WP2606-10 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2606 OF 2010 M/s.Mumbai Cricket Association .. Petitioner Versus Pramod G. Shinde .. Respondent Mr.A.V.Bukhari i/by N.Vora & Associates for the petitioner. Mr.S.S.Pathak a/w Mr.T.R.Yadav for the respondent. CORAM : S.C.DHARMADHIKARI, J. RESERVED ON : 12th JANUARY 2011. PRONOUNCED ON : 24th JANUARY 2011. JUDGMENT: . Rule. Respondent waives service. By consent Rule is made returnable forthwith. WP2606-10 2 2 A short but interesting question of law arises for determination in this writ petition under Article 226 of the Constitution of India which is directed against an order dated 15th October 2010 delivered by the 12th Labour Court, Bombay in Reference (IDA) No.364 of 2004. The question of law can be framed thus: “Whether two distinct category of employees i.e one suspended pending departmental enquiry and other facing a de-novo inquiry in Court in a reference challenging his dismissal, can be equated, so as to permit the latter to claim subsistence allowance till conclusion of the reference u/s 10 of the Industrial Disputes Act, 1947?” 3 In other words, can such employee be held to be suspended pending enquiry into charges of misconduct so as to enable him to claim subsistence allowance. 4 A few facts need to be set out to decide the above framed WP2606-10 3 question. The respondent was employed as higher grade clerk/typist by the petitioner-employer. He was chargesheeted for having committed misconduct under Model Standing Orders, namely, dishonesty in connection with the employer’s activity, attempt to take bribe or illegal gratification and commission of an act subversive of discipline. He was dismissed from service after a departmental enquiry at which the charges were held to be proved. The respondent- employee sought a Reference and Appropriate Government referred the matter of his dismissal to the competent Labour Court. Before the Labour Court it was held that the enquiry conducted against the respondent-employee was not fair and proper and findings of the Enquiry Officer are perverse. This Award was rendered on 29th May 2010. The Labour Court thereafter afforded to the petitioner-employer the opportunity to prove the charges in Court. Thus, an opportunity was given to justify the termination of the services of the respondent- employee. It would be relevant to note that the services came to be terminated on 25th November 2002. WP2606-10 4 5 When the matter was pending and the Labour Court had directed the employer to lead evidence, an application was made by the respondent-workman on 16th August 2010 stating that since the de novo enquiry was to be held in Court, in order to enable him to participate in the same and fight the litigation, he should be paid an amount which was styled as subsistence/survival allowance. It was stated that if the enquiry before the Court drags on, it will not be possible for the respondent-employee to sustain himself as he is out of service and unemployed. Therefore, a provision in the Model Standing Orders, namely, section 10-A of the Industrial Employment (Standing Orders) Act, 1946 be invoked and applied so as to grant subsistence allowance to the respondent, from the date of the termination till the date his misconduct is proved in Court. The respondent submitted that in order to give him an opportunity to defend himself at this de novo enquiry, he should be paid subsistence allowance. 6 The foundation of the claim was that in law there is nothing WP2606-10 5 which would enable the employer to conduct de novo enquiry in Court after, a declaration that the domestic/ departmental enquiry was not fair, just and proper and the findings therein are perverse, has been rendered. If no such opportunity is contemplated by law but the same is granted pursuant to judicial pronouncements, then, the same judicial pronouncements enable the respondent to claim financial assistance during the pendency of the matter before the Court. The enquiry before the Court is equivalent to an enquiry into the charges by an employer and, therefore, when the law permits claiming the subsistence allowance pending the domestic/departmental enquiry, then, the same principle should be applied and subsistence allowance at the rate of 75% of the last drawn wages be paid to the respondent- workman. Unless such a relief is granted, grave loss and serious prejudice will be caused. The same, therefore, be directed to be paid and therefore, the amount as claimed be directed to be paid to him. An affidavit in support of the said application was filed by the respondent. 7 In opposition, the petitioner-employer contended that the WP2606-10 6 application is misconceived and untenable in law and should be rejected. The Labour Court has no power to grant such allowance or financial assistance. The Labour Court has to adjudicate the dispute as per the terms of reference. In the terms there is nothing which would enable the respondent to claim the subsistence allowance. It was contended that the legal right available to the petitioner to lead evidence before the Court to prove the misconduct and to justify the action taken against the respondent-employee is something which cannot be equated with a disciplinary or departmental enquiry conducted by the employer. Here, the dismissal order stands and its legality is being tested before a judicial forum. Once, it is being so tested, then, there is no question of any suspension pending domestic/departmental enquiry. Therefore, the question of applicability of Model Standing Orders does not apply. There is no prejudice to the employee. If the petitioner employer fails to prove the charges, the dismissal order will be set aside and appropriate award would be made by the Court including for backwages. Therefore, no prejudice will be caused to the respondent-employee. Instead WP2606-10 7 prejudice will be caused to the petitioner if such untenable applications are granted and this can create a precedent in all cases of the present nature. On merits also there is no case made out for grant of any such relief. Therefore, the application be dismissed. This was the stand taken by the petitioner in its reply dated 30th August 2010. 8 Thereafter, the application was placed before the learned Judge of the 12th Labour Court and by the impugned order he held that the respondent is entitled to claim subsistence allowance which must be paid to him from the date of the termination. Accordingly, he directed the petitioner to pay subsistence allowance at the rate of 75% of the last drawn wages till the petitioner proves the alleged misconduct before the Court. The amount from 25th November 2002 till the end of October 2010 was directed to be paid within one month from the date of the order and thereafter the subsistence allowance at the rate of 75% of his last drawn wages was directed to be paid on tenth day of every successive month. WP2606-10 8 9 It is this order which is challenged in this writ petition under Article 226 of the Constitution of India. 10 Mr.A.V.Bukhari, learned counsel appearing on behalf of the petitioner contended that the impugned order is ex-facie erroneous and contrary to law. It suffers from serious errors apparent on the face of the record and can safely be termed as arbitrary. He submits that the application filed by the respondent was totally misconceived and not maintainable. The Labour Court exceeded its jurisdiction in granting the claim of the respondent. The claim was made on a basis which is untenable in law. The proceedings before the Court cannot be equated with a departmental/domestic enquiry by the employer. The learned Judge completely lost sight of the fact that he was dealing with a reference under section 10 of the Industrial Disputes Act, 1947. While dealing with the reference which arose out of the order of dismissal of the respondent dated 25th November 2002 the mandate was to go into the correctness and legality of the order of dismissal passed by the employer. That order was passed after a domestic enquiry was held WP2606-10 9 into the charges of misconduct. The enquiry was held and the dismissal order was passed after which a reference was sought by the respondent and the matter came to be referred to the Labour Court. The Labour Court at the first stage decided the issue of fairness of the enquiry and correctness of the findings rendered by the Enquiry Officer. It held that the enquiry was not fair and proper and the findings of the Enquiry Officer are perverse. Thereafter, in law an opportunity is to be afforded to the petitioner to prove the misconduct in Court. Such a stage or situation can never be equated with suspension pending domestic enquiry. Therefore, there is no question of granting any subsistence allowance to the employee. The order of dismissal stands and if the employer is successful in proving the misconduct before the Labour Court, the Labour Court will uphold the dismissal order, which is already passed. In other words, the award of the Labour Court would then relate back to the date of the dismissal. In other words, the dismissal order is neither set aside nor is it held in abeyance as contended. Once such is the position in law, then, respondent’s claim for subsistence allowance could not have been WP2606-10 10 raised at all. If that could not have been raised and granted in law, then, the order of the Labour Court deserves to be quashed and set aside. 11 In support of his submissions Mr.Bukhari has relied upon a judgment of the Hon’ble Supreme Court reported in (1997) 1 Supreme Court Cases 9 (R.Thiruvirkolam Vs. Presiding Officer & Anr). 12 On the other hand, Mr.Pathak appearing for the respondent supported the impugned order. He submits that in such cases the enquiry before the Court into the same charges and to prove identical misconduct must be equated with a domestic enquiry or else serious prejudice will be caused to the workman. The experience is that the employers prolong the proceedings after it is held that the domestic enquiry was not fair, just and proper or the findings of the Enquiry Officer are perverse. The de novo enquiry before the Court is not held and completed expeditiously. The employee has no control over the WP2606-10 11 judicial proceedings. They may drag on for decades together. In these circumstances, it will be difficult for the employee to sustain himself and particularly when he is facing a long legal battle. Therefore, in equity and in law the claim for subsistence allowance could have been made and granted. Drawing support from section 10A of the Industrial Employment (Standing Orders) Act, 1946 and the decision of the Hon’ble Supreme Court reported in 1980 Labour and Industrial Cases 1004 (Gujarat Steel Tubes Ltd etc Vs. Gujarat Steel Tubes Mazdoor Sabha & Ors) and a judgment of the learned single Judge of the Madras High Court reported in 2001 (2) Labour Law Notes 345 (Management of Auro Food Ltd, Auroville And Presiding Officer, Labour Court, Cuddalore & Anr), it is submitted by Mr.Pathak that Mr.Bukhari’s arguments overlook the fact that the law does not contemplate a de novo enquiry in Court to prove the misconduct but such an opportunity is afforded by virtue of judicial pronouncements and particularly by virtue of the decision of the Hon’ble Supreme Court reported in 1973 Labour and Industrial Cases 851 = AIR 1973 Supreme Court 1227 (Workmen of M/s./Firestone Tyre & Rubber Co WP2606-10 12 of India Pvt Ltd Vs. The Management & Ors). If the Industrial Disputes Act does not contemplate a de novo enquiry and the right is claimed by virtue of the judicial pronouncements, then, such pronouncements not prohibiting the grant of the subsistence allowance in equity and the situation being on par with a suspension pending domestic enquiry instituted by the employer, the workman in this case was entitled to apply for and equally the Labour Court was empowered to grant subsistence allowance. There is nothing shocking in the order of the Industrial Court as it is based on equity, fairness and justice. There is no protection for the poor employee who is forced to go to a Court of law for redressal of his grievance arising out of his wrongful dismissal and it is not expected that such protracted litigation can be conducted by him without any financial assistance. If financial assistance is granted in such deserving cases, then, the order need not be interfered with in this Court’s jurisdiction under Article 226 of the Constitution of India. The said jurisdiction is equitable and discretionary. If by exercise of such jurisdiction a just order is interfered with, then, the very object and purpose of writ jurisdiction WP2606-10 13 will be defeated. For all these reasons if the order of the Labour Court can be sustained otherwise, then, this Court should sustain and uphold it and dismiss this writ petition. 13 Mr.Pathak has relied upon following decisions in support of his above submissions: (1)2004 (2) Maharashtra Law Journal 130 (Air India Ltd Vs. Libio Francisco Colaco & Anr); (2)W.P.No.2234 of 2010 dt.27th October 2010 (Mumbai Cricket Association Vs. Pramod G. Shinde); (3)1980 Labour and Industrial Cases 1004 (Gujarat Steel Tubes Ltd Vs. Gujarat Steel Tubes Mazdoor Sabha & Ors); (4)2001(2) Labour Law Notes 345 (Management of Auro Food Ltd, Auroville Vs. Presiding Officer, Labour Court, Cuddalore & Anr); (5)1973 Labour Industrial Cases 851 (The Workmen of M/s.Firestone Tyre & Rubber Co of India Pvt Ltd Vs. The WP2606-10 14 Management and Ors); and (6)1986 ICLR SC 440 (Fakirbhai Fulabhai Solanki Vs. The Presiding Officer & Anr) 14 For properly appreciating the rival contentions, it would be necessary to notice the admitted facts. The undisputed factual position is that the petitioner served a chargesheet on the respondent-employee and in accordance with the Model Standing Orders held a departmental enquiry. At the conclusion of such departmental enquiry the order of termination/dismissal was passed on 25th November 2002. That order of dismissal has been made the subject matter of a reference to the competent Labour Court. The referral order is very clear inasmuch as the Labour Court is called upon to consider as to whether order of dismissal is passed in accordance with law. The adjudication of this reference is in stages. At the first stage the Court considered whether the domestic enquiry held by the respondent- employer can be said to be fair and just and whether the finding of the Enquiry Officer in his report could be termed as perverse. After WP2606-10 15 giving opportunity to both sides the Labour Court held that the enquiry in this case is not fair and proper and the findings of the Enquiry Officer are perverse. That order was delivered on 29th May 2010. However, at the same time the petitioner employer is allowed to prove the charges in Court by adducing evidence. This order of the Labour Court was challenged by the petitioner by filing a writ petition being Writ Petition No.2234 of 2010 but the learned single Judge refused to interfere with the said order and dismissed the writ petition on 27th October 2010. 15 Therefore, the reference is placed before the Labour Court for adjudication at the second stage, namely, whether the petitioner has proved the charges of misconduct. At such an adjudication opportunity will have to be given to the parties to lead evidence. The matter is pending at that stage. However, the respondent-workman made an application claiming subsistence allowance on the basis that the situation is akin to suspension pending domestic enquiry and therefore subsistence allowance be provided in terms of the provisions WP2606-10 16 contained in the Model Standing Orders. In other words, by the adjudication and the order delivered at first stage of the proceedings, the dismissal order is held in abeyance, if not set aside. If that cannot be given effect to until the employer proves the charges de novo, then, the employee can be held to be placed under suspension. The Labour Court has accepted this position and granted subsistence allowance. 16 In my view, the Labour Court has seriously erred in allowing the application. In a recent decision reported in AIR 2004 Supreme Court 4951 (Engineering Laghu Udyog Employees’ Union Vs. The Judge, Labour Court and Industrial Tribunal & Anr) a three Judges’ Bench of the Hon’ble Supreme Court was dealing with the controversy about effective date of termination and doctrine of relation back. It was held that by virtue of section 11A of the Industrial Disputes Act, 1947 a wide power is conferred on the Labour Court to give appropriate relief in case of discharge or dismissal of workman. While adjudicating on a reference made to it, the Labour Court if satisfied that the order of discharge and dismissal was not WP2606-10 17 justified, it may, while setting aside the same, direct reinstatement 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. 17 Thus, only in case a satisfaction is reached by the Tribunal that the order of the discharge or dismissal was not justified, same can be set aside. So long as the same is not set aside, it remains valid. But once where on the basis of the evidence brought on record in the domestic enquiry or by reason of additional evidence, the employer makes out a case justifying the order of dismissal, such an order of dismissal cannot be given effect to only from the date of the award but from the date of the order of punishment. Once the charges are proved before the Labour Court, the order of termination would relate back to the date of original order. 18 Referring to all the cases that have been brought to my notice by WP2606-10 18 the counsel appearing for both sides, this is what is held by the Hon’ble Supreme Court: “6. Section 11A of the Industrial Disputes Act, 1947 (for short ‘the Act’) confers a wide power upon the Labour Court, Tribunal or the National Tribunal to give appropriate relief in case of discharge or dismissal of workmen. While adjudicating on a reference made to it, the Labour Court, Tribunal or the National Tribunal, as the case may be, if satisfied that the order of discharge or dismissal was not justified, it may, while setting aside the same, direct reinstatement 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. Thus, only in a case where the satisfaction is reached by the Labour Court or the Tribunal, as the case may be, that an order of dismissal was not justified, the same can be set WP2606-10 19 aside. So long as the same is not set aside, it remains valid. But once whether on the basis of the evidences brought on record in the domestic inquiry or by reason of additional evidence, the employer makes out a case justifying the order of dismissal, we fail to understand as to how such order of dismissal can be given effect to only from the date of the award and not from the date of passing of the order of punishment. The distinction sought to be made by this Court in some of the matters including Gujarat Steel Tubes (supra), in our opinion, is not based on a sound premise, particularly when the binding decisions of this Court in Motipur Sugar Factory’s case (supra) and Workmen of Messrs Firestone Tyre and Rubber Company of India (P) Ltd v. Management and others, 1973 (3) SCR 387 have not been taken note of. 7. In the present case, we find that the charges were proved before the Labour Court and, thus, the High Court was correct in holding that the order of termination would relate WP2606-10 20 back to the date of original order. 8. Learned senior counsel then urged that P.H.Kalyani’s case (supra) in dissimilar as it was a case of defective inquiry. According to the learned senior counsel, there is a difference between a termination which is not followed by an inquiry and where an inquiry is found to be defective on account of procedural breach. 9. It is not in dispute that in a proceeding for obtaining approval of an order of dismissal from the Labour Court or the Tribunal as the case may be, in terms of Section 33(2)(b) of the Act or where a reference has been made under section 10 thereof, if it is found that an inquiry has been conducted in violation of the principles of natural justice, the employer is entitled to raise the said question in its written statement by way of preliminary issues and pray for grant of such an opportunity to prove the charges levelled against him. WP2606-10 21 10. In Workmen of Motipur Sugar Factory (Private) Ltd v. Motipur Sugar Factory, 1965 (3) SCR 588, this Court held: “It is now well-settled by a number of decision of this Court that where an employer has failed to make an enquiry before dismissing or discharging a workman it is open to him to justify the action before the tribunal by leading all relevant evidence before it. In such a case the employer would not have the benefit which he had in cases where domestic inquiries have been held. The entire matter would be open before the tribunal which will have jurisdiction not only to go into the limited questions open to a tribunal where domestic inquiry has been properly held (see Indian Iron and Steel Cl v. Their Workmen, 1958 SCR 667 but also to satisfy itself on the facts adduced before it by the employer whether the dismissal or discharge was WP2606-10 22 justified. We may in this connection refer to M/s.Sasa Musa Sugar Works (P) Limited v. Shobrati Khan, 1959 Supp SCR 836; Phulbhari Tea Estate v. Its Workmen, 1960 (1) SCR 32 and the Punjab National Bank Limited v. Its Workmen, 1960(1) SCR 806. These three cases were further considered by this Court in Bharat Sugar Mills Limited v. Shri Jai Singh, 1962 (3) SCR 684, and reference was also made to the decision of the Labour Appellate Tribunal in Shri Ram Swarath Sinha v. Belaund Sugar Co 1954 LAC 697. It was pointed out that “the import effect of commission to hold an enquiry was merely this: that the tribunal would not have to consider only whether there was a prima facie case but would decide for itself on the evidence adduced whether the charges have really been made out.” It is true that three of these cases except Phulbari Tea Estate’s case were on applications under S.33 of the Industrial Disputes Act, 1947. But in WP2606-10 23 principle we see no difference whether the matter comes before the tribunal for approval under S.33 or on a reference under S.10 of the Industrial Disputes Act, 1947. In either case if the enquiry is defective or if no enquiry has been held as required by Standing Orders, the entire case would be open before the tribunal and the employer would have to justify on facts as well that its order of dismissal or discharge was proper. Phulbari Tea Estate’s was on a reference under S.10, and the same principle was applied there also, the only difference being that in that case, there was an enquiry though it was defective. A defective enquiry in our opinion stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts WP2606-10 24 and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper.” The employer thus, has