SCA/8928/1999 1/26 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 8928 of 1999 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= JAYANT PRABHUBHAI PATEL & 7 - Petitioner(s) Versus DINESH MILLS LTD - Respondent(s) ========================================================= Appearance : MR NR SHAHANI for Petitioner(s) : 1,None for Petitioner(s) : None for Petitioner No(s).: for Petitioner(s) : 2 - 8. MR KM PATEL for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 01/08/2006 ORAL JUDGMENT 1. Heard the learned advocate Mr. N.R. Shahani appearing on behalf of the petitioners and learned advocate Mr. K.M. Patel appearing on behalf of the SCA/8928/1999 2/26 JUDGMENT respondent. 2. In the present petition, petitioner workmen challenged the award passed by the Labour Court, Bharuch in Reference (L.C.B.) No. 170 of 1990 (Old No.340 of 1987) dated 10th May 1999. The Labour Court, Bharuch has denied the relief of reinstatement and back wages of interim period and granted the amount of compensation Rs.65,000/- in favour of 12 workmen whose names are mentioned as under : (i)Shri Jayantkumar Prabhubhai Patel (ii)Shri Thakor D. Patel (iii)Shri Mahesh T. Patel (iv)Shri Sanu C. Patel (v)Shri Dinkar J. Pravasi (vi)Shri Ahamadbhai I. Pandor (vii)Shri Jayanti C. Prajapati (viii)Shri R. K. Sharma (ix)Shri Hare Ram Sing (x)Shri Hitendrabhai Viththalbhai Desai (xi)Shri Mohanbhai Bhikhabhai Patel (xii)Shri Govindbhai Ramabhai Ahir 3. It is necessary to note that out of 12 workmen those who are concerned in Reference, only 8 workmen have filed this present petition. 4. Learned advocate Mr. Shahani has raised contentions that workmen has not admitted the allegation made by employer. The finding given by SCA/8928/1999 3/26 JUDGMENT Inquiry Officer is baseless and perverse. Pursis given by the workmen must have to be read in toto. Not a single workman accepted the guilt and it was a mass guilt theory adopted by the employer on the basis of going to strike by the workman. He relied upon the decision of Apex Court in case of Gujarat Steel Tubes Limited v. Gujarat Steel Tubes Mazdur Sabha reported in AIR 1980 SC 1896, the Apex Court has held in para 111 that such theory has been negatived by the Apex Court. He also submitted that individually a case of termination is challenged by the workman then Labour Court should have to examine individually and therefore, Labour Court has committed gross error in not examining the matter individually in respect to each workmen as to whether the misconduct of going on strike has been committed by the workmen or not? He relied upon Para 7 in respect to one workman who was not remained present at the relevant date of incident because he was sick and he was not aware about the going on strike incident and the strike by the mass workmen. Therefore, he submitted that Labour Court has committed gross error and on that ground, the finding given by the Labour Court is vitiated. He also submitted that petitioner No.7 herein - Hareram Singh has not received Rs.65,000/- from the respondent. He pointed out from the award that at two places, the observations are made by the Labour Court that at present, the strike of the workmen is continue which adversely affected the production of the company. Therefore, on the basis of such observations made by SCA/8928/1999 4/26 JUDGMENT Labour Court taking into consideration which amounts to factually wrong on the basis gone into by Labour Court and considered against the workmen so on that ground, it vitiates the finding of the Labour Court. 5. Learned advocate Mr. K.M. Patel appearing on behalf of the respondent submitted that against the present respondents, in respect to the same misconduct of the same period by different group of workmen challenged the termination before the Labour Court, Bharcuh being Reference No. 169 of 1990 (Old No.334 of 1987) wherein identical order has been passed by the Labour Court awarding Rs.65,000/- in favour of each workman in lieu of reinstatement with continuity of service and back wages of interim period. This award also challenged by the workmen before this Court being Special Civil Application No.9410 of 2001. He submitted that this Court (Coram : Justice K.S. Jhaveri) decided the matter on 15.12.2005 and come to the conclusion that Labour Court has rightly passed an order granting compensation instead of granting reinstatement in such cases and it being a just and proper award passed by the Labour Court. For that, Labour Court having discretionary power and therefore, this Court is not interfered in this matter while exercising the power under Article 227 of the Constitution of India. 6. From the perusal of the award at Page 36, workers were went on strike with a view to pressurise their demand of pay revision. At that time, binding SCA/8928/1999 5/26 JUDGMENT settlement was continued between the parties and without giving any notice of termination of settlement. A strike has been taken place which ultimately, adversely affected the production of respondent. Therefore, Labour Court has rightly appreciated the aforesaid facts and come to the conclusion that strike declared by workmen was illegal and unreasonable. The strike was in support of workers those who were working at Baroda in company by workmen working at Ankleshwar, if such misconduct of going on strike during the continuation of the settlement which ultimately, adversely affected the production of respondent. This aspect has been also taken into account by the Labour Court. In such circumstances, while exercising the power whether Labour Court can pass appropriate order or put appropriate condition while granting the relief to the workmen. The Section 11-A of the Industrial Disputes Act, 1947 is quoted as under : “Section 11-A : Powers 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 SCA/8928/1999 6/26 JUDGMENT 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.“ 7. Recently the Apex Court in case of The General Secretary, South Indian Cashew Factories Worker's Union v. The Managing Director, Kerala State Cashew Development Corporation Ltd. & Ors. Reported in 2006 LLR 657 = (2006) 6 Scale page 44 has considered the scope of Section 11-A of the Industrial Disputes Act, 1947. The relevant para 14, 15 and 16 are quoted as under : “14. The only other ground found by the Labour Court against the enquiry officer is that he made some unnecessary observations and, therefore, he was biased. The plea that enquiry officer was biased was not raised during the enquiry or pleadings before the SCA/8928/1999 7/26 JUDGMENT Labour Court or in earlier or pleadings before the High Court. The bias of the enquiry officer has to be specifically pleaded and proved before the adjudicator. Such a plea was significantly absent before the Labour Court. We also note that the Labour Court itself found that the enquiry and its findings were not perverse. After such a finding, even if he has stated some unwarranted observations, it cannot be stated that report is biased. In Tata Engineering and Locomotive Co. Ltd. v. S.C. Prasad (1969) 3 SCC 372 this Court held that : “Industrial Tribunals, while considering the findings of domestic enquiries, must bear in mind that persons appointed to hold such enquiries are not lawyers nd that such enquiries are of a simple nature where technical rules as to evidence and procedure do not prevail. Such findings are not to be lightly brushed aside merely because the enquiry officers, while writing their reports, have mentioned facts which are not strictly borne out by the evidence before them.” 15. In this case for finding the employee guilty, the enquiry officer relied on the evidence adduced in the enquiry and Labour SCA/8928/1999 8/26 JUDGMENT Court itself found that the findings were not perverse. In such circumstances, the preliminary order of the Labour Court setting aside the enquiry on the ground that enquiry was conducted by an officer of the Management and he had made some observations in the enquiry report which were not warranted in the case is not a vitiating factor and these reasons are not sufficient to set asdie the enquiry. 16. The Labour Court had earlier held that the enquiry was properly held and there was no violation of the principles of natural justice and that the findings were not perverse. The vitiating facts found by the Labour Court against the enquiry are erroneous and are liable to be set aside. If enquiry is fair and proper, in the absence of any allegations of victimization or unfair labour practice, the Labour Court has no power to interfere with the punishment imposed. Section 11-A of the Act gives ample power to the Labour Court to re-appraise the evidence adduced in the enquiry and also sit in appeal over the decision of the employer in imposing punishment. Section 11-A of the Industrial Disputes Act is only applicable in the case of the dismissal or discharge of a workman as clearly mentioned in the section itself. Before the introduction of section SCA/8928/1999 9/26 JUDGMENT 11-A in Indian Iron and Steel Co. Ltd. v. Their Workmen, (1958) SCR 667 this Court held that the Tribunal does not act as a Court of appeal and substitute its own judgment for that of the Management and that the Tribunal will interfere only when there is want of good faith, victimization, unfair labour practice, etc. on the part of the management. There is no allegation of unfair labour practice, victimization etc. in this case. The powers of the Labour Court in the absence of Section 11-A is illustrated by this Court in Workmen of Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. v. The Management, (1973) 1 SCC 813. When enquiry was conducted fairly and properly, in the absence of any of the allegations of victimization or malafides or unfair labour practice, Labour Court has no power to interfere with the punishment imposed by the management. Since Section 11-A is not applicable, Labour Court has no power to reappraise the evidence to find out whether the findings of the enquiry officer are correct or not or whether the punishment imposed is adequate or not. Of course, Labour Court can interfere with the findings if the findings are perverse. But, here there is a clear finding that the findings are not perverse and principles of natural justice were complied with while conducting enquiry.“ SCA/8928/1999 10/26 JUDGMENT 8. In case of North Eastern Karnataka R.T. Corpn. v. Ashappa & Anr. Reported in 2006 AIR SCW 2644, the observation has held in Para 11 is as under : “11. The said principle of law has been reiterated in A. Sudharkar v. Post Master General, Hyderabad and Anr. [2006(3) SCALE 524] stating : “Contention of Dr. Pillai relating to quantum of punishment cannot be accepted, having regard to the fact that temporary defalcation of any amount itself was sufficient for the disciplinary authority to impose the punishment of compulsory retirement upon the Appellant and in that view of the matter, the question that the third charge had been partially proved takes a back seat. In Hombe gowda Educational Trust and another v. State of Karnataka and otehrs [(2006) I SCC 430], this Bench opined : “The Tribunal's jurisdiction is akin to one under Section 11-A of the Industrial Disputes Act. While exercising such discretionary jurisdiction, no doubt it is open to the Tribunal to substitute one punishment by another; but it is also trite that the Tribunal exercises a limited jurisdiction in this behalf. The jurisdiction SCA/8928/1999 11/26 JUDGMENT to interfere with the quantum of punishment could be exercised only when, inter alia, it is found to be grossly disproportionate. This Court repeatedly has laid down the law that such interference at the hands of the Tribunal should be inter alia on arriving at a finding that no reasonable person could inflict such punishment. The Tribunal may furthermore exercises its jurisdiction when relevant facts are not taken into consideration by the Management which would have direct bearing on the question of quantum of punishment. Assaulting a superior at a workplace amounts to an act of gross indiscipline. The Respondent is a teacher. Even under grave provocation a teacher is not expected to abuse the head of the institution in a filty language and assault him with a chappal. Punishment of dismissal from service, therefore, cannot be said to eb wholly disproportionate so as shock one's conscience. A person, when dismissed from services, is put to a great hardship but that would not mean that a grave misconduct should be unpunished. Although the doctrine of proportionality may be applicable in such SCA/8928/1999 12/26 JUDGMENT matters, but a punishment of dismissal from service for such a misconduct cannot be said to be unheard of. Maintenance of discipline of an institution is equally important. Keeping the aforementioned principles in view, we may hereinafter notice a few recent decisions of this Court.”“ 9. In case of Mahindra and Mahindra Limited v. Sunil Yeshwant Pandit and Shri P.S. Narkar, Presiding Officer, Labour Court, Nashik reported in 2006-II LLJ 363 Bombay, the relevant observation made in Para 22 is as under : “22. If this were a criminal trial, certainly the 1st respondent would be acquitted inasmuch as nobody has been him lifting the drill bits nor has anybody proved that there were marks on the drill bits to show that they belongs to the company. However, in a domestic Tribunal, the standard to be applied is the standard of probability. If there is some relevant material on record and the domestic authority has accepted it and which material reasonably supports the conclusion that the employee is guilty, then merely because another view is possible, it is not permission fort he High Court to substitute its own view, as held in Union of India v. Sardar bahadur (Supra). The view taken by the employer, if it is a probable SCA/8928/1999 13/26 JUDGMENT one cannot be terms to be perverse. It can be terms to be perverse only, if such a view is just not possible. In the facts of the present case, in our view, such a conclusion cannot be drawn. The findings of the Labour Court, therefore, rendered earlier in para 12 that the employer has not proved that the articles belonged to the Company is unsustainable. Similarly the finding of the Labour Court, on remand, in para 22 of the order to similar effect is unsustainable. The Labour Court has held on remand that there is no evidence to link the circumstance of possession of drill bits with the dishonest intention of the workman. The Court has acted almost as a criminal Court and held that there is nothing on record to suggest that he had lifted those drill bits, that they were found less in the department and, therefore, it could not be said that they belongs to the company. The intention is to be inferred from the conduct and the totality of the circumstances. If on these facts, the domestic Tribunal comes to the conclusion that respondent No.1 workman has committed theft, in our view, it cannot be termed to be a conclusion without any basis so as to call it perverse. The findings of the Labour Court, therefore, on remand, will have to be interfered, which we hereby do.“ SCA/8928/1999 14/26 JUDGMENT 10. In case of Madras Fertilizers Limited represented by its Executive Director (personnel and administration), Hanali, Chennai v. Presiding Officer, I Additional Labour Court, Chennai and Another reported in 2006-II M.L.J. 3, the relevant observation is as under : “The findings of the Labour Court are on evidence and this Court cannot substitute its own findings under Article 226 of the Constitution.“ 11. In case of M/s. Maharashtra State Seeds Corpn. Ltd. v. Haridas & Anr. reported in 2006 AIR SCW 1228, the relevant observations made in para 20 and 21 are as under : “20. The 1st respondent held an office of trust. He distributed seeds to the farmers. He collected a huge amount from them. He not only defalcated a huge amount but also misappropriated some bags of seeds. It was in the aforementioned situation improper for the High Court to interfere with the quantum of punishment. It is now well settled that in a matter of disciplinary proceedings the High Court exercises a limited power. [See Govt. of A.P. & Ors. v. Mohad. Nasrullah Khan [JT 2006(2) SC 82], L.K. Verma v. H.M.T. Ltd. & Anr. [JT 2006(2) SC 99], Karnataka Bank Ltd. v. A.L. Mohan Rao [(2006) 1 SCC 63] and SCA/8928/1999 15/26 JUDGMENT Hon'ble Gowda Educational Trust & Anr. v. Sate of Karnataka & Ors. [(2006) 1 SCC 430]. 21. The grounds for judicial review are limited. In Damoh Panna Sagar Rural Regional Bank & Anr. v. Munna Lal Jain [(2005) 10 SCC 84] this Court held that when the High Court intends to interfere with the quantum of punishment on the ground that the same is shockingly disproportionate, it must record reasons for coming to such a conclusion.“ 12. In view of the aforesaid decisions of the Apex Court and various High Courts and considering the findings recorded by the Labour Court while considering the evidence led in departmental inquiry, according to my opinion, Labour Court has rightly come to the conclusion that finding recorded by the inquiry officer is legal and valid. Legality and validity of inquiry was not under challenge and therefore, in such circumstances, Labour Court has exercised the power under Section 11-A of the Industrial Disputes Act, 1947 to set aside the dismissal order and giving such other relief to the workmen including the award of any lessor punishment in lieu of discharge or dismissal as the circumstances of the case may require. The Labour Court, therefore, rightly granted other relief instead of reinstatement with back wages being a compensation about service rendered by the workmen and considering a mass misconduct committed by the SCA/8928/1999 16/26 JUDGMENT workmen. Therefore, when finding given by Labour Court based on evidence, this Court has very limited jurisdiction to interfere this such award. 13. I have considered the submissions made by both the learned advocates appearing on behalf of the respective parties and I have also perused the award passed by the Labour Court, Bharuch. The respondent – employer has taken action in respect the misconduct committed by the workmen. According to respondent, charge-sheet was served and after completion of departmental inquiry while giving reasonable opportunity to the petitioner – workmen, a finding recorded by the Inquiry Officer holding the guilty to these workmen and then issue show cause notice and ultimately, dismissal order dated 5th November 1986 was passed by the respondent. Before the Labour Court, pursis was filed by workmen not to challenge the legality and validity of departmental inquiry, however, in pursis, it was made clear that allegations which were made against the workmen are not accepted by any of the workman. But once, the legality and validity of departmental inquiry is not challenged by workmen then next question has been examined by the Labour Court whether finding given by the inquiry officer is based on legal evidence or not? The Labour Court has considered this aspect and examined the evidence which were led in departmental inquiry and ultimately, come to the conclusion that finding recorded by the inquiry officer is based upon legal evidence and it is not a perverse and baseless. SCA/8928/1999 17/26 JUDGMENT It is necessary to not one important aspect that advocate, who was appearing on behalf of the workmen, has made submission before the Labour Court at Page 34 – Para 2 internal page 21. Wherein it is recorded by the Labour Court that learned advocate on behalf of the workmen in his argument stated that punishment of dismissal imposed by the employer in respect to the gravity of misconduct is harsh, unjustified and disproportionate. Meaning thereby, that Labour Court has exercised the power under Section 11-A of the Industrial Disputes Act, 1947. The Labour Court on two occasions had discussed that finding recorded by the inquiry officer is legal and valid and not baseless and perverse. On the basis of material on record and after considering the evidence led in departmental inquiry, Labour Court has come to the conclusion that misconduct of strike committed by the workmen is illegal and unreasonable, therefore, while coming to this conclusion, the Labour Court has also appreciated the recent position of 1999 wherein considering the argument of the respondent's advocate that even at present also, the strike is going on and work of the company is suffered if it is taken into account by the Labour Court while keeping in mind, the earlier strike, there is nothing wrong to consider the present condition of the company whether it is going well or not? It has not adversely affected or it cannot consider to be a wrong approach of the Labour Court and on that ground, finding given by the Labour Court cannot be vitiated. Therefore, submission made by learned advocate Mr. Shahani SCA/8928/1999 18/26 JUDGMENT cannot be accepted that merely mentioning the facts of the present status of the company wherein strike was going on, it has not be adversely affected any way to the right of the petitioners. 14. After considering the decision as referred above inspect to power and jurisdiction under the provisions of Section 11-A of the Industrial Disputes Act, 1947. The Labour Court in serious misconduct cannot exercised such power for passing alternate punishment or to substitute the lessor punishment. In such misconduct which found to be proved on record interference by Labour Court under Section 11-A of the I.D. Act, 1947 held to be unwarranted, however, in such cases instead of substitute lessor punishment, it is open for the Labour Court to grant some reasonable compensation in lieu of reinstatement and back wages and substitute punishment. Therefore, Labour Court has rightly considered the record and proceedings of inquiry officer and come to the conclusion that in such a serious misconduct, relief of reinstatement with back wages cannot be granted to the petitioner. The Labour Court has power when reinstatement is not possible because of the reason that financial difficulties of the institution, post in question is abolished or not available strain relation with employer, loss of confidence, daily wager, temporary employee, then Labour Court can grant other relief of reasonable compensation while exercising the power under Section 11-A of the Industrial Disputes Act, 1947. In this case, after SCA/8928/1999 19/26 JUDGMENT considering the strain relation with employer because of serious misconduct of strike which proved against the petitioner, therefore, Labour Court has rightly granted compensation