Employment LawBurden of Proof of Gainful Employment Lies on the Employee

February 23, 20220

The Supreme Court, in the case of National Gandhi Museum v. Sudhir Sharma and others, Civil Appeal Numbers 8215-8216 of 2011 decided on 24.09.2021, held that the burden to prove that an employee was not gainfully employed after dismissal, lies on the employee himself.


Sudhir Sharma, (hereinafter referred to as “the Respondent”) was appointed as a Museum Assistant for the National Gandhi Museum (hereinafter referred to as “the Appellant”), which was managed by the Gandhi Smarak Sangrhalaya Samiti.

In the year 2002, the Appellant issued an Office Order vide which, the option of compensatory leave against the extra attendance was withdrawn and provided for extra emoluments for extra attendance. Subsequent to the issuance of the Office Order, the Respondent raised an objection against the same.

Moving forward, it was contended by the Appellant that in the year 2003, the Respondent assaulted its Assistant Director and thus committed misconduct. Consequently, a charge sheet was filed against the Respondent and, an inquiry Report was submitted by the Inquiry Officer holding that the Respondent was guilty of acts of relegation, creating a scene, causing disturbance to others in performance of their duty, and causing violence in the office. Thus, in the light of the above-mentioned, in the year 2004, the Appellant imposed the penalty of mandatory retirement on the Respondent.

The Respondent filed a Writ Petition before the Delhi High Court for a declaration that the Office Order for mandatory retirement was null and void on account of the failure to obtain approval under sub-section 2(b) of Section 33 of the Industrial Tribunal Act, 1947 (the Act).

The Delhi High Court allowed the Writ Petition and directed the Appellant to reinstate the Respondent in service with back wages, i.e., wages for the wrongful dismissal of the Respondent.

Being aggrieved by the decision of the Delhi High Court, an appeal was preferred by the Appellant and the Appellant also applied for a clarification of the said decision. However, the Division Bench of Delhi High Court dismissed the appeal.

Thus, the aggrieved Appellant has preferred an appeal before the Supreme Court.


  1. Whether or not the Appellant is an ‘Industry’ under the Act?
  2. Whether there was a need to reinstate the employee or not?


The Appellant submitted that by no means, the Appellant is an industry within the meaning of the Act and for the same, the Appellant placed reliance on the case of Bangalore Water Supply and Sewerage Board v. A. Rajappa and Ors., (1978) 2 SCC 213.

In the backdrop of the foregoing, the Appellant stated that the Appellant has no income and solely is dependent on the Government grants and donations for its functioning. Hence, in no manner can the Appellant be considered as an industry.

The Appellant further contented that considering the conduct of the Respondent of assaulting a senior officer, as well as the acts of violence, indiscipline and disobedience and considering the fact that for a period of 17 years, the Respondent is not working with the Appellant; the order of reinstatement by the Delhi High Court was not at all appropriate.

The Appellant claimed that the continuation of the employment of the Respondent, irrespective of his misconduct, would be encouraging gross indiscipline.

The Appellant also asserted that the onus was on the Respondent to plead and prove that he was not gainfully employed from the date of the order of compulsory retirement.

The Appellant also brought it to the notice of the Supreme Court that the entire amount of back wages payable as on the date the interim order was duly paid to the Respondent and the same has been withdrawn by the Respondent.

Furthermore, the Appellant stated that as the organization is run by the Government grants and donations made by the citizens, any amount which is payable to the Respondent will amount to unjust enrichment.

On the contrary, the Respondent has submitted that the Appellant did not raise a contention that it is not an industry within the meaning of Act, but filed an application for approval under Section 33(2)(b) of the Act.

The Respondent also contended that the Appellant was aware of the fact that the approval was required and therefore, an application for grant of approval was made, which was withdrawn.

The Respondent relied upon the Supreme Court’s decision in Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. v. Ram Gopal Sharma and Ors., (2002) 2 SCC 244 and stated that the order of compulsory retirement as a punishment amounts to discharge or dismissal from the employment by way of punishment. Therefore, in absence of the approval under Section 33(2)(b) of the Act, the Respondent shall be able to continue his employment.


The Supreme Court observed that the Appellant at all times proceeded on the premise that it is an industry within the meaning of the provisions of the Act. Furthermore, an application was made by the Appellant for grant of prior approval as provided in sub-section 2(b) of Section 33 of the Act before the Industrial Tribunal. In the light of the same, the Supreme Court held that it cannot be considered that the Appellant is not an industry within the meaning of the Act.

The claim that the Appellant was not an industry was not raised in the aforementioned proceedings before the Industrial Tribunal. However, the Supreme Court held that it is not permissible for the Appellant to raise this issue in the current appeals when the opportunity to raise it earlier was provided, but was not contended. Thus, the Supreme Court observed that however, the issue is not resolved, and it will remain open for the Appellant to pursue if any other employee takes action.

The Supreme Court also held that the burden is on the employee to come out with a case that he was not gainfully employed after his dismissal. In the present case, the Respondent has not even pleaded that from the date of the compulsory retirement till date, he was not gainfully employed.

The Supreme Court observed that the Respondent has used the amount of Rs. 4,43,380/- for the last 11 years. In the year 2004, the Respondent’s monthly gross income was Rs. 5,788/-.

Taking into account all of the facts, the Supreme Court determined that compensation in the range of Rs. 6,50,000 to Rs. 7,00,000 in lieu of reinstatement would be equitable and proper under the circumstances. After deducting the value of Rs. 4,43,380/- which was already received by the Respondent, the Appellant shall grant the Respondent Rs. 2,50,000/- in lieu of reinstatement.

As a result, the Supreme Court partially granted the appeals by striking down the Respondent’s reinstatement order as well as the directing the Appellant to pay the back wages towards the Respondent.


The existence of another job or engagement of a worker after the alleged unlawful termination of previous employment is not enough, which makes a study of the jurisprudence on the subject noteworthy.

Courts consider whether the alternative job was profitable, which depended, amongst other things, on whether the activity was intermittent or had some semblance of permanence, and if the worker was receiving enough remuneration from it.

However, what is frequently overlooked is that an individual’s employment circumstances, such as how lucrative a job is in terms of its nature, remuneration, and roles and responsibilities, etc., which are typically confidential due to the terms of employment entered into between the individual and the current employer.

The recent ruling of the Supreme Court has placed the onus on the workman to prove that he is not gainfully employee for seeking any applicable relief.

– Team AMLEGALS assisted by Mr. Akshay Sharma (Intern)

For any query or feedback, please feel free to get in touch with chaitali.sadayet@amlegals.com or mridusha.guha@amlegals.com.

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