IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE SIXTH DAY OF FEBRUARY TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE SANJAY KUMAR WRIT PETITION NO : 11179 of 1997 Between: Bio-Chemical & Synthetic Products Ltd., Rep. by its General Manager, Sanathnagar, Hyderabad-18. ..... PETITIONER AND 1 Sri Somaiah, S/o Rajamallu, R/o 4-26, Sumitranagar, Kukatpally, Hyderabad. 2 The Additional Labour Court, Rep. by its Presiding Officer, Hyderabad. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue an order, direction or writ particularly one in the nature of writ of mandamus declaring that the award of the 2nd Respondent in I.D.No.387/93 dt 5.2.97 as bad in law and consequently declare that the same is illegal and unenforceable in law and pass Counsel for the Petitioner:MR.B.VIJAYSEN REDDY Counsel for the Respondent No.: MR.V.HARI HARAN WRIT PETITION NO : 15447 of 1997 Between: ..... PETITIONER AND .....RESPONDENT Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to Counsel for the Petitioner:MR.V.HARI HARAN Counsel for the Respondent No.: MR.B.VIJAYSEN REDDY The Court made the following : THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NOS.11179 AND 15447 OF 1997 COMMON ORDER The Award dated 05.02.1997 passed by the Additional Industrial Tribunal-cum-Labour Court (hereinafter referred to as ‘the Labour Court’), Hyderabad, in I.D.No.387 of 1993 is under challenge in both these writ petitions. The facts in brief. Somaiah, the petitioner in Writ Petition No.15447 of 1997 and the first respondent in Writ Petition No.11179 of 1997 (hereinafter referred to as ‘the workman’), was appointed on 15.09.1976 as a Boiler Attendant in the service of Bio-Chemical and Synthetic Products Limited, Hyderabad, the petitioner in Writ Petition No.11179 of 1997 and the second respondent in Writ Petition No.15447 of 1997 (hereinafter referred to as ‘the management’). He was subjected to disciplinary proceedings in connection with an incident that took place on 09.01.1991 wherein he was found guilty of quarreling with a co-employee, Venkateswarulu, and was levied the punishment of stoppage of three annual increments. Thereafter, disciplinary proceedings, subject matter of the present litigation, were initiated with regard to two independent charges levelled against the workman. It was alleged that on 05.04.1991 the workman quarreled with a co-employee, K.Visweswar Rao, the Time Keeper, in connection with denial of his leave. The second charge is that during the intervening night of 05.04.1991 and 06.04.1991, the workman was found sleeping while on duty. A domestic enquiry was instituted and the workman was found guilty on both counts. After following the due procedure, the management dismissed him from service by its order dated 27.11.1991. He was also paid the sum due in full and final settlement of his account on 09.12.1991. Aggrieved thereby, the workman filed I.D.No.387 of 1993 before the Labour Court, Hyderabad, under Section 2-A(2) of the Industrial Disputes Act, 1947 (for brevity, ‘the Act of 1947’). By order dated 20.06.1994, the Labour Court held that the domestic enquiry instituted to look into the charges levelled against the workman was conducted properly. While so, the management filed a petition in I.A.No.124 of 1994 in I.D.No.387 of 1993 seeking permission to raise a new plea with regard to its loss of confidence in the workman and raise additional grounds in support thereof. The dismissal of this petition by the Labour Court led to the filing of Writ Petition No.16832 of 1994 before this Court. A learned single Judge of this Court dismissed the writ petition upholding the rejection of the petition by the Labour Court. Aggrieved thereby, the management preferred a Writ Appeal in W.A.No.918 of 1995. The said appeal was allowed on 22.08.1995 by a learned Division Bench of this Court by the Judgment reported in BIO-CHEMICAL AND SYNTHETIC PRODUCTS LTD., SANATHNAGAR, HYDERABAD v. SRI SOMAIAH AND ANOTHER[1]. The learned Division Bench directed that in case the Labour Court was of the opinion that the imposition of the punishment was not justified, it was open to the management to seek an opportunity to lead further evidence to justify the punishment and the Labour Court was held to be duty-bound to consider such evidence. The learned Division Bench observed that the amendment of the pleadings in this regard did not affect the right of the workman in any way as he could lead evidence to rebut the evidence produced by the management. Thereupon, the Labour Court by its order dated 05.01.1996 opined that the dismissal of the workman from service for the proved misconduct under the two charges was disproportionate to the gravity of the misconduct and accordingly permitted the management to lead further evidence to justify the said punishment. The management examined its Production Manager as M.W.1 while the workman examined himself as W.W.1. After considering the matter afresh, the Labour Court passed the Award dated 05.02.1997 in I.D.No.387 of 1993, holding that the charges of misconduct were not proved and rejecting the plea of the management that it had lost confidence in the workman. In consequence, the Labour Court directed the management to reinstate the workman in service with continuity of service and seniority but without back wages. In W.P.No.11179 of 1997 the management challenges the grant of relief by the Labour Court, to the extent indicated above, while the workman is before this Court in W.P.No.15447 of 1997 aggrieved by the Award of the Labour Court to the extent that it denied him back wages. Heard Sri Koka Satyanarayana Rao, learned counsel for the management and Sri V.Hari Haran, learned counsel for the workman. It is the contention of the learned counsel for the management that the Labour Court having passed an order on 20.06.1994 that the domestic enquiry was held properly ought not to have re-opened the said issue and given a finding with regard to the conduct of the said enquiry. More specifically, the finding of the Labour Court that material witnesses were not permitted to be cross-examined by the workman is attacked by the learned counsel. The learned counsel pointed out that by its order dated 05.01.1996, the Labour Court had held that the misconduct under the two charges was proved and asserted that the Award under challenge, which records a contrary finding, is unsustainable in law as the Labour Court ought not to have reviewed the finding. He contended that the workman having received the terminal benefits without protest cannot be permitted to agitate the issue of his dismissal from service thereafter. He further contended that the management having been permitted by the learned Division Bench of this Court in Writ Appeal No.918 of 1995 to amend its plea and adduce further evidence with regard to its loss of confidence in the workman, had placed sufficient evidence before the Labour Court but the Labour Court upon a mis-appreciation of the same rejected the plea of the management in this regard. With regard to the issue of back wages, the learned counsel stated that the workman was gainfully employed and was therefore not entitled to any relief. He submitted that the grant of back wages was a discretionary relief and the exercise of this discretion by the Labour Court did not warrant any interference by this Court under Article 226 of the Constitution of India. He relied upon various Judgments in support of his contentions. Per contra, the learned counsel for the workman asserted that even though the domestic enquiry had been held to be valid by the Labour Court, it was still open to it to look into the evidence on record and assess as to whether the inferences drawn by the management on such evidence were lawful and correct. The findings in the domestic enquiry could therefore be evaluated by the Labour Court, notwithstanding the validity or otherwise of the domestic enquiry. Further, under Section 11-A of the Act of 1947, it was open to the Labour Court to examine whether the punishment imposed was justified and proportionate to the misconduct alleged and proved. He submitted that the findings of the Labour Court as reflected by the order dated 05.01.1996 and the Award dated 05.02.1997 were not perverse, warranting interference by this Court in exercise of its certiorari jurisdiction under Article 226 of the Constitution of India. He contended that the fact that none of the other employees involved in the alleged misconduct had been subjected to any punishment by the management had weighed with the Labour Court in coming to the conclusion that the dismissal of the workman from service was unjustified and disproportionate. He further contended that merely because the workman had received terminal benefits without protest, he could not be held to be estopped from questioning the punishment imposed on him. With regard to the denial of back wages, the learned counsel for the workman contended that the workman was not gainfully employed and that it was for the management to adduce evidence to the contrary. In the absence of such evidence, he stated that the denial of back wages in entirety was unjustified. The record reflects that these two writ petitions were disposed of by a learned single Judge of this Court earlier and in appeal the said order was set aside and the matters were remitted back for fresh adjudication. In this interregnum, it is stated that the workman attained the age of superannuation and therefore, his reinstatement in service does not arise at the present stage. The issue raised in this litigation revolves around the exercise of power by the Labour Court under Section 11-A of the Act of 1947. Section 11-A reads as follows:–– “11-A. Power of Labour Courts, Tribunals and National Tribunals to give appropriate relief in case of discharge or dismissal of Workmen:–– Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct re-instatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require : Provided that in any proceeding under this Section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter.” Section 11-A was introduced in the statute by way of an amendment vide Act No.45 of 1971 with effect from 15.12.1971. The Section fell for consideration before the Supreme Court in THE WORKMEN OF M/S. FIRESTONE TYRE & RUBBER CO. OF INDIA P. LTD. v THE MANAGEMENT AND OTHERS[2] and it was held that the Labour Court was clothed by the said provision with the power to re-appreciate the evidence in a domestic enquiry and satisfy itself whether the evidence relied on by the employer established the misconduct alleged against the workman. Thus, what was once largely in the realm of the satisfaction of the employer, had ceased to be so, and now it is the satisfaction of the Labour Court that finally decides the matter. The Labour Court would therefore examine and re-appreciate the evidence on record to ascertain whether the charges levelled against the workman were established and proved. Thereafter, the Labour Court would evaluate whether the punishment imposed upon the workman as a consequence of the charges held proved and established was justified and proportionate to the misconduct. The power of the Labour Court to modify the punishment in exercise of its jurisdiction under Section 11-A of the Act of 1947 is now beyond the pale of doubt. (RAMA KANT MISRA v. STATE OF U.P.[3]; SCOOTER INDIA LTD. v. LABOUR COURT, LUCKNOW[4]; THE DISTRICT MANAGER, APSRTC, JAGGAIAHPET v. LABOUR COURT, GUNTUR[5]; KAMALAMMA AND OTHERS v. MANAGEMENT OF NURSING INDUSTRIES[6]; SK.Q.HUSSAIN AND ANOTHER v. THE DEPOT MANAGER, APSRTC BUS DEPOT, NARSAMPET AND ANOTHER[7]; ITC BHADRACHALAM PAPER BOARDS LTD. v. THE INDUSTRIAL TRIBUNAL-CUM-LABOUR COURT, WARANGAL AND ANOTHER[8]; THE DISTRICT MANAGER, APSRTC, NIZAMABAD v. THE ADDITIONAL LABOUR COURT[9]; T.ALI AKBAR v. LABOUR COURT[10]). However, the Labour Court in exercise of its discretion in interfering with the punishment imposed would be required to record reasons, justifying such interference. It is also an established proposition of law that where the Labour Court finds that the management had not instituted a domestic enquiry, or such enquiry, though instituted, was defective, it would be open to the Labour Court to permit the management and workman to adduce evidence before it as a Court of first instance, appraise the evidence and thereafter pass orders on the validity of the punishment imposed. This principle, laid down in RAM SWARATH SINHA v. MANAGEMENT OF THE BELSUND SUGAR CO. LTD.[11] by the Labour Appellate Tribunal, found resonance in the observations made by the Supreme Court in THE WORKMEN OF M/S. FIRESTONE TYRE & RUBBER CO. OF INDIA P. LTD.’s case (2 supra) and has been reiterated thereafter. It is interesting to note that in UNITED PLANTERS ASSOCIATION OF SOUTHERN INDIA v. K.G.SANGAMESWARAN AND ANOTHER[12], the Supreme Court went further and held that the Labour Court would have jurisdiction to record evidence even in cases where an opportunity of hearing was given and the principles of natural justice were complied with before the passing of the punishment. Even in the earlier Judgment of this Court between the parties hereto in BIO- CHEMICAL AND SYNTHETIC PRODUCTS LTD.’s case (1 supra), the learned Division Bench rejected the argument that once the domestic enquiry was held to be valid, there would be no occasion for the Labour Court to provide the management with an opportunity to adduce evidence in justification of the punishment imposed. The learned Division Bench held that there was no stage determined for an employer to come forward and ask for leading evidence before the Court or Tribunal in support of its action and that it would be the duty of the Court to see that such opportunity was afforded to the employer; and unless the employer consciously waives the right to lead fresh or further evidence in the course of enquiry by the Court, it would not be proper for the Court/Tribunal to say that it cannot do so. It is also to be noticed that the learned Division Bench held that the materials on record under the proviso to Section 11-A did not mean only such material which was placed before the domestic enquiry and would mean and include all the material placed before the Labour Court. Reference may be made to the Judgment of a learned Division Bench of this Court in CH.SUBBA LAKSHMI v. HON’BLE LABOUR COURT[13], wherein it was held that even if the workman admitted to the validity of the domestic enquiry it would still be open to him to lead evidence to show that his defence was prejudiced, rendering the domestic enquiry invalid. Applying the above principles of law to the established facts of the present case, the following conspectus would emerge: The mere fact that the workman received his terminal benefits without protest cannot be held against him. The Act of 1947 and more specifically, Sections 2-A(2) and 11-A thereof, being beneficial legislation, the management cannot be permitted to estop the workman from challenging his dismissal from service on such technical and flimsy grounds. The workman, though he raised a ground in his petition filed under Section 2-A(2) of the Act of 1947 with regard to the validity of the domestic enquiry held against him, did not choose to agitate the issue before the Labour Court and suffered the order dated 20.06.1994 passed by the Labour Court holding the domestic enquiry to have been properly conducted. However, applying the law laid down in CH.SUBBA LAKSHMI’s case (13 supra), notwithstanding such a finding it was open to the workman to agitate and the Labour Court to examine as to whether there was any prejudice caused to the workman in such enquiry. However, by its order dated 05.01.1996, the Labour Court found that the misconduct alleged against the workman under the two charges, was proved. Having said so, the Labour Court took note of the fact that the workman’s Assistant, Pentaiah, who was also found to be sleeping along with the workman while on duty, was let off by the management without any punishment whatsoever. Significant to note, no evidence was let in by the management as to the nature and scope of the duties of the Assistant, whereby an inference could be drawn that he was not responsible to the same extent as the workman, warranting the lenience shown to him. On the other hand, it is the case of the management that merely because Pentaiah tendered an apology he was let off. The Labour Court also found that the Time Keeper, Visweswar Rao, who was allegedly involved in the misconduct of quarreling with the workman on 05.04.1991, was also let off without any punishment as he had tendered an apology. This discrimination by the management in dealing with its employees weighed with the Labour Court in coming to the finding that the punishment of dismissal from service levied upon the workman was not proportionate to the gravity of the proved misconduct. Having come to the said conclusion, the Labour Court, taking due note of the directions of the learned Division Bench of this Court in Writ Appeal No.918 of 1995, permitted the management to adduce fresh evidence justifying the punishment imposed. Thereafter, having considered the matter afresh, including the management’s plea of loss of confidence in the workman, the Labour Court passed the Award dated 05.02.1997. As reflected in the Award dated 05.02.1997, the Labour Court proceeded on the assumption that the plea of loss of confidence raised by the management was belated and was an afterthought inasmuch as it had not been raised in the counter filed by the management on 12.07.1993. The Labour Court also took note of the fact that the said plea was not the subject matter of the domestic enquiry held against the workman. On merits, the Labour Court found that the workman had not been punished at any time during the 16 years of his service except for the earlier incident in January, 1991 and thereafter in April, 1991. The evidence adduced by the management was found to be insufficient to prove loss of confidence in the workman. The Labour Court also found that the neglect of duty and disorderly behaviour alleged against the workman were not proved. The discrimination in meting out punishment to the workman alone and letting off the others who were involved in the alleged misconduct weighed with the Labour Court in coming to the conclusion that the punishment imposed was not justified. It is relevant to note that the Labour Court found the domestic enquiry to be valid and proper and after appreciation of the evidence in the said enquiry, recorded a finding in its order dated 05.01.1996 that the misconduct was proved. Thereafter, by the Award dated 05.02.1997, the Labour Court went into that issue once again and reviewed its earlier decision and came to the contrary finding that the misconduct, be it the neglect of duty occasioned by the workman sleeping while on duty or the disorderly behaviour in quarreling with a co-employee, was not proved. It is significant to note that the evidence adduced by the management before the Labour Court in proof of the charges levelled against the workman was only the material pertaining to the domestic enquiry and no independent evidence was led. The evidence adduced thereafter through witnesses was only on the issue of loss of confidence by the management in the workman. Thus, on the very same material which was considered by the Labour Court, two contrary conclusions as reflected in the order dated 05.01.1996 and in the Award dated 05.02.1997 cannot be sustained. It was therefore improper for the Labour Court to review it’s earlier order dated 05.01.1996 and come to a different finding as regards the misconduct held proved earlier. However, the Labour Court is empowered under Section 11-A of the Act of 1947, having found the misconduct to be proved, to examine the proportionality of the punishment imposed. It is in this exercise that the Labour Court took note of the fact that neither of the other employees alleged to have been involved in the misconduct, be it the Time Keeper-K.Visweswar Rao or Pentaiah, the workman’s Assistant, were subjected to any disciplinary action and were let off simply because they had tendered apologies. This discrimination which is writ large on the action of the management in singularly picking upon the workman for the dire punishment of dismissal from service clearly indicates that such punishment was not justified. The visitation of the harshest punishment upon the workman alone, exonerating the others involved in the misconduct, is clearly shocking to the conscience of the Court and warranted interference under Section 11-A of the Act of 1947. Insofar as the aspect of loss of confidence is concerned, the Labour Court misdirected itself in coming to the conclusion that the plea was belated as it had not been raised earlier in the counter or in the course of domestic enquiry. The Labour Court appears to have lost sight of the fact that a learned Division Bench of this Court in Writ Appeal in W.A.No.918 of 1995 had specifically permitted the management to raise this additional plea, notwithstanding the fact that it had not been raised earlier. Therefore, the Labour Court’s finding that the said plea was belated and an afterthought, as it had not been the subject matter of the domestic enquiry instituted against the workman and was not raised in the counter filed in the first instance in the I.D., was unwarranted. However, the Labour Court, having raised these wholly unsustainable technical grounds did not let the issue rest there and went on to consider the plea on its own merits. The Labour Court, after considering the evidence adduced, found that the management had failed to establish loss of confidence in the workman. It took note of the fact that the workman had rendered unblemished service to the management for 15 long years, till the incident in January, 1991. Though the Production Manager (M.W.1) spoke of earlier complaints against the workman, the fact remained that there was nothing on record or in writing about the same. Thus, as rightly held by the Labour Court, the management failed to establish that it had lost confidence in the workman basing on the incidents in January, 1991 and April, 1991, ignoring the loyal service rendered by the workman for 15 long years. All the more so, as the management failed to take any disciplinary action against the other employees involved in the said misconduct, clearly indicating that the management treated the incidents as trivial in nature. This discrimination on the part of the management while dealing with its employees clearly demonstrates that the imposition of the harshest punishment of dismissal from service upon the workman was unjustified. The learned counsel for the management relied upon the Judgment of the Supreme Court in U.B.GADHE AND OTHERS v. GENERAL MANAGER, GUJARAT AMBUJA CEMENT (PRIVATE) LTD.[14], wherein it was held that the power under Section 11-A of the Act of 1947 has to be exercised judiciously and only when the Labour Court is satisfied that the punishment imposed was wholly and shockingly disproportionate to the degree of guilt of the workman concerned. It was also observed that the Labour Court has to give reasons in support