Hindustan Machine Tools vs. Ghanshyam Sharma: Supreme Court Modifies Reinstatement Order

The case of Management, Hindustan Machine Tools Ltd. vs. Ghanshyam Sharma revolves around an employment dispute concerning whether a casual worker is entitled to reinstatement or lump sum compensation after termination. The Supreme Court of India, in its judgment dated 30th October 2018, modified the order of reinstatement and instead directed the payment of lump sum compensation.

Background of the Case

The respondent, Ghanshyam Sharma, was employed as a casual helper in the manufacturing plant of Hindustan Machine Tools Ltd. from 10th June 1976 to 30th July 1977. According to Sharma, his services were terminated orally on 31st July 1977, and he was never reinstated.

Feeling aggrieved, Sharma approached the government, leading to a reference under Section 10 of the Industrial Disputes Act, 1947. The matter was referred to the Labour Court, Jaipur, for adjudication.

Labour Court’s Decision

The Labour Court ruled in favor of the workman, holding that:

The termination was illegal and improper.
The workman was entitled to reinstatement with continuity in service.
All consequential benefits must be provided.

On these findings, the Labour Court ordered the reinstatement of Sharma with all service benefits.

Appeal Before the Rajasthan High Court

The employer, Hindustan Machine Tools Ltd., challenged the Labour Court’s award before the Rajasthan High Court through a writ petition. The Single Judge of the High Court:

Set aside the Labour Court’s order and ruled in favor of the employer.
Held that the worker’s casual status did not entitle him to reinstatement.

Aggrieved by this decision, Sharma filed an intra-court appeal before the Division Bench of the High Court, which:

Set aside the Single Judge’s order and restored the Labour Court’s ruling.
Directed the employer to reinstate Sharma with full benefits.

This prompted Hindustan Machine Tools Ltd. to approach the Supreme Court.

Arguments by the Petitioner (Hindustan Machine Tools Ltd.)

The employer argued that:

Sharma was a casual worker and had only worked for one year, making reinstatement inappropriate.
The workman had not provided evidence regarding his employment status after termination.
Too much time had passed (more than 40 years), and reinstatement was impractical.
The Labour Court should have awarded lump sum compensation instead of reinstatement.

Arguments by the Respondent (Ghanshyam Sharma)

The workman argued that:

His termination was illegal and done without following due process.
He had worked for a sufficient period to claim service benefits.
Reinstatement was the only way to ensure fairness.

Supreme Court’s Judgment

The Supreme Court examined the facts and made the following key observations:

Sharma was a casual worker and had worked for only one year (240 days).
There was no evidence to show whether he was gainfully employed elsewhere after termination.
The Labour Court should have awarded monetary compensation instead of ordering reinstatement.
The case was similar to earlier judgments where lump sum compensation was preferred over reinstatement.

Key Excerpts from the Judgment

The Supreme Court held:

“In a case of this nature, and having regard to the fact that many decades had passed in between with no evidence adduced by the respondent that whether he was gainfully employed from 1977 onwards or not, the Labour Court should have awarded lump sum money compensation to the respondent in lieu of the relief of reinstatement.”

The Court further ruled:

“Having regard to the peculiar nature of the respondent’s appointment and rendering of services for a very short duration (just 240 days only), this was a fit case where the Labour Court should have awarded lump sum compensation instead of directing reinstatement in service with consequential benefits.”

Final Judgment

The Supreme Court modified the order of the High Court and Labour Court, directing the employer to:

Pay a lump sum compensation of Rs. 50,000 to the workman instead of reinstating him.
The compensation had to be paid within three months from the date of the judgment.

Legal Precedents and Significance

This judgment is consistent with previous rulings, including:

Senior Superintendent Telegraph (Traffic) Bhopal vs. Santosh Kumar Seal – Preference for compensation instead of reinstatement in cases of casual employment.
Assistant Engineer, Rajasthan Development Corporation vs. Gitam Singh – Recognizing that compensation is a more practical solution in disputes involving casual workers.

Conclusion

The case of Hindustan Machine Tools Ltd. vs. Ghanshyam Sharma establishes an important precedent regarding the reinstatement of casual workers. The Supreme Court emphasized that in cases where the employment was short-term and decades had passed since termination, monetary compensation is a fairer remedy than reinstatement.

This ruling prevents unnecessary hardship for employers while ensuring justice for workers who were unfairly dismissed. By balancing the rights of both parties, the Supreme Court reinforced the principle that labour disputes must be resolved in a practical and just manner.

Petitioner Name: Management, Hindustan Machine Tools Ltd..
Respondent Name: Ghanshyam Sharma.
Judgment By: Justice Abhay Manohar Sapre, Justice Indu Malhotra.
Place Of Incident: Rajasthan.
Judgment Date: 30-10-2018.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: Management, Hindusta vs Ghanshyam Sharma Supreme Court of India Judgment Dated 30-10-2018.pdf

Direct Downlaod Judgment: Direct downlaod this Judgment

See all petitions in Employment Disputes
See all petitions in Termination Cases
See all petitions in Pension and Gratuity
See all petitions in Judgment by Abhay Manohar Sapre
See all petitions in Judgment by Indu Malhotra
See all petitions in partially allowed
See all petitions in Modified
See all petitions in supreme court of India judgments October 2018
See all petitions in 2018 judgments

See all posts in Service Matters Category
See all allowed petitions in Service Matters Category
See all Dismissed petitions in Service Matters Category
See all partially allowed petitions in Service Matters Category