http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: PATNA ELECTRIC SUPPLY CO., LTD., PATNA.

       Vs.

RESPONDENT: BALI RAI & ANOTHER.

DATE OF JUDGMENT: 05/11/1957

BENCH: BHAGWATI, NATWARLAL H. BENCH: BHAGWATI, NATWARLAL H. SINHA, BHUVNESHWAR P. IMAM, SYED JAFFER KAPUR, J.L. GAJENDRAGADKAR, P.B.

CITATION:  1958 AIR  204            1958 SCR  871

ACT:        Industrial  Dispute-Dischage of employee-Permission  granted        by  Industrial Tribunal-Powers of Labour Appellate  Tribunal        to   interfere-Question   of    law-Appealability-Industrial        Disputes  Act,  1947  (14  Of 1947),  s.  33-The  Industrial        Disputes (Appellate) Tribunal Act, 1950 (48 of 1950), s. 7.

HEADNOTE:        The appellant made an application before the Industrial Tri-        bunal under s. 33 Of the Industrial Disputes Act, 1947,  for        permission to dismiss the respondents, its employees, on the        ground  of  misconduct  under  cl.  17  (b)  (viii)  of  the        appellant’s Standing        872        Orders, but subsequently, on a reconsideration of the facts,        made  another application praying instead for permission  to        discharge  the respondents under cl. 14(a) of  the  Standing        Orders.   The  Industrial  Tribunal found  that  the  second        application  was  bona fide made by the appellant  with  the        honest  motive  of  exercising its right  to  discharge  the        respondents  instead  of visiting upon them the  penalty  of        dismissing  them,  and granted the appellant  permission  on        payment  to  the respondents of one month’s pay in  lieu  of        notice.   The Labour Appellate Tribunal, on appeal,  was  of        the opinion that having once alleged misconduct against  the        respondents the appellant could not be allowed to adopt  the        expedient of terminating their services by giving notice for        the  requisite period, by means of a fresh application,  and        after considering whether the appellant had made out a  case        under  cl. I7(b)(viii) of the Standing Orders, came  to  the        conclusion  that the respondents had not been guilty of  any        misconduct,  and held that the Industrial Tribunal erred  in        granting  the permission to discharge the  respondents.   On        appeal to the Supreme Court:-        Held, that in an application under s. 33 of the  Industrial:        Disputes  Act, 1947, the relevant consideration was  whether        the  employer  was guilty of any unfair labour  practice  or        victimisation, and unless the Tribunal came to a  conclusion        adverse  to the applicant it would have no  jurisdiction  to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

      refuse  the permission asked for to discharge the  employee.        Accordingly,  in  view  of the  finding  of  the  Industrial        Tribunal that the application was bona fide, no question  of        law  arose  out  of  its order,  and  the  Labour  Appellate        Tribunal erred in entertaining the appeal.

JUDGMENT:        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 142 of 1956.        Appeal  by special leave from the judgment and  order  dated        September  13,  1954, of the Labour  Appellate  Tribunal  of        India (Calcutta Bench) in Appeal No. Cal-87 of 1953.        H.   N. Sanyal, Additional Solicitor--General of India,        J.   B. Dadachanji, S. N. Andley and Rameshwar Nath, for the        appellants.        P. K. Chatterjee, for the respondents.        1957.   November 5. The Judgment of the Court was  delivered        by        BHAGWATI J.-This appeal with special leave arises out of  an        application   made  by  the  appellant  to  the   Industrial        Tribunal, Bihar under s. 33 of the Industrial Disputes  Act,        1947  (hereinafter  referred  to  as  "’the  Act"),  seeking        permission to discharge the respondents from its employ.                                    873        The respondents were in the employ of the appellant and were        staying  in a two storeyed house in the city of Patna  which        had  been rented by the appellant for housing  its  workmen.        On  November 20, 1952, an occurrence took place in the  said        house  wherein  the  respondents  were  involved.    Written        reports  of  the said occurrence were sent on  November  21,        1952, to the appellant’s Chief Engineer and the  respondents        were  placed under suspension the same day.   An  industrial        dispute  was  then  pending between the  parties  i.e.,  the        appellant  and its workmen before the  Industrial  Tribunal,        Bihar,  and the appellant therefore made an  application  to        the  said Tribunal under s. 33 of the Act for permission  to        dismiss  the respondents on the ground of misconduct as  per        cl.  17(b)(viii)  of the appellant’s  Standing  Orders.   On        November 27, 1952, the respondents also made an  application        before the said Tribunal under s. 33A of the Act inter  alia        on  the  ground that their suspension by  the  appellant  as        aforesaid was a breach of s. 33 of the Act.        On  December  6,  1952, the appellant  made  an  application        before  the said Tribunal stating that on a  reconsideration        of  the  facts of the case of the respondents  the  original        prayer for permission to dismiss the the respondents was not        being  pressed,  and  for the ends of justice  it  would  be        sufficient  if  the  appellant  was  granted  permission  to        discharge  the respondents under cl. 14(a) of  the  Standing        Orders  instead of the original prayer for  dismissal  under        cl.  17(b)(viii) thereof. This application was  resisted  by        the   respondents.    The  Industrial   Tribunal,   however,        entertained the same and after hearing the parties duly made        its  award  on  May 14, 1953,  dismissing  the  respondents’        application  under  s.  33A  of the  Act  and  granting  the        appellant  permission to discharge the respondents from  its        employ with effect from the date of the order on payment  to        the respondents of one month’s pay in lieu of notice  within        15 days therefrom.        The respondents carried an appeal against the said order  of        the Industrial Tribunal granting the appellant’s application        under s. 33 of the Act before the Labour Appellate  Tribunal        of India, Calcutta.  A        874

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

      preliminary  objection was taken on behalf of the  appellant        before  the  Labour Appellate Tribunal that  no  substantial        question of law was involved and as such the appeal was  not        maintainable.   The  Labour Appellate Tribunal  was  of  the        opinion  that the appellant had alleged  misconduct  against        the  respondents  and  could not be  allowed  to  adopt  the        expedient of terminating their services by giving notice for        the requisite period or payment of salary in lieu of  notice        and  that the Industrial Tribunal, therefore, ought  not  to        have entertained the application for amendment of the prayer        of the original application in which the appellant wanted to        dismiss  the respondents for misconduct.  This according  to        the Labour Appellate Tribunal was a substantial question  of        law  and  it therefore entertained the appeal.   The  Labour        Appellate Tribunal thereafter considered whether the  appel-        lant  had  made  out a case under  cl.  17(b)(viii)  of  the        Standing  Orders  and  came  to  the  conclusion  that   the        respondents had not been guilty of any misconduct within the        meaning of that clause and that therefore the order made  by        the Industrial Tribunal granting permission to the appellant        to  terminate the services of the respondents was liable  to        be  set aside.  In so far, however, as after  obtaining  the        permission  from the Industrial Tribunal the  appellant  had        given  notice  of discharge to the respondents,  the  Labour        Appellate  Tribunal  expressed  its inability  to  give  the        respondents  any substantial relief either in the  shape  of        reinstatement or compensation.        The  appellant has come up in appeal before us against  this        order of the Labour Appellate Tribunal.        Shri H. N. Sanyal, appearing for the appellant, has urged in        the fore-front the contention that no appeal from the  order        of  the  Industrial  Tribunal lay to  the  Labour  Appellate        Tribunal  under s. 7 of the Industrial  Disputes  (Appellate        Tribunal)  Act, 1950.  He contended that the said order  was        not a "decision" within the meaning of that expression in s.        7  and  even  assuming that it was so,  the  appeal  neither        involved  any  substantial  question of law  nor  was  it  a        decision in respect of any of the matters specified in  sub-        s. (1)(b)                                    875        of  that  section.  The answer of Shri P. K.  Chatterjee  on        behalf  of  the  respondents  was that  the  action  of  the        appellant  in the matter of the termination of the  services        of  the  respondents  was punitive in  character,  that  the        discharge of the respondents for which permission was sought        by  the  appellant  was  a  punitive  discharge,  that  such        discharge  was  by reason of the alleged misconduct  of  the        respondents  falling within cl. 17(b)(viii) of the  Standing        Orders  and  not  within  cl. 14(a)  thereof  and  that  the        substantial  question of law which arose in the  appeal  was        whether  the  appellant  could  be  allowed  to  adopt   the        expedient  of terminating the services of  the  respondents,        without going through the procedure of submitting a  charge-        sheet to the respondents and holding a proper enquiry in the        matter  of  those charges, by merely giving notice  for  the        requisite period or payment of salary in lieu of notice  and        thus  resorting to el. 14(a) of the Standing Orders  instead        of  cl. 17(b)(viii) of the same.  The other answer  made  by        Shri  P.  K.  Chatterjee  was  that  having  regard  to  the        definition  of  the term "retrenchment" to be  found  in  s.        2(oo)  of  the Act the discharge of the respondents  by  the        appellant  really amounted to retrenchment and  retrenchment        being one of the matters specified in sub-s. (1)(b) of s.  7        of  the Industrial Disputes (Appellate Tribunal) Act,  1950,        the  respondents  had  a  right  of  appeal  to  the  Labour

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

      Appellate Tribunal.        It is necessary, therefore, to appreciate what was sought to        be done by the appellant when it made the application before        the   Industrial  Tribunal  on  December  6,   1952.    This        application  has  been  described by  the  Labour  Appellate        Tribunal  as  an application for amendment of  the  original        application  which  had  been  filed  by  the  appellant  on        November 21, 1952, for permission to dismiss the respondents        from  its  employ  as per el. 17(b)(viii)  of  the  Standing        Orders.  It must be noted, however, that what the  appellant        purported to do by its application of December 6, 1952, was,        in  effect,  to substitute another  application  asking  for        permission to discharge the respondents from its        111        876        employ  under  el.  14(a)  of  the  Standing  Orders,   thus        abandoning  the  relief  which  it had  prayed  for  in  the        original  application.   The application dated  December  6,        1952, was thus, in substance, a new application made by  the        appellant to the Industrial Tribunal, no doubt relying  upon        the  facts  and  circumstances which were  set  out  in  the        original  application but asking for the permission  of  the        Industrial  Tribunal to discharge the respondents  from  its        employ  under  cl. 14(a) of the Standing Orders  instead  of        dismissing  them  from  its  employ  under  el.  17(b)(viii)        thereof.   We  do not see how it was not  competent  to  the        Industrial Tribunal to allow the appellant to do so.  If the        appellant  bad  been  actuated by any  oblique  motives  and        wanted  to evade the consequences of its not having  held  a        proper  enquiry,  after  submitting a  charge-sheet  to  the        respondents one could have understood the criticism made  by        the  Labour Appellate Tribunal in regard to the  same.   The        Industrial Tribunal, however, expressly recorded the finding        that the application for leave to discharge the  respondents        from its employ was bona fide and what the appellant did  by        making the application dated December 6, 1952, was  actuated        by an honest motive of exercising its right to discharge the        respondents  under el. 14(a) of the Standing Orders  instead        of  visiting upon the respondents the penalty of  dismissing        them  from  its employ under el. 17(b)(viii)  thereof.   The        discharge of the respondents was a discharge simpliciter  in        exercise  of the rights of the employer under el.  14(a)  of        the  Standing Orders and was not a punitive discharge  under        el.  17(b)(viii)  thereof and if it was merely  a  discharge        simpliciter,  then, no objection could be taken to the  same        and the appellant would be well within its rights to do so,        provided,  however, that it was not arbitrary  or  apricious        but  was  bona  fide.   The only  question  relevant  to  be        considered  by  the  Industrial Tribunal would  be  that  in        taking the step which it did the appellant was not guilty of        any  unfair  labour  practice  or  victimization.   If   the        Industrial Tribunal did not come to a conclusion adverse  to        the appellant on these counts, it would have no jurisdiction        to refuse,        877        ’the  permission  asked  for by  the  appellant.   Once  the        Industrial  Tribunal  was of opinion  that  the  application        dated December 6, 1952, and the discharge of the respondents        for  which . the permission of the Industrial  Tribunal  was        sought  were  in  the honest  exercise  of  the  appellant’s        rights, no question of law, much less a substantial question        of  law could arise in the appeal filed by  the  respondents        against  the  decision of the Industrial  Tribunal  and  the        Labour  Appellate  Tribunal  was clearly in  error  when  it        entertained the appeal.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

      In view of the above finding, we do not propose to deal with        the  contention  that  the order passed  by  the  Industrial        Tribunal  under s. 33 of the Act is not a "decision"  within        the meaning of that term in s. 7 of the Industrial  Disputes        (Appellate Tribunal) Act, 1950.        The  argument that the discharge of the  respondents  though        patently  it was a discharge simpliciter was, in  substance,        retrenchment within the meaning of the definition  contained        in s. 2(oo) of the Act is equally untenable, for the  simple        reason  that the term "retrenchment" was for the first  time        defined  in  the  manner in which it has  been  done  by  an        Ordinance promulgated in October 1953 which was followed  by        Act  43 of 1953 which was published in the Gazette of  India        on  December  23, 1953.  The Industrial  Tribunal  made  its        order granting the permission under s. 33 of the Act on  May        14,   1953,   so   that,  this  definition   of   the   term        "retrenchment"  could not apply to the facts of the  present        case.   If, therefore, at the relevant period the  discharge        simpliciter  could not be deemed to be retrenchment  of  the        respondents by the appellant, the decision of the Industrial        Tribunal  could not be said to be one in respect of  any  of        the  matters  specified  in sub-s. (1)(b) of  s.  7  of  the        Industrial Disputes (Appellate Tribunal) Act, 1950.  In that        view  also  no  appeal could lie from the  decision  of  the        Industrial  Tribunal  to the Labour Appellate  Tribunal.  It        must be observed that neither of these two points was  taken        by  the  respondents either in the  proceedings  before  the        Industrial Tribunal or the Labour        878        Appellate  Tribunal nor was either of them mentioned in  the        statement  of case filed by the respondents in  this  Court.        They were taken for the first time in the arguments advanced        before us by Shri P. K. Chatterjee.  We have, however, dealt        with the same because we thought that we should not  deprive        tile respondents of the benefit of any argument which  could        possibly be advanced in their favour.        We  are, therefore, of opinion that no appeal lay  from  the        decision of the Industrial Tribunal to the Labour  Appellate        Tribunal,   that  the  Labour  Appellate  Tribunal  had   no        jurisdiction  to  interfere  with  the  order  made  by  the        Industrial  Tribunal  granting the appellant  permission  to        discharge  the respondents under s. 33 of the Act  and  that        the  decision of the Labour Appellate Tribunal is liable  to        be set aside.        We  accordingly allow the appeal, set aside the decision  of        the Labour Appellate Tribunal and restore the order made  by        the  Industrial Tribunal, Bihar, on date May 14, 1953.   The        appellant will be entitled to its costs of this appeal  from        the respondents.                              Appeal allowed.