JUDGMENT : SANGEETA CHANDRA, J. 1. Heard Sri Bal Ram Jakhar, learned counsel for the petitioner and Sri Vishnu Kumar Misra, learned counsel for the respondent no. 2/workman. 2. This petition has been filed by the Handloom Corporation challenging the Award dated 27.08.2018 passed by the Presiding Officer, Labour Court, Uttar Pradesh Lucknow in Adjudication Case No. 104/2010, wherein he has set aside the order of retrenchment of the respondent no. 2 and directed his reinstatement with all consequential benefits. It has been argued by learned counsel for the petitioner that the respondent no. 2 was initially appointed as Daftari on 17.10.1973 as a General Category candidate. His Service Book shows his caste as Bhaatt (Hindu). The respondent no. 2 continued to serve the Corporation as a General Category candidate and was given promotion from time to time as Assistant Librarian, as Librarian and thereafter as Office Superintendent in General Category. During his entire service, the respondent no. 2 never raised any objection regarding his caste as mentioned in the Service Book. The counsel for the petitioner has pointed out that from Annexure Nos. 4 and 5 which are copies of letters sent by the Corporation to the petitioner to submit his caste certificate. The petitioner in response wrote a letter on 15.05.1999 saying that he belonged to General/ unreserved category. 3. The Corporation was suffering huge losses and therefore the State Government directed retrenchment of workers to be carried out so that establishment cost may be controlled. The main source of finances for the Corporation was the subsidy provided by the Central Government but there was a change in Textile Policy and the Government of India curtailed the Subsidy which was later on also stopped n 1998-1999. This drastically affecting the business of the Corporation. The Corporation because of financial crunch could not even pay salaries to its employees for almost 50 to 70 months. The State Government took a decision to curtail the manpower and thus lessen the Establishment cost for running the Corporation. It was because of such a decision that a Voluntary Retirement Scheme (VRS) was launched in June 1993 and then again in August, 2003. The Corporation was down sized and the strength of the employees was reduced to 599 only. To attain this goal, 855 employees were retrenched from service in 2004 after giving retrenchment compensation which also was provided by the State Government. The Corporation was down sized and the strength of the employees was reduced to 599 only. To attain this goal, 855 employees were retrenched from service in 2004 after giving retrenchment compensation which also was provided by the State Government. The Corporation became a Sick Industrial Company under Section 2(46)(AA) for the Sick Industrial Companies Act as the accumulated losses were more than 50% of its average net worth. The Corporation is on the verge of closure and is working with only 94 employees as on date of filing of the writ petition. The letters of the State Government dated 19.02.2004, 08.03.2004 and 18.03.2004 advising the Corporation to reduce its manpower to 599 employees by giving the option of VRS or Retrenchment compensation has been filed together as Annexure No. 12 to the writ petition. 4. It was in pursuance of such letters that the Corporation drew a seniority list of its existing employees for the purpose of retrenchment in accordance with the principles given in Section 6(P) of the U.P. Industrial Disputes Act, 1947. The list so prepared was pasted on the Notice Board and also published in the daily newspapers ‘Amar Ujala’ on 12.04.2004. The petitioner’s name finds place at Serial No. 40 in the category of employees to be retrenched. The respondent no. 2 did not file any objection to the seniority list but he managed a caste certificate to be issued by the Tehsildar, Raebareli and submitted the same in the Corporation on 13.04.2004 alleging that he belonged to OBC category and therefore entitled to be given the benefit of reservation in terms of various Government Orders which were applicable to the Corporation even in case of retrenchment. The said certificate was doubtful as it was issued in Raebareli on 13.04.2004 and the respondent no. 2 managed to submit it in Lucknow office on the very same day. Since the list of employees to be retrenchment had already been finalized for published on 06.04.2004, the Corporation proceeded to retrench the services of the respondent no. 2 and issued an order in this regard on 25.04.2004 and offered Retrenchment of compensation and other dues admissible to the respondent no. 2. 5. The respondent no. 2 challenged with the order dated 25.04.2004 by filing a writ petition No. 4556 (S/S) 2004 which was dismissed on 10.12.2007 on ground of statutory remedy being available under the Industrial Disputes Act. 2. 5. The respondent no. 2 challenged with the order dated 25.04.2004 by filing a writ petition No. 4556 (S/S) 2004 which was dismissed on 10.12.2007 on ground of statutory remedy being available under the Industrial Disputes Act. The respondent no. 2 thereafter filed Special Appeal No. 206 of 2008 which was also dismissed by the Division Bench by observing that even if retrenchment compensation is accepted by an employee it would not prejudice his right to challenge his retrenchment before the Labour Court under the U.P. Industrial Disputes Act. The respondent no. 2 however did not approach the Labour Court but filed a Claim Petition No. 634/2009 before the U.P. State Public Services Tribunal which was dismissed on 29.10.2009 directing the respondent no. 2 to approach the competent forum. 6. The respondent no. 2 thereafter instituted a claim under Section 2A of the Industrial Disputes Act challenging his retrenchment order on the ground that he belonged to Other Backward Category and a person junior to him placed at Serial No. 16, namely, Anil Kumar Verma has been given the benefit of reservation and retained in service whereas the services of respondents no. 2 were dispensed with. 7. The Corporation filed a written statement wherein it stated that notice for retrenchment was published in the newspaper and no objection was filed by the respondent no. 2. The retrenchment had been done on the principle of “last come and first go” and the claim petition be dismissed. The respondent no. 2 filed a rejoinder alleging that neither he had been given the benefit of reservation as OBC nor the principle of “last come and first go” had been followed. His retrenchment was illegal and should be set aside by the Court. The respondent no. 2 had also approached the State Commission for Other Backward Category where the Corporation was asked to submit its report. The Corporation had submitted its report on 04.06.2005 indicating that the respondent no. 2 had sent a letter to the Corporation in 1999 saying that he belonged to General category. Thereafter the Government also on the complaint made by the respondent no. 2, issued a similar direction to the Corporation to reconsider the retrenchment of the respondent no. 2 to which replied on 23.07.2005 reiterating its stand that the respondent no. 2 had sent a letter to the Corporation in 1999 saying that he belonged to General category. Thereafter the Government also on the complaint made by the respondent no. 2, issued a similar direction to the Corporation to reconsider the retrenchment of the respondent no. 2 to which replied on 23.07.2005 reiterating its stand that the respondent no. 2 had not been recorded as belonging to Other Backward Classes category in the service records of the Corporation. 8. It has been argued by the counsel for the petitioner that by the impugned Award that Labour Court has accepted the caste certificate of the respondent no. 2 of OBC category having been issued on 13.04.2004, before his retrenchment order on 25.04.2004, and has wrongly observed that such caste certificate was submitted by the respondent no. 2 in the office of the Corporation before the retrenchment order was passed. It has, therefore, found the retrenchment to be illegal by observing that a junior to the respondent no. 2, one Anil Kumar Verma, shown at Serial No. 16 in the seniority list had been retained and the respondent no. 2 had been retrenched although he was shown at Serial No. 14. 9. It has also been argued by the leaned Counsel appearing on behalf of the petitioner that since the respondent no. 2 had himself claimed as belonging to General category at the initial stage of entry into service in 1973 and thereafter also wrote a letter to the Corporation in 1999 reiterating that he belonged to General category and did not claim any benefit of reservation for almost 30 years he remained in service of the Corporation, the caste certificate dated 13.04.2004 submitted at the office after the list of proposed retrenched employees was published on 06.04.2004 in the newspapers was doubtful. The respondent no. 2 had been rightly retrenched and the Award passed by the Labour Court directing his reinstatement with consequential benefits is arbitrary and liable to be set aside. 10. Learned Counsel appearing on behalf of the respondent no. 2, however, has pointed out from the Service Book that has been filed as Annexure-3 to the writ petition by the petitioner itself, his caste has been shown as Bhaatt (Hindu) and his signature on page No. 3 of the Service Book has been made in English. On subsequent pages also the signatures of respondents no. 2, however, has pointed out from the Service Book that has been filed as Annexure-3 to the writ petition by the petitioner itself, his caste has been shown as Bhaatt (Hindu) and his signature on page No. 3 of the Service Book has been made in English. On subsequent pages also the signatures of respondents no. 2 have been made in English in column No. 8. Although the hand writing had differed a little but all such signatures are all in English. Even the initials been made by him on page 4 of the Service Book in column no. 8 are different from the ones on the alleged letter written by the respondent no. 2 dated 15.05.1999 saying that the respondent no. 2 belonged to General category. The said letter dated 15.05.1999 is a fabricated document, and has been placed before this Court as an afterthought as it was never produced before the respondent no. 1 during the hearing of the Adjudication Case. 11. It has been argued by learned counsel for the respondent no. 2 that initially the respondent no. 2 had not even accepted the Retrenchment compensation, it was only after the order passed in Special Appeal on 07.04.2008 saying that mere acceptance of retrenchment compensation will not prejudice the rights of the workman to challenge his retrenchment order before the Labour Court that the respondent no. 2 has accepted the retrenchment compensation. 12. The Counsel for the respondent no. 2 has pointed out that the claim petition filed before the respondent no. 1 and referred to Paragraphs 9, 10, 11, 12, 13, 15, 16 and 17 thereof to say that the respondent no. 2 had repeatedly written to Corporation for indicating his correct caste/category in the Service Book. He had also approached the Backward Classes Commission and in the letter sent by the Corporation on 16.10.2004 to the U.P. State Commission for Backward Classes; the Corporation had accepted that the caste certificate issued by the Tehsildar, Raebareli on 13.04.2004 was received in the office of the employer on 19.04.2004 i.e. before the retrenchment order dated 25.04.2004. 13. He had also approached the Backward Classes Commission and in the letter sent by the Corporation on 16.10.2004 to the U.P. State Commission for Backward Classes; the Corporation had accepted that the caste certificate issued by the Tehsildar, Raebareli on 13.04.2004 was received in the office of the employer on 19.04.2004 i.e. before the retrenchment order dated 25.04.2004. 13. It has also been pointed out that the State Backward Classes Commission as well as the State Government through the letters dated 01.06.2006 and 04.07.2006 respectively, had directed the Corporation to reconsider the retrenchment on the ground that the petitioner belonged to Backward Classes Category and had not been given the benefit of reservation as was required to be given by the Government Order dated 18.03.2004. It was provided in Government Order dated 18.02.2004 that while cutting down the strength of employees to 599, the Roster for reservation shall be followed and their quota would be maintained as per the Roster. If any post was meant for reserved category candidate, then such reserved category candidate would not be retrenched but his juniors of the reserved category or persons of the General category/unreserved category alone would be retained on the principle of last come and first go. 14. It has been argued by learned counsel for the respondent no. 2 that he was neither given the benefit of reservation as an OBC category person nor the principle of ‘last come and first go’ was followed, instead the Corporation adopted a pick and choose method while retrenching its employees. 15. Learned counsel for the respondent no. 2 has also pointed out from the written statement submitted by the Corporation in Adjudication Case No. 104/2010 where none of the paragraphs of the claim petition as pointed out have been denied specifically. It has only been mentioned that the Corporation was suffering losses and therefore a decision was taken to cut down the strength of its employees to 599 and retrenchment had been done after following provisions of Section 6(P) of U.P. Industrial Disputes Act, 1947. 16. In rejoinder, learned counsel appearing on behalf of the petitioner-Corporation has referred to the Supplementary Affidavit filed by it on 30.01.2023 and pages 6 and 7 thereof where the examination-in-chief and the cross-examination of the respondent no. 2 has been annexed. It has been argued on the basis of such Annexure that the respondent no. 16. In rejoinder, learned counsel appearing on behalf of the petitioner-Corporation has referred to the Supplementary Affidavit filed by it on 30.01.2023 and pages 6 and 7 thereof where the examination-in-chief and the cross-examination of the respondent no. 2 has been annexed. It has been argued on the basis of such Annexure that the respondent no. 2 had admitted before the Labour Court that he had not submitted his caste certificate before his order of retrenchment. It was only after the retrenchment order was passed that he submitted his caste certificate. 17. Having heard learned counsel for the parties and having gone through the Award also, this Court has perused the copies of statement/examination-in-chief and cross-examination filed on 30.01.2023. Although in the cross-examination, there is a mention that Backward Classes Certificate had not been submitted earlier, but it has also been stated that it was submitted on 13.04.2004. The exact words used in the cross-examination are as follows: ^^NVuh dk vkns’k feyus ij gh eq>s Kkr gqvk fd esjk uke cSdoMZ Js.kh esa ugha gSA NVuh vkns’k eq>s fnukad 25-04-2004 dks ÁkIr gqvk FkkA NVuh vkns’k dh ÁkfIr ds ckn eSaus fnukad 13-04-2004 dks cSdoMZ lfVZfQdsV iqu% ÁLrqr dj fn;kA ;g dguk lgh gS fd eSaus cSdoMZ lfVZfQdsV igys nkf[ky ugha fd;k Fkk vkSj fnukad 13-04-2004 dks gh nkf[ky fd;k FkkA cSdoMZ lfVZfQdsV nkf[ky djus ij eq>s dk;kZy; ls dksbZ ÁkfIr jlhn ugha feyh FkhA** 18. The petitioners’ counsel had also stated that it is imperative to say that after the retrenchment proceedings were over, the respondent no. 2 had submitted his Backward Classes Category certificate. However, the exact words used in the cross-examination are as follows: ^^;g dguk xyr gS fd NVuh ÁfØ;k iw.kZ gksus ds ckn eSaus cSdoMZ lfVZfQdsV ÁLrqr fd;k Fkk cfYd lgh ;g gS fd eSaus NVuh ÁfØ;k iw.kZ gksus ds 01 lIrkg iwoZ gh fnukad 13-04-2004 dks lfVZfQdsV nkf[ky dj fn;k FkkA eSaus cSdoMZ Js.kh dk gksus ds ukrs feyus okys ykHkksa ds laca/k esa dksbZ ÁR;kosnu eSusftax Mk;jsDVj] ;wŒihŒ gS.Mywe dks ugha fn;k FkkA ;g dguk xyr gS fd eSaus viuh f’kdk;r ÁkFkZuk i= vius foHkkx ds vf/kdkfj;ksa dks u nsdj nwljs vf/kdkfj;ksa dks nsrk jgkA eq>s viuk uke cSdoMZ fyLV esa u gksus dh tkudkjh NVuh Áfdz;k ds iw.kZ gksus ls iwoZ gh gks xbZ FkhA** 19. This Court on consideration of the award passed by the respondent no. This Court on consideration of the award passed by the respondent no. 1, finds that it is cryptic in nature. However, on looking to the evidence before the respondent no. 1, this Court is of the opinion that the retrenchment order was incorrectly passed without following the principle as given under Section 6(P) of the U.P. Industrial Disputes Act. The State Government had issued an order on 18.03.2004 directing the principle of 6(P) of ‘last come and first go’ to be strictly followed by the Corporation while preparing the list of employees to be retrenched. It had also been specifically mentioned that the quota of reserved category candidates/ Roster must be maintained and only the juniors employees and unreserved category incumbents may be retrenched. As such, this Court finds that the reasoning as given in the Award dated 27.08.2018 to be unimpeachable. 20. This Court has however also found from a perusal of documents filed before the Tribunal that the respondent no. 2 had not stated anywhere that he was not gainfully employed. He had been given retrenchment compensation also for rendering almost thirty years of service. The Corporation was in a pitiable financial condition and therefore had to retrench its employees. At present less than 94 employees are working in the Corporation and it is on the verge of closure. The claim petition was filed in 2010 and has been decided in 2018. Before filing of the claim, the petitioner had filed a complaint before the U.P. State Backward Classes Commission and thereafter filed a Writ Petition and Special Appeal and also Claim petition before the U.P. State Public Services Tribunal. He may have had to do so and this Court cannot take any adverse view only because the respondent no. 2 had approached different fora before approaching the Labour Court, but since there was no pleading on record on the basis of which it could be said that the respondent no. 2 was entitled to entire back wages on setting aside of the retrenchment order, the direction for setting aside the retrenchment order with consequential benefits reinstatement with full back wages appears to be unreasoned and against the law settled by the Hon’ble Supreme Court. 2 was entitled to entire back wages on setting aside of the retrenchment order, the direction for setting aside the retrenchment order with consequential benefits reinstatement with full back wages appears to be unreasoned and against the law settled by the Hon’ble Supreme Court. The ordinary principle of grant of retrenchment with full backwages, when termination is found to be illegal is not to be applied mechanically in all cases while what may be the position where services of a regular/permanent workman are terminated illegally and/or malafide and/or by way of victimisation, unfair labour practice etc. However, the Labour Court has wide discretion in granting relief when setting aside termination. It may look into the surrounding circumstances. 21. The direction issued by the respondent no. 1 for reinstatement with back wages could not have been issued as the Corporation was already incurring losses and this fact had come to the notice of the respondent no. 1 and the respondent no. 1 could have set aside the retrenchment order and structured the relief in such a manner as not to create additional financial burden of reinstatement when the Corporation was on the verge of closure. On facts, lump sum compensation for wrong retrenchment would have been the appropriate relief. [Reference: Hari Nandan Prasad and Another vs. Employer FCI, 2014 (7) SCC 190 , BSNL vs. Bhurumal, 2014 (7) SCC 177 , In-charge Office and Another vs. Shankar Shetty, 2010 (9) SCC 126 ] 22. Hence, this writ petition is partly allowed and the Award dated 27.08.2018 is modified to the extent that while the order of setting aside retrenchment is not being interfered with, a lump sum compensation of Rupees Two lakhs may be given to the respondent no. 2 by the Corporation instead of back wages and reinstatement. 23. The lump sum compensation shall be given by the petitioner to the respondent no. 2 within a period of three months from today. In case of failure to do so, the respondent no. 2 shall be entitled to get interest @ 6% per annum with effect from today till the date of actual payment of compensation.