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PETITIONER: PHULBARI TEA ESTATE

       Vs.

RESPONDENT: ITS WORKMEN

DATE OF JUDGMENT: 06/05/1959

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. SINHA, BHUVNESHWAR P. GAJENDRAGADKAR, P.B.

CITATION:  1959 AIR 1111            1960 SCR  (1)  32  CITATOR INFO :  R          1959 SC1342  (18)  R          1960 SC 160  (66)  C          1963 SC 375  (7)  R          1963 SC1756  (2,6)  D          1965 SC 155  (8)  R          1965 SC1803  (11)  R          1972 SC 136  (33)  R          1972 SC1031  (51)  E          1976 SC1760  (7,8,9,10,11)  RF         1979 SC1652  (18)  D          1984 SC 273  (37)

ACT: Industrial Dispute-Tribunal-Question of competency-when  can be  raised-Dismissal of workmen on enquiry -Rule of  natural justice-Defect in Procedure, if curable-Industrial  Disputes Act 14 of 1947), s. 7.

HEADNOTE: Two  workmen Das and another were arrested by the police  on the complaint of the appellant company for an alleged theft. The  manager held an enquiry and dismissed Das from  service for gross misconduct. At  the enquiry, Das stated that he had nothing to  say  and knew  nothing  about  the  theft.   Certain  persons   whose statements   had  been  recorded  by  the  manager  at   the investigation  stage in the absence of Das, were present  at the  said enquiry.  Das was told to ask those  persons  what they  had  to say, though he was neither supplied  with  the copies  of  the statements made by them nor  the  statements were  read  over  to him at the time of  the  enquiry.   Das replied  that  he  would not put  any.  questions  to  them. Thereupon  these witnesses were asked whether  the  evidence they  had given before the manager was correct, and if  not, they were at liberty to amend it, to which they replied that the evidence they had given was correct. Some  time later, the Magistrate on the final report of  the police discharged Das.  Thereafter the Union had the  matter referred  to the Tribunal.  Before the Tribunal the  company produced  only the statements of the witnesses but  did  not produce  the  witnesses themselves.  The Tribunal  found  in

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favour  of  the workman.  The company came up in  appeal  by special  leave  to the Supreme Court, where, for  the  first time  it  raised  the  question  of  the  qualification  and competency of the one member Tribunal under S. 7 Of the Act. Held, that the question whether the Tribunal was a competent one  under s. 7 of the Industrial Disputes Act, 1947,  prior to  the  amending Act 36 of 956, must be raised  before  the Tribunal  itself  as it was a matter  of  investigation  and could  not be raised for the first time before  the  Supreme Court. Held further, that the basic principle of natural justice in an  enquiry  was  that  the  opponent  must  be  given   the opportunity  of questioning the witnesses after  knowing  in full  what they had to state against him.  The witnesses  on whom  the party relied should generally be examined  in  the presence of the opponent and he must also be informed  about the  material  sought to be used against him, and  given  an opportunity to explain it,                              33 Union of India v. T. R. Varma [1958] S.C.R. 499, followed. New Prakash Transport Co. Ltd. v. New Suwvarna Transport Co. Ltd. [1957] S.C.R. 98, referred to. Held,  further, that if there was defect in the  conduct  of the  enquiry  by the employer it could be cured if  all  the relevant  evidence  including  the witnesses  who  were  not examined in the presence of the workman were produced before the  Tribunal,  thereby giving the party an  opportunity  to cross-examine  them,  and  leaving it  to  the  Tribunal  to consider the evidence and decide the case on merits. M/s.  Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan  C.As. Nos. 746 & 747 Of 1957 decided on 29-4-1959, followed.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 205 of 1958. Appeal  by special leave from the judgment and  order  dated October  23,  1956,  of the Industrial  Tribunal,  Assam  in Reference No. 16 of 1956. M.C.   Setalvad,  Attorney-General  for  India,   S.   N. Mukherjee and B. N. Ghosh, for the appellant. C.B. Agarwala and K. P. Gupta, for the respondents. 1959.  May 6. The Judgment of the Court was delivered by WANCHOO  J.-This  is  an  appeal  by  special  leave  in  an industrial matter.  The appellant is the Phulbari Tea Estate (hereinafter  called the company).  The case relates to  the dismissal  of  one workman namely, B.  N.  Das  (hereinafter called  Das),  which  had been taken up by  the  Assam  Chah Karmchari  Sangh.  which  is a registered  trade  union.   A reference  "Was made by the Government of Assam on March  8, 1956, to the Industrial Tribunal on the question whether the dismissal  of Das was justified; and if not, whether he  was entitled  to reinstatement with or without  compensation  or any other relief in lieu thereof.  Das was dismissed by  the company on March 12, 1955.  The charge against him was  that on  the  night  of February 6/7, 1955,  he  along  with  one Samson, also an employee of the company, committed theft  of two wheels complete with tyres and tubes from the  company’s lorry, 5 34 which  amounted  to  gross  misconduct  under  the  Standing Orders.   The  case was reported to the police and  ’Das  as well  as Samson were arrested.  Das remained in jail  up  to February  25,  1955,  when  he was  released  on  bail.   He

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reported for duty on February 28 ; but the manager suspended him  for  ten days from March 1. Thereafter, he  was  served with  a charge-sheet on March 10, 1955, asking him  to  show cause why he should not be dismissed for gross misconduct as mentioned  above.  He gave a reply on March 11, that as  the case  was sub judice in the criminal court, the question  of dismissal  did not arise at that stage and  the  allegations against him would have to be proved in the court.  On  March 12,  the  manager  held an enquiry, which  was  followed  by dismissal,  on  that very day.  We shall  mention  later  in detail  what  happened at the enquiry, as that is  the  main point  which  requires  consideration in  this  appeal.   To continue  the  narrative, however, the  police  submitted  a final report and the magistrate discharged Das on March  23, 1955.   Thereafter, his case was taken up by the  union  and eventually  reference was made to the Tribunal on  March  8, 1956.   The  Tribunal  came  to  the  conclusion  that   the dismissal  of Das was not justified on the ground of  proper procedure  not  having been followed and also  for  want  of legal  evidence.  It went on to say that normally Das  would have  been  entitled to reinstatement but  in  the  peculiar circumstances of this case it was of opinion that he  should be   granted  the  alternative  relief   for   compensation. Consequently,  it ordered that Das would be entitled to  his pay  and allowances from February 28, to March 11, 1955  and full  pay  and allowances from March 12, till  the  date  of payment.   It  also  ordered that he would  be  entitled  to fifteen day’s pay for every completed year of service  along with all benefits that accrued to him till the date of final payment.  This award, was given on October 23, 1956, and was in  due  course published and came into  force.   Thereupon, there was an application to this Court for special leave  to appeal,  which was granted; and that is how the  matter  has come up before us.                              35 Two  points  have  been urged before us  on  behalf  of  the company, namely- (1)the Tribunal was not a competent tribunal under s. 7 of the  Industrial Disputes Act, No. XIV of  1947  (hereinafter called the Act) as it then stood; and (2)the award of the Tribunal is not sustainable in law  as it  shows  as if the Tribunal was sitting in appeal  on  the enquiry held by the company, and this it was not entitled to do. Re. (1). Reference in this case was made on March 8, 1956, before the amending  Act  No. XXXVI of 1956 came into  force.   At  the relevant  time, therefore, s. 7 of the Act,  which  provided the qualifications of a tribunal, required that where it was one member tribunal, he (a) should be or should have been  a Judge of a High Court, or (b) should be or should have  been a district judge, or (c) should be qualified for appointment as  a  Judge of a High Court.  The contention is  that  Shri Hazarika  who  was  the  tribunal  in  this  case,  was  not qualified  under  this provision.  This contention  was  not raised before the Tribunal and therefore the facts necessary to  establish  whether  Shri Hazarika was  qualified  to  be appointed  as  a tribunal or not were not gone  into.   Shri Hazarika was an Additional District & Sessions Judge,  Lower Assam  Division,  at  the  time  the  reference  was   made. Assuming  that he was not qualified under clause (a)  above, he  might well have been qualified under clause (b),  if  he had been a District Judge elsewhere before he became an  Ad- ditional   District  Judge  in  this  particular   division. Further even if he had never been a District Judge, he might

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be  qualified  for  appointment as Judge of  a  High  Court. These matters needed investigation and were not investigated because  this question was not raised before  the  Tribunal. In  the  circumstance,  we are not  prepared  to  allow  the company to raise this question before us for the first  time and so we reject the contention under this head. Re. (2). The Tribunal gave two reasons for holding that the dismissal was unjustified; namely--(1) that 36 proper  procedure had not been followed, and (2) that  legal evidence  was  wanting.   So far as  the  second  reason  is concerned, there is force in the criticism on behalf of  the company that the Tribunal had proceeded as if it was sitting in  appeal  on  the  enquiry  held  by  the  company.    But considering  that  the  Tribunal Was also  of  opinion  that proper procedure had not been followed we have still to  see whether   that  finding  of  the  Tribunal   justifies   the conclusion  at which it arrived.  We may in this  connection set out in detail what happened at the enquiry on March  12, as  appears  from  the  testimony of  the  manager  and  the documents  produced by him before the Tribunal.   They  show that when the enquiry was held on March 12, certain persons, whose  statements  had been recorded by the manager  in  the absence  of  Das  during the course of what  may  be  called investigation by the company were present.  The first  ques- tion  that  Das  was asked on that day was  whether  he  had anything to say in connection with the disappearance of  two lorry wheels and tyres from the garage.  He replied that  he had  nothing to say, adding that he knew nothing  about  the theft.   He  was  then told that the people  who  had  given evidence  against  him were present and he should  ask  them what  they  had  to say.  He replied that he  would  put  no questions  to them.  Then the witnesses present  were  asked whether  the evidence they had given before the manager  was correct  or not; and if that was not correct, they  were  at liberty  to  amend it.  They all replied that  the  evidence they had given before the manager was correct.  This was all that had happened at the enquiry on March 12, and thereafter the  order  of  dismissal was passed by  the  manager.   The manager’s  testimony  shows  that  the  witnesses  who  were present at the enquiry were not examined in the presence  of Das.   It also does not show that copies of  the  statements made  by  the witnesses were supplied to Das before  he  was asked to question them.  Further his evidence does not  show that  the statements which had been recorded were read  over to  Das at the enquiry before he was asked to  question  the witnesses.  It is 37 true  that the statements which were recorded were  produced on  behalf  of  the company before  the  Tribunal;  but  the witnesses  were  not produced so that they might  be  cross- examined even at that stage on behalf of Das.  The  question is  whether  in these circumstances it can be said  that  an enquiry  as  required by principles of natural  justice  was made in this case. We  may in this connection refer to Union of India v. T.  R. Varma  (1).  That was a case relating to the dismissal of  a public servant and the question was whether the enquiry held under  Art.  311  of  the  Constitution  of  India  was   in accordance  with  the principles of natural  justice.   This Court,  speaking  through Venkatarama Ayyar J.  observed  as follows in that connection at p. 507:- "  Stating  it  broadly  and  without  intending  it  to  be exhaustive, it may be observed that rules of natural justice

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require that a party should have the opportunity of adducing all relevant evidence on which he relies, that the  evidence of the opponent should be taken in his presence, and that he should  be  given  the opportunity  of  cross-examining  the witnesses  examined  by that party, and  that  no  materials should  be relied on against him without his being given  an opportunity of explaining them." It will be immediately clear that these principles were  not followed  in  the  enquiry which took  place  on  March  12, inasmuch  as the witnesses on which the company relied  were not  examined in the presence of Das.  It is true  that  the principles  laid  down  in that case are  not  meant  to  be exhaustive.  In another case New Prakash Transport Co.  Ltd. v. New Suwarna Transport Co. Ltd. (2), this Court held  that "rules   of   natural   justice  vary   with   the   varying constitutions  of statutory bodies and the rules  prescribed by  the  legislature under which they have to act,  and  the question  whether  in  a  particular  case  they  have  been contravened must be judged not by any preconceived notion of what  they may be but in the light of the provisions of  the relevant Act ". In that case, it (1)  [1958] S.C.R. 499. (2) [1957] S.C.R. 98. 38 was  held  that  " the reading out of the  contents  of  the police  report by the Chairman at the hearing of the  appeal was  enough compliance with the rules of natural justice  as there was nothing in the rules requiring a copy of it to  be furnished to any of the parties.  That was, however, a  case in  which  the  police officer making  the  report  was  not required  to be crossexamined; on the other hand, the  party concerned was informed about the material sought to be  used against him and was given an opportunity to explain it.  The narration of facts as to what happened on March 12, which we have given above, shows that even this was not done in  this case,   for  there  is  no  evidence  that  copies  of   the statements, of witnesses who had given evidence against  Das were supplied to him or even that the statements made by the witnesses  to the manager were read out in extensor  to  Das before   he   was  asked  to  question   them.    In   these circumstances one of the basic principles of natural justice in  an enquiry of this nature was not observed, and,  there- fore, the finding of the Tribunal that proper procedure  had not been followed is justified and is not open to challenge. The  defect  in the conduct of the enquiry could  have  been cured  if the company had produced the witnesses before  the Tribunal  and given an opportunity to Das  to  cross-examine them  there.   In Messrs.  Sasa Musa Sugar  Works  (Private) Ltd. v. Shobrati Khan (1), we had occasion to point out that even  where  the employer did not hold  ail  enquiry  before applying under s. 33 of the Act for permission to dismiss an employee,  he  could make good the defect by  producing  all relevant  evidence  which would have, been examined  at  the enquiry,  before  the tribunal, in which case  the  tribunal would  consider the evidence and decide  whether  permission should be granted or not.  The same principle would apply in case  of adjudication under s. 15 of the Act, and  if  there was defect in the enquiry by the employer he could make good that  defect  by  producing necessary  evidence  before  the tribunal.  But even that was not done in this case, for  all that the company did (1)  C. As.  Nos. 746 & 747 Of 1957 decided on 29-4-1059. 39 before  the Tribunal was to produce the statements  recorded by  the  manager during what we have  called  investigation.

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This  left the matters where they were and Das had never  an opportunity  of questioning the witnesses after  knowing  in full   what  they  had  stated  against,  him.    In   these circumstances  we  are of opinion that the  finding  of  the Tribunal  that  the enquiry in this case was not  proper  is correct and must stand. We  therefore dismiss the appeal.  We should, however,  like to make it clear that the order of the Tribunal fixing grant of compensation till the date of payment must be taken to be limited  to the sum of Rs. 11,125, which has been  deposited in  this Court in pursuance of this Court’s order  of  April 22,  1957 and Das will not be entitled to anything more,  as further  stay of payment was pursuant to the order  of  this Court.   In  the circumstances we are of  opinion  that  the parties should bear their own costs of this Court. Appeal dismissed.