Dismissed

Chairman, M/S. Brooke Bond India Pvt. Ltd. v. Chandra Nath Choudhary

Supreme Court3 Sept 19681968 INSC 217 · [1969] 1 S.C.R. 9191968 INSC 217

Case brief

AI extract

What is this about?

An employer discharged a salesman after a domestic enquiry on charges of taking personal loans from wholesalers; the salesman complained under section 26 of the Bihar Shops and Establishments Act and the Labour Court reinstated him. The Supreme Court dismissed the employer's appeal, holding section 26 extends beyond Rule 20 misconducts and confers full original jurisdiction.

What did the court decide?

Labour Court's order setting aside discharge and directing reinstatement upheld; parties to bear their own costs.

What the court decided

Chairman, M/S. Brooke Bond India Pvt. Ltd… — Labour and Industrial Disputes | Supreme Court (1969)

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CHAIRMAN, M/S. BROOKE BOND INDIA PVT. LTD •.

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CHANDRA NATH CHOUDHARY

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September 3, 1968

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1l (J. M: SHELAT, V. BHARGAVA AND C. A. VAIDIALINGAM, JJ.]

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Bihar Shops and Estcblishment Act, 1953, s. 26(1) and (2)-Scope of-Whether jurisdiction of La.bour Court or co1npetent authority only to deal with cases of misconduct falling under Rule 20 of the Bihar Shops and Establishment Rules, 1955, or 'any misconducf-Scope of proviso to s. 26(1)-Whether jurisdiction under s. 26 the sa1ne as under s. 33A, Industrial Disputes Act, 1947.

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The respondent was appointed a salesman in August, 1954 by the appellant company. He was sent to Kathmandu in 1956 to promote sales; the appellant company had also appointed a firm of wholesalers to stock and promote the sales of its products in Kathmandu. In December, 1960, differences developed between the wholesalers and the respondent and the firm reported to the appellant a cash shortage of Rs. 11,000 which amount was alleged by it to have been advanced to the respondent against D two receipts. On December 27, 1960 the respondent intimated to the appellant company that the receipts were extorted from him by the wholesalers and that pending instructions from the company he was filing a criminal complaint against them. The company thereafter served the respondent with a charge-sheet alleging acts of misconduct by him in taking personal loans from the wholesalers, de"nial by him of these loans, and filing a criminal complaint against the wholesalers, abusing the position of E trust and responsibility as the Company's employee and thereby bringing down its reputation. An enquiry into these charges was held by an Enquiry Officer who, in his report, found infer a/ia that a number df 'charges against the respondent were satisfactory proved and that he had abused the trust reposed in him by the company. By an order dated September 20, 1961, the respondent was discharged from the Company's service "with immediate effect for the aforesaid items of misconduct committed by and proved against you."

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Aggrieved by the order of discharge, the, respondent filed a complaint in the Labour Court, Patna, under section 26 of the Bihar S80]1S and Establishment Act, 1953. The Labour C<>urt, with the consent of the parties admitted evidence recorded at the domestic enquiry as substantive evidence and also certain other evidence and ultimately found, inter alia, that the respondent's claim that the two receipts were extorted from him by the whoJcs.alCrs was correct; that his denial of having taken any Joans from the wholesalers was right; and that the Company's case that the wholesalers had advanced Rs. 11,000 as loan to the respondent was not correct. The Labour Court therefore allowed the respondent's complaint and set aside the order of discharge passed by the Company and dinx:ted his reinstatement.

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In appeal to this Court, it was contended on behalf of the Company (i) that the order passed by tha Col'.llpany was one of discharge simplicit'er H and not one by way of punishment; that in the events that had transpiredit was not possible 'for the company to continue to repose trust and confi~ence in the respondent and it \'as justified in refusing to continue him in its SefVice; (ii) that Section 26 gave jurisdiction to the Labour Court to,

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entertain a complaint only in cases of misconduct defined in rule 20 of the lliha-r Shops and Establishmcn'.s Rules, 1955, and the misconduct alleged against the respondent in the charge-sheet did not fall under rule 20· accordingly section 26(2) and (5) had no application in the present case~ and (iii) the misconduct not being covered hy rule 20. the jurisdiction of the Labour Court to inlrtcrc .-itil the Comp;iny·s order pac;scd after a domestic enquiry was a limited one, namely, only if the'rc was a breach of the principles ol naturJI ju;;ticc or if the order was perverse, or where there \'a victimisation or unfair lahour practice: the juri'idiction of the Labour C'...ourt in such cases would he the san1e as under sec. 33A of the Industrial Disputes Act. 1947.

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HELD : dismissing the appeal :

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(i) The contention th<it the Company v.·<is ju~lilicd in rerusing to continue the respondent in service was based on l\vo assu1np1ion5; th<1t the respondent had taken loan" from the wholesalers and that the order of the management was one of discharge _sirnplici1cr._ The Lahour Court\ finding that _the_ respondent had not taken loans from the wholesaler~ could not be allacked in the present appeal under Art. 136. 'fhc arb'Ument that the appellant''> order "-·as one of discharge sitnplicirrr and not hy way of punishment was inconsistent Vr·ith the record and manifcs1ly untenable. The order of discharge was passed by the management in consequence of the finding of the Enquiry Officer and stated in clear ten11s that it was passed as a punishment. !926 H-927 (:]

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(ii) It is clear from the provision~ of sub-sec1ions l and 2 of section :!6 that an employer cannot dismiss or even discharge his employee wichout a reasonable cause and a notice or payn1cnt of a month's \vage in lieu thereof. Even when an employer allege, that he had a reat.onahle caue for disch<1rging or dismissing hi" -cn1ploycc the cn1ployee "so dis· 1nied or discharged" has the right under sub-section 2 to file a con1pl<1in1 on any one of three grounOs, i.e .. that there \Vas in 'fact no rea..:.onahle cause, or that no notice was given to him, or that he was no:· guihy of .. anv misconduc•". Th·.! ""·ords "any misconduc1·· show that sub-s. 2 is not confined only to misconduct set out in rule 20. The only thing that the proviso to suh-s. I docs is to dispense with notice in cases "'·here lh~ ~rvices of an l.'mploycc are dispensctl with for a misconduct which the State Government has included in rule 20. To read anything more into that proviso would be contrary to the clear language of the proviso and of h'Ub-ss. I and 2. [928 11,929 F.!

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(iii) The proceedings under s. 26 arc not by "-'ay of appeal again::il the order passed at or ;is a rcsulr of a don1cstic enquiry; they arc indc.pcndent ·and original procccdingc; v.·here the competent authority (in thb ca..,e the L;1hour Courl) has to arrive al its O\Vn findins on apprcciathin of evidence le<l before it and nor on evidence adduced in the domc<1 ic enquiry. l'"hat being so, it cannot he held that the competen· authorrlv under s. 26 ha." a limited juri~diction a.c; in cases falling under s. 331\ of the lndmtri;il Di:;putcs Act. J930 C-DJ

lndish Vastrala·ra v. State o/ Biliar. A.LR. 1964 Pat 180; Spt•ncer & Co. Ltd. v. J/eadq1u1rtt•rs Asisronr to Co1111ni.;_~ion1·r of l.ahollr. 119(}1) 2 L.l..J. 603. referred to

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C1vn. APPELLATE JuR1so1cT10N : Civil Appeal No. 630 of 1966.

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Appeal by special leave from the decision dated Februar~ 3,o 1965 of the Labour Court, an Authority under the Bihar

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BROOKE BOND (INDIA) v. c. N. CHOUDHARY (She/at, J.) ~21

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A Shops and Establishments Act, Patna in B.S. & E. Case No. 23 of 1961.

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H. R. Gokhale M. C. Bhandare, Jatindas Mahajan, 0. C. Mathur, J. B. Dadachanji and Ravinder Narain, for the appellants. '

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B A. S. R. Chari and A. K. Nag, for the respondent.

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The Judgment of the Court was delivered by

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Shelat, J. This appeal, by special leave, is against the order by which the Labour Court, Patna, set aside the order of discharge from service passed by the Appellant-Company against the respondent and which also directed his reinstatement.

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The respondent was appointed a salesman on August 19, 1954 by a letter of appointment, clause ( 9) whereof provided that either party could terminate the contract of employment by a notice of 28 days. The Appellant-Company had also appomted by an agreement M/s Hari Bhagat Laxmi Bhagat at Kathmandu D as its wholesalers. The said agreement provided that the wholesalers would have to deposit with the Company a sum of Rs. 20,000/-, that they would be paid commission at 3% -on all sale proceeds in respect of sales effected by them, that out of the stock supplied to the wholesalers the Company's own salesman posted at Kathmandu would also be entitled to effect sales and E that the sale proceeds in respect of sales effected by both of them should be remitted to the Company through its salesman. On August 26, 1956 the Company sent the respondent to Kathmandu for promoting sales and for assisting the said wholesalers in their sales. No difficulty appears to have been experienced by the Company by this arrangement until the middle of 1960. But it was said that thereafter the respondent became irregular in re- F mitting the sale proceeds and that notwithstanding his assurances to regularise his work he did not do so. The result was that the Company sent one P. N. Saxena to Kathmandu and also a relief salesman, one K. B. Sinha, who on December 5, 1960, took over charge from the respondent. On December 6, 1960 the Company received a telegram from the wholesalers that there was cash .G shortage of Rs. ll,000/- by the respondent. On receipt of the telegram, one K. P. Sinha, the Branch Manager at Patna, went over to Kathmandu and made a preliminary enquiry in the course of which it was said that the respondent admitted that he had taken personal loans from the wholesalers and had executed two loan bonds for Rs. 6,400/- and Rs. 4,600/-. The respondent H was also said to have written on 7th, 8th, 9th and 10th December 1960 letters to the said Branch Manager admitting that he tad obtained the said loans from the wholesalers. On December 9, 1960, the wholesalers wrote to the Company that they had

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paid the said two amounts to the respondents for remittance to the Company and asked the Company to send them the requisite credn vouchers therefor. On December 28, 1960, the wholesalers :dso enclosed copies of two receipts pucportcd to have been executed by the respondent in respect nf the said two amounts. On December 27, 1960 the respondent intimated to the Company that the said receipts were extorted from him bv the wholesalers, and that pending instructions from the Company he was filing a criminal complamt against them. It is clear that the wholesa¹ ers had changed their case, their case first being that the said two amounts we·e advanced by way of loans to the respondent and later on stating that the said two amounts were given to the respondent for remittance but the respondent had failed to remi! them and that therefore there was cash shortage of Rs. 11.000/-. The rcsponent's case, on the other hand. was that he had not taken any loans from the said wholesalers, that contrary to the said agreement with the wholesalers, the Company's officers at Patna Branch connived at credit sales effected bv the wholesalers. that the wh<ilesalers on coming to know that on December 5. I 960 the respondent had handed over charge to a new salesman. · got panicky and realising that they would not be able to recover the sale proceeds of the said credit sales. they and the said K. P. Sinha, the Branch Manager, arranged between them to get the said Joan bonds executed by the respondent. that the wholesalers thereafter also extorted under coercion the said two receipts. and that therefore the wholesalers' version that there was ca.sh shorta?,e of Rs. I 1.000/ was false. The Company thereafter served a charge-sheet on the respondent alleging therein that he had ablled the· position of trust and responsibility as a Company's employee and brought down therehv its reputation and had com· mitted the following acts of misconduct, namely :

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"You have given room for allegations to be made against you by the wholesalers Hari Bhagat Laxmi Bhagat with respect to transactions admittedly entered into bs· you in your personal capacity.

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The wholesaler alleges that he handed over to you Rs. J l,000/- made up of Rs. 6.400/- on 2-10-1960 and Rs. 4.600/- on 3-12-1960. You deny the receipt of this money from the wholesaler and in fact it appears that you have filed a criminal complaint against the wholesaler for alleged extortion of certain receipts from you.

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By such conduct and behaviour you have brought down the reputation of the Company at Kathmandu and, therefore. you have committed a gross misconduct prejudicial to the interest of the Company.

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BROOKE BOND (INDIA) v. c. N. CHOUDHARY (She/at,!.) 923

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A Further, by such irresP?nsible conduct on your part you have also forfeited the confidence of the Company reposed on you."

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The charge-sheet called upon the respondent to show cause why "for the aforesaid gross misconduct committed by you, you should not be dismissed from service or otherwise suitably dealt with". B It is clear that the acts of misconduct alleged against the respondent as his acts were :

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taking personal loans from the wholesalers,

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denial by him of these loans and filing a criminal complaint against the wholesalers, and

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c 3. abusing the position of trust and responsibility as the company's employee and thereby bringing down its reputation.

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The last allegation is obviously an inference from the alleged acts (1) and ( 2), and not an independent act of misconduct. It may be mentioned that it was not the Company's case that the respon- D dent had embe-aled the Company's monies, its case all throughout being that the monies for which the respondent was said to have executed the said bonds and the said receipts were not the Company's monies but were for loans advanced by the wholesalers. In his reply to the said charge-sheet, the respondent denied the said alleged transactions, his case, as aforesaid, being that the said bonds and the said receipts as also the said four letters E written by him from the 7th to the 10th of December 1960 were secured from him either under the influence of the Branch Manager or extorted from him under force and coercion by the wholesalers. It was admitted before us that the Appellant-Company has not framed any rules of conduct for its servants and further that there was no rule forbidding a Company's employee from F entering into personal transactions such as loans. In the .absence of any such. rule, it is prima facie difficult to say how a loan or its denial could be said to be acts of misconduct.

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An enquiry into the said charges was duly held thereafter wherein the respondent admittedly was given an opportunity of being heard and to lead such evidence as he desired. At the end G of the enquiry, the enquiry officer gave the following findings :

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( 1) that between August to December 1960 the respondent was guilty of irregularities in his work,

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( 2) that stocks were sold on credit and further that the respondent had failed to remit sale proceeds thereof,

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( 3) that in spite of aswrances given by him to be

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• regular in future the respondent failed to live up to those assurances,

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( 4) that during the time when the respondent was at Kathmandu the Company's business was low and that was due to his failure to inform the company of the market position there and his failure to obey instructions given to him by the oflicers at Patna Branch, ( 5) that the respondent had taken Joans on his personal account from the wholesalers for which he had executed the said two bonds,

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( 6) that by executing the said two receipts he had made it appear as if the said monies were part Of the monies given to him for remittance, thus enabling the wholesalers to allege that they had handed them over for remittance and were no Jongc;· liable to the company for them. (7) that the letters of the 7th, 8th, 9th and 10th December, 1960 were voluntarily written by the respondent to the Branch Manager, and ( 8) that it was possible that the said two receipts were extorted from the respondent.

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The enquiry officer concluded his report by holding that the charge that the respondent had entered into personal transactions with the wholesalers taking advantage of his position was satisfactorily proved and that he had made abuse of the trust reposed in him by the company and by systematic irregular work and disobedience of the instructions of tho company he had managed to keep everybody in the dark with a view to covering his "illegal acth·ities". The report ended by stating "that alJ the charges" had been satisfactorily established by cogent evidence beyond any reasonable doubt. By an order dated September 20, 1961, the respondent was discharged from the company's service "with immediate effect for the aforesaid items of mLsconduct committed by and proved against you."

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It is clear from the a¹ orc.<aid findings that although the chargesheet alleged only two acts of misconduct on the part of the respondent, the enquiry officer had allowed evidence to be led on several other matters outside the scope of the charge-sheet such as the alleged irregularities on the part of the respondent prior to December 1960, his alleged disobedience of instructions given to him by the Patna Branch, his failure to live up to the assurnnccs given by him etc. and funhcr the enquiry officer had given his findings on those matters which were nnt the subject matter of the charges.

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Aggrieved by the order of discharge, the respondent filed " complaint in the Labour Court, Patna under s. 26 of the Bih:ir Shops & Establishment Act, 1953 in which he pleaded inter a/ia :

BROOKE BOND (INDIA) v. c. N. CHOUDHARY (She/at, I.) 9 2 5 •

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(a) that there was no reasonable cause for dispensing with his services,

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(b) that he was not guilty of any misconduct,

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( c) that he had not entered into persona! transactions with the wholesalers, and

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( d) that "the officers of the company in collusion with the wholesalers, and to save their gross negligence, took statements from the petitioner under threat and undue influence".

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In reply to the said complaint the company alleged that after a careful enquiry and on the basis of evidence adduced c thereat and the findings of the enquiry officer the company had come to the conclusion that "the petitioner was guilty of the charges levelled against him", and had decided to discharge him from the service of the company instead of dismissing him "which however would have been perfectly warranted by the facts and circumstances of the case and the charges established against the petitioner". The Labourt Court on these pleadings framed four D questions for its consideration :

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( 1 ) Whether the said wholesalers had advanced to the respondent the said two sums ?

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( 2) Whether the credit sales effected by the wholesalers were contrary to their agreement with the company?

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( 3) Whether they were with the consent and knowledge of the company's officers at Patna? and

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( 4) Whether the company's said officers for fear that they might be taken to task by the Head Office for permitting such credit sales got the respondent to admit in various letters that the said two sums were advanced to him as personal loans?

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The Labour Court with the consent of the parties admitted the evidence recorded at the domestic enquiry as substantive evidence aud also recorded certain other evidence led by the G parties, and ultimately found :

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( 1 ) that the domestic enquiry was properly held,

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( 2) that the company's contention that it had jurisdiction to interfere with th~ finding, o1 the domestic enquiry only, if it Vi:ls prvv.od ih;it there was want of good faith or'victimisation or unfair labour practice or that ·the enquiry officer had

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• committed any basic error or violated the P\inciples of natural justice or that bis findings were

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baseless or perverse was wrong, and that under s. 26 ( 2) and ( 5) it could record evidence and come to its own findings irrespective of the findings of the domestic enquiry,

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( 3) that the respondent's contention that the wholesalers extorted from him on December 8. 1960 the said two receipts bearing dates October 3, 1960 and December 2, 1960 was right,

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( 4) that the denial by the respondent of having taken any loan from the wholesalers and his filing the criminal complaint in Nepal court "appear to be justified".

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( 5) that the company's case that the wholesalers had advanced Rs. 11,000/- as loan to the respondent was not correct, and

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( 6) that there was force in the respondent's contention that the company's officers apprehending that action might be taken against them for conniving at credit sales made the respondent admit that he had taken personal loans, the amount whereof being the price due under the said credit sales.

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On these findings the Labour Court allowed the respondent's complaint, set aside the order rf discharge passed by the Company and directed his reinstatement.

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Counsel for the company urged that the order passed by the company was one ol discharge simJJ/t~iter anc.l not one by way of punishment. It was urged that the true position was that the respondent was sent to Kathmandu to promote sales and that as the company's representative he was to see that the wholesalers fuily remitted al! the sale proceeds regularly, that in the position he w·as. if he were to take loans even in his personal capacity he would place himself into a situation where he would not be able to exact proper performance from the wholesalers and consequently he placed himself into a position where there was bound to be conflict between duty and interest. In these circumstances it was not possible for the company to continue to repose in him trust and confidence and the company was justified in refusing to continue him in its service.

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But the argument proceeds on two assumptions : (I ) that the respondent had taken loans from the wholesalers, and ( 2) that the order of the managemznt was one of discharge simp/lcitcr. As to ( 1), the La hour Court found that the respondent's contesition, that he had not taken Joans but that the bonds and the letters written by him from 7th to I 0th December 1960 were all taken

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BROOKE BOND (INDIA) v. C. N. CHOUDHARY (She/at, !.) 927

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A from him at the instance of the Branch Manager and the said . two receipts were extorted from him, was justified. That being a finding of fact, in an appeal under Art. 136, in accordance with the practice consistently followed by this Court, we would not be justified to go behind that finding except on well recognised grounds such as perversity or unreasonableness of the findings. In view of the evidence before the Labour Court, counsel for the

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B company, could not attack the finding on that ground. As to. 2. the argument that the order was discharge simpliciter and not by way of punishment is inconsistent with the record before us and is manifestly untenable. The charge-sheet contained allegations of what the company called "acts of misconduct". The· findings of the enquiry officer were that the acts of misconduct

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c charged against the respondent were proved, the order of discharge passed by the management was in consequence of those findings and that order in clear terms stated that it was passed· as a punishment. Lastly, in the written statement filed by the company before the Labour Court in answer to the averments in

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the complaint the company's case was that the respondent was.

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D found guilty of the charges of misconduct preferred against him, but that the company preferred to punish him by discharging him from service instead of dismissing him which the company would have been justified in doing. That being so, it cannot be legitimately argued that the order was one of discharge simpliciter and not by way of punishment.

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E The second contention urged by counsel was that s. 26 of the· Act cannot apply as it gives jurisdiction to the Labour Court to entertain a complaint thereunder only in cases of misconduct defined in the rules made under the Act. Section 40(2) empowers the State Government to frame rules on any of the matters therein set out and clause ( c) empowers the Government to frame rules

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F with regard to misconduct of an employee for which his services. may be dispensed with without notice required by sub-s. 1 of s. 26 .. Rule 20 of the Bih:ir Shops & Establishment Rules, 1955 provides that the acts therem set out shall each be treated as misconduct for the purposes of the proviso to sub-s. 1 of s. 26. It is clear that the misconducts alleged against the respondent in the said charge-sheet do not fall within the various acts set out in rule 20.

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G The ai:gument was that the misconduct on which the company bas".'11ts order of discharge, as~uming it was one by way of pumshment, is not one of the misconducts set out in rule 20 and· therefore s. 26 ( 2) and ( 5) have no application. The Labour Court, therefor.e, had no jurisdiction to entertain the complaint, much less try 1t, and consequently, the order passed by it was

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H without jurisdiction. • The contention, in your view, is misconceived and is p.ot borne out by the express language and the scheme of sec. 26,

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Section 26, as it stands after its amendment by Bihar Act 26 of 1959, provides by sub-s. 1 that no employer shall dismiss or discharge from his employment any employee who has been in such employment continuously for a period of not Jess than 6 months .except for a reasonable cause and without giving such employee at least one month's notice or one month's v-ages in lieu thereof. Sub-s. I applies thus to all cases of dismissal and discharge anci requires in both cases ( 1) a reasonable cause without which an employer .cannot dismiss or discharge his employee and (2) a month's notice or one month's wages in lieu thereof. Then there is a proviso which lays down that such a notice shall not be necessary where the services of such employee are dispensed with on a charge of such misconduct as may be prescribed by the State Government supported by satisfactory evidence recorded at an enquiry held for the purpose. It is clear that the main part of sub-s. I is general and applies to all cases of dismissal and dis·charge, while the proviso carves out from such cases, cases where the services of an employee are dispensed with for a misconduct set out in rule 20 and where dispensing of service of such an employee is supported also by satisfactory evidence recorded at a domestic enquiry held in that regard. Jn such limited cases the proviso dispenses with the notice required under sub-sec. I. The proviso thus applies only to those types of misconduct prescribed by the State Government and not to the rest of the misconducts not so prcscrihed. Sub-s. 2 then provides that every employee "so dismissed or discharged" may file a complaint to the prescribed authority (in this case the Labour Court) Oh any one of the fo!lowing three grounds. namely :

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( I ) that there was no reasonable cause for dispensin.g with his services, or

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( 2) that no notice wa_, served on him as required by sub-s. I, or

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( 3) that he was not guilty of any misconduct as held by the employer.

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Suh-s. 2 thus confers a right on n employee to file a complaint before the Labour Court on any one of the three grounds set out therein. The words "so dismissed or discharged" must mean dismissed or discharged as st.ated in sub-s. 1. that is to say, all cases where an employer either dismisses or discharges his employee for which sub-s. 1 requires that there should he a reasonable cause for such an order and a notice or one month's wages in lieu thereof. It is. therefore. clear that an employer cannot dismiss or even discharge his employee without a reasonable cause therefor and a notice or payment of a month's wages in lieu thereof. Bt even when an employer alleges that he had a reas<mable cause for discharging or dismissing his employee the matter docs not

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BROOKE BOND (INDIA) v. c. N. CHOUDHARY (She/at,,/.)

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A end. An employee "so dismissed or discharged" has the .. right under sub-s. 2 to file a complaint on any one of the said three grounds i.e. that there was in fact no reasonable cause, or that no notice ~as given to him or that he was not guilty of "any misconduct". The words "any misconduct" show that sub-sec. 2 1s not confined only to misconducts set out in rule 20. If counsel's B contention were right the ground that no notice was served . as required by sub-sec. 1 would be superfluous for no such nol!ce is necessary in cases of misconduct prescribed in rule 20. The words "as required by sub-sec. l" in that ground in sub-sec. 2, on the other hand, makes it abundantly clear that sub-sec. 2 applies to all cases of dismissal and discharge and not merely to cases falling under the proviso. Sub-s. 5 provides that the presc cribed authority shall cause a notice to be served on the employer relating to the said complaint, record briefly the evidence adduced by the parties, hear them and after making such enquiry as it may consider necessary, pass orders giving reasons therefor. The section also empowers the prescribed authority to give relief to· the employee by way of reinstatement or compensation or both.

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In view of the clear language of sub-ss. 1 and 2 of sec. 26, counsel cannot ask us to limit cases where a complaint can be filed only if the misconduct is one of those set out in rule 20. In our view the only thing that the proviso to sub-s. 1 does is· to Jispense with notice in cases where the services of an employee B are .dispensed with for a misconduct which the State. Government has included in rule 20. To read anything more into that proviso, as collnsel invited us to do, would be contrary to the clear language of the proviso and of sub-ss. 1 and 2. The contention has, therefore, to be rejected.

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The next contention was that the misconduct fa this case beino F not one of those misconducts set out in rule 20 the jurisdictio~ of the.Labour Court to interfere with the company's order passed ~ftet a domestic enquiry is a limited one, namely, where there is breach of the principles of natural justice or where the order is perverse, or where there is victimisation or unfair labour practice. The jurisdiction in such cases of the Labour Court would according to the argument, be the same as under sec. 33A of the IndusG trial Disputes Act, 1947.

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The contention again is contrary to the express language of sec. 26 (2) and ( 5). There is no comparison between s. 26 of the Act and s. 33A of the Industrial Disputes Act. The purposes qf the two sections also are different. The language of s. 26 H clearly shows that when a complaint is filed on any one of the grounds set out in sub-s. 2 the procedure laid down in sub-s. 5 w0j1ld apply and the competent authority is entitled to record evidence aud come to its own findings on such evidence. The

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• .authority thus is required to come to its own findings on the evidence adduced by the parties and recorded by it independently of the findings given in the domestic enquiry. This is also clear from sub-s. 2 wherounder an employee has a right to show th'1t there was no reasonable cause for dispensing with his services <ir that he was not guilty of the misconduct for which he was charge.! and held guilty in a domestic enquiry. The fact that he is entitled to file a complaint and show that there was no reasonable cause or that he was not guilty of misconduct shows that the competent authority under s. 26 has to come to its own findings on the evidence led before it irrespective of the findings in the domestic enquiry. The proceedings under s. 26 arc not hy way of apr<:al against the order passed at or as a result of the domestic enquiry: they are independent and original proceedings where the competent authority (in this case th~ Labour Court) has to arrive at it> <lwn findings on appreciation of evidence lcJ before it and not on evidence adduced in the domestic enquiry. That being so, it cannot be held that the competent authority under s. 26 has a limited jurisdiction as in cases falling under s. 33A of the Industrial Disputes Act. In this connection we were shown two dcci~ions, one by the High Court of Patna in Jagdish Vastralnva v. State of B ihar (¹ ) and the other by the High Court of Mysore in Spencer & Co. Ltd. v. Headquarters Assistant to Commissioner of l,abour('). These decisions are however of no assistance Though the Patna decision is on s. 26 of the Act, the decision contains hardly any reasoning. The second decision also cannot be brought to aid because the provisions of the Mysore Act thC<"e dealt with are not in pari materia with s. 26 before us.

¶186

The last contention was that the order of the Labour Court wa.~ in any event perverse ina.,much as it was based on an assumption that under the agreement with the wholesalers the wholesaler., were prohibited from selling tea on credit. We have gone throuqh the agreement and we find that it i' not possible to say that the interpretation placed by the Labour Court was wrong, and th:it therefore its reasoning is unrea.~onable or misconceived.

¶187

In our view none of the contentions urged by counsel for the company can be accepted. The appeal has therefore to be dismis.<ed which we do. Jn the circumstances of the ca,e. however. we feel that it is just that each party should hear his own costs.

¶188

Appeal dismissed.

¶189

R.K.P.S.

¶190

<I) A.I.R. 1964 Pal. !RO. (:!) [196~] ~ L.L.J. 60.~.

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