A) ABSTRACT / HEADNOTE

This case examines the interplay between disciplinary proceedings, tort adjudication before a Motor Accidents Claims Tribunal (MACT), and subsequent industrial adjudication culminating in review by a High Court and final adjudication by the Supreme Court. The core questions were whether the employer Maharashtra State Road Transport Corporation (“the Corporation”) committed suggestio falsi and suppresio veri by adopting a position before the MACT (that the lorry-driver alone caused the collision) and then failing to disclose that stance and the MACT award to the Labour Court and the Writ Court; whether the High Court properly exercised review jurisdiction on that basis; and what relief (if any) in the form of back wages and terminal benefits should follow when dismissal is set aside.

The MACT found the lorry driver solely negligent and dismissed the claim against the Corporation. The Labour Court earlier held the departmental enquiry and punishment (dismissal) valid. On discovery of the MACT pleadings and award, the High Court, on review, allowed the writ, set aside the Labour Court award, and directed benefits including back wages. The Supreme Court affirmed that the Corporation’s contradictory positions amounted to suggestio falsi and suppresio veri, justified the High Court’s review, recognised the MACT material as highly relevant to the disciplinary lis, and modified the High Court’s 100% back-wages directive to 75% while directing payment of full terminal benefits with interest. Key principles:

(i) a party cannot approbate and reprobate;

(ii) suppression of material pleaded under oath is a fraud on the court;

(iii) award of back wages on reinstatement is normally full but is a discretionary remedy to be shaped by the court after a fact-finding exercise on gainful employment in the interregnum.

Keywords: suggestio falsi; suppresio veri; back wages; labour adjudication; MACT award; approbate and reprobate; reinstatement; natural justice; fraud on court.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The dispute originates from a fatal road collision on 10 May 1996. The respondent, Mahadeo, a Corporation bus driver appointed in 1988, was subject to a departmental inquiry and dismissed in 1997 for alleged gross negligence causing the accident. The Corporation sustained damage and two passengers died; criminal FIR named only the lorry driver as accused. The Union raised an industrial dispute and the Labour Court, after hearing evidence, upheld the disciplinary inquiry’s fairness and the proportionality of punishment, denying reinstatement.

Mahadeo filed a writ under Article 226; the single-judge initially dismissed it for lack of merit. Meanwhile, claimants pursued compensation under s.166 of the Motor Vehicles Act before the MACT. The Corporation, by sworn written statement in MACT proceedings, unequivocally pleaded that the lorry-driver alone was negligent and that the bus-driver was not at fault. The MACT, on evidence including eyewitness and conductor testimony, awarded compensation against the lorry owner and insurer and dismissed the case against the Corporation. Only when Mahadeo obtained certified copies of the MACT pleadings and award (in June 2017) did he move for review of the High Court’s earlier order.

The High Court allowed the review, set aside the Labour Court’s award, and directed benefits including back wages. The Corporation appealed to the Supreme Court challenging, inter alia, the High Court’s exercise of review jurisdiction and the award of back wages. The Supreme Court, after analysing suggestio falsi and suppresio veri, the probative value of MACT material, and established precedents on back wages, upheld the High Court’s exercise of review but reduced the quantum of back wages to 75% while retaining full terminal benefits and interest.

D) FACTS OF THE CASE

On 10 May 1996 at about 22:45 hrs a lorry (No. MRL-8226) struck the Corporation’s bus (MH-12-Q-8712) near Nagothane; two passengers died and several were injured. Mahadeo was driving the bus. The FIR named the lorry-driver as sole accused; Mahadeo was not charged. The Corporation quantified loss at Rs.45,000/-. A departmental enquiry resulted in dismissal on 27 May 1997.

Appeal within the Corporation failed. A union-referred industrial dispute produced a Labour Court finding (preliminary awards of 26.5.2004 & 9.12.2005; final award 16.5.2006) that the inquiry was fair and punishment proportionate. A writ under Article 226 was dismissed by the High Court on 7.2.2017. Independently, the claimants sought compensation under s.166 MV Act before MACT (Application No. 2901/1996). The Corporation filed a sworn written statement before MACT admitting the lorry’s rashness and expressly denying any negligence by the bus-driver and any liability of the Corporation.

MACT evidence (passenger eyewitness and conductor) supported the lorry-driver’s negligence; MACT awarded Rs.1,40,000/- against the lorry owner and insurer, and dismissed the case against the Corporation. Mahadeo obtained copies of MACT pleadings and award in June 2017 and applied for review of the High Court order; review succeeded. The High Court set aside the Labour Court award and directed benefits; Supreme Court reviewed for appropriateness on points of suggestio falsi, suppresio veri, review power, and back wages.

E) LEGAL ISSUES RAISED

i. Whether the Corporation’s different affidavits/pleadings and non-disclosure before the Labour Court/Writ Court constitute suggestio falsi and suppresio veri?
ii. Whether the High Court was properly justified in exercising review jurisdiction based on the MACT material?
iii. Whether Mahadeo is entitled to back wages and, if so, what quantum is appropriate given his admitted daily-wage engagement during the interregnum?

F) PETITIONER / APPELLANT’S ARGUMENTS

i. The Corporation argued that the MACT’s conclusions are not binding on labour adjudication since the forums deal with different issues; disciplinary proceedings scrutinise misconduct and not identical negligence standards as tort claims.
ii. Judicial review of the Labour Court award was limited to procedure; there were no grounds showing perversity or denial of natural justice to justify review or substitution of an appellate view.
iii. The High Court substituted its view for the competent adjudicator and should have, if at all, remanded to the Labour Court.
iv. The award of full back wages (by the High Court) lacked any evidence that Mahadeo was not gainfully employed during the interregnum; therefore full relief was unjustified.

G) RESPONDENT’S ARGUMENTS

i. Mahadeo alleged the Corporation committed fraud on the court by suppressing its MACT pleading and award, thereby prejudicing him before the Labour Court and the Writ Court.
ii. He contended prolonged litigation and loss of employment prevented him from getting permanent work and that award of reinstatement benefits including back wages was justified.
iii. Reliance was placed on precedents that treat wrongful termination and violation of natural justice as strong grounds for awarding full back wages (e.g., Deepali Gundu Surwase).

H) JUDGEMENT

The Supreme Court answered the issues affirmatively in favour of the respondent on the first two matters and imposed a moderated monetary remedy. The Court held that the Corporation’s sworn written statement in MACT proceedings explicitly blaming the lorry-driver and denying any negligence by the bus-driver and the MACT award absolving the Corporation, were material and highly probative in the disciplinary/labour lis. By failing to disclose that pleaded position and the MACT award to the Labour Court and Writ Court, the Corporation indulged in suggestio falsi (a false representation) and suppresio veri (suppression of truth), conduct tantamount to a fraud on the court.

The Court emphasised that principles of natural justice and fairness require candour from statutory creatures; the Corporation attempted to approbate and reprobate enjoying the benefit of one stance (before claimants) and denying it elsewhere which equity and precedent forbid. The Supreme Court relied on Associate Builders v. DDA (regarding disregard of vital evidence), State of M.P. v. Narmada Bachao Andolan (on suppression of truth), and Union of India v. N. Murugesan (approbate and reprobate doctrine), among others.

a. RATIO DECIDENDI

The decisive ratio is twofold. First, material pleaded under oath and the resulting MACT award were relevant to the Labour Court’s inquiry into negligence and discipline; suppression of that material by the Corporation amounted to suggestio falsi and suppresio veri, justifying judicial interference. Second, while reinstatement with back wages is the normal remedy where termination is held illegal, the quantum of back wages is discretionary and requires a limited fact-finding on whether the employee was gainfully employed in the interregnum.

Given Mahadeo’s admitted daily-wage work and inability to secure permanent employment, and the Corporation’s fraudulent concealment which prevented his earlier vindication, the Court modified the High Court’s 100% back-wages order to 75% of back wages from termination to superannuation while awarding full terminal benefits with 6% p.a. interest.

b. OBITER DICTA 

Courts should be vigilant against litigational stratagems that allow parties to take inconsistent positions in different fora. The judgment reiterates that industrial adjudication must respect the general principles of evidence and fairness even if strict rules of evidence do not apply, and that suppression of decisive material can justify review under CPC Order XLVII and s.114. The Court also observed that exceptional cases may warrant lump-sum awards instead of reinstatement and that superior courts must avoid penalising employees for systemic delays.

c. GUIDELINES

• A party must disclose material facts and cannot plead one way in one forum and deny that stance elsewhere; approbate and reprobate conduct will attract adverse consequences.

• Documents not produced earlier but having decisive worth may be considered on review under Order XLVII CPC and s.114 if due diligence explains earlier non-production.

• On reinstatement, back wages are ordinarily full; but courts must conduct a limited inquiry into gainful employment during the interregnum and may modulate quantum when evidence indicates partial mitigation. Burden of proof on gainful employment rests with the party asserting the positive fact.

• Suppression of evidence in judicial proceedings can be equivalent to fraud on the court and will justify interference with prior orders.

I) CONCLUSION & COMMENTS

The Supreme Court rightly treated the MACT pleading and award as highly relevant and condemned the Corporation’s contradictory positions as tantamount to suggestio falsi and suppresio veri; the Court’s intervention by review and its calibrated remedy (75% back wages plus full terminal benefits with interest) balance restitution to the victim-employee with equitable mitigation where the employee had some casual/daily engagement during the interregnum. The decision reaffirms that public bodies and statutory corporations owe a heightened duty of candour in litigation and that suppression of decisive material undermines judicial process.

For practitioners, the judgment is a cautionary precedent: pleadings under oath in one forum must be disclosed when directly relevant to another forum; failure may lead to reversal of favourable outcomes and disgorgement of procedural advantage. The judgment also crystallises the remedial framework on back wages: normal rule of full back wages, but subject to limited fact-finding on mitigation, with burden on the party asserting gainful employment.

J) REFERENCES

a. Important Cases Referred

i. Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49.
ii. T.N. State Transport Corpn. (Coimbatore) Ltd. v. M. Chandrasekaran, (2016) 16 SCC 16.
iii. Rajasthan State Road Transport Corporation v. Phool Chand, (2018) 18 SCC 229.
iv. Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyala, (2013) 10 SCC 324.
v. State of M.P. v. Narmada Bachao Andolan, (2011) 7 SCC 639.
vi. Union of India v. N. Murugesan, (2022) 2 SCC 25.
vii. Hindustan Tin Works (P) Ltd. v. Employees, (1979) 2 SCC 80.
viii. Surendra Kumar Verma v. Central Govt. Industrial Tribunal-cum-Labour Court, (1980) 4 SCC 443.

b. Important Statutes Referred

i. Motor Vehicles Act, 1988 (s.166).
ii. Industrial Disputes Act, 1947.
iii. Evidence Act, 1872 (Sections on burden of proof).
iv. Code of Civil Procedure, 1908 (Order XLVII, s.114).