31 March 1964
Supreme Court


Case number: Appeal (civil) 517 of 1963






DATE OF JUDGMENT: 31/03/1964


CITATION:  1965 AIR  155            1964 SCR  (7) 555  CITATOR INFO :  R          1969 SC  30  (6)  R          1972 SC 136  (23)  F          1972 SC1343  (11)  F          1975 SC2025  (7)  R          1978 SC1004  (7)  RF         1984 SC 289  (10)  R          1984 SC5050  (18)  R          1988 SC2118  (5)  RF         1991 SC1070  (6)

ACT: Industrial  Dispute-Assault on co-employee-Whether  Standing Order  22(viii) attracted-Domestic enquiry-Findings  binding unless  shown  to be perverse or  evidence  lacking-Criminal Trial  also  pending-Failure to stay  enquiry,  if  vitiates enquiry-Standing Order 22(viii).

HEADNOTE: On  a report that R and M, both employees of  the  appellant waylaid  A, another employee and assaulted him  outside  the factory,  the appellant held an enquiry and sought  approval for  the dismissal of R and M from the Industrial  Tribunal, before  which  an  industrial  dispute  was  pending.    The Tribunal  approved  the dismissal of R but not  that  of  M. Thereupon  R  was  dismissed.   The  respondent  raised   an industrial  dispute in regard to the propriety and  validity of  the said dismissal.  On reference of this  dispute,  the Industrial  Tribunal held that the assault could be  treated as a private matter between R and A with which the appellant was  not concerned and as a result Standing  Order  22(viii) could  not  be  invoked  against  R,  and  it  ordered   the reinstatement of R. On appeal by special leave: Held:  (i) that It would be unreasonable to, include  within Standing  Order 22(viii) any riotous behaviour  without  the factory   which  was  the  result  of  purely  private   and individual  dispute and in course of which tempers  of  both the  contestants become hot.  In order that  standing  order 22(viii)  may be attracted, the appellant should be able  to show  that  the  disorderly or riotous  behaviour  had  some rational connection with the employment of the assailant and the victim.



(ii) In  the  present case the assault by R on A was  not  a purely private or individual matter but was referable to the difference  of  opinion  between the two in  regard  to  the introduction  of incentive bonus scheme and that  cannot  be said to be outside the purview of standing order 22(viii). (iii)     The  Tribunal  was  in error  in  coming,  to  the conclusion that the enquiry suffered from the infirmity that it was conducted    contrary  to the principles  of  natural justice. It  is true that if it appears that by refusing to  adjourn. the  hearing at the instance of charge-sheeted workmen,  the Enquiry Officer failed to give the said workmen a reasonable opportunity to lead evidence, that may in a proper case,  be considered  to  introduce  an element of  infirmity  in  the enquiry; but in the circumstances of this case, it would not be possible to draw such an inference. (iv) The  finding  of the Tribunal that  the  dismissal  was malafic, cannot possibly be sustained. The   Tribunal  has  completely  overlooked  an   elementary principle  of  judicial  approach that even if  a  judge  or Tribunal may reach an erroneous conclusion either of fact or of  law, the mere error of the conclusion does not make  the conclusion malafide. 556 (v)  Since  the domestic enquiry had been fairly  conducted, and  the  findings recorded therein were based  on  Evidence which  was  believed,  there was no  justification  for  the Industrial  Tribunal to consider the same facts for  itself. Findings properly recorded at such enquiries are binding  on parties,  unless, of course, it is shown that such  findings are perverse or are not based on any evidence. Phulbari  Tea  Estate v. Its Workmen, [1960]  1  S.C.R.  32, referred to. (vi) The  Industrial Tribunal was in error when  it  charac- terised  the  result  of the domestic  enquiry  as  malafide partly  because the enquiry was not stayed pending  criminal proceedings against R. It is desirable that if the incident giving rise to a charge framed  against  a workman in a domestic  enquiry  is  being tried  in  a criminal court, the employer  should  stay  the domestic enquiry pending the final disposal of the  criminal case.  It would be particularly appropriate to adopt such  a course  when the charge is of a grave character  because  it would  be  unfair  to compel the workman  to  disclose  the, defence which he may take before the criminal court.  But to say  that domestic enquiries may be stayed pending  criminal trial  is  very different from saying that  if  an  employer proceeds with the domestic enquiry inspite of the fact  that the  criminal trial is pending, the enquiry for that  reason alone is vitiated and the conclusion arrived at in such,  an enquiry is either bad in law or malafide. Delhi  Cloth  & General Mills Ltd. v. Kishan Bhan  [1960]  3 S.C.R. 227, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 51.7 of 1963. Appeal  by special leave from the Award dated September  28, 1960  of the Industrial Tribunal, Ernakulam,  in  Industrial Dispute No. 81 of 1958. G.   B.  Pai,  J. B. Dadachanji, O. C. Mathur  and  Ravinder Narain,   for the appellant. P.   Govinda  Menon, M. S. K. Iyengar and M. R.  K.  Pillai, for respondent No. 1.



March 31, 1964.  The Judgment of the Court was delivered by GAJENDRAGADKAR, C. J.-This appeal by special leave raises  a short question about the validity of the order passed by the Industrial Tribunal, Ernakulam, directing the appellant, the Tata  Oil  Mills Co. Ltd., to reinstate its  workman  K.  K. Raghavan whom it had dismissed with effect from the 14th  of November,  1955.  The appellant is a public limited  concern engaged  in the industry of soaps and toilet  articles.   It owns  three factories in addition to 12 sales offices.   One of  these factories is located at Tatapuram,  Ernakulam,  in the  State  of Kerala.  Mr. Raghavan was  working  with  the appellant  at its factory at Tatapuram.  It was reported  to the appellant that on the 12th November, 1955, Mr.  Raghavan and another employee of the appellant, Mr. Mathews by  name, waylaid Mr. C. A. Augustine, the Chargeman of the  557 Soap  Plant of the company’s factory at Tatapuram  while  he was  returning home after his duty in the second  shift  and assaulted  him.   That  is  why  charge-sheets  were  issued against  both  Messrs  Raghavan  and  Mathews  on  the  14th November,  1955.   Pursuant to the service  of  the  charge- sheets, two officers were appointed by the appellant to hold an  enquiry,  but the respondent Union  represented  to  the appellant  that  justice would not be done to  Raghavan  and Mathews  unless  somebody outside Tatapuram was  invited  to hold  the  enquiry.  Thereupon, the General Manager  of  the appellant appointed Mr. Y. D. Joshi, who is a Law Officer of the appellant in the Head Office, to hold the enquiry.   Mr. Joshi held the enquiry from the 27th to 30th December, 1955, and subsequently, he made his report to the General  Manager of the appellant on the 7th January, 1956.  At that time, an industrial dispute was pending between the appellant and its employees,  and so, the appellant applied to the  Industrial Tribunal  for approval of the dismissal of  Messrs  Raghavan and  Mathews.   The Tribunal approved of  the  dismissal  of Raghavan,  but did not accord its approval of the  dismissal of Mathews.  Acting in pursuance of the approval accorded by the  Tribunal, the appellant dismissed Raghavan with  effect from the 14th November, 1955.  Not satisfied with the  order of dismissal, the respondent raised an industrial dispute in regard  to the propriety and validity of the said  dismissal of  Raghavan and that has become the subject-matter  of  the present reference which was ordered on the 3rd of  December, 1958.  It is on this reference that the Industrial  tribunal has held that the appellant was not justified in  dismissing Raghavan,  and so, has ordered his reinstatement.   This  is the  order  which has given rise to the  present  appeal  by special leave. The first point which calls for our decision in this  appeal is whether the Tribunal was right in holding that the  facts proved  against Raghavan did not attract the  provisions  of Standing Order 22(viii) of the Certified Standing Orders  of the  appellant.   The  said  standing  order  provides  that without  prejudice  to  the  general  meaning  of  the  term "misconduct", it shall be deemed to mean and include,  inter alia,  drunkenness,  fighting,  riotous  or  disorderly   or indecent  behaviour  within or without the factory.   It  is common  ground that the alleged assault took  place  outside the  factory, and, in fact, at a considerable distance  from it.  The Tribunal has held that the assault in question  can be  treated as a purely private matter between Raghavan  and Augustine with which the appellant was not concerned and  as a result of which standing order 22(viii) cannot be  invoked against  Raghavan.   Mr.  Menon who  has  appeared  for  the respondent before us, has



558 contended that in construing standing orders of this charac- ter,  we  must take care to see that disputes  of  a  purely private  or  individual type are not  brought  within  their scope.   He  argues  that  on  many  occasions,   individual employees  may  have  to  deal  with  private  disputes  and sometimes,  as a result -of these private disputes,  assault may be committed.  Such an assault may attract the  relevant provisions  of the Indian Penal Code, but it does  not  fall under  standing  order  22(viii).   In  our  opinion,   this contention   is  well-founded.   It  would,  we  think,   be unreasonable  to include within standing order 22(viii)  any riotous  behaviour without the factory which was the  result of  purely private and individual dispute and in  course  of which tempers of both the contestants became hot.  In  order that standing order 22(viii) may be attracted, the appellant should  be  able  to show that  the  disorderly  or  riotous behaviour  had some rational connection with the  employment of the assailant and the victim. In  the  present case, however, it is quite clear  that  the assault committed by Raghavan on Augustine was not a  purely private  or individual matter.  What the occasion  for  this assault was and what motive actuated it, have been consider- ed by the domestic Tribunal and the findings of the domestic Tribunal  ’on these points must be accepted in  the  present proceedings,  unless they are shown to be based on  no  evi- dence  or are otherwise perverse.  Now, when we look at  the report  of  the  Enquiry Officer, it is clear  that  on  the evidence  given by Mr. M. M. Augustine and K. T.  Joseph  it appeared that the assault was committed by Raghavan on C. A. Augustine,  because he was in favour of the introduction  of the   Incentive   Bonus  Scheme.   It   appears   that   the introduction of this incentive bonus scheme was approved  by one  set  of workmen and was ’opposed by another,  with  the result that the two rival unions belonging to these two sets respectively  were  arrayed  against  each  other  on   that question.  The evidence of the two witnesses to whom we have just referred clearly shows that when Raghavan assaulted  C. A.  Augustine,  he  expressly stated that  Augustine  was  a black-leg  (Karinkali)  who  was  interested  in   increased production in the company with a view to obtain bonus-,  and the  report further shows that the Enquiry Officer  believed this  evidence and came to the conclusion that  the  assault was  motivated by this hostility between Raghavan and C.  A. Augustine.   In  fact, the charge framed  clearly  suggested that the assault was made, for that motive.  It was  alleged in the charge that Augustine was assaulted to terrorise  the workmen  who  had  been  responsible  for  giving  increased production under the incentives bonus scheme.  According  to the charge, such acts were highly subversive of  discipline. The  Enquiry  Officer  has held that in  the  light  of  the evidence given by M. M. Augustine and 559 K.   T. Joseph, the charge as framed had been proved.   This finding clearly means that the assault was not the result of a   purely  individual  ’or  private  quarrel  between   the assailant  and  his  victim, but it  was  referable  to  the difference  of  opinion  between the two in  regard  to  the introduction of the incentive bonus scheme on which the  two unions   were  sharply  divided.   Therefore,  if   Raghavan assaulted Augustine solely for the reason that Augustine was supporting the plea for more production, that cannot be said to be outside the purview of standing order 22(viii). The next point which needs to be considered arises out of  a plea which has been strenuously urged before us by Mr. Menon



that the Tribunal was justified in holding that the  Enquiry Officer  did not conduct the enquiry in accordance with  the principles  of  natural justice, and so,  the  Tribunal  was entitled to go into the evidence itself and decide  whether, Raghavan’s  dismissal  was  justified  or  not.   The  legal position in this matter is not in doubt.  If it appears that the  domestic enquiry was not conducted in  accordance  with the  principles  of  the natural justice  and  a  reasonable opportunity was not, for instance, given to Raghavan to lead evidence  in support of his defence, that would be  a  valid ground on which the Tribunal can discard the finding of  the domestic  enquiry  and  consider the matter  on  the  merits uninfluenced  by  the said finding.  Unfortunately  for  the respondent,  however, on the material on record it  is  very difficult  to sustain the finding of the Tribunal  that  the Enquiry  Officer did not conduct the enquiry  in  accordance with the principles of natural justice. The  whole  of  this contention is based on  the  fact  that Raghavan  wanted  to examine two witnesses,  -Messrs  M.  P. Menon  and  Chalakudi.  It appears that  Raghavan  told  the Enquiry  Officer  that he wanted to examine these  two  wit- nesses and he requested him to invite the said two witnesses to give evidence.  The Enquiry Officer told Raghavan that it was  really  not  a part of his duty to call  the  said  two witnesses  and that Raghavan should in fact have  kept  them ready  himself.  Even so, in order to assist  Raghavan,  the Enquiry  Officer  wrote letters to the two  witnesses.   Mr. Menon replied expressing his inability to be present  before the  Enquiry Officer, and the Enquiry  Officer  communicated this  reply to Raghavan, so that for Raghavan’s  failure  to examine  Menon  no blame can be attributed  to  the  enquiry officer at all.  In regard to Chalakudi, it appears that  he sent  one  letter addressed to the Enquiry  Officer  and  it reached him on the 31st December, 1955, the day on which  he was leaving for Bombay.  This letter was not signed, and so, the Enquiry Officer took no action on it and gave no time to Chalakudi to appear three or four days later as had been 560 suggested  in  that unsigned letter.  The  Tribunal  thought that  this attitude on the part of the Enquiry  Officer  was unsympathetic  and that introduced an element of  Unfairness in the enquiry itself.  We are unable to appreciate how such a conclusion can follow on facts which are admitted.  We  do not  think the Enquiry Officer was called upon to accept  an unsigned  letter  and  act upon it.   Besides,  the  Enquiry Officer  had gone to Ernakulam from Bombay for holding  this enquiry, because the respondent Union itself wanted that the enquiry  should  be held by some other officer  outside  the local station and it was known that the Bombay Officer would go back as soon as the enquiry was over.  In such a case, if Raghavan did not take steps to produce his witnesses  before the  Enquiry  Officer, how can it be said that  the  Enquiry Officer  did not conduct the enquiry in accordance with  the principles  ’of  natural justice?  Mr. Menon  has  suggested that the Enquiry Officer should have taken steps to get  the witnesses  M. P. Menon and Chalakudi brought before him  for giving evidence.  This suggestion is clearly untenable.   In a domestic enquiry, the officer holding the enquiry can take no valid or effective steps to compel the attendance of  any witness; just as the appellant produced its witnesses before the officer, Raghavan should have taken steps to produce his witnesses.  His witness Menon probably took the view that it was beneath his dignity to appear in a domestic enquiry, and Chalakudi  was content to send an unsigned letter  and  that too  so as to reach the Enquiry Officer on the day  when  he



was leaving Ernakulam for Bombay.  It would be  unreasonable to  suggest that in a domestic enquiry, it is the right  ’of the charge-sheeted employee to ask for as many  adjournments as he likes.  It is true that if it appears that by refusing to adjourn the hearing at the instance of the charge-sheeted workman, the Enquiry Officer failed to give the said workman a  reasonable opportunity to lead evidence, that may,  in  a proper  case,  be  considered, to introduce  an  element  of infirmity  in the enquiry; but in the circumstances of  this case,  we do not think it would be possible to draw such  an inference.   The record shows that the Enquiry Officer  went out of his way to assist Raghavan; and if the witnesses  did not turn up to give evidence in time, it was not his  fault. We  must accordingly hold that the Tribunal was in error  in coming to the conclusion that the enquiry suffered from  the infirmity  that it was conducted contrary to the  principles of natural justice. Let  us then consider whether the dismissal of  Raghavan  is actuated  by  malafides, or amounts  to  victimisation.   In regard  to  the  plea of  victimisation,  the  Tribunal  has definitely  found against the respondent.  "I do not  for  a moment  believe",  says the Tribunal, "that  the  management foisted a 561 case  against  the ex-worker.  Regarding the  allegation  of victimisation,  there is no sufficient evidence in the  case that  the management ’or its Manager Mr. John was  motivated with victimisation or unfair labour practice".  This finding is quite clearly in favour of the appellant.  The  Tribunal, however,  thought that because the Enquiry Officer  did  not give  an adjournment to Raghavan to examine  his  witnesses, that  introduced  an  element of  malafides.   It  has  also observed  that since the case against Raghavan did not  fall within  the purview of standing order 22(viii) and yet,  the appellant  framed  a  charge  against  Raghavan  under  that standing   order,   that  introduced  another   element   of malafides.  It is on these grounds that the conclusion as to malafides recorded by the Tribunal seems to rest. In regard to the first ground, we have already held that the Tribunal  was not justified in blaming the  Enquiry  Officer for not adjourning the case beyond 31st December, 1955.   In regard to the second ground, we are surprised that the  Tri- bunal should have taken the view that since in its  opinion, standing  order 22(viii) did not apply to the facts of  this case,  the  framing of the charge under  the  said  standing ’order and the finding of the domestic Tribunal in favour of the appellant on that ground showed malafides.  It seems  to us that the Tribunal has completely overlooked an elementary principle  of  judicial  approach that even if  a  judge  or Tribunal may reach an erroneous conclusion either of fact or of  law, the mere error of the conclusion does not make  the conclusion malafiedes.  Besides, as we have just  indicated, on  the  merits we are satisfied that the  Tribunal  was  in error in holding that standing order 22(viii) did not apply. Therefore, the finding of the Tribunal that the dismissal of Raghavan was malafide, cannot possibly be sustained. There is one more point which has been press-Id before us by Mr.  Menon.  In Phulbari Tea Estate v. Its Workmen,(1)  this Court  has held that even if a domestic enquiry is found  to be defective, the employer may seek to justify the dismissal of  his employee by leading evidence before the Tribunal  to which  an  industrial dispute arising out  of  the  impugned dismissal  has  been referred for adjudication.   Mr.  Menon contends that by parity of reasoning, in cases where the em- ployee  is unable to lead his evidence before  the  domestic



Tribunal  for  no fault of his own,  a  similar  opportunity should  be  given to him to prove his  case  in  proceedings before  the  Industrial  Tribunal.   In  our  opinion,  this contention is not well-founded.  The decision in the case of Phulbari  Tea Estate (supra) proceeds on the basis which  is of basic importance in industrial adjudication that findings properly recorded in (1)  [1960] 1 S.C.R. 32. 562 domestic enquiries which are conducted fairly, cannot be re- examined by Industrial adjudication unless the said findings are  either perverse, or are not supported by any  evidence, or  some other valid reason ’of that character.  In  such  a case,  the  fact  that the finding is not  accepted  by  the Industrial  Tribunal  would  not  necessarily  preclude  the employee  from justifying the dismissal of his  employee  on the  merits, provided, of course, he leads  evidence  before the Industrial Tribunal and persuades the Tribunal to accept his  case.   That, however, is very -different from  a  case like  the present.  In the case before us, the  enquiry  has been   fair,  the  Enquiry  Officer  gave   Raghavan   ample opportunity   to  lead  his  evidence.   If  at   reasonable opportunity had been denied to the employee, that would have made  the  enquiry itself bad and then, the  employer  would have  been required to prove his case before the  Industrial Tribunal,  and in dealing with the dispute,  the  Industrial Tribunal would have been justified in completely ignoring in the  findings of the domestic enquiry.  But if  the  enquiry has  been  fairly conducted, it means  that  all  reasonable opportunity has been given to the employee to prove his case by leading evidence.  In such a case, how can the court hold that  merely  because the witnesses did not appear  to  give evidence  in  support of the employee’s case, he  should  be allowed   to  lead  such  evidence  before  the   Industrial Tribunal.  If this plea is upheld, no domestic enquiry would be effective and in every case, the matter would have to  be tried afresh by the Industrial Tribunal.  Therefore, we  are not  prepared  to accede to Mr. Menon’s  argument  that  the Tribunal  was  justified in considering the  merits  of  the dispute  for  itself in the present  reference  proceedings. Since  the  enquiry  has  been  fairly  conducted,  and  the findings  recorded  therein are based on evidence  which  is believed, there would be no justification for the Industrial Tribunal  to consider the same facts for  itself.   Findings properly  recorded  at  such enquiries are  binding  on  the parties,  unless,  of  course, it is  known  that  the  said findings are perverse, or are not based on any evidence. There  is yet another point which remains to be  considered. The Industrial Tribunal appears to have taken the view  that since   criminal  proceedings  had  been   started   against Raghavan,  the  domestic  enquiry should  have  been  stayed pending the final disposal of the said criminal proceedings. As this Court has held in the Delhi Cloth and General  Mills Ltd. v. Kushal Bhan,(1) it is desirable that if the incident giving rise to a charge framed against a workman in a domes- tic  enquiry  is  being  tried  in  a  criminal  court,  the employer, should stay the domestic enquiry pending the final disposal  of  the criminal case.  It would  be  particularly appropriate to (1)  [1960] 3 S.C.R. 227. 563 adopt such a course where the charge against the workman  is of  a grave character, because in such a case, it  would  be unfair  to compel the workman to disclose the defence  which he  may  take before the criminal court.  But  to  say  that



domestic  enquiries may be stayed pending criminal trial  is very different from saying that if an employer proceeds with the domestic enquiry in spite of the fact that the  criminal trial  is  pending,  the enquiry for that  reason  alone  is vitiated  and the conclusion reached in such an  enquiry  is either bad in law or malafide.  In fairness, we ought to add that  Mr.  Menon  did  not  seek  to  justify  this  extreme position.   Therefore,  we  must hold  that  the  Industrial Tribunal  was in error when it characterised the  result  of the domestic enquiry as malafide partly because the  enquiry was  not  stayed pending the  criminal  proceedings  against Raghavan.  We accordingly hold that the domestic enquiry  in this  case  was properly held and fairly conducted  and  the conclusions of fact reached by the Enquiry Officer are based on  evidence which he accepted as true.  That being  so,  it was  not open to the Industrial Tribunal to  reconsider  the same questions of fact and come to a contrary conclusion. The  result is, the appeal is allowed.  The order passed  by the Industrial Tribunal is set aside and the reference  made to  it  is answered in favour of the appellant.   Before  we part with this appeal, we ought to add that Mr. Pai for  the appellant has fairly offered to pay ex gratia Rs. 1,000/- to Raghavan  in addition to the amount which has  already  been paid  to him by the appellant in pursuance of the  order  of this Court granting stay to the appellant pending the  final disposal of the present appeal.  There would be no order  as to costs. Appeal allowed. 564