Rustom & Hornsby (I) Ltd. versus T. B. Kadam

Section 2A of <he Industrial Dispute• Act, 1947, provide. that where any employer discharges, dismisses, retrenches or otherwise termina1es the serv~ of an individual workman, any di'Spute or difference between that workman and his employer connected with or arising out of such discharges etc., shall c be deemed to be an industrial dispute notwithstanding that no other workman nor ttnion is a party to the dispute.

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The respondent was a watchman in the factory of the appellant. He was diamisscd from service on Jan. 7, 1964, after holding a domestic cnquirv with respect to an incident on the night of December 15, 1963. In June 1967, the dispute regarding the dismissal of the respondent was referred to the Labour Court. Directing him to be rein•tated, the Labour Court, held that :

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( 1) The charge against the respondent was vague;

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(2) The suspected dishone•ty of the respondent in connection with the appellant's property did not constitute any misconduct either under Standin,cOrders of the Company or otherwise; and

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(3) The domestic 'enquiry held was defective because, the respondent produced a police constable as his witness at the time of the enquiry who expressed his inability to give evidence without the permission of his s.uperion ud the Enquiry Officer took no steps for obtaining the necessary permission. The Labour Court- summoned and examined the police constable and took. hil evidence into account.

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In api)eal to this Court, it was contended :

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(I) That s. 2A came into force only on December I, 1965, aud ar the dismissal took place before that date the reference of the dispute was bad; and

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'2) That the findin• of the Enquiry Officer was based upon a fair enquiry 1.nd the Labour Court should not have interfered with the finding.

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Allowing the appeal to this Court on the second contention.

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HELD: (1) The test for .the validity of a reference under '· 10 is whether there WM in existence a dispute on the day the reference was maCl,e. [124B--C]

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Jahiruddin v. Mod•l Mills, Nagpur [1966] I LL.J 430, applied.

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National Productivity Council v. S. N. Kaul [1969] II LL.J 186 and Shru Gopa/ Paper Mills Ltd. v. Stat< of Haryana, [1968] I Lab. !.<;:. 1259, approved.

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P. Janardhana Sh<tty v. Union of India [1970] II L.L.J. 738, over-ruled .

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(a) Section 2A provides in effect that what would not be an industrial diapute as defined in s. 2(k), a!! interpreted by this Court, woo1d b" rl<>emed to be an industrial dispute in certain circumstances. There is. no question of · living retrospective effect to that section in mai1dng the refe'"ence Whe11 the 5ection uses the words "discharges, dismisses, retrenches etc." it does not deal with the question a'S to when that was done but merely rc,ers to a situation or st•te o! affairs. [123B-D]

[1976] 1 S.C.R.

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SUPREME COURT REPORTS

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(b) It is no objection to this to say tha~ such an interpretation would lead A to ~\ll old dispute being reopened after the lapse of many years. Every reference would be made only sometime after the dispute has arisen. Even in this case, if a Jabour union or a group of workmen had sponsored the case of lhe respondent, such a reference after lapse of some time would have been valid. All that s. 2A bas done is that by legislative action such a dispute is deemed to be an industrial dispute even where it is not sponsored by a labour union or a group of workmen. The only consideration in such matters is whether there was or apprehended an industrial dispute when the reference was made. B [123D-124B] (2) The charge is not vague, [121H] (3) The facts set out show that the charge is one of an &!tempt to steal the appellant's property and if proved, the respondent, being a watchman, deserves dismissal. [121H-122A]

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( 4) When a workman is dismissed as a result of a domestic enquiry the C only power which the Labour Court has is to consider whether the enquiry was proper and if it was so, no further question arises. Findings properly recorded at an enquiry fairly conducted are bindine: on parties unless ·t is shown that such findings were perverse. It was not the duty of the Enquiry Officer tO seek .permission of the constable's superiors and it was the respondent's· duty to have his witnesses properly su.mmoned. The enquiry was fair and the Labour Court had no righ: to examine the witness on behalf of the workman and based on that evidence to upset the finding arrived at the domestic enquiry. [124DD 125C) D.C.M. v. Ludh Budh Singh [1972] 3 S.C.R. 29; Workmen v. Fi.restone Tyre & Rubber Co, [1973] 3 S'.C.R. 587 and Tata Oil Mills Co. Ltd. v. Tis Workmen [1964] 7 S.C.R. 555, referred to.

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OVJL APPELLATE JURISDICTION: Civil Appeal No. 1142 of 1969. Appeal by special leave from the award dated the 8th November E 1968 of the Labour Court, Poona in Reference (IDA) No. 9 of 1967. G. B. Pai, 0. C. Mathur, D. C. Shroff and 0. N. Mishra, for the appellant.

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S. C. Manchanda and A. G. Ratnaparkhi, for the respondents. The Judgment of the Court was delivered by

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ALAG!RISWAMI, J.-This is an appeal by special leave against the award of the Labour Court, Poona directing the reinstatement of the respondent in the service of the appellant company.

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The respondent was a watchman in the factory of the appellant at Cbinchwad, Poona. A domestic enquiry was held against him in respect of an incident on the night of 15-16 December 1963 and following the enquiry be was dismissed from service on the 7th January 1964. His appeal was dismissed after a personal hearing by the appellate authority. Section 2A of the Industrial Disputes Act came into force on !st December 1965 and on 23rd June 1967 a reference was made by the Government of Maharashtra regarding the dismissal of the respondent to t.'ie Labour Court, Poona and the Labour Court held that the domestic enquiry held against the respondent was defective, that the charges against the respondent had not been made out and directed him to be reinstated.

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RUSTOM & HORNSBY Lrn. v. T. B, KADAM (Alagiriswami, l.) 121

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There were four charges framed against the respondent in the domestic enquiry. They were :

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( 1) Suspected dishonesty in connection with the company's property.

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(2) Gross negligence in performance of his duties.

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(3) Disobedience of instrnctions given by the superiors.

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( 4) Commission of an act subversive of discipline.

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For the purposes of this appeal it is not necessary to consider other charges than charge No. 1. The char_gesheet is rather a bit confused but the statement of facts regarding charge No. 1 is clear and there cannot be any doubt or confusion about it. The facts stated in the c chargesheet are as follows :

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"It is reported that while you were on duty in the 2nd shift on Sunday the 15th December, 1963 at about 10.30 P .M. you left the guard room and went into the factory. While returning from the factory you are reported to have brought out with you a new Fluroscent 1'ube and to have kept 0 it in the guard room. Immediately after this you are also reported to have directed one of the two watchmen on duty at that time to take a round with the tel-a-tel clock. It is further reported that at about 11.20 P.M. you removed the Fluroscent Tnbe from the guard room and were carrying it away out of the factory. At this stage you were challenged by the. watchman, Shri M. B. Shinde and consequently you E brought back the tube and left it in the guard room. The Company had, however, not received any report in the matter from you.

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You were, therefore, called up when you reported for duty on 16th afternoon and were questioned in the matter. When you were asked to submit your written report about the mci- .F dent and about your failure to report immediately to your superiors you stated that you will submit yonr report after consulting your pleader.

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The above mentioned facts and particularly your unwillingness to submit written report when called npon to do so give rise to doubts about your integrity and faithfulness both G in regard to the security and property belonging to the Com' • pany for which you are responsible while on duty as a person in charge of the security of the Company."

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The Labour Court took the view that the charge of suspected dishonesty in connection with the company's property did not constitute any misconduct either under Standing Order 24 or otherwise and therefore no action could be taken against the respondent on the basis of that H charge, and also that the chargesheet was vague. We can see no vaguemiss in the chargesheet and on the basis of the facts set out above there could be no doubt that the charge is one of an attempt to steal the

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122

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[1976] 1 S.C.R.

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SUPREME COURT REPORTS

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company's property. The respondent being a watchman the charge is a· serious one and if it was held proved he deserves nothing short of dismissal.

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The Labour Court was concerned only with the question whether the domestic enquiry held against the respondent was a proper enquiry. It held that the enquiry was not a proper one on the ground that the re!p<>ndent had produced a police constable as his witness at the time ot enquiry and this witness expressed his inability to give evidence without the permission of his superiors, that it was clearly the duty of the Inquiry Officer to obtain the necessary permission and to help the respondent in .the matter of .his defence, that the reluctance on the part ot the InqUiry Officer to pursue the matter further is indicative ot the fact that he was not inclined to afford proper opportunity to the respondent to defend himself, that there was no necessity for the respondent to apply again to the Inquiry Officer for obtaining the necessary permission, that the passive approach adopted by the Inquiry Officer in the matter had undoubtedly resulted in an opportunity to defend himself being denied and the inquiry will therefore be defective in this respect. It summoned and examined the police constable and taking his evidence also into acconnt held as follows :

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"Then there is evidence on the record of the inquiry to show that the relations of the second party with the Security Jamadar Shri David were strained. As a matter of fact the evidence shows that the reports from the watchmen started coming in at his instance. The proceedings against the second party started on the report of Shri David. The said report and the reports made by the other watchman and the second party are not forthcoming though referred to in the record of the inquiry. Then there is the glaring fact that very ambiguous allegations and charges which do not even constitute any misconduct are made against the second party and in spite ot the fact that the evidence in the inquiry is too conflicting and vague the concerned authorities have without affording proper opPortunity to defend f'?und the second party .guilty of the charges levelled against him. On a careful readmg of the findings of the Inquiry Officer, the Works Manager and the Aonellate Authoritv in the light of the recitals in the charge-sheet it becomes absolutely clear that they have found him guilty without applying their mind to the facts and circumstances of the case. All these factors raise a strong presumption that the removal of the second party was predetermined by the first party and that is dismissal is bv way of victimization. For all the aforesaid reasons therefore tho dismissal of the second oarty must be held to be illgal a?d immoner. There is nothing adverse in the past agamst h~m and he is therefore entitled to the relief ot reinstatement with back wages."

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The first argument on behalf of the appellant is that the incident took place .in December 1963 and the order of dismissal was made on the 7th of January 1964 and as section 2A of the Industrial Disputes

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RUSTOM & HORNSBY LTD. v. T. B, KADAM (Alagiriswami., !.) 123

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A Act came into force on 1-12-1965 the reference of this dispute under section 10 of the Industrial Disputes Act read with section 2A is bad. It is argued that this will amount to giving retrospective effect to the provisions of section 2A. We are not able to accept this contention. Section 2A is in effect a definition section. It provides in effect that what would not be an industrial dispute as defined in section 2(k) as

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Ir ll interpreted by this Court would be deemed to be an industrial dispute in certain circumstances. As was pointed out by this Court in Chemicals & Fibres of India Ltd. v. D. G. Bhoir & Ors.(¹ ) the definition

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,, could as well have been made part of clause (k) of section 2 instead of being put in as a separate section. There is therefore no question of giving retrospective effect to that section in making the reference which resulted in the award under consideration. When the section

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c uses the words "where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman" it does not deal with the question as to when that was done. It refers to a situation or a state of affairs. In other words where' there is a discharge, dismissal, retrenchment or termination of service otherwise the dispute relating to such discharge, dismissal, retrenchment or termination becomes an industrial dispute. It is no objection to this to say that this

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D interpretation would lead to a situation where the disputes would be i:eopened after the lapse of many years and referred for adjudication under section 10. The question of creation of new rights by section 2A is also not very relevant. Even before the introduction of section 2A a dispute relating to an individual workman could become an industrial dispute by its being sponsored by a labour union or a group of workmen. Any reference under section 10 would be made only sometime

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E after the dispute itself has arisen. The only relevant factor for consi• deration in making a reference under section 10 is whether an industrial dispute exists or is apprehended. There cannot be any doubt that on the day the reference was made in the present case an industrial dispute as defined under s. 2A did exist. Normally the dispute regarding an individual workman is not an industrial dispute unless it is sponsored by the union to which he belongs or a group of work-

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F men. The change made by section 2A i.S that in certain cases such a dispute need not be so sponsored and it will still be deemed an industrial dispute. Supposing in this very case a labour union or a group of workmen had sponsored the case of the respondent before the reference was made, such a reference would have been valid. All that section 2A has done is that by legislative action such a dispute is deemed to be an industrial dispute even where it is not sponsored by a labour

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G union or a group of workmen. What a Jabour union or a l!fOUp of workmen can do the law is competent to do. The only question for consideration in considering the validity of a reference is whether there was or apprehended an industrial dispute when the reference was made. If there was an industrial dispute or an industrial dispute was apprehended. even though tke facts giving rise to that dispute might have arisen before the reference was made the reference would still be valid. It

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H is to be borne in mind that every reference would be made only some-

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0 (I) C.A. Nos.1633-1644ofl973decidcd on 2-5-1975.

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[1976] 1 S.C.R.

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124

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SUPREME COURT REPORTS

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time after the dispute has arisen. In Bir/a Brothers. Ltd. v. Modak ( 1) it was pointed out that though the Industrial Disputes Act came into force in 1947, reference of an industrial dispute based on the facts which arose before that Act came into force is a valid reference. The same reasoning would apply to a reference of a dispute falling under section 2A even though the facts giving rise to that dispute arose before that section came into force. The decision in Bir/a Brothers' case (supra) was approved by this Court iu its decision in Jahiruddin v. Model MiUs, Nagpur("). These two decisions clearly establish that the test for the validity of a reference under section 10 is whether there was in existence a dispute on the day the reference was made and there was no question ·of giving retrospective effect to the Act. We find that that is the view taken by the Delhi High Court in National Productivity Council v. S. N. Kaul(') by the Punjab & Haryana High Court in Shree Gopal Mills Ltd. v. The State of Haryana(''). The view of the High Court of Mysore in P. lanardhana Shetty v. Union of India(") to the contrary is not correct.

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Coming now to the other points in the case : the decisions of thi; ·Court establish clearly that when a workman is dismissed as a result· of a domestic enquiry the only power which the Labour Court has is to consider whether the enquiry was proper and if it was so no further question arises. If the enquiry was not proper the employer and the employee had to be given an opportnuity to examine their witnesses. It is not the duty of the Enquiry Officer in this case to seek permission of the police constable's superiors. It was the respondent's duty to have him properly summoned. He did not even apply to the Enquiry Officer requesting him to seek the permission of the police constable's superiors. It is therefore wrong on the part of the Labour Court to have held that the enquiry against the respondent was not a proper enquiry. Once this conclusion is reached there was no room for the summonin!l and examination of the police constable by the Labour Court. The question regarding the jurisdiction exercised by an Industrial Tribunal in respect of a domestic enquiry held by the management against a worker has been elaborately considered by this Court in its decision in D.C.M. v. l,udh Budh Singh(') and the principles that emerge out of the earlier decisions of this Court have been set out in that decision. The decision of this Court in Workmen v. Firestone Tyre & Rubber Co.(¹ ) also sets out the principles that emerge from the earlier decisions. In Tata Oil Mills Co. Ltd. v. Its Workmen(') it was argued that where the employee is unable to lead his evidence before the domestic Tribunal for no fault of his own, an opportunity should be given to him to vrove his case in proceedings before the Industrial Tribunal. This Court held that this contention was not well founded. It was pointed out that the Enquiry Officer gave the employee amole oooortunitv to lead his evidence and the enquiry had been fair. It was also pointed out that merely because the witnesses did not appear

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(I) !. L. R. 1948 2 Cal 209. (2) [1966] IL. L. J. 430. (l) [1969] II L. L. J. 186. (4) [1968] Lab.T.C. 1259. '(5) [1970] Il L. L. J. 738. (6) [19721 3 S.C.R. 29. (7) [I 973] 3 S. C. R. 587. (8) [19641 7 S. C. R. 5551.

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RUSTOM & HORNSBY LTD. v. T. B. KADAM (Alagiriswami, !.) 125.

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A to give evidence in support of the employee's case it could not be held that he should be allowed to lead such evidence before the Industrial Tribunal and if such a plea was to be upheld no domestic enquiry would be effective and in every case the matter would have to be tried afresh by the Industrial Tribunal. It was pointed out that findings properly recorded at the enquiries fairly conducted were binding on the parties, unless it was shown that the said findings were perverse, or

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B were not based on any evidence. We are not not able to agree with the Labour Court in this case that the findings of the domestic enquiry are either perverse or not based on any evidence .

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We therefore come to the conclusion that there was no failure on the part of the Enquiry Officer to give a reasonable opportunity to the respondent workman, that the enquiry was fair and the Labour Court c had, therefore, no right to examine the witness on behalf of the workman and based on that evidence to upset the finding arrived at the domestic enquiry. We also hold that the punishment imposed in the circumstances is one in which the Labour Court cannot interfere. The· result is that the appeal will have to be allowed and the award of the Labour Court set aside.

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D It, however, appears that the respondent had attained the age of 60 on 11-6-73 and even if he had been in service he would have retired on that dale. Under an interim order made by this Court on 29-4-1969 the respondent has been paid Rs. 200/- per month as part of the remuneration payable to him till the hearing and final disposal of the appeal and such payment bas been made upto-date. Even if the respondent had succeeded in this appeal he would not have been

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E entitled to any payment after 11-6-73. In view of this appeal being allowed and the award of the Labour Court being set aside th" respondent will have to repay the money he had received in pursuance of the order of this Court. The appellant has agreed that it would not take any steps to recover from the respondent the payments already made·to him. There will be no order as to costs.·

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V.P.S.

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Appeal allowed.

Rustom & Hornsby (I) Ltd. v. T. B. Kadam

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Rustom & Hornsby (I) Ltd. v. T. B. Kadam

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