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PETITIONER: RUSTOM & HORNSBY (1) LTD.

       Vs.

RESPONDENT: T. B. KADAM

DATE OF JUDGMENT24/07/1975

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

CITATION:  1975 AIR 2025            1976 SCR  (1) 119  1976 SCC  (3)  71  CITATOR INFO :  R          1978 SC 978  (1)  RF         1986 SC 842  (8,12)

ACT:      Industrial Disputes  Act (14  of 1947), S. 2A Scope of- Domestic Enquiry  Jurisdiction of  Labour Court  in relation to.

HEADNOTE:      Section  2A   of  he  Industrial  Disputes  Act,  1947, provides that  where  any  employer  discharges,  dismisses, retrenches  or   otherwise  terminates  the  service  of  an individual workman,  any dispute  or difference between that workman and  his employer  connected with  or arising out of such discharges  etc., shall  be deemed  to be an industrial dispute notwithstanding that no other workman nor union is a party to the dispute.      The respondent  was a  watchman in  the factory  of the appellant. He  was dismissed  from service  on Jan. 7, 1964, after holding  a    domestic  enquiry  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 reinstated, the Labour Court, held that:      (1) The charge against the respondent was vague;      (2) The  suspected dishonesty  of the  respondent    in connection with  the appellant’s property did not constitute any misconduct  either under  Standing orders of the Company or otherwise; and      (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  superiors and  the Enquiry officer  took no  steps for  obtaining the necessary permission. The  Labour  court  summoned  and  examined  the police constable and took his evidence into account.      In appeal to this Court, it was contended:      (1) That s. 2A came into force only on December 1, 1965 and as  the  dismissal  took  place  before  that  date  the reference of the dispute was bad; and      (2) That  the finding  of the Enquiry officer was based

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upon a  fair enquiry  and the  Labour Court  should not have interfered with the finding.      Allowing  the  appeal  to  this  Court  on  the  second contention, ^      HELD: (1) The est for the validity of a reference under s. 10 is whether there was in existence a dispute on the day the reference was made. [124B C]      Juhiruddin v.  Model Mills,  Nagpur [1966] 1 L.L.J 430, applied.      National Productivity  Council v.  S. N. Kaul [1969] II L.L.J 186  and Shree  Gopal Paper  Mills Ltd.  v.  State  of Haryana, [1968] 1 Lab. I.C. 1259, approved.      P. Janardhana Shetty v. Union of India [1970] II L.L.J. 738, over-ruled.      (a) Section  2A provides  in effect that what would not be an  industrial  dispute  as  defined  in  s.  2  (k),  as interpreted  by   this  Court,  would  b  deemed  to  be  an industrial dispute  in certain  circumstances. There  is  no question of  giving retrospective  effect to that section in making the  reference.  When  the  section  uses  the  words "discharges dismisses,  retrenches etc."  it does  not  deal with the question as to when that was done but merely refers to a situation or state of affairs. [123B-D] 120      (b) It  is no  objection to  this to  say that. such an interpretation would  lead  to an 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 labour union or a group of workmen had sponsored the case  of the respondent, such a reference after lapse of some time  would have been valid. All that s. 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 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.                                                  [123D-124B]      (2) The charge is not vague. [121H]      (3) The facts set out show that the charge is one of an attempt to steal the appellant’s property and if proved, the respondent, being  a watchman,  deserves  dismissal.  [121H- 122A]      (4) 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. Findings properly recorded at an enquiry fairly conducted are binding on parties unless 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  summoned. The enquiry was fair and the  Labour Court had 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. [124D-15C]      D.C.M. v. Ludh Budh Singh [1972] 3 S.C.R 29. Workmen v. Firestone Tyre & Rubber Co. [1973] 3 S.C.R. 587 and Tata Oil Co. Ltd. v. Its Workmen [1964] 7 S.C.R. 555, referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1142 of 1969.      Appeal by  special leave  from the  award dated the 8th

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November 1968  of the Labour Court, Poona in Reference (IDA) No. 9 of 1967.      G .  B. Pai,  O. C.  Mathur, D.  C. Shroff  and  O.  N. Mishra, for the appellant.      S.  C.   Manchanda  and  A.  G.  Ratnaparkhi,  for  the respondents.      The Judgment of the Court was delivered by      ALAGIRISWAMI, 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.      The respondent  was a  watchman in  the factory  of the appellant at  Chinchwad, 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  he 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 1st  December 1965  and on  23rd June  1967 a reference  was   made  by   the  Government  of  Maharashtra regarding the  dismissal of  the respondent  to  the  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. 121      There were  four charges  framed against the respondent in the domes tic enquiry. They were:           (1)  Suspected dishonesty  in connection  with the                company’s property.           (2)  Gross  negligence   in  performance   of  his                duties.           (3)  Disobedience of  instructions  given  by  the                superiors.           (4)  Commission   of    an   act   subversive   of                discipline. For the  purposes of  this appeal  it is  not  necessary  to consider other charges than charge No. 1. The chargesheet 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 k chargesheet are as follows:           "It is reported that while you were on duty in the      and 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      Tube  and   to  have  kept    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 Tube  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   brought back the tube and left it in      the guard  room. The Company had, however, not received      any report in the matter from you.           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 incident  and about  your failure  to      report immediately  to your  superiors you  stated that      you will  submit  your  report  after  consulting  your      pleader.

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         The above  mentioned facts  and particularly  your      unwillingness to submit written report when called upon      to do  so give  rise to doubts about your integrity and      faithfulness  both   in  regard  to  the  security  and      property belonging  to the  Company for  which you  are      responsible while  on duty as a person in charge of the      security of the Company."      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  there fore  no  action could be  taken against  the respondent on the basis of that charge, and  also that the chargesheet was vague. We can see no vagueness  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 122 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.      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 respondent had produced a police constable as  his witness  at the  time of  enquiry and this witness expressed  his inability  to give  evidence with out 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 of  the  Inquiry officer to  pursue the  matter further  is indicative of 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 account held as follows .           "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 of the fact that the evidence in the      inquiry is  too conflicting  and  vague  the  concerned      authorities have  without affording  proper opportunity      to defend  found the second party guilty of the charges      levelled against  him. On  a  careful  reading  of  the      findings of  the Inquiry officer, the Works Manager and      the Appellate Authority 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

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    and that  his dismissal is by way of victimization. For      all the  aforesaid reasons  therefore the  dismissal of      the second  party  must  be  held  to  be  illegal  and      improper There  is nothing adverse the past against him      and  he   is  therefore   entitled  to  the  relief  of      reinstatement with back wages."      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 123 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  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  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  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 interpretation would  lead to a situation where the disputes would be reopened 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 after the  dispute itself  has  arisen.  The  only  relevant factor for consideration 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  workmen. The  change made by section 2A is 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  union or a group of workmen. What a  labour union or a group 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

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dispute was  apprehend. even though the facts giving rise to that dispute might have arisen before the reference was made the reference  would still  be valid.  It is  to be borne in mind that every reference would be made only some- 124 time after  the dispute  has arisen.  In Birla 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 Birla Brothers case (supra) was approved by this Court in  its decision  in  Jahiruddin  v.  Model  Mills  13 Nagpur(2). 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 is the view taken by  the Delhi  High  Court  in  National  Productivity Council v.  S. N. Kaul(3) by the Punjab & Haryana High Court in Shree  Gopal Mills  Ltd. v.  The State of Haryana(4). The view of  the High Court of Mysore in P. Janardhana Shetty v. Union of India(5) to the contrary is not correct      Coming now  to  the  other  points  in  the  case:  the decisions of  this  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  opportunity 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  summoning  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. Ludh Budh Singh(6) 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.(7) also sets out the principles that  emerge from  the earlier decisions. In Tata Oil Mills  Co. Ltd.  v. Its  Workmen(8) 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  Prove 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 ample opportunity to lead his evidence  and the  enquiry had  been fair.  It was  also pointed out that merely because the witnesses did not appear 125 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

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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  were not based on any evidence. We are  not able to agree with the Labour Court in this case that  the  findings  of  the  domestic  enquiry  arc  either perverse or not based on any evidence.      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 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.      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 re tired on that date. 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 has been made upto-date. Even if the respondent had succeeded in this appeal he would not have been 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 the 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. V.P.S.                                       Appeal allowed. 126