11 November 1964
Supreme Court


Case number: Appeal (civil) 1036 of 1963






DATE OF JUDGMENT: 11/11/1964


CITATION:  1965 AIR 1496            1965 SCR  (2) 148  CITATOR INFO :  R          1975 SC 661  (13,14,18,19)  E          1976 SC2062  (27,28)  RF         1980 SC1896  (68)

ACT: Industrial Disputes Act (14 of 1947), s. 33(2)(b),  proviso- it applicable to s. 33 (2) (a) -Jurisdiction of Tribunal  to entertain application under S. 33-A.

HEADNOTE: During  the  pendency of an industrial dispute  between  the appellant  and its workmen, the services of the  respondent, who  was  an employee, were terminated  without  giving  any reasons.    He  filed  a  petition  before  the   Industrial Tribunal,  under  s. 33-A of the  Industrial  Disputes  Act, 1947,  complaining  that the approval of  the  Tribunal  for terminating  his services as required by the proviso  to  s. 33(2)(b)  was  not obtained.  The  appellant  justified  the termination  by  contending that cl. 17(a) of  the  Standing Orders  enabled the management to terminate the services  of an  employee  by  fourteen days’  notice,  that  though  the respondent  was  deliberately  going slow in  his  work  the termination was not for misconduct, and that therefore s. 33 (2)  (b) and its proviso did not apply.  The Tribunal  held, that as the termination was under cl. 17(a) of the  Standing Orders, s. 33(2) (a) applied. The Tribunal however held that the proviso applied to s. 33(2)(a)also, and that, since  the approval  of the Tribunal was not  obtained,  theapplication under   s.  33-A  was  maintainable.   The   Tribunal   then considered  the  evidence adduced on merits, held  that  the allegation  that the respondent had been deliberately  going slow was not made out, and ordered the reinstatement of  the respondent.  The appellant filed a writ petition in the High Court, which held, that the proviso applies only to cl.  (b) and  not  to  cl. (a), that action  was  taken  against  the respondent by way of punishment and therefore was covered by cl. (b) to which the proviso applies, and that therefore the Tribunal  had jurisdiction to entertain the application  and pass  order on merits.  In appeal to the Supreme  Court,  it was contended that since the Tribunal took the view that the case was covered by s. 33 (2) (a), it had no jurisdiction to



entertain  the  application  because,  the  proviso  is  not applicable to that sub-section. HELD : Even though the Tribunal was in error in holding that the proviso applied to s. 33(2) (a), there was no reason to. interfere with its order.  The contention of the  respondent was  that  there  was a contravention of  cl.  (b)  and  its proviso  and  that  contention  gave  jurisdiction  to   the Tribunal  in the absence of a domestic enquiry  to  consider the evidence and find that the respondent was not guilty  of dereliction of duty, and to order reinstatement. [153 A-C] The form used for terminating the services is not conclusive and  the  Tribunal  has jurisdiction to  enquire  into.  the reasons which lead to the termination. [152 B] Chartered  Bank v. Chartered Bank Employees  Union,  [1960]3 S.C.R. 441 and Management of U. B. Dutt & Co. v. Workmen  of U. B. Dutt & Co. [1962] Supp. 2 S.C.R. 822, followed

JUDGMENT: CIVIL,  APPELLATE  JURISDICTION.--Civil Appeal No.  1036  of 1963.  149 Appeal  by special leave from the judgment and  order  dated November 8, 1960 of the Madras High Court in Writ Appeal No. 146 of 1960. A.V.   Viswanatha-  Sastri and R. Ganapathy  Iyer,  for  the appellant. M.S. K. Sastri and M. S. Narasimhan, for respondent No. 2 The Judgment of the Court was delivered by Wanchoo,  J. This is an appeal by special leave against  the judgment  of  the  Madras High Court.  The  appellant  is  a textile mill.  Rangarathinam Pillai respondent was  employed as  an  accountant  in  the mill for over  13  years  by  he appellant.   On September 11, 1958, the appellant  served  a notice  on the respondent under cl. 17 (a) of  the  Standing Orders  terminating his services on and from  September  24, 1958.   No reasons were given in the order  terminating  the service.  The respondent protested against his dismissal and said  that  he  had  a blameless record  and  had  not  done anything meriting the termination of his services.  He added that  no  showcause  notice had been  served  upon  him,  no explanation was asked for and no enquiry whatsoever had been held  before the order was issued.  He further alleged  that he had been victimised for his trade union activities as  he was  a  member of the Executive of the  Coimbatore  District Textile  Mill Staff Union.  When his protest had no  effect, he  made  an  application under S. 33-A  of  the  Industrial Disputes  Act, No. 14 of 1947, (hereinafter referred  to  as the Act), as an industrial dispute was pending at the  time, between the appellant and its workmen.  The main  contention of  the  respondent  was  that  the  order  terminating  his services  had been passed without obtaining the approval  of the  industrial tribunal and this was against the  provision contained in S. 3 3 (2) (b) of the Act, which lays down that during  the  pendency  of any proceeding in  respect  of  an industrial  dispute the employer may in accordance with  the standing  orders applicable to a workman concerned  in  such dispute,  discharge  or punish him whether by  dismissal  or otherwise  for any misconduct unconnected with the  dispute, provided  that  no such discharge or dismissal may  be  made unless the workman has been paid wages for one month and  an application  has been made by the employer to the  authority for approval of the action taken by the employer. The contention of the appellant before the tribunal was that



the services of the respondent had been terminated under cl. 17 150 (a)of  the  Standing Orders.  It enables the  management  to terminate  the services of a worker by 14 days’ notice.   It was  further contended that the termination was not for  any misconduct and was not meted out as punishment and therefore S.  33  (2) (b) did not apply and it was  not  necessary  to obtain  the  approval of the tribunal.  It was  also  stated that the reason for the termination of service was that  the respondent had been deliberately going slow in his work  for some  months  prior to the date on which his  services  were terminated.   This was because he had asked for increase  in pay sometime back and that had been refused.  It was further stated that the balance-sheet for the year 1957 had not been prepared  till August 1958 and therefore when the  appellant found  that the respondent was deliberately going  slow  his services were terminated as provided in the Standing Orders. The  tribunal  took  the view that  as  the  termination  of service  had  taken place under cl. 17 (a) of  the  Standing Orders, this was not a case covered by s. 33 (2) (b) of  the Act,  which provides for discharge or punishment by  way  of dismissal  or otherwise for any misconduct unconnected  with the  dispute.  The tribunal however held that the  case  was covered by s. 33 (2) (a).  It further held that the  proviso to  S. 33 (2) not only applies to a case covered by cl.  (b) but  also  to cl. (a).  Therefore, as the  proviso  was  not complied  with,  the tribunal held that the  termination  of service  of  the  respondent was  in  contravention  of  the section  and  the application under S. 33-A of the  Act  was maintainable.  However, as evidence had been adduced on both sides on the merits of termination of service, the  tribunal went into the matter.  It took the view that even under  the Standing Orders, the appellant could terminate  respondent’s services  only for proper reason or the particular  standing order   provides  that  reasons  should  be   recorded   and communicated to the workman if he so desired.  The  tribunal went  into  the question whether the  appellant  had  proper reasons for terminating the services of the respondent.   It came  to  the  conclusion  that  the  reason  given  by  the appellant  to  the  effect  that  the  respondent  had  been deliberately going slow because his requests for rise in pay had  been  refused  was  not  made  out.   As  to  the  non- preparation  of  the balance-sheet for the year 1957  up  to August  1958,  the  tribunal  seems  to  have  accepted  the explanation of the respondent that the delay was due to  the appellant’s  desire  not to publish the  balance-sheet  till fresh  shares issued by it had been taken up by  the  public for if the loss incurred for the year 1957 were known to the public  before the fresh shares were subscribed, the  public response might be poor.  The tribunal finally  151 held that the delay in the finalisation of the accounts  for the year 1957 could not be said to be due to solvenliness or dereliction  of  duty on the part of  the  respondent.   The tribunal therefore allowed the application under S. 33-A and ordered the reinstatement of the respondent with back wages. The  appellant  then filed a writ petition before  the  High Court,  which  came  before a  learned  Single  Judge.   The learned Single Judge did not decide the question whether the proviso to s. 33 (2) applied only to cl. (b) and not to  cl. (a).  He held that as the action against the respondent  was taken by way of punishment for negligence etc., the case was clearly  covered  by  cl. (b) of s. 3 3  (2)  to  which  the proviso  undoubtedly  applied.  He therefore held  that  the



industrial  tribunal  had  jurisdiction  to  entertain   the application under s. 33-A in the circumstances.  Finally  he held  that as the tribunal had held on the merits  that  the charge against the respondent of dereliction of duty was not made  out, the writ petition must fail.  The appellant  then went in appeal to the Division Bench, which upheld the order of the learned Single Judge.  Then there was an  application for leave to appeal to this Court, which was rejected.   The appellant  then applied for and obtained special leave  from this Court and that is how the matter has come up before us. The  right of the employer to terminate the services of  his workman  under  a  standing order, like  cl.  17(a)  in  the present case, which amounts to a claim "to hire and fire" an employee  as  the  employer  pleases  and  thus   completely negatives  security  of service which has  been  secured  to industrial  employees through industrial adjudication,  came up for consideration before the Labour Appellate Tribunal in Buchkingham   &  Carnatic  Co.  Ltd.  v.  Workers   of   the Company(1).  The matter then came up before this Court  also in  Chartered Bank v. Chartered Bank Employees Union(2)  and the Management of U. B. Dutt & Co. v. Workmen of U. B.  Dutt & Co.(3) wherein the view taken by the Labour Appellate Tri- bunal was approved and it was held that even in a case  like the present the requirement of bona fides was essential  and if  the termination of service was a colourable exercise  of the  power or as a result of victimisation or unfair  labour practice the industrial tribunal would have the jurisdiction to  intervene and set aside such termination.  The  form  of the order in such a case is not conclusive and the  tribunal can no behind the order to find the reasons which led to the order and then consider for itself whether the (1) (1952) L.A.C. 490.    (2) [1960]3 S.C.R. 441. (3)  (1962) Supp. 2 S.C.R. 822, 152 termination was a colourable exercise of the power or was  a result  of victimisation or unfair labour practice.   If  it came to the conclusion that the termination was a colourable exercise  of the power or was a result of  victimisation  or unfair  labour  practice it would have the  jurisdiction  to intervene and set aside such termination. The form therefore used in the present case for  terminating respondent’s services under cl. 17 (a) is not conclusive and the  tribunal  was justified in enquiring into  the  reasons which  led  to such termination; even  the  Standing  Orders provide that an employee can ask for reasons in such a case. Those  reasons  were  given  before  the  tribunal  by   the appellant  viz  the respondent’s  services  were  terminated because he deliberately adopted go-slow and was negligent in the  discharge  of his duty.  His  services  were  therefore terminated for dereliction of duty and go-slow in his  work. This  clearly  amounted  to punishment  for  misconduct  and therefore to pass an order under cl. 17 (a) of the  Standing Orders  in  such  circumstances  was  clearly  a  colourable exercise of the power to terminate the services of a workman under  the  provision  of the  Standing  Orders.   In  those circumstances  the  tribunal  would be  justified  in  going behind  the  order  and  deciding  for  itself  whether  the termination of the respondent’s services could be sustained. In the present case, evidence was led before the tribunal in support  of  the appellant’s case that  the  respondent  was guilty of dereliction of duty and go-slow in his work.   The tribunal has found that this has not been proved.  In  these circumstances the case was clearly covered by cl. (b) of  S. 33  (2)  of the Act as the services of the  respondent  were dispensed  with during the Pendency of a dispute by  meeting



out  the punishment of discharge to him for misconduct.   As this  was  done  without complying  with  the  proviso,  the termination of the service was rightly set aside. It  is  however urged on behalf of the  appellant  that  the tribunal  found  that the case under S. 33 (2) (b)  had  not been made out. It   also found that the case which had  been made out was one under S.     33  (2) (a).  It then went  on to hold that the proviso applied to     S. 33 (2) (a).   The appellant  contends that the view of the tribunal  that  the proviso applied to S. 33 (2) (a) is incorrect and  therefore the  tribunal was not right in entertaining the  application under S. 33-A and ordering reinstatement of the  respondent. It  is  clear  from a bare perusal of S.  33  (2)  that  the proviso  thereto only applies to cl. (b) and not to cl.  (a) and the tribunal therefore was in error when it held that it also  applied to cl. (a).  But that in our opinion makes  no difference in the present case as pointed  153 out by the High Court.  The contention of the respondent was that  there had been a contravention of S. 33 (2)  (b).   It was that contention which gave jurisdiction to the  tribunal and  which the appellant had to meet and it did meet  it  by producing  evidence.   That evidence was considered  by  the tribunal  and it found that the appellant’s contention  that the respondent was guilty of dereliction of duty and go-slow had  not been made out.  In these circumstances even  though the tribunal was in error in holding that the proviso to  S. 33  (2) applied to cl. (a) thereof also, there in no  reason for  us to interfere with the order passed by the  tribunal. As  the  High  Court has rightly pointed out,  the  case  is clearly  covered  by  s. 33 (2) (b)  to  which  the  proviso undoubtedly  applies.  As the proviso was not complied  with the  application under S. 33-A could be entertained  by  the tribunal and the tribunal did entertain it and went into the merits  of  the charge and came to the conclusion  that  the charge  had  not been proved.  In  these  circumstances  the order passed by the tribunal, and upheld by the High  Court, is  substantially  correct,  in spite of the  error  of  law committed  by the tribunal.  The appeal therefore fails  and is hereby dismissed with costs. Appeal dismissed. 3Sup./65 - 11 154