IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 1612 of 1993 with SPECIAL CIVIL APPLICATION No 9148 of 1993 For Approval and Signature: Hon'ble MR.JUSTICE H.K.RATHOD ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : YES of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- SHRIRAM BEARINGS LTD Versus SHANTILAL B PARIKH -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 1612 of 1993 MR HASMUKH THAKKAR FOR MR PS CHARI for Petitioner No. 1 MR YV SHAH for Respondent No. 1 2. Special Civil Application No. 9148 of 1993 MR YV SHAH for Petitioner No. 1 RULE SERVED for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE H.K.RATHOD Date of decision: 04/08/2003 COMMON ORAL JUDGEMENT #. Heard learned advocate Mr.Hasmukh Thakkar for learned advocate Mr.P.S.Chari on behalf of the petitioner Company and learned advocate Mr.Y.V.Shah for respondent workman in connection with SCA No.1612 / 1993 and vis-a-vis in another cross petition. #. In both these petitions, the employer and the employee have challenged the very award passed by the Labour Court, Ahmedabad in Reference LCA No.695 / 1978 dated 20th June, 1992. The labour court has partly allowed the Reference with direction to the employer to pay Rs.67,000/- being compensation to the respondent workman instead of reinstatement for the period from 25th July, 1978 to 31st May, 1992 with further direction to the employer to comply with the award within 30 days from the date of publication of the award and also awarded the cost of Rs.500/- against the employer to be paid to the employee. #. The employer being aggrieved of this award filed this petition with prayer to quash and set aside the award, whereas, the workman being aggrieved of the amount of the compensation so awarded by the labour court, has preferred cross petition for enhancement of the amount of compensation. Learned advocate Mr.Shah has submitted that today the respondent workman has crossed the age of about 70 years. #. Considering the fact that both these petitions arose out of the common award between the very parties, both these petitions are being disposed of by this common judgment. The Division Bench of this Court, while issuing Rule in Special Civil Application No.1612 / 1993 passed the order on date 11.3.1993 with interim direction to the employer to deposit a sum of Rs.25,000/- before this Court and on the other hand, permitted the respondent workman to withdraw the said amount on filing an undertaking. The order passed by the Division Bench of this Court on date 11.3.1993, is very relevant for being referred and therefore, the same is reproduced as under: "Rule. Heard the learned advocates appearing for the parties as regard interim relief. The learned counsel for the petitioner states that as per the direction given by the Labour Court, the petitioner is required to make payment of an amount of Rs.67,000/- [Rupees Sixty Seven Thousand only ]. This statement is not disputed by the learned counsel appearing for the respondent. In our opinion, if the petitioner is directed to make payment of an amount of Rs.25,000/- [ Rupees Twenty Five Thousand only ] at this stage and if the petitioner is permitted to retain the balance of the amount during the pendency of the petition, that would meet the ends of justice as far as the interim relief is concerned. For the aforesaid reasons, it is ordered that the direction given by the Labour Court as regards payment of backwages and the amount of compensation is concerned, the implementation of the same is stayed on condition that the petitioner deposits an amount of Rs.25,000/- [ Rupees Twenty Five Thousand only ] in this court on or before April 17, 1993. As and when the amount is deposited in this Court, the same shall be permitted to be withdrawn by the respondent workman. The respondent workman shall file an undertaking in this court that in case he loses in the petition and is required to restore the entire amount or any amount as may be determined by this Court, he shall restore the same to the petitioner within the time as may be directed by this Court. Only after the undertaking is filed, the amount shall be permitted to be withdrawn by the office. A copy of the undertaking shall be served upon the learned counsel for the petitioner. The balance of the amount may be retained by the petitioner on condition that in case the petitioner loses in the petition and is required to make payment of the balance of the amount or any other amount as may be determined by this Court, the same shall be paid to the respondent workman by the petitioner with 15 % [ Fifteen percent ] interest which will be calculated from the date of the award i.e. June 29, 1992. If the amount as indicated hereinabove is not deposited by the petitioner, the interim relief granted herein shall stand vacated. Dt.11.3.94 [A.P.Ravani,J.] [J.M.Panchal,J.]" #. Learned advocate Mr.Thakkar for the employer has submitted that the petitioner has deposited a sum of Rs.25,000/- before this Court and learned advocate Mr.Y.V.Shah submits that the workman has withdrawn this amount from the Registry of this Court. Considering submissions of the learned advocates for the parties, this Court has verified the record and even from the record, it is ascertained that the petitioner employer has deposited the said amount and the same has been withdrawn by the respondent workman. #. It is also noted that the workman concerned has also filed petition subsequent to the filing of the petition by the employer, wherein, this Court has issued Rule on 15th July, 1994. The brief facts of the petition filed by the workman are as under : According to the workman, he was employed by the employer on 23rd September, 1968 and he remained on leave for a period from 6th February, 1978 to 4th March, 1978 and on that basis, ultimately, suspension order came to be passed by the employer on 21st February, 1978 and after holding departmental inquiry, ultimately, the respondent workman was dismissed from service by the employer on date 25th May, 1978. However, the dispute between the parties is that leave was not sanctioned by the management and no prior permission has been obtained by the respondent workman and workman was working as Senior Accountant having post of confidence which resulted into chargesheet and thereby, departmental inquiry and dismissal. The workman has raised industrial dispute aganinst dismissal which ultimately referred by the Assistant Commissioner of Labour, Ahmedabad on 18th July, 1978. Before the labour court, the workman had filed statement of claim and the employer also filed written statement and certain documents were also produced by both the parties and the workman was examined before the labour court and two witnesses examined by the employer and after completion of the oral and documentary evidence, the labour court has examined the merits of the matter. One important fact which requires to be noted that before the labour court, the workman has not challenged the legality and validity of the departmental inquiry and ultimately, relying on that Purshis, the labour court has come to the conclusion that department inquiry held to be legal and valid. Even finding was not challenged and disputed by the respondent workman. Thereafter, the labour court has examined the question of punishment while exercising the powers under Section 11-A of the I.D.Act. The labour court has come to the conclusion that upto inquiry report, there was no challenge by the respondent workman but in between, from the inquiry report to the dismissal, second show cause notice was not given to the respondent workman and that is how the labour court has come to the conclusion that dismissal order is required to be set aside. This being only ground, on which, reliance has been emphasized by the labour court for setting aside dismissal order. #. In the background of above factual aspects, the learned advocate Mr.Thakkar for the employer has submitted that once departmental inquiry held to be legal and valid and no challenged to the finding of the inquiry report, then the labour court is not having any power or jurisdiction to interfere with the punishment order. The second contention raised by the learned advocate Mr.Thakkar is that the respondent workman who was dismissed in the year 1978, he obtained Sanad in the year 1979 and started practice in the year 1981 and the workman was having two telephone connections, one is at residence and another in his office, though, wife of the workman was not working and therefore, this was the clear evidence led before the labour court. Therefore, learned advocate Mr.Thakkar submitted that once gainful employment is proved and the workman having become a Practicing Advocate, certain presumption must be drawn about his gainful employment and therefore, the labour court has committed gross error in granting lumpsum compensation of Rs.67,000/- in favour of the workman and it is the basic error committed by the labour court. He also submitted that the labour court has committed error in considering the period from 1981 - 1992 because that period wherein the respondent workman was having established practice, for that, no payment is necessary and therefore, the labour court has committed gross error. He relied on the decision in support of his submission that second show cause notice which is not given by the employer - petitioner is not fatal to the case of the petitioner, meaning thereby, punishment of dismissal ought not have been set aside. Therefore, he relied on decision in case of ASSOCIATED CEMENT CO.LTD V. T.C.SRIVASTAVA & ORS. reported in 1984 [2] LLJ pg.105. Relying on the aforesaid decision, he submitted that the Apex Court has come to the conclusion that while interpreting the Industrial Employment Standing Orders, Standing Order providing for opportunity to be given to workers to offer explanation before imposing punishment of dismissal, does such standing orders imply second opportunity being given before inflicting punishment after conclusion of enquiry ?, whether enquiry is vitiated by failure to give second opportunity. Learned advocate Mr.Thakkar submitted that the answer given by the Apex Court in negative and therefore, contended that since no opportunity was given to the workman, dismissal ought not to have been set aside. Except this decision, learned advocate Mr.Thakkar has not cited any other decision or authority before this Court. In short, his submission is the labour court has committed gross error in granting lumpsum amount without application of mind and also to set aside dismissal because of want of second show cause notice and therefore, the award in question is required to be set aside. Save and except the contentions referred above, no other submission made by the learned advocate Mr.Thakkar while defending the case of the petitioner employer before this Court. #. Learned advocate Mr.Y.V.Shah for the respondent workman has submitted that at present the workman is aged about 70 years and the labour court has committed gross error not granting higher amount of compensation because the workman had worked for more than ten years with the employer and in past, there was no any bad incident in his service career, meaning thereby, the respondent workman was having clean service record. Therefore, he submitted that some more amount of compensation ought to have been awarded in favour of the respondent workman. He also submitted that the respondent workman was not working on the post possessing confidence as at the relevant time, he was working on the post of Sub Accountant not as Senior Accountant. Except that, learned advocate Mr.Y.V.Shah has not made any further submissions before this Court, nor cited and relied upon any decision while pleading the case of the respondent workman before this Court. #. I have considered submissions made by the learned advocates for the respective parties. This Court has also gone through the decision of the Apex Court in case of ASSOCIATED CEMENT CO. LTD. cited before this Court referred to above. The question put up for consideration before this Court by the learned advocate Mr.Thakkar that whether chargesheet which has been served to the respondent workman by the employer under any provisions of the Standing Orders Act or not; whether departmental inquiry was held under any provisions of Standing Order Act or not, the answer is "No", meaning thereby, departmental inquiry which has been conducted and chargesheet which has been served to the respondent workman without following any provisions of the Standing Orders Act and Standing Order Act is not applicable to the petitioner - employer and chargesheet and departmental inquiry is not held in accordance with standing orders of the petitioner employer. In the decision of ASSOCIATED CEMENT CO. LTD. Vs. T.C. SRIVASTAVA & ORS, the Apex Court has made the following observations while keeping in mind the Standing Orders and that cannot be considered to be general observations which apply to the facts of any other cases. The following observations are very important to make distinction about the observations made by the Apex Court as under :- "It is well known that after the enunciation of these principles model standing orders have been framed to provide for the detailed steps required to be undertaken during a domestic inquiry. Since the instant Standing Order was certified prior to the formulation of the above principles it merely contains a bald provision for giving the accused an opportunity to offer any explanation. In other words, different stages in domestic inquiry were never in the contemplation of the framers of the Standing Order. That being the position it would be difficult to attribute any intention to the framers thereof to provide for a second opportunity being given to the delinquent of showing cause against the proposed punishment." The observations made by the Apex Court in para-8 of the aforesaid decision are relevant and the same are reproduced as under :- "8. At the outset the legal position as has been clarified At the outset the legal position as has been clarified by this Court in the Saharanpur Light Railway Co.'s case (supra) may be stated. In the context of certain modification sought to be introduced in a Standing order requiring a second show cause notice this Court has observed thus: ' "As regards the modification requiring a second show cause notice, neither the ordinary law of the land nor the industrial law requires an employer to give such a notice. In none of the decisions given by the Courts or the Tribunals , such a second show cause notice in the case of removal has ever been demand or considered necessary. The only class of cases where such a notice has been held to be necessary are those arising under Art. 311. Even that has now been removed by the recent amendment of that Article. To import such a requirement from Art. 311 in industrial matters does not appear to be either necessary or proper and. would be equating industrial employees with civil servants. In our view, there is no justification or any principle for such equation. Besides, such a requirement would unnecessarily prolong disciplinary enquiries which in the interest of industrial peace should be disposed of in short time as possible. In our view it is not possible to consider this modification as justifiable either on the ground of reasonableness of fairness and should therefore be set aside." It is thus clear neither under the ordinary law of the land nor under industrial law a second opportunity to show cause against the proposed punishment is necessary. This, of course, does not mean that a Standing order may not provide for it but unless the Standing order provides for it. either expressly or by necessary implication no inquiry which is otherwise fair and valid will be vitiated by non-affording of such second opportunity. The question is whether para 3 of the Standing order No. 17 provides for such second opportunity being given to the delinquent ? The relevant words are " all dismissal order shall be passed by the Manager alter giving the accused an opportunity to offer any explanation". The underlined words are wholly inappropriate to convey the idea of a second hearing on opportunity on the question of punishment but appropriate in the context of seeking an explanation in regard to the alleged misconduct charged against him. An explanation' is to be called from the 'accused' which suggests that the same is to be called for prior to the recording of finding that the delinquent is guilty of misconduct: it is the alleged misconduct that is to be explained by him and not the proposed punishment. On a plain reading of the relevant words no second opportunity of showing cause against the proposed punishment is contemplated either expressly or by necessary implication. In other words, it is clear to us that the opportunity spoken of by para 3 OE S.O. 17 is the opportunity to be given to the delinquent to meet the charge framed against him. In this connection it will be pertinent to mention that the concerned S.O. was framed and came into force on March 1, 1946 and was duly certified on October 16, 1954 under the Industrial employment (Standing orders) Act, 1946 i.e. prior to the enunciation of the law by Courts regarding the observance of the principles of natural justice such as issuance of a charge-sheet, holding of an inquiry, opportunity to lead evidence, etc. and it is well-known that after the enunciation of these principles model standing orders have been framed to provide for the detailed steps required to be undertaken during a domestic inquiry. Since the Instant Standing order was certified prior to the formulation of the above principles it merely contains a bald provision for `giving the accused an opportunity to offer any explanation'. In other words, different stages in domestic inquiry were never in the contemplation of the framers of the S.O. That being the position it would be difficult to attribute any intention to the framers thereof to provide for a second opportunity being given to the delinquent of showing cause against the proposed punishment. The latter part of para 3 merely casts a unilateral obligation on concerned authority or the officer to give due consideration to the gravity of the misconduct and the previous record of the delinquent in awarding the maximum punishment." ##. Therefore, while keeping in mind the said observations made by the Apex Court in case of ASSOCIATED CEMENT CO.LTD referring to above, the view taken by the Division Bench of this Court in case of GUJARAT STATE ROAD TRANSPORT CORPORATION VS. CHANDULAL G. RASADIYA reported in 1993 [1] GLR 442, wherein the question was examined by the Division Bench of this Court that when the discipline and appeal procedure is not required to be followed in case of Badali Workers, then principles of natural justice are requires to be followed if dismissal amounts to stigmatizing their career. Therefore, the Division Bench has examined the question that what are the necessary steps being an opportunity available to the workman in case when any chargesheet is served to the employee. The Division Bench of this Court has considered various decisions of the Apex Court and come to the conclusion that to satisfy requirement of observance of principle of natural justice in departmental inquiry which impliedly covers a show cause notice for the proposed punishment. Relying upon the decision of the Apex Court in case of U.P.WAREHOUSING CORPORATION VS. VIJAY NARAYAN reported in AIR 1980 SC 840, the relevant observations made by the Division Bench of this Court in para-13 are quoted as under : "13. Mr.Rathod, learned advocate for the respondent, for this purpose rightly relied upon the decision of the Supreme Court in the case of S.E. & Stamping Works Ltd. V. Workmen, AIR 1963 SC 1914. In that case the Court was required to consider a situation where there were no rules framed before termination of the employees' services and the employees' services were terminated by the Company for causing wilful insubordination or disobedience whether alone or in combination with another or others, of many orders of the superior or of the management. The enquiring authority arrived at the conclusion that workmen were unable to explain as to why these persons [ other person who were examined by the management ] would be making the reports against them falsely. Thereafter the services of the employees were terminated. In that context it was observed that it has been laid down by the Court in a series of decisions that if an industrial employee's services are terminated after a proper domestic enquiry held in accordance with the rules of natural justice and the conclusions reached at the enquiry are not perverse the Industrial Tribunal is not entitled to consider the propriety or the correctness of the said conclusions. Thereafter the Court pertinently observed that some employers have misunderstood the decisions of the Court to mean that the mere form of an enquiry would satisfy the requirements of Industrial Law and the Court held as under : "An enquiry cannot be said to have been properly held unless, [i] the employee proceeded against has been informed clearly of the charges levelled against him, [ii] the witnesses are examined ordinarily in the presence of the employee in respect of the charges; [iii] the employee is given a fair opportunity to cross examine witnesses, [iv] he is given a fair opportunity to examine witnesses including himself in his defence if he so wishes on any relevant matter, and [v] the enquiry officers records his findings with reasons for the same in his report." Same principle has been reiterated in the case of Meenglas Tea Estate v. The Workmen, AIR 1963 SC 1719, wherein it is held as under : "It is an elementary principle that a person who is required to answer a charge must know not only the accusation but also the testimony by which the accusation is supported. he must be given a fair chance to hear the evidence in support of the charge and to put such relevant questions by way of cross examination as he desires. Then he must be given a chance to rebut the evidence led against him. This is the barest requirement of an enquiry of this character this requirement must be substantially fulfilled before the result of the enquiry can be accepted." In the case of U.P.Warehousing Corpn. V. Vijay Narayan, AIR 1980 SC 840, also the Court has held as under : "The rules of natural justice in the circumstances of the case, required that the respondent should be given a reasonable opportunity to deny his guilt, to defend himself and to establish him innocence which means and includes an opportunity to cross examine the witnesses relied upon by the appellant -Corporation and an opportunity to lead evidence in defence of the charge as also a show cause notice for the proposed punishment." ##. In light of above observations made by the Division Bench of this Court relying upon the Apex Court, if this Court now consider the case on hands in similar line keeping in mind the principle of natural justice, ultimately, it is common sense justice, nothing else. The employer served the chargesheet to the workman and after completion of departmental inquiry, employer came to the conclusion to accept the report of the inquiry officer, wherein chargesheet has been found to have been proved against the workman. On that basis, while accepting the report of the inquiry officer, if the employer wants to pass any order which is