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PETITIONER: ASSOCIATED CEMENT CO.  LTD.

       Vs.

RESPONDENT: THE WORKMEN AND ANR.

DATE OF JUDGMENT: 08/05/1963

BENCH:

ACT: Industrial Dispute-Diemissal of workmen - Enquiry  conducted by eye witnesses--Property-If violates principle of  natural justice-Proper   procedure  in  domestic   enquiry-Rule   of evidence- Industrial Disputes Act, 1947 (14 of 1947). 10 (1) D.

HEADNOTE: An  industrial dispute arose in regard to the  dismissal  of certain  workmen.  It was referred for adjudication  to  the industrial  Tribunal.  There were three domestic  enquiries. One of them was conducted by officers, who had themselves  653 witnessed  the  alleged  misconduct.   The  enquiries   were challenged on the ground that they were held in violation of the  principle of natural justice and the procedure  adopted in  conducting them was not fair.  The  Industrial  Tribunal came to the conclusion that the enquiries were not conducted in accordance with the principle of natural justice. Held (i) that the enquiry conducted by the eye witnesses was not in accordance with the principles of natural justice  as the  enquiry officers had themselves witnessed  the  alleged misconduct  of  the workmen.  Domestic enquiries  should  be conducted  by  such  officers of the employer  who  are  not likely  to import their personal knowledge into the  enquiry proceedings. (ii) That in domestic enquiries, the employer should firstly lead  evidence  against  the workman charged,  give  him  an opportunity  to  cross-examine the witnesses  and  then  the workman  should  be asked to give an explanation  if  he  so desires in regard to the evidence led against him. (iii)     That  the  rule  that  a  witness  should  not  be disbelieved  on the ground of an inconsistency  between  his statement  and  that contained in a document  unless  he  is given  a  chance  of explaining  that  document,  cannot  be treated as a mere technical rule of evidence.  The principle on which that rule is based is one of natural justice. (iv) That  the  evidence  given in an  enquiry  against  one workman cannot be accepted as evidence in an enquiry against another for the reason that the evidence given in the former enquiry  was  not recorded in the presence  of  the  workman concerned with the second enquiry and lie had no opportunity to test that evidence by cross-examination.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 636 of 1962. Appeal by special leave from the award dated July 13,  1960,

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of the Industrial Tribunal, Punjab, Patiala in Reference No. 16 of 1957. R  J.  Kolah, J. B.  Dadachanji, O. C. Mathur  and  Ravinder Narain, for the appellant. 654 K.   T.  Sule,  Anand  Swaroop  and  Janardan  Sharma,   for respondent No. 1. 1963.  May S. The judgment of the Court was delivered by GAJENDRAGADKAR  J. -This appeal arises out of an  industrial dispute   between  the  appellant,  the  Associated   Cement Companies  Ltd.,  and the respondents, their  workmen.   The dispute  was  in  regard to the dismissal  of  five  workmen employed  by  the appellant at its Bhupendra  Cement  Works, Surajpur.   The  said  workmen are :  (1)  Mehnga  Ram,  Bar Bender,  (2)  Janak Raj Soni, Store-Clerk, (3)  Vishwa  Nath Bali, Painter, (4) Daulat Singh, Motor Driver and (5)  Malak Ram  Khanna,  Turner.  The respondents  contended  that  the dismissal  of  the said workmen was  unjustified,  and  they demanded   that  the  said  dismissed  workmen   should   be reinstated  and  their  wages for  the  period  of  enforced unemployment  should  be paid to them.   The  Government  of Punjab  referred  this  dispute  for  adjudication  to   the Industrial  Tribunal Punjab, Patiala, under section  10  (1) (d) of the Industrial Disputes Act (No. 14 of 1947). It  appears that on May 1, 1952, the appellant’s  management had  arranged a cinema show in the Club grounds at  Surajpur for the entertainment of its workmen.  At about 8 P. M. when the  film was being exhibited, confusion was created in  the Hall by some employees and shouts were raised.  Amongst  the workmen who raised these shouts was Malak Ram.  Owing to the dowdyism thus created by the workmen, the cinema show had to be  cancelled.  It was in respect of the misconduct  alleged to  have been committed by Malak Ram on May 1, 1952  that  a charge-sheet  was given to him and an enquiry  held  against him. On  August 12, 1952, at 7 A. M., Mehnga Ram, janak  Raj  and Daulat Singh, it was  655 alleged,  had stopped workmen from getting into the  factory and starting their work in time after they had punched their cards  and taken their tokens.  The said three  workmen  are also  alleged to have shouted slogans causing  cessation  of work  in the factory for about half an hour.  In respect  of this  alleged misconduct of the said three workmen,  charges were supplied to them and an enquiry was held against them. On   October 14, 1952, at         4 P. M., Mehnga Ram  and Janak Raj who were concerned with the incident of August 12, are  alleged to have collected some workers in front of  the main office building on the way to the grain-shop and in the meeting  so organised they instigated their coworkers to  go on  strike and to resort to violence.  In consequence,  some of  the officers of the appellant were abused and the  noise created  at  the meeting disturbed the  office  work.   This incident  also gave rise to charge-sheets against  the  said two workmen and a subsequent enquiry. On October 20,1952, at about 7 A. M., Mehnga Ram, Janak Raj, Vishwa  Nath  and Daulat Singh are alleged to  have  stopped workmen at the Factory Gate from entering the factory and to have prevented them from going to their duties for sometime. At  this  time, the said workmen are also  alleged  to  have indulged  in shouting hostile slogans.  This  incident  gave rise to charge-sheets and an enquiry. The record shows that three different Boards of Enquiry were constituted to hold enquiries into the several charge-sheets served  on  the different workmen in  question.   The  first

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enquiry  was  about  the incident of  1.5.1952  and  it  was confined  to  Malak Ram.  The second enquiry was  about  the incident  of  August 12,1952, and it concerned  Mehnga  Ram, Janak Raj and Daulat Singh; and the last enquiry was in 656 regard to the incidents which took place on October 14, and, October 20, 1952-in regard to the first of these Mehnga  Ram and Janak Raj were involved and in regard to the second  one Mehnga  Ram  Janak Raj, Vishwa Nath and  Daulat  Singh  were concerned.   It is thus clear that Malak Ram  was  concerned with  the incident of May 1, 1952 and Vishwa Nath  with  the incident  of October 20, 1952.  As a result of the  findings recorded at the said enquiries, the appellant dismissed  all the five workmen concerned. Before  the  Industrial  Tribunal,  it  was  urged  by   the respondents  that none of the three enquiries was  conducted according to the principles of natural justice, and so,  the dismissals of the 5 workmen which were based on the findings recorded at the said enquiries could not be said to be legal or  valid.   The appellant did not attempt  to  justify  the dismissals  by leading evidence before the Tribunal, but  it contented itself with producing the evidence of the  enquiry proceedings and urged that the enquiries were properly  held and  that the Tribunal had no jurisdiction to sit in  appeal over  the  findings recorded at the said enquiries  and  the orders  of  dismissal  passed in  consequence  of  the  said findings.   The  Tribunal has upheld the  respondents’  case that all the three enquiries were not conducted according to the  principles of natural justice, and so, it has  up  held that the dismissals of the five workmen were unjustified and accordingly, an award has been made directing the  appellant to  reinstate the five workmen with continuity  of  service, coupled  with the direction that the said workmen should  be paid  their full wages from the date of their  dismissal  to the  date of their restatement as compensation for  wrongful dismissal.  It is against this award that the appellant  has come to this Court by special leave. In  respect  of  Mehnga Ram, Janak  Raj  and  Daulat  Singh, parties have agreed to take on order  657 by  consent.   It  is agreed that the award  passed  by  the Tribunal  in  respect of these three workmen should  be  set aside,  and  the order of dismissal against them  should  be treated as an order of discharge simpliciter.  Mr. Kolah for the  appellant  has agreed to pay to each one  of  the  said three  workmen Ks. 3500/- provided the amounts paid to  them in  pursuance  of  the order passed by  this  Court  in  the present appeal while granting stay are deducted.  Mr.  Kolah has  also agreed that the amount of gratuity  and  provident fund to which the said workmen may be entitled would be paid to them as well.  Mr. Sule for the respondents has agreed to these terms.  In view of this agreement between the parties, we  direct that the award in regard to these  three  workmen should  be  set aside and an order passed in terms  of  this agreement.   That leaves the question of two workmen  to  be considered; they are Malak Ram and Vishwa Nath. In the case of Malak Ram, charge-sheet was served on him  on May  20, 1952, in which he was told that he was found to  be one  of  the persons who had instigated, and who  also  took active  part in, rowdyism and hooliganism during the  cinema show on May 1, 1952, and so, he was asked to see the Manager of the Bhupendra Cement Works on May 22, at 2.30 P. M.  with his written explanation as to why disciplinary action should not  be taken against him.  Malak Ram did not appear  before the Manager on May 22, as required by the said charge-sheet.

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That is why a further notice was given to him on June4, 1952 calling  upon  him  to show cause  why  disciplinary  action should  not be taken against him, and it was added that  his behaviour  amounted to misconduct under Standing  Order  No. 16,  sub-clauge  (1).   There  upon,  Malak  Ram  gave   his explanation on June 5, 1952.  In this explanation, he denied that,  he  had taken part in hooliganism as alleged  in  the charge-sheet and urged 658 that  he had in fact tried his best to control  the  distur- bance  at the cinema show.  On the same day, another  notice was served on Malak Ram in which the Manager stated "We  are not  prepared to accept all that you have stated by  way  of explanation  as it is not borne out by all that we  actually saw  and  also  all  that  was  seen  by  other  independent witnesses."  Malak Ram was accordingly required to meet  the Manager at 10.  A. M. on June 11, 1952 to enable him to hold the necessary enquiry. On  June, 11, 1952 an enquiry was held by the  Manager,  the assistant  Manager  and the Chief  Engineer.   This  enquiry began  with  the examination of Malak Ram himself.   He  was elaborately  questioned about the allegations  made  against him and after his examination was over, four other witnesses were  examined against him.  When these four witnesses  gave evidence,  Malak Ram was asked whether the wanted to  cross- examine  any of them.  He told the enquiry officers that  he did not want to cross-examine them.  Then a 5th witness gave evidence  and that closed the enquiry.  As soon as  the  5th witness  gave evidence and Malak Ram protested that  he  had done  nothing wrong and urged that the evidence against  him was  false, the Manager observed that the  evidence  against him  was overwhelming and the three officers made a  finding that "from the enquiry we are satisfied that you were one of the  ring  leaders who instigated and took  active  part  in hooliganism and rowdyism during the cinema show on the night of 1st May." After this finding was recorded, the Manager served an order on  Malak Ram on June, 12 1952.  By this letter,  Malak  Ram was suspended indefinitely from June 13, 1952 pending final action.  While suspending him indefinitely, the Manager told Malak  Ram  in  this  letter that  his  explanation  was  in variance with the evidence  659 against him and also the evidence that the Assistant Manager Mr.  Mohan had been maltreated and against what the  enquiry officers had actually seen.  This Order was, in due  course, followed by the final order of dismissal. On  these facts, the question which arises for our  decision is  whether the Tribunal was justified in holding  that  the enquiry was not conducted in accordance with the  principles of natural justice.  It is true that domestic enquiries need not  be conducted in accordance with the technical  require- ments of criminal trials, but they must be fairly  conducted and in holding them, considerations of fair-play and natural justice must govern the conduct of the enquiry officer.   In the present cage, the first serious infirmity from which the enquiry  suffers  proceeds  from the  fact  that  the  three enquiry officers claimed that they themselves had  witnessed the  alleged  misconduct of Malak Ram.  Mr.  Kolah  contends that  if  the Manager and the other officers saw  Malak  Ram committing  the  act of misconduct, that  itself  would  not disqualify  them from holding the domestic enquiry.  We  are not prepared to accept this argument.  If an officer himself sees  the misconduct of a workman, it is desirable that  the enquiry  should be left to be held by some other person  who

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does not claim to be an eyewitness of the impugned incident. As we have repeatedly emphasised, domestic enquiries must be conducted  honestly  and bonafide with a view  to  determine whether  the charge framed against a particular employee  is proved or not, and so, care must be taken to see that  these enquiries  do not become empty formalities.  If  an  officer claims  that  he  bad himself seen  the  misconduct  alleged against  an employee, in fairness steps should be  taken  to see that the task of holding an enquiry is assigned to  some other  officer.   How the knowledge claimed by  the  enquiry officer can vitiate the entire proceedings 660 of the enquiry is illustrated by the present enquiry itself, We have already noticed that when’ the Manager rejected  the written explanation given by Malak Ram, he told him in terms that the said explanation could not be accepted, because  it was contrary to what the Manager, the Assistant Manager  and the  Chief Engineer had themselves seen.  He was  also  told that  his  explanation  was  inconsistent  with  what  other independent  witnesses had told the Manager.  It  is  hardly necessary to emphasise that these statements betray complete ignorance  as  to  the requirements  of  a  proper  domestic enquiry.   In  deciding  the  question  as  to  whether  the explanation given by Malak Ram was true or not, the  enquiry officer should not have imported his personal knowledge  and the  knowledge  of his colleagues and should not  have  also relied on the reports received from other witnesses.  We are inclined  to  think that the injustice which  is  likely  to result  if a domestic enquiry is held by an officer who  has himself  witnessed the alleged incident, is very  eloquently illustrated  by  the statements contained in  the  Manager’s letter  to Malak Ram.  That is why we think it is  desirable that  the  conduct of domestic enquiries should be  left  to such  officers of the employer who are not likely to  import their personal knowledge into the proceedings which they are holding as enquiry officers. The  other infirmity in the present proceedings  flows  from the  fact  that  the  enquiry has  commenced  with  a  close examination of Malak Ram himself.  Some of the questions put to   Malak  Ram  clearly  sound  as  questions   in   cross- examination.  It is necessary to emphasise that in  domestic enquiries,  the  employer should take steps  first  to  lead evidence against the workman charged, give an opportunity to the  workman  to cross-examine the said  evidence  and  then should  the  workman be asked whether he wants to  give  any explanation about the evidence  661 led  against  him.  It seems to us that it is  not  fair  in domestic enquiries against industrial employees that at  the very  commencement  of the enquiry, the employee  should  be closely cross-examined even before any other evidence is led against  him.   In dealing with domestic enquiries  held  in such industrial matters, we cannot overlook the fact that in a  large  majority  of cases, employees  are  likely  to  be ignorant, and so, it is necessary not to expose them to  the risk  of  cross-examination  in the manner  adopted  in  the present  enquiry  proceedings.  Therefore we  are  satisfied that Mr. Sule is right in contending that the course adopted in  the present enquiry proceedings by which Malak  Ram  was elaborately cross-examined at the outset constitutes another infirmity in this enquiry. It appears that before the enquiry was actually held on June 11,  1952,  notice was not given to Malak  Ram  telling  him about the specific date of the enquiry.      It may be  that failure to intimate to the workman concerned about the  date

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of the enquiry may, by   itself, not constitute an infirmity in  the enquiry, but, on the other hand, it is necessary  to bear in mind that it would be fair if the workman is told as to  when the enquiry is going to be held so that he  has  an opportunity  to prepare himself to make his defence  at  the said enquiry and to collect such evidence as he may wish  to lead in support of his defence.  On the whole, it would  not be  right  that  the workman should be  called  on  any  day without  previous intimation and the enquiry   should  begin straightaway.  Such a course should ordinarily be avoided in holding domestic enquiries in industrial matters. There  is yet another infirmity in this enquiry and that  is furnished by the communication sent by the Manager to  Malak Ram  on  June 12, 1952.  In this letter,  the  Manager  told Malak Ram that his 662 version  was inconsistent with the evidence that the  Asstt. Manager  Mr.  Mohan had been maltreated and  with  what  the enquiry officers had themselves seen.  Mr. Mohan was one  of the enquiry officers, so that it is clear that what  weighed with  the enquiry officers was the fact that Mr.  Mohan  had been maltreated by Malak Ram and that Malak Ram’s misconduct had  been  seen by the enquiry officers themselves.   It  is thus obvious that in coming to the conclusion that Malak Ram was  guilty  of the misconduct, the  enquiry  officers  have plainly  relied  upon  their  own  knowledge,  and  that  is reasonably calculated to create an impression in the mind of Malak  Ram that the present enquiry was nothing more than  a sham  or  an empty formality.  Therefore, we  are  satisfied that  the view taken by the Tribunal that the  enquiry  held against  Malak Ram was not conducted in accordance with  the principles   of  natural  justice  cannot  be   successfully challenged  by the appellant.  As we have already  observed, the  appellant did not lead evidence before the Tribunal  to justify  the dismissal on the merits, and so,  the  Tribunal had  no alternative but to hold that Malak  Ram’s  dismissal was  unjustified,  and that inevitably led to the  order  of reinstatement and payment of wages during the period of  the employee’s enforced unemployment. That  takes us to the case of  Vishwa Nath. A  charge-sheet) was served on Vishwa Nath on October 21, 1952. This  charge- sheet  alleged that on October 20, 1952, at about 7  A.  M., Vishwa  Nath had stopped workmen entering the Works  at  the Factory  Gate  and.  prevented  them  from  going  on  their respective  duties for some time.  He was also charged  with having indulged in disorderly behaviour by shouting  hostile slogans.   The allegation was that this conduct amounted  to misconduct under Standing Order No. 16, sub-clause (ix).  On receiving  this  charge-sheet, Vishwa Nath gave  his  expla- nation on October 25, 1952, and stated that on  663 October 20, 1952, he was not present at 7 A. M. and had  not shouted  any hostile slogans and had not  prevented  anybody from  going to duty.  Thereupon, an enquiry was held on  the same day.  This enquiry was conducted by the Manager and the Asstt.   Manager.   At this enquiry also,  Vishwa  Nath  was first  examined  and then five witnesses  gave  evidence  in support  of  the charge.  After the enquiry  was  over,  the enquiry   officers  recorded  their  conclusions  that   the misconduct alleged against Vishwa Nath under Standing  Order No. 16 (ix) was proved. It appears that Vishwa Nath later moved the enquiry officers for leave to cite witnesses in his favour and permission was given  to  him  to examine  those  witnesses.   Accordingly, Vishwa Nath examined four witnesses and after this  evidence

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was  recorded, the enquiry officers noted their  conclusions on  November  25, 1952.  In recording these  conclusion  the enquiry  officers  have  given reasons  why  they  were  not prepared  to  believe the evidence given  by  the  witnesses examined  by Vishwa Nath.  The first reason is that  in  the original  list  of 43 witnesses cited by Vishwa  Nath,  some were  absent from duty on October 20, 1952 and  the  enquiry officers thought that clearly showed that the person charge- sheeted  manouvered to produce false witnesses.   The  other reason given for disbelieving the said evidence was that out of  the  four witnesses examined by Vishwa  Nath,  Bakhtawar Singh was present on duty on October 20, at 3 P.M.,  whereas he  mentioned  in cross-examination that he came to  duty  - between  6.45 A.M. and 7.0 A.M. There is yet another  reason which was given for disbelieving the said, evidence and this reason was, that whereas Vishwa Nath’s witnesses denied that there  was  any gathering at 7 A.M. on October  20,  at  the Factory Gate, the witnesses who were produced in defence  by Daulat  Singh  against whom a separate  enquiry  was  held,’ clearly admitted that there was a gathering at the 664 ate and that Daulat Singh did address the gatheing. It  would be noticed that each one of the three sasons   set out  in  the report in support of the  conclusion  that  the version  of Vishwa Nath’s witnesses could not  be  believed, introduces  a  serious  infirmity in  the  enquiry  and  the report.   The first reason refers to the fact that  some  of the witnesses cited by Visshwa Nath were absent from duty on October 20, 1952.  Now, it is plain that this fact had  been ascertained by the officers from the attendance register and Vishwa  Nath  was  not  given an  opportunity  to  give  his explanation  and a chance to produce the said  witnesses  to say  what they had to say on the point.  Besides, it is  not unlikely  that even if the witnesses may not  have  attended duty, they may have been  able  to depose to  what  happened near the  gate on October 20, at 7 A.M. Therefore, the first reaso n on which the enquiry officers relied is based on information receivey  by  them from register without  notice  to  Vishwa Nath. The  second reason is also open to serious challenge.   When Bakhtawar  Singh was examined, he was not asked why  he  was shown as on duty at 3 P. M. when in fact he claimed that  he came  to  duty between 6.45 A. M. and 7 A.M. The  rule  that witness  should  not  be disbelieved on  the  ground  of  an inconsistency  between  his statement and  another  document unless  he is given a chance to explain the  said  document, cannot  be  treated -as a technical rule  of  evidence,  The principle on which the said rule is based is one of  natural justice,  and so, it seems, that in  disbelieving  Bakhtawar Singh on a ground not put to him, the enquiry officers acted unfairly against Vishwa Nath. The third reason given in the report for disbelieving Vishwa Nath’s  witnesses is based on the evidence recorded  by  the enquiry officers in the  665 enquiry held against Daulat Singh.  If one enquiry had  been held  against  Daulat Singh and Vishwa Nath, it  would  have been another matter; but if two separate enquiries were held against the two workmen, it would, we think, be very  unfair to  rely  upon the evidence in the  enquiry  against  Daulat Singh when the officers were dealing with the case of Vishwa Nath.  The evidence given in Daulat Singh’s enquiry was  not recorded  in Vishwa Nath’s presence and Vishwa Nath  had  no opportunity to test the said evidence by  cross-examination.

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Therefore,  it  is plain that the final  conclusion  of  the enquiry  officers is based on grounds which have  introduced an  element  of unfairness in the whole  enquiry.   We  are, therefore, satisfied that the Tribunal was right in  holding that the report made by the enquiry officers against  Vishwa Nath  cannot  be accepted as a report made after  holding  a proper enquiry in accordance with the principles of  natural justice.    That  being  our  view,  we  must  confirm   the orderpassed by the Tribunal in respect of Vishwa Nath. The  result  is, the award is set aside in  respect  of  the three  workmen,  Mehnga Ram, Janak Raj and Daulat  Singh  in terms  of compromise arrived at between the  parties  before the  Court, and the award made in respect of Malak  Ram  and Vishwa  Nath  is confirmed.  There would be no order  as  to costs. 666