16 August 1996
Supreme Court


Bench: KIRPAL B.N. (J)
Case number: C.A. No.-003969-003970 / 1990
Diary number: 76108 / 1990






DATE OF JUDGMENT:       16/08/1996


CITATION:  JT 1996 (7)   239        1996 SCALE  (6)6



JUDGMENT:                 THE 16TH DAY OF AUGUST, 1996 Present :           Hon’ble Mr. Justice J.S.Verma           Hon’ble Mr. Justice B.N.Kirpal R.F.Nariman, Sr.Adv.,  P.H.Parekh  and  Ms.  Sunita  Sharma, Advs. with him for the appellant. Dr. R.S.Kulkarni,  Sr.Adv., B.K.Pal  and Ms.  Meenakshi Vij. Advs. with him for the Respondents.                       J U D G M E N T The following Judgment of the Court was delivered : Pfizer Limited V. Mazdoor Congress and Ors.                       J U D G M E N T Kirpal, J.      These are  appeals by  special leave from the  judgment of the  Bombay High Court whereby the petition under Article 227 of  the constitution,  filed  by  respondents  2  and  3 herein, was  allowed and  the orders of the Labour Court and the   Industrial Court  which had  upheld the termination of their services was quashed with a direction to the appellant to give all consequential benefits to the said respondents.      The  appellant   is,  inter   alia,  engaged   in   the manufacture of pharmaceutical products. At the material time Waman S.  Surve and  R.B. Sail,  respondents 2  and 3,  were engaged   as   security   staff   (watchman   and   havaldar respectively) at  the factory  of the  appellant situated at Thane, Bombay.  It appears  that on  7th  August,  1975  one temporary workman named Parkar employed by the  appellant at its aforesaid factory was caught by the appellant’s security staff while  he was  trying to take away certain products of the  appellant.   Parkar  was  handed  over  to  the  police authorities and  during the  course of  investigation he  is stated to  have disclosed to the police that besides himself two other  workmen of  the appellant  employed in  watch and ward section,  namely,  respondents  2  and  3  herein  were



involved in  a conspiracy to commit theft of the products of the appellant.      On 8th  August 1975  the said  respondents 2 and 3 were arrested by the police. It is the case of the appellant that during  the     course   of  interrogation   both  the  said respondents confessed  that they  were involved in the theft of  the  appellant’s  products  and  their  statements  were recorded on  9th and 10th August, 1975 by the police  in the presence of  two panchas.  Based on the said information the police is stated to have raided the  houses of respondents 2 and  3   and  recovered  stolen  property  therefrom,  which consisted  of   medicines  manufactured   by  the  appellant company.      After  the   arrest  on  8th  August,  1975,  the  said respondents 2  and 3  were absent from duty. On 14th August, 1975 a letter was written by the appellant to respondent no. 2 herein  to the  effect that  he had  been absent from duty with effect  from 8th  August, 1975  without  intimation  or permission. It  was also  stated therein  that  the  company understood that  respondent No.  2 had  been arrested by the police in connection with the material which was stolen from the appellant’s  company. The  letter further   stated  that while the company did not wish to sit in judgment on whether respondent No. 2 was in fact involved in any criminal action or not, it was perturbed that a member of its watch and ward staff should even be suspected of involvement by police. The company further  stated that  it had lost confidence  in his suitability as a member of its watch and  ward staff and had come   to the  conclusion that it was not in the interest of the company  to continue  him in  service. Accordingly,  the company terminated  the services  of  respondent  No.  2  in accordance with  the  company’s certified standing order No. 25 (4).  A formal letter of termination was  also sent along with this  communication. An identical letter of termination was written  by the appellant to respondent No.3 except that the absence  of respondent  No. 3  from duty was with effect from 9th August, 1975.      After the  aforesaid recoveries  were made  the  police filed charge  sheets against  respondents  2  and  3  and  a criminal complaint  for offence punishable under Section 381 read and with Section 34 of the Indian Penal Code.      Respondents 2 and 3 filed identical complaints on  13th November, 1975  before the  Labour Court under Section 28 of the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practice Act, 1971 (hereinafter referred to as the ’said Act’) challenging their termination of services by alleging that  the appellant  herein  had  committed  unfair labour practice  under Item  1 (a) to (b) of  Schedule IV of the said  Act. the  appellant filed  its  written  statement stating the full facts and contended that it had not committed any unfair labour practice.      About one  year after  the   filing of  the complaints, respondents 2  and  3  filed    on  application  dated  19th October, 1976 for permission to amend the original complaint with a  view to  introduce an  allegation that they had been falsely implicated  in the  criminal case  by the  appellant company because  of union  rivalry. The  appellant  resisted this   application by  contending that  the allegations were totally misconceived  and a  new case  was sought to be made out. By  order dated  10th January,  1977 the  Labour  Court rejected the said application, inter alia, observing that if the amendments  were allowed then the  subject matter of the complaint  would   fall  within   the  jurisdiction  of  the Industrial Court  and not the Labour Court, against the said order of the Labour Court, refusing to allow the amendments,



a writ  petition was  filed by  the said  respondents in the Bombay High Court but  the same was withdrawn  on 4th April, 1978.      The Labour Court by an order dated 21st September, 1978 dismissed the  complaints filed  by  the  respondents  under Section 28  of the  said Act by holding that they had failed to make  out any  case of unfair labour practice. A revision petition was  filed  by  the  said  respondents  before  the Industrial Court  which was  allowed  on 21st July, 1979 and the applications filed by respondents 2 and 3 under  Section 28 of  the said  Act were  remanded to  the Labour Court for being decided  as per the directions given by the Industrial Court in its said order of 21st July, 1979. The Labour Court was specifically  directed to  consider the  allegations  of respondents 2  and 3  that they  were falsely  implicated in the criminal  case. The  Labour Court  was directed to allow the said  respondents to  lead evidence  in  order  to  show whether the appellant herein had committed any unfair labour practice as had been alleged.      Before the  order dated  21st July,  1979 was passed by the Industrial  Court. remanding  the  matter  back  to  the Labour Court,  the criminal trial of respondents 2 and 3 was completed and  by the order dated 29th July, 1978 respondent no.2 was  acquitted on  account of lack of adequate evidence but respondent  no.3  was  convicted.  Thereafter  the  said respondent  no.3   filed  an  appeal  before  the  Court  of Additional Sessions  Judge at  Thane.  By  order  dated  4th December,  1979   the  said   appeal  was  allowed  and  the conviction was  set aside.  A perusal of the judgment of the Additional Sessions  Judge  shows  that  the  conviction  of respondent No.3  was set  aside because  of lack of adequate and reliable evidence.      When  the  Labour  Court  was  seized  of  the  matter, pursuant to  their order  of remand  dated 21st  July, 1979, respondents 2  and 3  filed three different applications. In the first  application they sought permission to amend their complaint so  that they  could insert  a  paragraph  to  the effect that  termination or discharge for loss of confidence amounted to  retrenchment within  the   meaning of Section 2 (oo) of  the Industrial Disputes Act, 1947 and the condition precedent   to such  termination had not been fulfilled and, therefore,  the   order  of   termination   was   void   and inoperative. The  second application  was for a direction to the  appellant   herein  to   produce  their   records   and proceedings together  with the findings given by the members of the  inquiry committee  which had  been set up to inquire into certain  instances of  assault on a trade union leader. The third  application was  for  issue  of  summons  to  the members of  the said  inquiry committee  to give evidence in respect of the inquiry held by them. The Labour Court by its order  dated   4th  March,   1980  rejected  all  the  three applications.  Revision   applications  filed   before   the Industrial Court  by respondents  2  and  3  were  summarily rejected on 17th July, 1980. Thereafter writ petition  being no.2599 of  1980 was  filed and  admitted by the Bombay High Court on  15th September,  1980. Pursuant  to the  order  of remand dated  21st July,  1979 the Labour Court, as directed by the Industrial Court, received evidence from the parties. Respondents 2  and  3  filed  their  affidavits  which  were treated as  their examination  in chief  and they were cross examined on  behalf of the applicant herein. As against this on behalf  of the  appellant, its  security officer  and one S.K. Akolkar,  Senior Police  Sub Inspector  of Thane Police Station who had investigated the criminal case, was examined as witnesses.  During the  course of  hearing    before  the



Labour Court  the papers  and proceedings  of  the  criminal Court were  produced including  the judgment of the judicial Magistrate who  had acquitted  respondent no.2 but convicted respondent no.3  and also  the judgment  of   the Additional Sessions  Judge,   Thane  who  had  allowed  the  appeal  of respondent no.  3. Before  the Labour  Court, as  is evident from order  dated 28th  December, 1981 only  two points were agitated on behalf of the respondents and they were; firstly as whether  respondents 2  and 3 had been falsely implicated in a  criminal case  on a  false and concocted evidence and; secondly whether  the victimization  alleged by  them  falls under Item  1 Schedule IV of the said Act. The victimization which was  alleged by  respondents 2 and 3 was that Dr.Datta Samant,  a   labour  leader   was  assaulted   outside   the appellant’s factory  gate on  18th March,  1975. A Committee was set  up by  the company  consisting of Mr. V.R. Kale and Mr. M.S.  Datta and  the respondents 2 and 3 were alleged to have been  pressurized by Mr. Datta to falsely implicate the office bearers  of respondent 1 as being responsible for the said assault. It was further alleged that when respondents 2 and 3  refused to  cooperate with the appellant company, the company’s management  was displeased  and, with  a  view  to victimize the respondents, it took recourse to the action of terminating their  services which  amount to  unfair  labour practice under  Item 1  (a) of Schedule IV. The Labour Court noticed that  discharge or  punishing an  employee or office bearer or  acting union member on account of his trade union activity is  unfair labour practice falling under Item 4 (a) and (b)  of Schedule  II. The Labour Court, however, came to the conclusion  that respondents  2 and  3 had  neither been falsely implicated in the criminal case as mentioned in Item 1 (c)  of Schedule  IV  nor  was  there  any  unfair  labour practice carried  out by  appellant  company  qua  the  said respondents  in   the  manner   as  specified  in  the  said respondents in the manner as specified in Item 4 (a) and (b) of Schedule II of the said Act.      Against the  dismissal of  the complaints by the Labour Court the  said respondents  filed two revision applications before the  Industrial Court.  Before the  Industrial  Court also it  is only  this contention  of unfair labour practice falling under  Item 1  (a) or  (c) of  Schedule IV which was agitated. By  a reasoned order dated 10th February, 1984 the Industrial Court  dismissed both  the revision  applications and upheld  the findings  of fact  recorded  by  the  Labour Court. Respondents  2 and  3 then  filed  a  petition  under Article 227 of the Constitution being writ petition no. 2844 of  1984  before  the  Bombay  High  Court  challenging  the aforesaid order  dated 10th February, 1984 of the Industrial Court.      By judgment  dated 22nd/26th  February, 1990  a  single judge of  the Bombay  High Court  disposed of  both the writ petitions no.2599  of 1980,  whereby the order of the Labour Court disallowing  the three applications was challenged, as well as  main writ  petition no.2844  of  1984  whereby  the complaints under Section 28 of the said Act were rejected by the Labour  Court and  which  decision  was  upheld  by  the Industrial Court.  By the  impugned judgment  the High Court quashed and  set aside  the main  orders of  the Labour  and Industrial Court  and declared  that the appellant’s company had indulged in unfair labour practice covered by Item 1 (b) of Schedule IV of the said Act. It further directed that the appellant shall  cease and  desist from  indulging in unfair labour practice  and reinstate the workmen in their original position with  all consequential  benefits, full  back wages and continuity of service.



    While allowing  the writ  petition the  High Court held that it  was difficult  to  conclude  that  manner  and  had victimised the  workmen on  account  of  their  trade  union activities, as  had been alleged by them. The reason for the High Court  allowing the  writ petition  was that  the  said workmen had  made out a case of unfair labour practice in as much as  action had  been taken  by the appellant with undue haste.  In  this  connection  the  High  Court  observed  as follows:-      "Assuming for  the sake of argument      that the respondent-company thought      it proper to terminate the services      of  the   workmen   for   loss   of      confidence as they were arrested by      the police  in an  alleged case  of      theft, it  should not  be forgotten      that the  action taken  by them was      with  undue   haste   because   the      workmen were arrested by the police      on a  certain statement  made by an      accused person  by name  Parker who      was earlier  arrested and  for  all      that we  know that  the said Parker      had   given    false    or    wrong      information to  the police while in      custody of  the police or he did it      under pressure  of  the  police  or      perhaps the  present  workmen  were      really involved in a case of theft.      The respondent-company  should have      at least  waited for  a  reasonable      time   and    inquired   into   the      allegations of  theft made  against      the workmen who were members of the      staff of  watch and ward department      and  who   were   responsible   for      detection of  many  thefts  in  the      past. Merely  because they remained      absent from  duty for  a couple  of      days and  afterwards it came to the      notice  of  the  respondent-company      that they  were  suspected  by  the      police   for committing theft,  the      respondent-company should  not have      in an  ugly haste  terminated their      services so  fast as they did which      certainly would amount to discharge      or  dismissal  of  a  workman  with      undue  haste,   an  act  of  unfair      labour practice  covered by  Item 1      (b) of  Schedule IV  of the  MRTU &      PULP Act.  It may  be  incidentally      mentioned  here   that   both   the      workmen  were   acquitted  of   the      charge of  theft  levelled  against      them, one  at the  trial stage  and      the other at the appellate stage."      Challenging the  correctness of  the said  decision Mr. R.F. Nariman,  learned  senior  counsel  for  the  appellant submitted that  the concurrent binding of fact arrived at by the Labour  Court and  the Industrial  Court, to  the effect that the  appellant had committed no unfair labour practice, ought  not  to  have  been  set  aside  by  the  High  Court exercising limited  jurisdiction under  Article 227  of  the Constitution. He  further submitted that if the facts of the



case are examined the only conclusion which could be arrived at was  that the  appellant company  had acted bona fide and the action  of terminating the services of respondents 2 and 3 was  in accordance  with its  standing orders  and did not amount to  any unfair labour practice as contemplated by the said Act.      Dr. R.S.  Kulkarni,  learned  senior  counsel  for  the respondents on  the other hand while supporting the judgment of the  High Court submitted that the decision of the Labour Court and  the Industrial Court was perverse and, therefore, the  High   Court  was   justified  in  granting  relief  to respondents 2 and 3.      Under Section  28 of  the said  Act complaints  can  be filed relating to unfair labour practices. Section 26 of the said Act  states that   unfair  labour practices  are  those which are listed in Schedule II, III and IV of the said Act. Schedule II  enumerates unfair  labour practices on the part of the  employers, inter  alia, in  relation to  trade union activities. Schedule  IV lists  the  general  unfair  labour practices which may be alleged against the employers. Item 1 clause (b) of Schedule IV is as under :-      "(b)  in  utter  disregard  of  the      principles of  natural  justice  in      the conduct  of domestic enquiry or      with undue haste;"      There was  no justification  whatsoever  for  the  High Court to  have allowed  respondents 2  and 3 while hearing a petition under  Article 227  of the Constitution, to raise a new contention that there had been an unfair labour practice as   contemplated by  Item 1 (b) and the appellant had acted with undue  haste. No  such contention  was urged before the Labour Court or in revision before the Labour Tribunal. Even if the  writ petition  filed in the High Court under Article 227 of the Constitution, challenging the order of the Labour Court and  the Industrial  Court dismissing  the  complaints under Section 28 of the said Act, no specific contention had been raised  to the effect that there was any undue haste on the   part of the appellant in issuing the termination order and which  could be  regarded  as  unfair  labour  practice. Merely because in an affidavit filed before the Labour Court there was  a general  statement of  unfair  labour  practice covered by  Items 1  (a) to  (b) could  be no ground for the High Court  to come to the conclusion that a case under Item 1 (b)  had been made out because respondents 2 and 3 had not led any  evidence in this behalf and nor was this contention specifically raised  and argued,  as already noticed, before the Labour  Court and  the Industrial  Court or  even in the writ petition filed before the  High Court.      Whether there  was any  undue haste  on the part of the employer while  discharging or  dismissing an  employee is a question of  fact which has to be determined on the basis of evidence or  record. The  complaint under  Section 28 of the said Act  was filed  by respondents 2 and 3. If it was their case that there was an unfair labour practice on the part of the appellant  herein as  contemplated by Item 1 (b) then it was incumbent  upon the  said respondents  to state facts on the basis  of which  the Labour  Court  could  come  to  the conclusion that  there was an undue haste as contemplated by Item 1  (b). The complaints filed by the said respondents do not contain any particulars of undue haste and nor was there any evidence  led on  the part  of the said respondents. The High Court  clearly erred  in making  out a  new case and in setting aside  the concurrent  findings of  the Labour Court and the Industrial Court.      It is  not in  dispute  that  on  account  of  loss  of



confidence and because of the absence of respondents 2 and 3 from work  without leave  the standing orders of the company did empower  it to  discharge the  said respondents  on that ground. This  being so,  even if  the High  Court could have gone into  the question  as to  whether there  was any undue haste on  the part  of the  appellant, in  our  opinion  the conclusion  arrived   at  by  the  High  Court  against  the appellant herein is  without any evidence or basis.      It would depend  upon the facts of each case whether an employer has  acted with  undue haste  while discharging  or dismissing an employee. It is neither possible nor desirable to lay  down or  spell out  any general  principles in  this regard. Each  case will  have to be judged on its own facts. Keeping in mind the undisputed facts of the present case the only question  is whether  or when  the termination  letters were issued could it be said that the appellant had acted in undue  haste.  To  recapitulate  on  7th  August,  1975  the company’s employee  Parkar had  disclosed that respondents 2 and 3  were involved  in the  conspiracy  of  theft  of  the company’s medicines.  The said  respondents were arrested on 9th August, 1975 and they were absent from duty as from that date.  On   10th  August,   1975  the   statements  of  said respondents are  stated to  have been  recorded pursuant  to which recovery  was stated  have been  made  of  the  stolen property. Charge-sheet  against  the  said  respondents  was filed alleging  offence having  been committed under Section 381 read  with Section 34 of the Indian Penal Code. The said respondents were  not ordinary  clerks in  the office of the appellant but  they were  part and  parcel of  the watch and ward  section,   respondent  no.2  being  the  watchman  and respondent no.3  the havaldar.  These two  respondents  were supposed to  protect the  property of  the appellant company and on 14th August, 1975 the appellant company had before it information regarding  the alleged  involvement of these two persons in the theft of its property. It is difficult for us to appreciate how, under these circumstances, the High Court could possibly  have come  to the  conclusion that there was any undue  haste on  the part  of the  appellant company  in removing  these   respondents  from   service.   The   order terminating the  services of  respondents 2 and 3 was passed nearly 5/6  days after the arrest of respondents 2 and 3 and during which  period they  had been absent without leave. It cannot be said that there was any undue haste on the part of the appellant  company which  could  possibly  lead  to  the conclusion that it was guilty of unfair labour practice. The High Court  clearly erred in allowing respondents 2 and 3 to make out  a new  case and  then in  coming   to a conclusion which is  clearly untenable.  The orders  of the  Labour and Industrial Courts did not call for any interference.      For the  aforesaid reasons,  these appeals are allowed. The impugned  judgment of  the High  Court  dated  22nd/26th February, 1990 is set aside and  the judgments and orders of the Labour  Court and   the  Industrial Court  are restored. There will be no order as to costs.