Judgment 1. By this application under Article 227 of the Constitution of India the petitioner-management of TATA Robin Fraser Ltd. has impugned the validity of the order dated 20.7.94 passed by the Labour Court, Jamshedpur in respect of the petition filed by respondent no.2 under Sec.26 of this Bihar Shops and Establishment Act. The Labour Court considering the facts and circumstances of the case found the termination of services of the respondent no.2 illegal for the reason the respondent no.2 was not guilty of the alleged misconduct. Consequently the termination order was set aside and the petitioner was directed to reinstate the said respondent with full back wages. In the alternative the petitioner has been given option to grant compensation to the respondent no.2 in lieu of reinstatement, relying on 1987 LIC 25 and 1990 LIC 844. The petitioner la not willing to reinstate the respondent but in lieu thereof grant compensation. The petitioner is aggrieved with the direction of the Labour Court to grant 50 months wages coupled with full back wages as compensation. 2. Shri K. N. Prasad, learned Sr. Counsel for the petitioner has not challenged the award on merits but confined his argument to the latter part of the direction regarding compensation. The learned counsel has contended that the Labour Court has committed serious error of law in determining the quantum of compensation in lieu of reinstatement. Shri Prasad has placed strong reliance on O. P. Bhandari V/s. Indian Tourism Development Corpn. Ltd. ( AIR 1987 SC 111 ) and submitted that compensation in lieu of reinstatement should have been awarded on the basis of this decision. The Supreme Court in para 10 of the report laid down guidelines for determination of compensation in such cases. The said para is extracted below : - "10. In our considered opinion, compensation equivalent to 3.33 years salary (including allowances as admissible) on the basis of the last pay and allowances drawn by the appellant would be a reasonable amount to award in lieu of reinstatenent taking into account the following factors, viz : -1) The corpus if invested at the prevailing rate of interest (15%) will yield 50% of the annual salary and allowances. In other words every year he will get 50% of what he would have earned by way of salary and allowances with four additional advantages : i) He will be getting this amount without working. ii) He can work somewhere else and can earn annually whatever he is worth, over and above getting 50% of the salary he would have earned. iii) If he had been reinstated he would have earned the salary only up to the date of superannuation (up to 55, 58 or 60 as, the case may be unless he died earlier. As against this 50% he would be getting annually he would get not only beyond the date of superannuation, for his lifetime (if he lives longer) but even his heirs would get it in perpetuity after his demise. iv) The corpus of lump sum compensation would remain intact, in any event. " 3. The decision in Bhandaris case was considered in Workmen of Bharat Fritz Werner (P) Ltd. V/s. Bharat Fritz Werner (P) Ltd (1990 LIC 844 ). The Supreme Court awarded Rs.1,50,000/-towards back wages and compensation for loss of further employment In lieu of reinstatement in addition a sum of Rs.72,000/- which had already been received by them. 4. It is well settled now that in cases of wrongful dismissal or dlschage, the normal rule Is to award reinslatement. But where a case falls In any of the exceptions to the general rule of reinstatement industrial adjudicator has discretion to award reasonable and adequate compensation in lieu of reinstatement. Compensation In such a case is the solatium for unjustified and premature termination of employment (See Anglo Amerlcal Direct Tea Trading Co. V/s. Workmen of Nahortoll Tea Estate (1961) II LLJ 625 ). From the decided cases with respect to compensation In lieu of reinstatement where the discharge or dismissal of the workman has been held to be wrongful, no definite yardstick for measuring the quantum of compensation Is available. There Is no fixed formula for computation of compensation in cases of wrongful dismissal of workman. The amount of compensation has to be fixed taking all relevant facts and the circumstances of a particular case into account. Broadly speaking computation of compensation should neither be too low nor too generous and a balance is required to be struck between two competitive claims. 5. The amount of compensation has to be fixed taking all relevant facts and the circumstances of a particular case into account. Broadly speaking computation of compensation should neither be too low nor too generous and a balance is required to be struck between two competitive claims. 5. In 1971 LLJ 65 the Supreme Court held that in the facts and circumstances of the case, direction for reinstatement by the tribunal was not proper despite Its conclusion that termination of service of the workmen was wrongful. It was held that the Labour Court should have awarded suitable compensation instead of reinstatement. The Supreme Court directed the management to pay compensation equivalent to 12 months salary with interest thereon at the rate of 6 Oclock p. a. from the date of termination. In this case workmen had served the company only for a year. In Assam Oil Company Ltd. vs. Its Workmen ( AIR 1960 SC 1264 ) the Supreme Court directed for payment of substantial compensation in lieu of reinstatement. In Anglo American Direct Tea Trading Co. Ltd. V/s. Workmen of Nahortoli Tea Estate (1961 (2) LLJ 625) the Supreme Court held that It is quite proper to award by way of compensation (a) full wages for the period from the date of the order of dismissal or discharge to the date of the Tribunals order, and (b) one months average wages for every year of completed service. In Hindustan Steel Ltd. V/s. A. K. Roy ( 1970 (1) LLJ 228 ) the Supreme Court held as follows : - "having come to that conclusion, we heard counsel for both the parties. After doing so and taking Into consideration all the facts and circumstances of the present case we have come to the conclusion in the light also of the decision of this Court such as Assam Oil Company Ltd. V/s. Its Workmen (1960) 1 LLJ 587 , Utkal Machinery Ltd. V/s. Santi Patnalk, (1966) I LLJ 398 and the recent case of Ruby General Insurance Co. Ltd. V/s. P. P. Chopra (1970) I LLJ 63, that compensation for a period of two years at the rate of Rs.160 per month, that being the last salary drawn by the concerned workmen, would meet the ends of justice. " 6. Ltd. V/s. P. P. Chopra (1970) I LLJ 63, that compensation for a period of two years at the rate of Rs.160 per month, that being the last salary drawn by the concerned workmen, would meet the ends of justice. " 6. In S. S. Shetty V/s. Bharat Nidhi Ltd. ( AIR 1958 SC 12 ) the Supreme Court has held :- "the benefit of reinstatement awarded to a workman cannot be treated as part of the contract of employment between him and the employer. The effect of an order of reinstatement is merely to set at naught the order of wrongful dismissal of the workman by the employer, and to reinstate him in service as if the contract of employment originally entered into had been continuing. The terms and conditions of the contract which obtained when the workmen was in the employ of the employer prior to his wrongful dismissal continue to govern the relations between the parties. There is no variation of those terms and conditions, and the only thing which happens is that the workman is reinstated in his old service as before. Therefore, the mone- tary value of the benefit of reinstatement is to be computed but on the basis of a breach of the contract of employment, nor on the basis of a tort alleged to have been committed by the employer by reason of the non-implementation of the direction for reinstatement contained in the award. In computing in terms of money the value of the benefit of an order of the reinstatement, the Tribunal has to take into account all the circumstances of the case, namely :- (a) the terms and conditions of the contract of employment, (b) the tenure of service, (c) the possibility of termination of the employment at the instance of either party, (d) the possibility of retrenchment by the employer or resignation or retirement by the workman, (e) the possibility of the employer or the workman ceasing to exist, and (f) the possibility of the workman being awarded various benefits in the future which are normally incidental to the employment. (Salt V/s. Power Plant Co. Ltd. , 1936-3 All E. R.322-Relied on ). 7 In Victor Oil Co. (Salt V/s. Power Plant Co. Ltd. , 1936-3 All E. R.322-Relied on ). 7 In Victor Oil Co. Ltd V/s. Amarnath Das (1961 (2) LLJ 113) the Supreme Court fallowing S. S. Shetty V/s. Bharat Nidhi Ltd. (Supra) directed payment of (a) salary from the date of discharge till the date when the order of reinstatement became final, (b) one months salary in lieu of notice, and (c) further one years salary by way of compenstion for loss of the benefit of reinstatement. A Division Eench of this Court in B. Choudhary V/s. Labour Court, Jamshedpur (1983 LIC 1755) (DB) laid down certain guidelines which have to be borne out in mind in determining the quantum of compensation. There factors are only supportive and not exhaustive. 8. Mr. RRN. Roy learned counsel for the respondent no.2 has relied on 1994 (2) SCC 38 which is in my opinion, has not touched the question under consideration. That was not a case of granting compensation in lieu of reinstatement. 9. In my view in the facts and circumstances of the case, In my opinion the decision in Shettys case (Supra) is applicable and accordingly, the award of the Labour court is hereby set aside and It is ordered that respondent no.2 shall be paid (a) salary from the date of discharge to the date of order of reinstatement became final (b) one months salary in lieu of notice and further one years salary by way of compensation for loss of the benefit of reinstatement. 10. This application Is accordingly allowed to the extent Indicated above. There shall be no order as to costs.