CLR 46 referred to Para 30
(1999) 2 sec 106 referred to Para 31 F
r· JT (2001) 5 SC 203 referred to Para 33
c2004) a sec 222 referred to Para 39
(2007) 1 sec 566 referred to Para 39 G
c2001) 9 sec 148 referred to Para 40
A
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7011 of 2008.
H
924 SUPREME couRJ .REPORTS [2008) 16 S. C.R.

,
A From the Judgment and final Order dated 1.8,2007 of the '\-
High Court at Calcutta in APOT No. 469 of 2003.

J.P. Cama, Prabhjit Jauhar, Noko Mehta and S.S. Jauhar
for the Appellant.
B Pradip Kumar Ghosh, Rauf Rahim, Tara Chandra Sharma,
Neelam Sharma and Kishan Datta for the Respondents.
J.
I
The Judgment of the Court was delivered by

5.8. SINHA, J. 1. Leave granted.
c
2. Whether back wages should have been directed to be
paid in favour of respondent Nos. 2 to 4 by the Industrial Tribunal
' as also by the High Court of Calcutta is the question involved
in this appeal which arises out of a judgment and order dated
D 1st August, 2007 whereby and whereunder a Letters Patent
Appeal filed by the appellant from a judgment and order dated
11th July, 2003 passed by a learned Single .Judge of the High 'f
Court was affirmed dismissing the writ petition filed by the \
appellant herein and questioning the validity of an award dated
E 10th October, 2002.

3. Appellant herein is a successor in interest of a company
known as Sandoz (India) Limited. Respondents were appointed
as Sales Representatives by the said Santoz (India) Limited.
F Indisputably in terms of offers of appointment they could be
transferred from one place to another.
i
In October, 1994 respondent Nos. 2 to 4 were transferred
to Siwan, Karimganj and Farrukabad respectively. They were
alleged!y relieved from their duties and were directed to report
G at th.e transferred places on or about 17th October, 1994. They
filed their representations requesting for withdrawal/
cancellatioh of their respective orders of transfer.
' \
4. Respondent No.4 sought for cancellation of the order
H of his transfer on medical grounds.
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 925
AND ORS. [S.B. SINHA, J.]
_,, Respondent No.3 in his representation dated 19th October, A
1994 stated:-

"Now, the Company Advocate Shri C.U. Singh h8s made
statement before Her Hon'ble Judge Miss Sondur of
Bombay City Civil Court to the effect that "the Defendants
B
shall not take any disciplinary action against the transferred
J.. Medical Representatives not reporting to their posts of
\ transfer during the pendency of Notice of Motion". On this
statement, the Notice of Motion .are fixed for hearing on
5th October, 1994.
c
I have not accepted transfer and not reported at the place
of transfer in view of the above statement and awaiting
result of Motion. I am advised by Association to defer to
file suit to challenge the transfer order."
D
5. Indisputably Civil Suits were filed in the District Court
)
at Mumbai which were marked as Suit Nos. 6263 and 6290 of
> 1994 questioning the policy of transfer of the company.

6. The company, however, asked the respondents to report
for duties at their respective transferred places. Reminders E
were sent by the company to respondent Nos. 2 and 4 on 1st
April, 1995 while to respondent No.3 on 31st March, 1995. As
the respondents did not join at their transferred places, they
were discharged from services by orders dated 15th April,
1995, stating:_ F
t•
"Note that as you have failed to honour adhere to and
comply with the contractual obligations on your part, we are
left with no alternative but to determine your contract of
employment which we hereby do with immediate effect, G
with one month pay in lieu of notice. The notice pax for a
,>, sum of Rs.7311/- (Rupees seven thousand three hundred
and eleven only) by a Demand Draft No. 736343 dated
14.04.95 is being sent herewith. as ·a part of the same
transaction.
H
926 SUPREME COURT REPORTS [2008] 16 S.C.R.

A Your legal dues arising out of determination of the Contract
,
~ '
of Employment shall be remitted to you at your last known
local address upon your surrendering all company property
such a Detailing Bag, Promotion Aids, Medical Dictionary,
Training Manual, Operations Manual, Literatures, Company
B Correspondence etc. at an early date."

7. It is, however, not in dispute that in the meantime
,.+-
respondent Nos. 2 to 4 had approached the Regional Labour I
Commissio.ner for conciliation. The Company refused to
participate therein.
c
Questioning the said orders of termination respondent
Nos. 2 to 4 raised an industrial disput~. The Government of
West Bengal by an order dated 12th June, 1997 referred the
said dispute for determination by the Third Industrial Tribunal,
D West Bengal, the terms whereof read as under :-

"Whether the termination of services of (1) Shri Bikash
Bhusan Ghosh, (2) Shri Pradip Kum~r Mukherjee and (3) y
\
Shri Shyama Charan Mallick is justified ? What relief, if
any, are they entitled ?"
E I

8. The company filed its written statement before the
Industrial Tribunal inter alia questioning its jurisdiction, A
preliminary issue was raised as regards the maintainability of
the reference on the ground that the dispute, if any, could have
F been raised only at the transferred locations and the appropriate
State Governments where respondent Nos. 2 to 4 have been
transferred only had the jurisdiction to refer the alleged disputE?.
By an order dated 30th March, 1999 the said preliminary
·objection was rejected. The Industrial Tribunal made an award
G on 10th October, 2002 holding that since no domestic inquiry
was conducted before passing the orders of termination, the
same were bad in law. It was observed that since the said /,(
respondents had superannuated in the meantime, the question
of directing their reinstatement did not arise. It however, held
H that the said respondents were entitled to back wages from the
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 927
AND ORS. [S.S. SINHA, J.]

date of termination till the date of attaining their normal A
superannuation. However, it was directed that the back wages
should be calculated on the basis of the last pay drawn.

9. Questioning the validity of said award a writ petition was
filed before the High Court of Calcutta. A learned Single Judge
8
of the High Court dismissed the writ petition. However, in a'
Letters Patent Appeal filed by the appellant, by a judgment and
i order dated 1st March, 2006, a Division Bench of the said court ·
~
held that the State of West Bengal was not the appropriate
Government for making the reference.
c
A Special Leave Petition was filed by the workmen before
this Court. By 'a judgment and order dated 27th April, 2007,
reported as Bikash Bhushan Ghosh and others v. Novartis
India Ltd and another, [ (2007) 5 SCC 591 ) this Court differed
with the findings of the Calcutta High Court and while setting D
aside the judgment of the High Court remitted back the matter
. .,, to it for consideration of the matter on its own merits .
)
10. Pursuant to and in furtherance of the said directions,
the matter was considered afresh by a Division Bench of the
E
Calcutta High Court and by reason of the impugned judgment
dated 1st August, 2007 the said Letters Patent Appeal was
dismissed, stating:-

"From a perusal of the award passed by the learned
Tribunal, we find that the learned Judge, 3rd Industrial F
tw Tribunal, Calcutta decided the matter after taking into
consideration the entire evidence on record and we do not
find any reason to send back the matter again to the
Tribunal to decide the matter on merits after taking into
consideration the same evidence on record. So far as the G
payment of back wages we also do not find any reason
}. to interfere with the same."

11. This Court issued notice on 23rd November, 2007
--\ confined to the question of back wage~ only.
H
928 SUPREME COURT REPORTS [2008] 16 S.C.R.

A 12. Mr. J.P. Gama, learned senior counsel appearing on ~-
behalf of the appellant would submit :-

(1) That the Tribunal and consequently the High Court
committed a serious error in awarding back wages
in favour of respondent Nos. 2 to-4 herein without
B
taking into consideration the ·factors relevant
therefor.. ~
/.'
(2) Respondents 2 to 4 had not discharged the onus
placed on them to show that they were not
c employed elsewhere during the period of 3rd
October, 1994 and the date of the award and even
assuming that they were not employed in any
undertaking, they should have at least shown as to
how they survived for such ~,long time.
D
(3) The Tribunal applied the wrong test in so far as it
proceeded on the basis that the order of
termination being bad in law, back wages were to r
.
be paid automatically.
E (4) Learned Single Judge has failed to arrive at a
finding as to why the back wages should be
granted.

(5) The Division Bench has also not assigned any
F reason in support of the findings as to why the back
wages should be paid. w-f

(6) The Tribunal having directed that the back wages
should be calculated on the basis of last pay and
no consequeotial benefits having been given which
G has attained finality, the contention ef the workmen
that back wages should be calculated keeping in ,"\.
I

view the revised scale of pay must be held to be
wholly unsustainable.

H 13. Mr. Pradip Kumar Ghosh, learned senior counsel
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 929
AND ORS. [S.B. SINHA, J.]

-r appearing on behalf of respondents 2 to 4, on the other hand,
would support the judgment, contending:
A

(1) The back wages are granted in two different
situations; i.e. firstly by way of consequential relief;
and secondly byway of a compensation in a case B
where direction to reinstatement is not possible to
be given.
oJ.
~
(2) Re?pondent Nos. 2 to 4 having served the
company for more than 25 years with all sincerity,
their transfer to far away places only a few years . c
prior to their dates of superannuation being ma/a
fide, the same was.liable to be set aside.

(3) It was impossible for the respondents to get
alternative employment at that age, back wages D·
have rightly been granted in their favour.

'Y (4) The guidelines laid down by this Court for non-
.. payment or part payment of back wages, in a
situation of this nature should not be applied and
in any event the said guidelines which relate to the E
nature and mode of employment, the length of
service, etc. cannot be said to have any application
in the instant case.

(5) The Tribunal having directed calculation of back F
wages on the basis of the last drawn wages, the_
~·
same would mean that the wages to which the
workmen were entitled to and not the actual wages
drawn by them.

14. Respondents were posted at Kolkata by the appellant.
G
For a long time they were posted there. They were transferred
-'-
to far away places. They, however, immediately did not initiate
proceedings questioning the validity of the orders of their
transfer. The question as regards validity of order of transfer in
H
930 SUPREME COURT REPORTS [2008] 16 S.C.R.

A similar matters was p~nding decision in a court of law. They
were adviseg to wait till the decision in the notice of motion In
the suit filed before the City Civil Court, Mumbai is rendered.

Admittedly, however, even after the direction went against
the employees, respondents did not join their services at their
8
transferred places.

They might have committed a misconduct. Their services,
however, were terminated without holding any -domestic inquiry.
Only a month's wages were paid. It is not in dispute that after
C passing of the orders of transfer till the orders of termination,
no amount by way of salary or otherwise has been paid to them.
No disciplinary proceeding was initiated. No subsistence
allowance was also paid.

o 15. Indisputably when an industrial dispute was raised, the
company refused to participate in the conciliation proceedings
before the conciliation officer on 12th April, 1995, the date fixed
therefor Allegedly only upon receipt of notice of the conciliation Y
proceeding, the services of ;·espondents 2 to 4 were '
E terminated.

16. When an employee does not join at his transferred
place, he commits a misconduct. A disciplinary proceeding
was, therefore, required to be initiated. The order of discharge
is not a substitute for an order of punishment. If an-employee
F is to be dismissed from services on the ground that he had
committed a misconduct, he was entitled to an opportunity of
hearing. Had such an opportunity of hearing been given to them,
they could have shown that there were compelling reasons for
their not joining at the transferred places. Even a minor
G punishment could have been granted. Appellc;1nt precipitated the
situation by passing a post haste order of termination of their
services.

17. This Court in Bikash Bfwshan Ghosh and others
H (supra) in regard to a contention raised by the appellant in
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 931
AND ORS. [S.8. SINHA, J.]

-( earlier round of litigation that the order of transfer having not A
been challenged, the award of the Industrial Court was not
sustainable, held :-

"15. With respect to the Division Bench, we do not think
that it has posed unto itself a correct question of law. It is
B
not in dispute that the appellants did not join their duties
..;. at the transferred places. According to them, as the orders
). of transfer were illegal, their services were terminated for,
not complying therewith. The assertion of the respondent
that the appellants were relieved from job was unilateral.
If the orders of transfer were to be set aside, they would
c
be deemed to be continuing to be posted in Calcutta. The
legality qt the orders of transfer, thus, had a direct nexus
with the orders of termination.

It was furthermore observed:- D

"18. Yet again the appellants being workmer:i. their services
1 were protected in terms of the Industrial Disputes Act,
• 194 7. If their services were protected, an order of
termination was required to be communicated.
E
Communication of an order of termination itself may give
rise to a cause of action. An order of termination takes
effect from the date of communication of the said order."

18. The issue before us, namely - as to whether the
t'
respondents 2 to 4 were entitled to full back wages must be F
t· determined keeping in view the aforementioned background
facts in mind.

19. There can, however, be no doubt whatsoever that there
has been a shift in the approach of this Court in regard to
G
payment of back wages. Back wages cannot be granted
~ almost automatically upon setting aside an order of termination
inter alia on the premises 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
H
'
SUPREME COURT REPORTS [2008] 16 S.C.R.
r
932

A opined that grant of back: wages is not automatic. The burden
-r
of proof that he remained unemployed would be on_the
workmen keeping in view the provisions contained in Section
106 of the Evidence Act, 1972. This Court in the matter of grant
of back: wages has laid down certain guidelines stating that
B 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
k
with Articles 4 and 16 of the Constitution of India in cases of A

public employment; etc.
c 20. It is also trite that for the purpose of grant of back:
wages, conduct of the concerned workman 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

D
case.

Back wages are ordinarily to be grante~,.k:eeping in view
"' ,,

I-
the principles of grant of damages in mind. It cannot be claimed
as a matter of right.
'"'"- \

•
21. Large number of decisions have been referred before
E
us by the learned .counsel for the parties. It is not possible to
deal with each one of them. We may, however, notice a few of
them.

22. In M.P. Sate Electricity Board v. Jarina Bee, [(2003)
F 6 SCC 579] this Court observed that the award of full back:
wages was not the natural consequence of an order of •t
reinstatement.

23. In Allahabad Jal Sansthan v. Daya Shankar Rai and
another, [(2005) 5 sec 124 ] it was held :-
G
"6. A law in absolute terms cannot be laid down as to in
~( ~
• which cases, and under what circtmstances, full back:
I wages can be ,granted or denied. The Labour Court and/
or' lndustria'I Tribunal before
. which industrial dispute has
H
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 933
AND ORS. [S.B. SINHA, J.]

been raised, would be entitled to grant the relief having A
-(
regard to the facts and circumstances of each case. For
the said purpose, several factors are required to be taken
into consideration. It is not in dispute that Respondent 1
hereinwas appointed on· an ad hoc basis; his services
were terminated on the ground of a policy decision, as far B
back as on 24-1-1987. Respondent 1 had filed a written
statement wherein he had not raised any plea that he had
.J..
been sitting idle or had not obtained any other employment
"'
in the interregnum. The learned counsel for the appellant,
in our opinion, is correct in submitting that a pleading to c
that effect in the written statement by the workman was
necessary. Not only no such pleading was raised, even in
his evidence, the workman did not say that he continued
to remain unemployed. In the instant case, the respondent
herein had been reinstated from 27-2-2001." D

. ,.
It was furthermore observed :-

"16. We have referred to certain decisions of this Court
to highlight that earlier in the event of an order of dismissal
being set aside, reinstatement with full back wages was E
the usual result. But now with the passage of time, it has
come to be realised that industry is being compelled to
pay the workman for a period during which he apparently
contributed little or nothing at all, for a period that was spent
unproductively, while the workman is being compelled to F
go back to a situation which prevailed many years ago
y- when he was dismissed. It is necessary for us to develop
a pragmatic approach to problems dogging industrial
relations. However, no just solution can be offered but the
golden mean may be arrived at."
G
24. Yet again in U.P. State Brassware Corporation Ltd. v.
-!: Uday Narain Pandey, [ (2006) 1 SCC 479 ], this emphasized
that grant or denial of back wages would be subject matter of
each case stating :-
H
934 SUPREME COURT REPORTS [2008) 16 S.C.R.

A "61. It is not in dispute that the respondent did not raise _,_
...,
I

any plea in his written statement that he was not gainfully
employed during the said period. It is now well settled by
various decisions of this Court that although earlier this
Court insisted that it was for the employer to raise the
B aforementioned plea but having regard to the provisions
of Section 106 of the Evidence Act or the provisions
analogous thereto, such a plea should be. raised by the
workman." *
~'

25. In G.M. Haryana Roadways v. Rudhan Singh, [(2005)
c 5 sec 591 ], which was mentioned in paragraph 54 of U.P.
State Brassware Corporation Ltd. (supra) it was held :-

"8. There is no rule of thumb that in every case where the
Industrial Tribunal gives a finding that the termination of
D service was in violation of Section 25-F of the Act, entire
back wages should be awarded. A host of factors like the
manner and method of selection and appointment i.e. ·~
whether after proper advertisement of the vacancy or ~ -
inviting applications from the employment exchange, nature,
E of appointment, namely, whether ad hoc, short term, daily
wage, temporary or permanent in character, any special
qualification required for the job and the like should be
weighed and balanced in taking a dc..cision regarding
award of back wages. One of the important factors, which
F has to be taken into consideration, is the length of service,
which the workman had rendered with the employer. If the ~
r
workman has rendered a considerable period of service
and his services are wrongfully terminated, he may be /
awarded full or partial back wages keeping in view the fact
that at his age and the qualification possessed by him he
G
may not be in a position to get another employment.
However, where the total length of service rendered by a
workman is very small, the award of back wages for the
complete period i.e. from the date of termination till the
date of the award, which our experience shows is often
H
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 935
AND ORS. [S.S. SINHA, J.]

_, -f quite large, would be wholly inappropriate. Another
important factor, which requires to be taken into
A

consideration is the nature of employment. A regular
service of permanent character cannot be compared to
short or intermittent daily-wage employment though it may
be for 240 days in a calendar year." B
26. Again in U.P.S.R. T.C. Ltd. v. Sarada Prasad Misra
~ and another, [(2006) 4 sec 733], it was held that the grant of
.. back wages is discretionary. It was reiterated that initially it was
for the employee to prove that he had not been gainfully
employed. It was observed:-
c
"""
~
"16. From the above cases, it is clear that no precise
formula can be adopted nor "cast-iron rule" can be laid
down as to when payment of full back wages should be
allowed by the court or tribunal. It depends upon the facts D
and circumstances of each case. The approach of the
court/tribunal should not be rigid or mechanical but flexible
1 and realistic. The court or tribunal dealing with cases of
14
industrial disputes may find force in the contention of the
employee as to illegal termination of his services and may . E
come to the conclusion that the action has been taken
otherwise than in accordance with law. In such cases
obviously, the workman would be entitled to reinstatement
but the question regarding payment of back wages would
be independent of the first' question as to entitlement of F
reinstatement in service. While considering and
~~ determining the second question, the court or tribunal
would consider all relevant circumstances referred to
above and keeping in view the principles of justice, equity
and good conscience, shou!d pass an appropriate order."
G
27. In A.P.S.R. T.C. and another v. B.S. David Paul,
-t [(2006) 2 sec 282], it was observed :-

"8. The principle of law on point is no more res integra.
This Court in A.P. SRTC v. S. Narsagoud 1 succinctly H
936 SUPREME COURT REPORTS [2008) 16 S.G.R.

A crystallised the principle of law in para 9 of the judgment
on sec p. -215:
_,..

'9. We find merit in· the submission so made. There
is a difference between an order of reinstatement
accompanied by a simple direction for continuity of
B
service and a direction where reinstatement is
accompanied by a specific direction that the
employee shall be entitled to all the consequential _.__
benefits, which necessarily flow from reinstatement ".
or accompanied by a specific direction that the
c employee shall be entitled to the benefit of the
increments earned during the period of absence.
In our opinion, the employee after having been held
guilty of unauthorised absence from duty cannot
claim the benefit of increments notionally earned
• D during the period of unauthorised absence in the
• absence of a specific direction in that regard and
merely because he has been directed to be
· reinstated with the benefit of continuity in service." T
"'
E (See also A.P. Sate Road Transport Corporation and others
v. Abdul Kareem, [(2005) 6 SCC 36]. and Rajasthan State
Road Transport Corporation and others v. Sh yam· Bihar: Lal
Gupta, [(2005) 7 sec 406]).

28. In Muir Mills Unit of NJTC (Up.) Ltd. v. Swayam
F Prakash Srivastava and another, [(2007) 1 sec 491], it was
..
held:-
''(
"46. We are also of the view that the award of the Labour
Court is perverse as it had directed grant of back wages
G without giving any finding on the gainful employment of
Respondent 1 and held that the discontinuance of the
services of a probationer was illegal without giving any
finding to the effect that the disengagement of Respondent
1 was in any maRner stigmatic. In the decision in M.P. SEB
H v. Jarina Bee2 this Court heid that payment of full back
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 937
AND ORS. [S.8. SINHA, J.]

wages was not the natural consequence of setting aside A
-r an order of removal. In the instant case, though the
termination was as far back as in 1983, the industrial
adjudicator has not given any finding on unemployment.
This Court in a recent case of State of Punjab v. Bhagwan
Singh 18 has held that even if the termination order of the B
probationer refers to the performance being "not

... satisfactory", such an order cannot be said to be stigmatic
and the termination would be valid."

29. In J.K. Synthetics Ltd. v. K.P. Agrawal and another,
[(2007) 2 SCC 433], Raveendran, J. speaking for the Division
c
Bench held :-

"17. There is also a misconception that whenever
reinstatement is directed, "continuity of service" and
"consequential benefits" should follow, as a matter of D
course. The disastrous effect of granting several
promotions as a "consequential benefit" to a person who
J( has not worked for 10 to 15 years and who does not have
"' the benefit of necessary experience for discharging the
higher duties and functions of promotional posts, is E
seldom visualised while granting consequential benefits
automatically. Whenever courts or tribunals direct
reinstatement, they should apply their judicial mind to the
facts and circumstances to decide whether "continuity of
service" and/or "consequential benefits" should also be F
directed. We may in this behalf refer to the decisions of
1... this Court in A.P. SRTC v. S. Narsagoud, A.P. SRTC v.
Abdul Kareem 14 and Rajasthan SRTC v. Shyam Bihari
Lal Gupta."

30. Even if some income was derived by the employee, G
the same should be taken into for consideration for the purpose
__.
... of consideration in regard to grant of entire back wages. Our
attention has been drawn to a decision of the Bombay High
Court in Navin J. Surti v. Modi Rubber Ltd. and another, [2004
II CLR 46] wherein it was observed :- H
938 SUPREME COURT REPORTS [2008] 16 S.C.R.

A "Eventually, there would be a burden cast upon the
employee to disclose the efforts made by him to secure ·-~ ''II'-
an9ther job during the time he was out of employment on
accou~t of termination of the service, in order to justify the
Claim for the back wages in its entirety. Indeed, the Division
B . Bench .in Sadanand Patankar's case (supra) has clearly
ruled that "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 ..t;
idleness are within the special knowledge of the employee, ,. ·
c it is only fair and proper that he should first state whether,
he was employed or not and during what period, the J
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 has also been clearly held that once such burden
D
is discharged by the employee, it would be for the
r-
employer to prove facts to the contrary. Similarly is the
decision of the learned Single Judge, as he then was (Sri
Justice B.N. Srikrishna), in Indiana Engineering Works t
(Bombay) Pvt. Ltd. v. · The Presiding Officer 5th Labour "'
E
Court and Ors. 1995 (II) CLR. 890 where it has been
clearly held that "I am of the considered view that the
dismissed workman also owes a duty to the industrial
adjudicator to honestly disclose full particulars of the· facts
which are purely within his knowledge and that any attempt
F to mislead the Tribunal must surely be looked at askance,"

It was furthermore observed :- '"(

"Apart from the obligation on the part of the employer to
establish gainful employment of the employee during such
G
period, it would also be necessary for the employee to
disclose the efforts made by him to get. some other job
or employment during such period as well as about the :;}-
source of income during the said period and if so, to what ·
extent. Mere silence on the part of the employee in that
H
t,
STATE OF PUNJAB v. SUKHCHAIN SINGH & ANR. 939
[DR ARIJIT PASAYAT, J.]
( -( regard cannot, in any manner, enure to the benefit of the A
employee to justify the claim for back wages in entirety. It
cannot be forgotten that the order for payment of back
wages has to be from the point of view of compensating
the employee for the loss suffered during the time he was
out of the employment and not a reward for having B
succeeded in establishing the action of termination of the
~
. se!"ice by the employer to be illegal."

31. In regard to the construction of the words "last pay
dawn", learned counsel has drawn our attention to the decision
of this Court in Dena Bank v. Kirti Kumar T. Patel, [(1999) 2
c
sec 106] wherein it was held:-
"19. As per the decisions of the High Courts referred to
above, the expression "full wages last drawn" in Section
17-B can mean as under: D
t (i) Wages only at the rate last drawn and not at the same
~ rate at which the wages are being paid to the workmen
who are actually working. (Daladdi Coop. Agriculture
Service Society Ltd. v. Gurcharan Singh) E
(ii) Wages drawn on the date of termination of the services
plus the yearly increment and the dearness allowance to
be worked out till the date of the award. (Visveswaraya
Iron and Steel Ltd. v. M. Chandrappa and Kirtiben B.
Amin v. Mafatlal Apparels7 ) F
1'
(iii) Full wages which the workman was entitled to draw in
pursuance of the award and the implementation of which
is suspended during the pendency of the proceedings.
(Carona Sahu Co. Ltd. v. A.K. Munafkhan6 , Macneil and G
...I
Magor Ltd. v. First Addi. Labour Court8 and P. Chennaiah
~

v. Dy. Executive Engineer10 )

20. The first construction gives to the words "full wages last
drawn" their plain and material meaning. The second as
H
940 SUPREME COURT REPORTS [2008] 16 S.C.R.

A well as the third constructions read something more than
their plain and material meaning in those words. In
substance these constructions read the words "full wages
last drawn" as "full wages which would have been drawn".
Such an extended meaning to the words "full wages last
B drawn" does not find support in the language of Section
17-B. Nor can this extended meaning be based on the
object underlying the enactment of Section 17-B."

32. There cannot be any doubt whatsoever that ordinarily
an employee who has been transferred should, subject to just
C exceptions, join at his transferred place. Ordinarily in an
industrial undertaking indiscipline should not be encouraged.

33. This Court in Stqfe Bank of India v. Anjan Sanyal and
others, [JT 2001 (5) SC 203], observed that the conduct of an
D employee in a transfer case is material as he cannot get a
premium for his disobedience.

34. There are, however, certain exceptional situations in
i
,. _
this case. Admittedly the respondents were challenging the right
E of the employer to order transfer of the employee particularly
when they hold some posts in the association. The dispute was
suqjudice. They were in their late fiftees. They had served the
company for a period of more than 25 years. It is true that they
did not join at their transferred posts within a reasonable time.
It may also in an ordinary situation be held that seven months
F is too long a period to join at the transferred place. There cannot
furthermore be any doubt that l_he transfer is an incidence of "t
service; Unless an order of transfer is passed contrary to the
provisions of the statutory rµle or settlement, the same should
not be interfered.
G
. 35. However, the question which arose for consideration
-~
before the Industrial Tribunal was as to whether the order of _.,
termination passed by the company was valid. The answer to
the said issue was answered in the negative. It had attained
H finality. We have· also noticed herein before that there did not
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 941
AND ORS. [S.B. SINHA, J.]
., 4(
exist any justifiable reason as to why such a post haste decision A
was taken.

36. The workmen had pleaded that they remained
unemployed. They stated so in their respective depositions. The
fact that they survived and did not die of starvation itself could
B
not be a ground for denying back wages to them. Even an
t. unemployed person has a right to. survive. He may survive on
his past savings. He may beg or borrow but so long as he has
not been employed, back wages, subject to just exceptions,
should not be denied.
c
_, An award of reinstatement in service was denied to them
\
\ only because in the meanwhile, they attained their age of
superannuation.

37. Back wages in a situation of this nature had to be 0
granted to respondents by way of compensation. If the principle
,. i of grant of compensation in a case of this nature is to be
)>; applied, indisputably having regard to the fact situation
obtaining herein, namely, that they were doing a specialized job
and were to reach their age of superannuation within a few
B
years, grant of back wages was the only relief which could have
been granted. It was furthermore not expected that they would
get an alternative employment as they were superannuated.
Burden of proof was undoubtedly upon the workmen. The said
burden, however, was a negative one. Once they discharged
,.r their burden by deposing before the Tribunal, it shifted to the F
employer to show that their contention that they had not been
employed, was incorrect. No witness was examined on behalf
of the employer. Even-there was no pleading in that behalf.

38. Respondents were in private employment and not in G
...:.-r- public employment. Their services were permanent in nature .
The termination of their services was held to be illegal as prior
to issuance of the orders, no enquiry had been conducted. The
order of discharge was, thus, void ab initio. Back wages,
therefore, could have been granted from the date of termination H
942 SUPREME COURT REPORTS [2008] 16 S.C.R.

A of service ..
. .,... ,,.
39. In Nicks (India) Tools v. Ram , Surat [(2004)
'
8 SCC
222], this Court held :

"19. Reliance placed by the learned counsel for the
B appellant on the case of P.G.I. of Medical Education &
Research in our opinion, does not take the case of the
appellant any further. In that case, this Court held that the j
Labour Court being the final court of facts the superior
courts do not normally interfere with such findings of fact
c unless the said finding of fact is perverse or erroneous or
;I

not in accordance with law. In the instant case, we have t',
already noticed that the basic ground on which the Labour
Court reduced the back wages was based on a judgment
of the High Court of Punjab and Haryana which, as further
D noticed by us, was overruled by a subsequent judgment
of a Division Bench. Therefore, the very foundation of the
conclusion of the Labour Court having been destroyed, the ....
appellant could not derive any support from the above cited ·.-<
t
judgments ofthat Cou.rt. Similarly, in the case of M.P. SEB
E this Court only said that it is not an inevitable conclusion
that every time a reinstatement is ordered, full back wages
was the only consequence. This Court, in our opinion, did
not conclude that even in cases where full back wages are
legally due, the superior courts are precluded from doing
so merely because the Labour Court has on an erroneous
F
ground reduced such back wages. In the instant case, we
have noticed that the trial court apart from generally
't
observing that in Ludhiana, there must have been job
opportunities available, on facts it did not rely upon any
particular material to hold that either such job was in fact
G
available to the respondent and h.e refused to accept the
same.or he was otherwise gainfully employed during the ::t-
period he was kept out of work. On the contrary, it is for
the first time before the writ court the appellant tried to
produce additional evidence which was rightly not
H
NOVARTIS INDIA LTD. v. STATE OF WEST BENGAL 943
AND ORS. [S.B. SINHA, J.]

-{ considered by the High Court because the same was not A
brought on record in a manner known to law. Be that as it
may, in the instant case we are satisfied that the High
Court was justified in coming to the conclusion that the
appellant is entitled to full back wages."
B
{See also Jasbir Singh v. Punjab & Sind Bank & Ors.
[(2007) 1 sec 566]}.

40. In Madhya Pradesh Administration v. Tribhuvan
[(2007) 9 sec 748], while reiterating the principle relating to
grant of back wages in some of the decisions to which we had C
adverted to, this Court opined that the court should consider
each case on its own merits. So far as the issue that the orders
of transfer were not in question, in the case of the parties
themselves in Bikash Bhushan Ghosh (supra), it was observed
that the orders of transfer were not in issue before the Tribunal. D

41. There is another aspect of the matter which cannot be
t
lost sight of. The Industrial Court had directed calculation of back
wages on the last pay drawn. Its attention, however, was not
drawn to the fact that in the mean time revision in wages had E
taken place. On the date of their superannuation, they were
entitled to a much higher pay as the revision in wages had taken
place to which the workman were entitled to. In view of the fact
that the same attained finality, this Court is not inclined to
exercise its jurisdiction under Article 142 of the Constitution of F
India for the purpose directing payment of back wages on the
basis of revised scale of pay and, thus, it will not be fit and
proper to interfere with the impugned judgment while noticing
the law in this behalf.

42. For the reasons aforementioned, the impugned G
judgment warrants no interference. The appeal is dismissed with
costs. Counsel's fee assessed at Rs.50,000/-.

D.G. Appeal dismissed.