Reinstatement with full back wages is not automatic in every case of unlawful termination: Supreme Court

The Supreme Court held on Monday that reinstatement of employee with full back wages is not automatic in every case where termination was not in accordance with lawful procedure (Allahabad Bank vs. Krishan Pal Singh)..The judgment was passed by a Bench of Justices Subhash Reddy and Sanjiv Khanna on an appeal by Allahabad Bank (appellant) against an order of the Allahabad High Court directing the bank to reinstate the respondent-workman with all benefits.The top court found it fit to modify the High Court order considering that the respondent was in effective service with the bank for only six years and had already attained the age of superannuation. Therefore, it proceeded to grant a lumpsum monetary compensation."The reinstatement with full back wages is not automatic in every case, where termination / dismissal is found to be not in accordance with procedure prescribed under law," the judgment said..The respondent was a clerk-cum-cashier in Allahabad Bank and while posted in the Aurangabad Branch, he was suspected of complicity in a fire accident at the bank which led to burning of bank records. Therefore, he was placed under suspension and was ultimately dismissed from service..On his departmental and mercy appeal being rejected, the respondent moved the Industrial Tribunal. The tribunal found that the misconduct alleged against the respondent was not proven and even though there was strong suspicion, there was lack of evidence to prove misconduct. However, on the ground of loss of confidence by the management, a compensation of ₹30,000 was awarded in lieu of reinstatement.On appeal by the respondent, the High Court ordered reinstatement with all benefits.The bank appealed to the Supreme Court against the same..The Supreme Court noted that the respondent was in service for only about six years and was unsuccessful before departmental enquiry. Further, he had also attained the age of superannuation during the pendency of the proceedings.Hence, the Court modified the High Court order and instead of reinstatement, directed that the respondent be awarded compensation of ₹15 lakh."We deem it appropriate that ends of justice would be met by awarding lump sum monetary compensation. We accordingly direct payment of lump sum compensation of Rs.15 lakhs to the respondent, within a period of eight weeks from today," the order said..Advocate Rajesh Kumar Gautam appeared for the appellant bank while the respondent was represented by advocate Rakesh Taneja..[Read Judgment]