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CASE NO.: Appeal (civil)  2521 of 2000

PETITIONER: The General Secretary, South Indian Cashew Factories Workers’ Union

RESPONDENT: The Managing Director, Kerala State Cashew Development Corporation Ltd. & Ors.

DATE OF JUDGMENT: 12/05/2006

BENCH: ARIJIT PASAYAT & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J.

       Challenge in this appeal is to the legality of judgment  rendered by a Division Bench of the Kerala High Court setting  aside the judgment of a learned Single Judge. By the  impugned judgment it was held that the punishment of  reversion passed by the disciplinary authority was proper.   The concerned workman was in the employment of Kerala  State Cashew Development Corporation Ltd. (hereinafter  referred to as the Corporation) the respondent No.1 in this  appeal.

Background facts in a nutshell are as follows :

       The appellant-Union raised an industrial dispute on  behalf of one of its member questioning correctness of the  order passed by respondent No.1 reverting the concerned  workman Sh. S. Sivasankara Pillai, Manager, Grade II.  He  was designated as Manager, Grade II in the respondent No.1’s  establishment.  He was charge-sheeted for misconduct of (1)  causing willful loss to the Corporation: (2) habitual breach of  rules; (3) making false allegations against superior officers; (4)  gross negligence of duty.  The essence of allegations raised  against him was that by order dated 1.2.1975 he was put in  charge of filling and packing section of that factory. On  8.9.1975 he did not arrange work in the filling section and  that occasioned considerable loss to the factory. On 11.9.1975  the filling work suffered for about 1= hours due to his  indifferent attitude.  On 16.9.1975 no work was done in the  filling and packing sections, though the workmen were ready  to work.  Because of this non-cooperation and indifference,  huge loss was caused to the Corporation.  Dissatisfied with the  explanation submitted by the employee, a domestic enquiry  was conducted. The Assistant Personnel Manager of the  respondent establishment conducted the enquiry.  The enquiry  officer submitted a report holding that the charges were  proved in the enquiry.  After considering the findings of the  enquiry officer and seriousness of the charges leveled against  the employee, the Management imposed a punishment by  reverting the employee as factory clerk, but the salary he was  drawing was protected. According to the Respondent- Management, he was not dismissed from service by taking a  lenient view, even though the misconducts proved in the  enquiry were serious.

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       The appellant\026Union filed statement before the Labour  Court questioning the enquiry as well as the punishment  imposed.  The respondent-management in its pleadings raised  three preliminary points:

(1)     Whether the order of reference is proper and valid. (2)     Whether the enquiry held is proper and valid. (3)     Whether the findings of the enquiry officer are based  on legal evidence or whether the same are perverse?

The Labour Court at first held that the concerned  employee was not a workman as defined under the Industrial  Disputes Act, 1947 (in short the ’Act’) and hence there is no  valid industrial dispute.  That order was set aside by the  Kerala High Court and remanded for reconsideration.  After  remand the Labour Court in preliminary order found that the  employee is a workman as defined under the Act and  Industrial dispute is validly raised. With regard to the enquiry,  it was found that enquiry was fair and proper and findings are  not perverse. But the Labour Court set aside the enquiry  report on the ground that the enquiry officer was biased as  enquiry was conducted by an employee of the Corporation and  he also made certain observations against the workman,  which were not necessary for considering whether there was  misconduct or not.  The relevant portion of the preliminary  order is as follows:

"\005The workman challenges the validity of  the enquiry.  The findings of the enquiry  officers are also challenged by him.  As such  first of all I shall see whether the enquiry held  is proper and valid. In the enquiry 4 witnesses  are examined on the side of the management  and 19 documents were marked.  Three  documents were marked on the side of the  workman.  A perusal of the enquiry report and  connected papers shows that the workman  fully participated in the enquiry.  The  witnesses examined by the management were  cross examined in extensor by the workman.   The requests made by the workman were  allowed by the enquiry officer.  It has therefore  to be said that principles of natural justice  have been complied with by the enquiry officer.   In that sense it has to be said that the enquiry  is proper and valid."

After holding that enquiry was proper and valid, with  regard to the findings, the Labour Court held as follows:

"\005.The enquiry officer relied on the  evidence of the 4 witnesses examined by the  management.  He believed them and found the  workman guilty of the charges.  I do not say  that the findings are perverse."

Therefore, after holding that natural justice was complied  with, enquiry held was proper and valid and that the findings  are not perverse, the Labour Court set aside the enquiry  because enquiry officer was an interested person and biased.   Reasoning of the Labour Court as far as relevant is as follows :

"\005.As stated by me earlier the enquiry  was conducted by the Assistant Personnel

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Manager of the Corporation.  This I may state  was not proper.  He is an employee of the  corporation.  As such needless to say that he  is an interested person, interested in the  corporation.  He can and he will record a  finding in favour of the corporation only.  The  enquiry cannot therefore be said to be an  impartial one.  It is true that there is not legal  bar in the management holding an enquiry by  any of its officers.  But in fairness that task  could and should have been entrusted with  some external agency. This the management  had not done.  The enquiry cannot therefore be  said to be a proper and valid one."

The Labour Court also held that the enquiry officer made  some observations which are unwarranted and that shows  that the enquiry officer was biased towards the workman.   Hence, he did not accept the report and posted the case for  fresh evidence. The Management challenged the preliminary order before  the Kerala Court by filing O.P. No.5185 of 1987 and by  judgment that original petition was dismissed holding that  validity of the preliminary order can be canvassed by the  Management if the award goes against it. Thereafter, the  witnesses examined in the enquiry were again examined.  No  additional evidence was let in by the worker.  Labour Court re- appraised the evidence and found that the charges were not  proved and hence the punishment imposed was set aside by  the award.  Learned Single Judge found that the findings of  the Labour Court in the preliminary order to the effect that the  employee is a workman as defined under the Act is based on  evidence and there is valid industrial dispute.  With regard to  the contention that enquiry was valid, no specific finding was  recorded.  The contention of the Management that enquiry  cannot be said to be vitiated merely because the enquiry was  conducted by an officer of the Management was not considered  by the learned Judge. The learned Judge merely found that  the entire matter was considered by the Labour Court and  Labour Court had jurisdiction to go into all the aspects of the  dispute.  Therefore, the original petition was dismissed. The  learned Single Judge, inter alia, held as follows :

"\005..It was submitted that the first  respondent was not justified to go into the  validity of the domestic enquiry of the findings  arrived at by the Enquiry Officer, which, it was  submitted, were matters outside the scope of  Exh. P.5 (Rejoinder dt. 29.8.1978).  I do not  agree that this submission is justified.  The  first respondent, in my view has jurisdiction to  go into all aspects of the dispute and to come  to conclusions based on the evidence and  other materials."

    The respondent No.1 filed a writ appeal before the  Division Bench contending that the preliminary order of the  Labour Court in setting aside the enquiry report was illegal.   However, the said issue was not considered by the learned  Single Judge.  Though it did not contest the finding that the  concerned employee is a workman as defined under the Act  and that there was valid preference for adjudication, it  questioned the conclusion.  It was submitted that having  found that the enquiry conducted was fair and proper, there  was no scope for reappraising the evidence or to consider the

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adequacy of punishment.  The Labour Court had erred in  holding that since enquiry was conducted by an officer of the  Management, the enquiry was vitiated and also because he  made some observations against the workman that did affect  the validity of the enquiry.  The Division Bench accepted the  stand of the respondent No.1. Questioning correctness of the  conclusions of the Division Bench, the present Appeal has  been filed.

Learned counsel for the appellant submitted that the fact  that the enquiry officer was an officer of the management itself  affected the fairness of the enquiry. Further his biased  approach was evident from the unnecessary observations  made by him. He, therefore, contended that the view of the  learned Single Judge was the correct one and should be  restored. Learned counsel for the respondent No.1 on the  other hand supported the impugned order of the High Court.

In Delhi Cloth and General Mills Co. Ltd. v. Labour Court  [(1970) 1 LLJ 23] this Court has held that merely because the  Enquiry Officer is an employee of the Management it cannot  lead to the assumption that he is bound to decide the case in  favour of the Management.

In Saran Motors (P) Ltd.  v.  Vishwanath [(1964) II LLJ  139] this Court held as follows :

"It is well-known that enquiries of this  type are generally conducted by officers of the  employer companies and in the absence of any  special bias attributable of a particular officer,  it has never been held that the enquiry is bad  just because it is conducted by an officer of the  employer."

       Therefore, finding of the Labour Court that enquiry was  vitiated because it was conducted by an officer of the  Management cannot be sustained.  

The only other ground found by the Labour Court  against the enquiry officer is that he made some unnecessary  observations and, therefore, he was biased.  The plea that  enquiry officer was biased was not raised during the enquiry  or pleadings before the Labour Court or in earlier proceedings  before the High Court.  The bias of the enquiry officer has to  be specifically pleaded and proved before the adjudicator.   Such a plea was significantly absent before the Labour Court.   We also note that the Labour Court itself found that the  enquiry officer relied on the evidence adduced in the enquiry  and its findings were not perverse.  After such a finding, even  if he has stated some unwarranted observations, it cannot be  stated that report is baised.  In Tata  Engineering and  Locomotive Co. Ltd. v. S.C. Prasad [(1969) 3 SCC 372] this  Court held that :

"Industrial Tribunals, while considering the  findings of domestic enquiries, must bear in  mind that persons appointed to hold such  enquiries are not lawyers and that such  enquiries are of a simple nature where  technical rules as to evidence and procedure  do not prevail.  Such findings are not to be  lightly brushed aside merely because the  enquiry officers, while writing their reports,  have mentioned facts which are not strictly

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borne out by the evidence before them."

       In this case for finding the employee guilty, the enquiry  officer relied on the evidence adduced in the enquiry and  Labour Court itself found that the findings were not perverse.   In such circumstances, the preliminary order of the Labour  Court setting aside the enquiry on the ground that enquiry  was conducted by an officer of the Management and he had  made some observations in the enquiry report which were not  warranted in the case is not a vitiating factor and these  reasons are not sufficient to set aside the enquiry.

The Labour Court had earlier held that the enquiry was  properly held and there was no violation of the principles of  natural justice and that the findings were not perverse.  The  vitiating facts found by the Labour Court against the enquiry  are erroneous and are liable to be set aside.  If enquiry is fair  and proper, in the absence of any allegations of victimization  or unfair labour practice, the Labour Court has no power to  interfere with the punishment imposed.  Section 11A of the  Act gives ample power to the Labour Court to re-appraise the  evidence adduced in the enquiry and also sit in appeal over  the decision of the employer in imposing punishment.  Section  11A of the Industrial Disputes Act is only applicable in the  case of dismissal or discharge of a workman as clearly  mentioned in the Section itself.  Before the introduction of  Section 11A in Indian Iron and Steel Co. Ltd. v. Their  Workmen [(1958) SCR 667] this Court held that the Tribunal  does not act as a Court of appeal and substitute its own  judgment for that of the Management and that the Tribunal  will interfere only when there is want of good faith,  victimisation, unfair labour practice, etc. on the part of the  management.  There is no allegation of unfair labour practice,  victimisation etc. in this case.  The powers of the Labour Court  in the absence of Section 11A is illustrated by this Court in  Workmen of Firestone Tyre and Rubber Co. of India (Pvt.) Ltd.  v. The Management [(1973) 1 SCC 813].  When enquiry was  conducted fairly and properly, in the absence of any of the  allegations of victimisation or malafides or unfair labour  practice, Labour Court has no power to interfere with the  punishment imposed by the management.  Since Section 11A  is not applicable, Labour Court has no power to re-appraise  the evidence to find out whether the findings of the enquiry  officer are correct or not or whether the punishment imposed  is adequate or not.  Of course, Labour Court can interfere with  the findings if the findings are perverse.  But, here there is a  clear finding that the findings are not perverse and principles  of natural justice were complied with while conducting  enquiry.   

Above being the position the impugned judgment of the  High Court does not suffer from any infirmity to warrant  interference.

The appeal is sans merit and is dismissed.  No costs.