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The nature of the charges, the exact reason for the termination and the question as to whether the employee was gainfully employed would be matters which will enter into the consideration by the Court while deciding on a issue regarding payment of back wages to an employee who was illegally terminated, held the Supreme Court.

"In a case where it is found that the employee was not at all at fault and yet, he was visited with illegal termination or termination which is actually activised by malice, it may be unfair to deny him the fruits of the employment which he would have enjoyed but for the illegal / malafide termination. The effort of the Court must be to then to restore the status quo in the manner which is appropriate in the facts of each case....", added a bench of Justices KM Joseph and PS Narasimha.

These observations were made by the Court while hearing an appeal filed by one Pradeep, a qualified Chartered Accountant.

Pradeep was appointed as Manager (Finance) at Manganese Ore (India) Limited & Ors in 1997. Thereafter, he was posted in 2005 at the Balaghat Mines as the Deputy Chief (Finance). In certain circumstances, which were on account of the death of his father, he had to report late for work on three days. He was thus served with a show cause and it was followed up by yet another show cause.

He came to be suspended in October 2007. Later that month, he was served with a charge memo and was then dismissed in August 2008. The appeal carried by him was dismissed. A writ petition was filed which was partly allowed by a Division Bench and thus the instant appeal was filed.

While the Division Bench had ordered Pradeep's reinstatement but had denied him the benefit of backwages. 

The Court after having heard both the parties noted that, undoubtedly, it was true that when a question arises as to whether backwages is to be given and as to what is to be the extent of backwages, these are matters which will depend on the facts of the case.

In the present case, the bench held that the reason given by the High Court for denying backwages did not appeal to it as the appellant-employee had indeed stated that he was not working.

It was further found that the appellant had not denied that the he was indeed earning some amount from doing accountancy related work and he had filed returns under the Income Tax Act.

"This means as things stand before us, it is a case where the appellant must be treated as not having been without any income at all during the period. He was earning. We have also, however, noticed that there was hardly any worthwhile reason for the respondent to terminate the services. The impugned order itself shows that there was no basis for termination of the services of the appellant. When the appellant was qualified and particularly, when the appellant also has a case that all this was done for the reason that he had taken up certain issues relating to the manner in which the affairs of the respondent was being run, we would think that the High Court was in error in not making appropriate order relating to backwages", the bench noted.

Thus, while holding it to be in the interest of justice, the Court directed that the appellant be paid a total sum of Rs.80 lakhs as the backwages for the entire period for which the termination operated.

Cause Title: PRADEEP S/O RAJKUMAR JAIN v MANGANESE ORE(INDIA) LIMITED & ORS.