Supreme Court Upholds Review Where Employer Withheld MACT Pleadings; Directs 75% Back Wages

A Bench of Justice Dipankar Datta and Justice Sandeep Mehta heard an appeal by the Maharashtra State Road Transport Corporation against a Bombay High Court single‑judge order which, on review, set aside an earlier dismissal of a writ petition and the award of the 4th Labour Court, and directed full back wages to a dismissed bus driver. The principal question was whether the Corporation had engaged in suggestio falsi and suppressio veri by not disclosing pleadings and an award in proceedings before the Motor Accidents Claims Tribunal (MACT), and whether that justified exercise of review jurisdiction and an award of back wages.

The Court upheld the High Court’s conclusion that the Corporation had suppressed material and vindicated the exercise of review, but modified the relief. The Supreme Court found that the Corporation had made a contrary, sworn averment before the MACT that “there was no negligence whatsoever on the part of the S.T. Bus driver,” and that it failed to disclose the MACT award which absolved the Corporation of liability; the Court held that such conduct amounted to suggestio falsi and suppressio veri. The Court, in its reasoning, observed: “Taking a cue therefrom, it can safely be concluded that ordering back wages to be paid to a dismissed employee - upon his dismissal being set aside by a court of law – is not an automatic relief; grant of full or partial back wages has to be preceded by a minor fact‑finding exercise by the industrial adjudicator/court seized of the proceedings.” The Court also recorded that “That the Corporation indulged in the misadventure of suggestio falsi and suppresio veri is incontrovertible.”

Background Mahadeo Krishna Naik was appointed as a bus driver by the Corporation in April 1988. On 10 May 1996 his bus collided with a lorry at night; two passengers died and several were injured. The Corporation initiated disciplinary proceedings and dismissed Mahadeo in May 1997; the Labour Court, on reference, found the departmental inquiry fair and declined reinstatement. Parallelly, claimants filed a petition under Section 166 of the Motor Vehicles Act before the MACT against the lorry owner and the Corporation. In its sworn written statement before the MACT the Corporation expressly pleaded that the lorry came on the wrong side and that “there was no negligence whatsoever on the part of the S.T. Bus driver.” The MACT examined eyewitness and conductor evidence, found the lorry driver negligent, awarded compensation against the lorry owner and insurer, and dismissed the case against the Corporation.

Mahadeo later produced the MACT pleadings and award before the High Court in a review of the writ dismissal; the single judge concluded that the Corporation had suppressed relevant material, relied on Associate Builders v. DDA, and allowed review, setting aside the Labour Court award and granting full back wages and benefits (reinstatement was denied as Mahadeo had reached superannuation). The Corporation challenged that order before the Supreme Court, contending inter alia that MACT findings were not binding on a Labour Court, that review jurisdiction had been misapplied and that full back wages were awarded without proof that Mahadeo was not gainfully employed.

The Supreme Court held that the Corporation’s contradictory positions before different forums amounted to approbate and reprobate and were of sufficient gravity to justify review. The Court, while recognising established precedents that reinstatement with back wages was the normal rule in wrongful termination cases, ruled that award of back wages was not automatic and required a limited fact‑finding exercise as to gainful employment in the interregnum. Having regard to Mahadeo’s admitted engagement in casual daily‑wage work but also to the Corporation’s conduct, the Court modified the High Court’s relief and directed payment of 75% of back wages from the date of termination to superannuation, full terminal benefits with 6% interest, and release of amounts within three months with a 2% additional interest on default. The appeal was otherwise disposed and parties were to bear their own costs.

Case Details: Case No.: CIVIL APPEAL NO. 13834 OF 2024 (2025 INSC 218) Case Title: Maharashtra State Road Transport Corporation v. Mahadeo Krishna Naik Appearances: For the Petitioner(s): Not indicated in judgment For the Respondent(s): Not indicated in judgment