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PETITIONER: COOPER ENGINEERING LIMITED

       Vs.

RESPONDENT: SHRI P. P. MUNDHE

DATE OF JUDGMENT20/08/1975

BENCH: GOSWAMI, P.K. BENCH: GOSWAMI, P.K. ALAGIRISWAMI, A. UNTWALIA, N.L.

CITATION:  1975 AIR 1900            1976 SCR  (1) 361  1975 SCC  (2) 661  CITATOR INFO :  R          1978 SC1380  (8)  RF         1979 SC1652  (6,13,24,27,28,34)  R          1984 SC 289  (2)

ACT:      Industrial   Dispute-Domestic    enquiry-Violative   of principles of  natural justice-If  labour court  should give opportunity to  adduce evidence  afresh-Failure to  do so-If vitiates the award.

HEADNOTE:      On the  question, whether  when a domestic inquiry held by an employer was found by the labour court as violative of the principles  of natural  justice there  Was any duty cast upon that  court to  give an  opportunity to the employer to adduce evidence  afresh before  it and whether failure to do so would vitiate its ^      HELD: When  a case  of dismissal  or  discharge  of  an employee is  referred for industrial adjudication the labour court should first decide as a preliminary issue whether the domestic enquiry  has violated  the  principles  of  natural justice. When  there was  no domestic  enquiry or  defective enquiry is  admitted by  the  employer,  there  will  be  no difficulty. But  when the  matter is  in controversy between the parties  that question  must be decided as a preliminary issue.On that  decision being  pronounced it will be for the management to  decide wether  it will  adduce  any  evidence before the  labour court.  If it  chooses not  to adduce any evidence, it  will not  be  thereafter  permissible  in  any proceeding  to   raise  the   issue.  Three   will   be   no justification for  any party to stall the final adjudication of the  dispute by  the  labour  court  by  questioning  it, decision with  regard to  the  preliminary  issue  when  the matter, if  worthy, can  be agitated  even after  the  final award. It will be legitimate for the High Court to refuse to intervene at this stage. [368C-E]      Workmen of  Motipur Sugar  Factory (private) Limited v. Motipur Sugar  Factory [1962]  3 S.C.R.  588; Management  of Northern Railway  Cooperative  Society  Ltd.  v.  industrial Tribunal Rajasthan,  Jaipur and  Anr. [1967]  2 S.C.R.  476;

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Management of  Ritz Theatre (P) Ltd. v. Its workmen [1963] 3 S.S.R. 461/469-470; State Bank of India v. R. K. Jain & OrS. [1972] 1  S.C.R. 755/766,  777; Delhi  Cloth & General Mills Co. v.  Ludh Budh Singh [1972] 3 S.C.R. 29/54-56 and Workmen of Messrs  Firestone Tyre & Rubber Company of lndia (P) Ltd. v.  Management   &  Others,  [1973]  3  S.C.R.  587/606-607, referred to.

JUDGMENT:      CIVlL APPELLATE  JURISDICTION: Civil Appeal No. 1716 of 1969.      Appeal by  special leave  from the award dated the 31st March, 1969  of the  Labour Court,  Kolhapur, Maharashtra in Reference (IDA) No. f 1968.      B. Sen and I. N. Shroff, for the appellant.      R. K.  Garg, S.  C. Agarwal  and V. J. Francis, for the respondent.      The Judgment of the Court was delivered by      GOSWAMI, J.  The  important  question  which  has  been pinpointed hl this appeal by special leave is whether when a domestic inquiry  held by an employer is found by the labour court as  violative of  the principles  of  natural  justice there  is   any  duty  cast  upon  that  court  to  give  an opportunity to the employer to adduce evidence afresh before it and whether to do so would vitiate its award. 362      In the  present case  the workman concerned was charged under the  standing orders  of the company for soliciting or collecting from the employees contributions for some purpose (allegedly   purchase   of   microphone   and   loud-speaker arrangements)  within  the  factory  premises.  The  workman denied the  charge of  soliciting or collecting contribution within the  factory premises (for purchase of microphone and loudspeaker) but  added that  for this purpose I collect the said contribution  outside the  gate of the Company and this being so,  such erroneous  information supplied  to  you  by someone should not be considered acceptable".      After  holding  the  domestic  inquiry  in  which  some witnesses were  examined by  the employer and cross-examined by the  workman and questioning the workman at the outset as well as  at the  end of  the inquiry,  the  Enquiry  Officer Submitted  very   brief  report   to   the   Works   Manager (hereinafter the  Manager) holding  that  the  charges  were established. He  did  not  give  any  detailed  reasons  for preferring the  evidence of  the six  witnesses examined  on behalf of  the employer in the inquiry to the version of the workman. The  Manager after  perusal of  the report  of  the Enquiry  officer  passed  the  order  of  dismissal  without adverting  to   the  evidence   in  the  inquiry.  This  was particularly necessary  since the  Enquiry Officer  had  not given his reasons for his finding. Another incident occurred during the  inquiry before  the  Manager.The  workman  after answering the  first question  of the  Manager. when another question was  put, abruptly  left the inquiry without paying any heed  to the  orders of the Manager and to persuasion of other officer resent asking him to wait. The dismissal order was passed the same afternoon.      In this  appeal we  will proceed on the assumption that the domestic  inquiry was  rightly found by the labour court to be  defective. The  labour court  is aware  of the  legal position that it was competent in this case to take evidence of the  parties and come to its own conclusion on the merits of the case and to decide whether the order of dismissal was

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justified or  not to enable it to consider about the relief, if any,  to he  awarded to  the workman.  The labour  court, however, observed in its award that-           in the  instant case  no evidence regarding merits      is led  by the opponent before this Court....It is open      to the  Labour Court to hold an enquiry itself. But the      opponent has  chosen not to lead any evidence regarding      the merits  of  the  alleged  misconduct.  The  natural      result of  vitiating the  enquiry would therefore be to      set aside  the order  of dismissal  and to  direct  the      reinstatement in service of the dismissed employee with      all back wages".      The question  posed at the commencement of our judgment is thus  highlighted by  the aforesaid  observations of  the labour court  and we  are required to consider whether after the labour court comes to a decision about the inquiry being defective it  has any  duty to announce its decision in that behalf to  enable the  employer  an  opportunity  to  adduce evidence before  it to  justify  the  order  on  the  charge levelled against a workman. 363 There is,  however.. no doubt that when the employer chooses to do so the workman will have his opportunity to rebut such evidence. There  is also  no doubt,  whatsoever, that if the employer declines  to avail  of such an opportunity, it will be open to the labour court to make an appropriate award and the employer will thereafter be able to make no grievance on that score.      In dealing  with a  case of  dismissal of an industrial employee, this  Court has time and again adverted to various principles and  it is  not necessary  to recount  all  those decisions.  It   will  be   sufficient  to  concentrate  our attention only  on a few of the decisions so far as material for our  purpose and  which are  also rightly referred to at the bar.      The first  case arising  out of  an award  that  has  a material Bearing  on the  question is  that  of  Workmen  of Motipur Sugar  Factory (Private)  Limited v.  Motipur  Sugar Factory(1) which is a decision of four learned Judges. Inter alia, the  question that  arose in  that appeal  was  as  to whether, since the management held no inquiry as required by the standing  orders, it  could not  justify  the  discharge before  the   Tribunal.  In  Motipur  Sugar  Factory’s  case (supra), the  Court observed  at page  597 of  the report as follows :-           "If it  is held  that in  cases where the employer      dismisses his  employee without holding an enquiry, the      dismissal must  he set aside by the industrial tribunal      only on  that ground, it would inevitably mean that the      employer will  immediately proceed  to hold the enquiry      and pass  an order  dismissing the employee once again.      In that  case, another  industrial dispute  would arise      and the  employer would  be entitled  to rely. upon the      enquiry which  he had held in the meantime. This course      would mean  delay and  on the  second occasion  it will      entitle the  employer  to  claim  the  benefit  of  the      domestic enquiry  given. On  the other hand, if in such      cases the  employer is  given an opportunity to justify      the impugned  dismissal on the merits of his case being      considered by  the tribunal for itself and that clearly      would be  to the  benefit of  the employee. That is why      this Court  has consistently  held that if the domestic      enquiry is irregular, invalid or improper, the tribunal      may give  an opportunity  to the  employer to prove his      case and  in doing  so the  tribunal tries  the  merits

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    itself. This view is consistent with the approach which      industrial adjudication generally adopts with a view to      do justice between the parties without relying too much      on technical  considerations and  with  the  object  of      avoiding delay in the disposal of industrial disputes".      The consequence that can ensue from a contrary view, as noticed by  the,  Court  in  Motipur  Sugar  Factory’s  case (supra), will  appear from what took place in the Management of Northern  Railway. Cooperative Society Ltd. v. Industrial Tribunal, Rajasthan,  Jaipur and  Anr.(2) where  pursuant to the award after reinstating the employee the management (1) [1965] 3 S.C.R. 588.            (2) [1967] 2 S.C.R. 476. 364 drew a  fresh proceeding and passed a fresh order of removal and the A said order was again the subject matter of another reference to the industrial tribunal.      The pertinent question that arises for consideration is whether it  is the  duty of  the tribunal  to make known its decision to the parties on this jurisdictional aspect of the case so  that the  employer can  avail of the opportunity to justify the dismissal based on the charge.      In Management  of Ritz  Theatre (P) Ltd. v. Its workmen (1), this  Court was  required to deal with rather ingenious argument. It  was contended  in that case by the workmen, in support  of   the  tribunal’s   decision,  that   since  the management at  the very commencement of the trial before the Tribunal adduced  evidence with  regard to the merits of the case it should be held that it had given up its claim to the propriety  or   validity  of  the  domestic  enquiry.  While repelling this  argument this  court made  some  significant observations:           "In enquiries  of this  kind, the  first  question      which the  Tribunal has to consider is whether a proper      enquiry has  been held  or not.  Logically, it  is only      where the  Tribunal is  satisfied that a proper enquiry      has not  been held or that the enquiry having been held      properly the  finding recorded  at such  an enquiry are      perverse, that  the Tribunal  derives  jurisdiction  to      deal with the merits of the dispute.. Ir the view taken      by Tribunal  was held  to be  correct, it would lead to      this anamoly  that the employer would be precluded from      justifying the  dismissal of  his employee  by  leading      additional  evidence   unless  he  takes  the  risk  of      inviting the  Tribunal to  deal  with  the  merits  for      itself, because  as soon  as he  asks for permission to      lead additional evidence, it would follow that he gives      up his  stand based  on the  holding  of  the  domestic      enquiry. Other wise, it may have to be held that in all      such cases  no evidence  should be  led on  the  merits      unless the  issue about  the  enquiry  is  tried  as  a      preliminary issue.  If the  finding on that preliminary      issue is in favour of the employer, then, no additional      evidence need  be cited by the employer; if the finding      on the  said issue  is against hm, permission will have      to  be   given  to  the  employer  to  cite  additional      evidence". -      Although this  Court in  Ritz  Theatre’s  case  (supra) observed  that  such  a  procedure  may  be  "elaborate  and somewhat cumbersome"  it was  not held to be illegal nor had if been rejected out of hand      In State  Bank of  India v.  R. K. Jain & ors.(2), this Court had to deal with a similar question. The contention on behalf of the management in that case was that-           "Even assuming that the domestic inquiry conducted      by the  Bank was in any manner vitiated, the Industrial

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    Tribunal      (1) [1963] 3 S.C.R.461, 469-470.    (2) [1972] I S.C.R.                                                 755,766,777. 365      erred in  law in  not  giving  an  opportunity  to  the      management to  adduce evidence  before it  to establish      the validity of the order of discharge".      In  dealing   with  the  above  contention  this  Court observed as follows:-           "If the management defend its action solely on the      basis that  the domestic  inquiry held  by it is proper      and valid  and if Tribunal holds against the management      on that  point, the  management  will  fail....  It  is      essentially a matter for the management to decide about      the stand that it proposes to take before the Tribunal.      It may  be emphasised,  that it  is the  right  of  the      management to  sustain its  order by  adducing  also  .      independent evidence before the Tribunal. It is a right      given to the management and it is for the management to      avail it self of the said opportunity".      On the  facts of  that case  this Court  held that  the management, having made it clear to the Tribunal that it was resting its  case solely  on the  domestic enquiry,  had  no right to  make a grievance that it should have been given an opportunity to  adduce evidence on facts before the Tribunal in justification of its order.      This Court  further observed in that case that "no such opportunity was  asked for by the appellant nor even availed of". This  Court in that case took into account management’s consistent stand  throughout before Tribunal as also that it made no  grievance  on  the  score  of  non-availability  of opportunity to  adduce evidence  even in  the special  leave petition. The claim of the Bank in that case was rejected on the peculiar facts found by this Court.      Referring to  the State  Bank’s case  (supra) in  Delhi Cloth &  General Mills Co. v. Ludh Budh Singh(l), this Court observed that-           "the grievance of the management before this Court      that the Tribunal should have given such an opportunity      Suo moto  was not accepted in the circumstances of that      case". There was a further observation in the Delhi Cloth & General Mills’ case (supra) to the following effect:           "It may  be pointed  out that the Delhi and Madhya      Pradesh High Courts had held that it is the duty of the      Tribunal  to   decide,  in   the  first  instance,  the      propriety  of   the  domestic   enquiry  held   by  the      management and  if it  records, a  finding against  the      management, it  should suo  moto provide an opportunity      to the  management to adduce additional evidence though      the management  had made no such request. This view was      held to  be erroneous  by this  Court, in State Bank of      India v. R. K. Jain & others" (supra).      (1) [1972] 3 S. C. R. 29,54-56 10-839Sup. CI/75 366      We may  now refer  to the propositions (4), (5) and (6) in the A Delhi Cloth and General Mills’ case (supra):           (4) "When  a domestic enquiry has been held by the      management and the management relies on the same, it is      open to  the latter  to request the Tribunal to try the      validity of  r the  domestic enquiry  as a  preliminary      issue  and  also  ask  for  an  opportunity  to  adduce      evidence before  the Tribunal,  if the  finding on  the      preliminary issue  is against  the management.  However

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    elaborate and  cumbersome the  procedure may  be, under      such circumstances, it is open to the Tribunal to deal,      in the  first instance,  as  a  preliminary  issue  the      validity of  the s  domestic enquiry. If its finding on      the preliminary  issue is  in favour of the management,      then no  additional  evidence  need  be  cited  by  the      management But, if the finding on the preliminary issue      is against  the management,  the Tribunal  will have to      give the  employer an  opportunity to  cite  additional      evidence and  also give  a similar  opportunity to  the      employee to  lead evidence  contra, as  the request  to      adduce evidence  had been made by the management to the      Tribunal during  the  course  of  the  proceedings  and      before the trial has come to an end ...."           (5) "The  management has got a right to attempt to      sustain its  order  by  adducing  independent  evidence      before the  Tribunal. But  the management  should avail      itself of  the .  said opportunity by making a suitable      request to  the Tribunal  before  the  proceedings  are      closed. If  no such opportunity has been availed of, or      asked for by the management, before the proceedings are      closed, the  employer can  make no  grievance that  the      Tribunal did  not  provide  such  an  opportunity.  The      Tribunal  will   have  before   it  only   the  enquiry      proceedings  and   it  has   to  decide   whether   the      proceedings have  been held  properly and  the findings      recorded therein are also proper".           (6) "If  the employer  relies only on the domestic      enquiry and  does not  simultaneously  lead  additional      evidence or  ask for  an opportunity during pendency of      the proceedings  to adduce  such evidence,  the duty of      the Tribunal  is only  to consider  the validity of the      domestic  enquiry  as  well  as  the  finding  recorded      therein and  decide the matter. If the Tribunal decodes      that the  domestic enquiry  has not been held properly,      it is  not its function to invite suo moto the employer      to adduce  evidence before  it to  justify  the  action      taken by it".      In the  Delhi Cloth  and General  Mills’  case  (supra) dealing with  the case  of the  management’s application  to adduce evidence  after close  of arguments,  although on the same day  after the  Court  reserved  judgment,  this  Court observed as follows:-                "The appellant did not ask for an opportunity      to adduce evidence when the proceeding were pending nor      did it  avail itself of the right given to it in law to      adduce evidence  before he Tribunal during the pendency      of the proceedings". 367      In Workmen of Messrs Firestone Tyre & Rubber Company of India (P) Ltd. v. Management & Others, (1) this Court stated the law laid down by this Court as on December 15, 1971. For our  purpose   we  will  extract  from  that  decision  only propositions 4, 6, 7 and 8:           (4) "Even  if no  enquiry  has  been  held  by  an      employer or  if the  enquiry held by him is found to be      defective, the,  Tribunal in  order to  satisfy  itself      about the  legality and  validity of  the order, has to      give an  opportunity to  the employer  and employee  to      adduce evidence  before it.  It is open to the employer      to adduce  evidence for  the first  time justifying his      action".           (6) "The  Tribunal gets  jurisdiction to  consider      the evidence  placed before  it for  the first  time in      justification of  the action  taken only, if no enquiry

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    has been  held or  after the  enquiry conducted  by  an      employer is found to be defective".           (7)  "It   has  never  been  recognised  that  the      Tribunal should  straightway,  without  anything  more,      direct  reinstatement  of  a  dismissed  or  discharged      employee, once it is found that no domestic enquiry has      been  held   or  the   said  enquiry  is  found  to  be      defective". .           (8) "An  employer, who  wants to  avail himself of      the opportunity of adducing evidence for the first time      before the  Tribunal to  justify his action, should ask      for it at the appropriate stage. If such an opportunity      is asked  for, the Tribunal has no power to refuse. The      giving of  an opportunity  to  an  employer  to  adduce      evidence for  the first  time before the Tribunal is in      the interest  of both  the management  and the employee      and to enable the Tribunal itself to be satisfied about      the alleged misconduct".      We are  particularly concerned with proposition ( 8 ) . What is  the appropriate  stage was specifically adverted to in the  Delhi Cloth  & General  Mills’ case (supra) which we are  now   required  to   seriously  consider  whether  this conclusion   is    correct   and    ensures    justice    to all concerned in an industrial adjudicating.      Propositions (4),  (6) and  (7) set out above are well- recognised. It  is, however, fair and in accordance with the principles of  natural  justice  for  the  labour  court  to withhold its  decision on  a  jurisdictional  point  at  the appropriate stage  and visit  a party with evil consequences of a  default on its part in not asking the court to give an opportunity   to   adduce   additional   evidence   at   the commencement of  the proceedings  or at any rate, in advance of the  pronouncement of  the order  in that behalf ? Tn our considered opinion it will be most unnatural and unpractical to expect  a party  to take a definite stand when a decision of a  jurisdictional fact  has first  to be  reached by  the labour court  prior embarking  upon an enquiry to decide the dispute on  its merits. The reference involves determination of the larger issue of discharge or      (1) [1973] 3 S. C. R. 587, 605-607. 368      dismissal and  not merely  whether a  correct procedure had been followed by the management before passing the order of dismissal. Besides, even if the order of dismissal is set aside on  the ground  of defect of enquiry. a second enquiry after reinstatement  is not ruled out nor in all probability a second  reference. Where  will this  lead  to  ?  This  is neither going  to achieve  the paramount  object of  the Act namely industrial  peace, since  the award in that case will not lead  to a settlement of the dispute. The dispute, being eclipsed, pro  tempore, as  a result of such an award, will. be revived  and industrial  peace will  again  be  ruptured. Again  another   object  of   expeditious  disposal   of  an industrial dispute (sec section 15) will be clearly defeated resulting in  duplication of  proceedings. This position has to be  avoided in  the interest  of labour as well as of the employer and  in furtherance  of the ultimate aim of the Act to foster industrial peace.      We are,  therefore, clearly of opinion that when a case of dismissal  or discharge  of an  employee is  referred for industrial adjudication the labour court should first decide as a  preliminary issue  whether the  domestic  enquiry  has violated the principles of natural justice. When there is no domestic enquiry  or defective  enquiry is  admitted by  the employer, there  will be  no difficulty. But when the matter

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is in  controversy between the parties that question must be decided as  a preliminary  issue.  On  that  decision  being pronounced it  will be  for the management to decide whether it will  adduce any  evidence before the labour court. If it chooses  not   to  adduce  any  evidence,  it  will  not  be thereafter  permissible  in  any  proceeding  to  raise  the issue.. We  should also  make it clear that there will be no justification for  any party to stall the final adjudication of the  dispute by  the  labour  court  by  questioning  its decision with  regard to  the  preliminary  issue  when  the matter, if  worthy, can  be agitated  even after  the  final award. It  will be  also legitimate  for the  High Court  to refuse to  intervene at  this stage.  We  are  making  these observations in  our anxiety that there is no undue delay in industrial adjudication.      In the  present case,  however, besides  the long delay that has  already taken  place, since  the law  laid down by this Court  was not  very clear  at the time of the award in casting  a   duty  upon  the  labour  court  to  decide  the preliminary issue  and also in view of the submission of the appellant that  it is  prepared to  pay the entire salary of the workman  upto-date it  will meet the interest of justice if the  order  of  reinstatement  is  converted  to  one  of compensation in  terms of his entire salary from the date of dismissal to  the date  of this decision except for what has already been paid to him instead of remitting the. matter to the labour  court for disposal in the light of this judgment by setting aside the award.      In the  result the  appeal is  dismissed with the above modification of  the relief There will be, however, no order as to cost. P.B.R.                                     Appeal dismissed. 369