Civil Appeal No 1142 of 1969
Appeal by special leave from the award dated the 8th November 1968 of the Labour Court Poona in Reference IDA No 9 of 1967
B Pai O C Mathur D C Shroff and O N Mishra for the appellant
section C Manchanda and A G Ratnaparkhi for the respondents
The Judgment of the Court was delivered by ALAGIRISWAMI J
This is an appeal by special leave against the award of the Labour Court Poona directing the reinstatement of the respondent in the service of the appellant company
The respondent was a watchman in the factory of the appellant at Chinchwad Poona
A domestic enquiry was held against him in respect of an incident on the night of 15 16 December 1963 and following the enquiry he was dismissed from service on the 7th January 1964
His appeal was dismissed after a personal hearing by the appellate authority
Section 2A of the came into force on 1st December 1965 and on 23rd June 1967 a reference was made by the Government of Maharashtra regarding the dismissal of the respondent to the Labour Court Poona and the Labour Court held that the domestic enquiry held against the respondent was defective that the charges against the respondent had not been made out and directed him to be reinstated
121 There were four charges framed against the respondent in the domes tic enquiry
They were 1 Suspected dishonesty in connection with the company s property
2 Gross negligence in performance of his duties
3 Disobedience of instructions given by the superiors
4 Commission of an act subversive of discipline
For the purposes of this appeal it is not necessary to consider other charges than charge No 1
The chargesheet is rather a bit confused but the statement of facts regarding charge No 1 is clear and there cannot be any doubt or confusion about it
The facts stated in the k chargesheet are as follows It is reported that while you were on duty in the and shift on Sunday the 15th December 1963 at about 1030 PM you left the guard room and went into the factory
While returning from the factory you are reported to have brought out with you a new Fluroscent Tube and to have kept it in the guard room
Immediately after this you are also reported to have directed one of the two watchmen on duty at that time to take a round with the tel a tel clock
It is further reported that at about 1120 PM you removed the Fluroscent Tube from the guard room and were carrying it away out of the factory
At this stage you were challenged by the watchman Shri M B Shinde and consequently you brought back the tube and left it in the guard room
The Company had however not received any report in the matter from you
You were therefore called up when you reported for duty on 16th afternoon and were questioned in the matter
When you were asked to submit your written report about the incident and about your failure to report immediately to your superiors you stated that you will submit your report after consulting your pleader
The above mentioned facts and particularly your unwillingness to submit written report when called upon to do so give rise to doubts about your integrity and faithfulness both in regard to the security and property belonging to the Company for which you are responsible while on duty as a person in charge of the security of the Company
 The Labour Court took the view that the charge of suspected dishonesty in connection with the company s property did not constitute any misconduct either under Standing order 24 or otherwise and there fore no action could be taken against the respondent on the basis of that charge and also that the chargesheet was vague
We can see no vagueness in the chargesheet and on the basis of the facts set out above there could be no doubt that the charge is one of an attempt to steal the 122 company s property
The respondent being a watchman the charge is a serious one and if it was held proved he deserves nothing short of dismissal
The Labour Court was concerned only with the question whether the domestic enquiry held against the respondent was a proper enquiry
It held that the enquiry was not a proper one on the ground that the respondent had produced a police constable as his witness at the time of enquiry and this witness expressed his inability to give evidence with out the permission of his superiors that it was clearly the duty of the Inquiry officer to obtain the necessary permission and to help the respondent in the matter of his defence that the reluctance on the part of the Inquiry officer to pursue the matter further is indicative of the fact that he was not inclined to afford proper opportunity to the respondent to defend himself that there was no necessity for the respondent to apply again to the Inquiry officer for obtaining the necessary permission that the passive approach adopted by the Inquiry officer in the matter had undoubtedly resulted in an opportunity to defend himself being denied and the inquiry will therefore be defective in this respect
It summoned and examined the police constable and taking his evidence also into account held as follows 
Then there is evidence on the record of the inquiry to show that the relations of the second party with the Security Jamadar Shri David were strained
As a matter of fact the evidence shows that the reports from the watchmen started coming in at his instance
The proceedings against the second party started on the report of Shri David
The said report and the reports made by the other watchman and the second party are not forthcoming though referred to in the record of the inquiry
Then there is the glaring fact that very ambiguous allegations and charges which do not even constitute any misconduct are made against the second party and in spite of the fact that the evidence in the inquiry is too conflicting and vague the concerned authorities have without affording proper opportunity to defend found the second party guilty of the charges levelled against him
On a careful reading of the findings of the Inquiry officer the Works Manager and the Appellate Authority in the light of the recitals in the charge sheet it becomes absolutely clear that they have found him guilty without applying their mind to the facts and circumstances of the case
All these factors raise a strong presumption that the removal of the second party was predetermined by the first party and that his dismissal is by way of victimization
For all the aforesaid reasons therefore the dismissal of the second party must be held to be illegal and improper There is nothing adverse the past against him and he is therefore entitled to the relief of reinstatement with back wages
 The first argument on behalf of the appellant is that the incident took place in December 1963 and the order of dismissal was made on the 7th of January 1964 and as section 2A of the Industrial Disputes 123 Act came into force on 1 12 1965 the reference of this dispute under section 10 of the read with section 2A is bad It is argued that this will amount to giving retrospective effect to the provisions of section 2A
We are not able to accept this contention Section 2A is in effect a definition section
It provides in effect that what would not be an industrial dispute as defined in section 2k as interpreted by this Court would be deemed to be an industrial dispute in certain circumstances
As was pointed out by this Court in Chemicals  Fibres of India Ltd vs D G Bhoir  Ors1 the definition could as well have been made part of clause k of section 2 instead of being put in as a separate section
There is therefore no question of giving retrospective effect to that section in making the reference which resulted in the award under consideration
When the section uses the words where any employer discharges dismisses retrenches or otherwise terminates the services of an individual workman it does not deal with the question as to when that was done
It refers to a situation or a state of affairs
In other words where there is a discharge dismissal retrenchment or termination of service otherwise the dispute relating to such discharge dismissal retrenchment or termination becomes an industrial dispute
It is no objection to this to say that this interpretation would lead to a situation where the disputes would be reopened after the lapse of many years and referred for adjudication under section 10
The question of creation of new rights by section 2A is also not very relevant
Even before the introduction of section 2A a dispute relating to an individual workman could become an industrial dispute by its being sponsored by a labour union or a group of workmen
Any reference under section 10 would be made only sometime after the dispute itself has arisen
The only relevant factor for consideration in making a reference under section 10 is whether an industrial dispute exists or is apprehended
There cannot be any doubt that on the day the reference was made in the present case an industrial dispute as defined under section 2A did exist
Normally the dispute regarding an individual workman is not an industrial dispute unless it is sponsored by the union to which he belongs or a group of workmen
The change made by section 2A is that in certain cases such a dispute need not be so sponsored and it will still be deemed an industrial dispute
Supposing in this very case a labour union or a group of workmen had sponsored the case of the respondent before the reference was made such a reference would have been valid
All that section 2A has done is that by legislative action such a dispute is deemed to be an industrial dispute even where it is not sponsored by a labour union or a group of workmen
What a labour union or a group of workmen can do the law is competent to do
The only question for consideration in considering the validity of a reference is whether there was or apprehended an industrial dispute when the reference was made
If there was an industrial dispute or an industrial dispute was apprehend
even though the facts giving rise to that dispute might have arisen before the reference was made the reference would still be valid
It is to be borne in mind that every reference would be made only some 124 time after the dispute has arisen
In Birla Brothers Ltd vs Modak1 it was pointed out that though the came into force in 1947 reference of an industrial dispute based on the facts which arose before that Act came into force is a valid reference
The same reasoning would apply to a reference of a dispute falling under section 2A even though the facts giving rise to that dispute arose before that section came into force
The decision in Birla Brothers case supra was approved by this Court in its decision in Jahiruddin vs Model Mills 13 Nagpur2
These two decisions clearly establish that the test for the validity of a reference under section 10 is whether there was in existence a dispute on the day the reference was made and there was no question of giving retrospective effect to the Act
We find that is the view taken by the Delhi High Court in National Productivity Council vs section N Kaul3 by the Punjab  Haryana High Court in Shree Gopal Mills Ltd vs The State of Haryana4
The view of the High Court of Mysore in P Janardhana Shetty vs Union of India5 to the contrary is not correct Coming now to the other points in the case the decisions of this Court establish clearly that when a workman is dismissed as a result of a domestic enquiry the only power which the Labour Court has is to consider whether the enquiry was proper and if it was so no further question arises
If the enquiry was not proper the employer and the employee had to be given an opportunity to examine their witnesses
It is not the duty of the Enquiry officer in this case to seek permission of the police constable s superiors
It was the respondent s duty to have him properly summoned
He did not even apply to the Enquiry officer requesting him to seek the permission of the police constable s superiors
It is therefore wrong on the part of the Labour Court to have held that the enquiry against the respondent was not a proper enquiry
Once this conclusion is reached there was no room for the summoning and examination of the police constable by the Labour Court
The question regarding the jurisdiction exercised by an Industrial Tribunal in respect of a domestic enquiry held by the management against a worker has been elaborately considered by this Court in its decision in DCM vs Ludh Budh Singh6 and the principles that emerge out of the earlier decisions of this Court have been set out in that decision
The decision of this Court in Workmen vs Firestone Tyre  Rubber Co7 also sets out the principles that emerge from the earlier decisions
In Tata Oil Mills Co Ltd vs Its Workmen8 it was argued that where the employee is unable to lead his evidence before the domestic Tribunal for no fault of his own an opportunity should be given to him to Prove his case in proceedings before the Industrial Tribunal
This Court held that this contention was not well founded
It was pointed out that the Enquiry officer gave the employee ample opportunity to lead his evidence and the enquiry had been fair
It was also pointed out that merely because the witnesses did not appear 125 to give evidence in support of the employee s case it could not be held that he should be allowed to lead such evidence before the Industrial Tribunal and if such a plea was to be upheld no domestic enquiry would be effective and in every case the matter would have to be tried afresh by the Industrial Tribunal
It was pointed out that findings properly recorded at the enquiries fairly conducted were binding on the parties unless it was shown that the said findings were perverse or were not based on any evidence
We are not able to agree with the Labour Court in this case that the findings of the domestic enquiry arc either perverse or not based on any evidence
We therefore come to the conclusion that there was no failure on the part of the Enquiry officer to give a reasonable opportunity to the respondent workman that the enquiry was fair and the Labour Court had therefore no right to examine the witness on behalf of the workman and based on that evidence to upset the finding arrived at the domestic enquiry
We also hold that the punishment imposed in the circumstances is one in which the Labour Court cannot interfere
The result is that the appeal will have to be allowed and the award of the Labour Court set aside
It however appears that the respondent had attained the age of 60 on 11 6 73 and even if he had been in service he would have re tired on that date
Under an interim order made by this Court on 29 4 1969 the respondent has been paid Rs 200 per month as part of the remuneration payable to him till the hearing and final disposal of the appeal and such payment has been made upto date
Even if the respondent had succeeded in this appeal he would not have been entitled to any payment after 11 6 73
In view of this appeal being allowed and the award of the Labour Court being set aside the respondent will have to repay the money he had received in pursuance of the order of this Court
The appellant has agreed that it would not take any steps to recover from the respondent the payments already made to him
There will be no order as to costs
VPS Appeal allowed


Summary:
Section 2A of he  provides that where any employer discharges dismisses retrenches or otherwise terminates the service of an individual workman any dispute or difference between that workman and his employer connected with or arising out of such discharges etc shall be deemed to be an industrial dispute notwithstanding that no other workman nor union is a party to the dispute
The respondent was a watchman in the factory of the appellant
He was dismissed from service on Jan 7 1964 after holding a domestic enquiry with respect to an incident on the night of December 15 1963
In June 1967 the dispute regarding the dismissal of the respondent was referred to the Labour Court
Directing him to be reinstated the Labour Court held that 1 The charge against the respondent was vague 2 The suspected dishonesty of the respondent in connection with the appellant s property did not constitute any misconduct either under Standing orders of the Company or otherwise and 3 The domestic enquiry held was defective because the respondent produced a police constable as his witness at the time of the enquiry who expressed his inability to give evidence without the permission of his superiors and the Enquiry officer took no steps for obtaining the necessary permission
The Labour court summoned and examined the police constable and took his evidence into account
In appeal to this Court it was contended 1 That section 2A came into force only on December 1 1965 and as the dismissal took place before that date the reference of the dispute was bad and 2 That the finding of the Enquiry officer was based upon a fair enquiry and the Labour Court should not have interfered with the finding
Allowing the appeal to this Court on the second contention  HELD 1 The est for the validity of a reference under section 10 is whether there was in existence a dispute on the day the reference was made
124B C Juhiruddin vs Model Mills Nagpur  applied
National Productivity Council vs section N Kaul 1969 II LLJ 186 and Shree Gopal Paper Mills Ltd vs State of Haryana  approved
P Janardhana Shetty vs Union of India 1970 II LLJ 738 over ruled
a Section 2A provides in effect that what would not be an industrial dispute as defined in section 2 k as interpreted by this Court would b deemed to be an industrial dispute in certain circumstances
There is no question of giving retrospective effect to that section in making the reference
When the section uses the words discharges dismisses retrenches etc
 it does not deal with the question as to when that was done but merely refers to a situation or state of affairs
123B D 120 b It is no objection to this to say that
such an interpretation would lead to an old dispute being reopened after the lapse of many years Every reference would be made only sometime after the dispute has arisen
Even in this case if a labour union or a group of workmen had sponsored the case of the respondent such a reference after lapse of some time would have been valid
All that section 2A has done is that by legislative action such a dispute is deemed to be an industrial dispute even where it is not sponsored by a labour union or a group of workmen
The only consideration in such matters is whether there was or apprehended an industrial dispute when the reference was made
123D 124B 2 The charge is not vague
121H 3 The facts set out show that the charge is one of an attempt to steal the appellant s property and if proved the respondent being a watchman deserves dismissal
121H 122A 4 When a workman is dismissed as a result of a domestic enquiry the only power which the Labour Court has is to consider whether the enquiry was proper and if it was so no further question arises
Findings properly recorded at an enquiry fairly conducted are binding on parties unless is shown that such findings were perverse
It was not the duty of the Enquiry officer to seek permission of the constable s superiors and it was the respondent s duty to have his witnesses properly summoned
The enquiry was fair and the Labour Court had no right to examine the witness on behalf of the workman and based on that evidence to upset the finding arrived at the domestic enquiry
124D 15C DCM vs Ludh Budh Singh  Workmen vs Firestone Tyre  Rubber Co  and Tata Oil Co Ltd vs Its Workmen   referred to