SCA/11230/2007 1/59 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 11230 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD Sd/- ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2 To be referred to the Reporter or not ? YES 3 Whether their Lordships wish to see the fair copy of the judgment ? YES 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 ? NO 5 Whether it is to be circulated to the civil judge ? NO ========================================================= GUJARAT NARMADA VELLY FERTILIZERS CO. LTD. - Petitioner(s) Versus S.K. PARMAR & 1 - Respondent(s) ========================================================= Appearance : MR KD GANDHI for NANAVATI ASSOCIATES for Petitioner(s) : 1, MR MS MANSURI for Respondent(s) : 1, None for Respondent(s) : 2, ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 28/04/2008 ORAL JUDGMENT 1. RULE. Service of Rule is waived by learned SCA/11230/2007 2/59 JUDGMENT Advocate Mr. M.S. Mansuri on behalf of the respondent. In the facts and circumstances of the case and with consent of both the learned Advocates, matter is taken up for final hearing today. 2. Heard learned Advocate Mr. K.D. Gandhi for Nanavati Associates for the petitioner and MR. M.S. Mansuri, learned Advocate for the respondent. 3. Through this petition, the petitioner has challenged the order passed on preliminary issue in Complaint (IT) No.21 of 1994 dated 31st January 2007. Complaint was filed by the respondent against the order of punishment passed by petitioner – employer in Complaint (IT) No.21 of 1994, wherein, the Industrial Tribunal has come to the conclusion that the departmental inquiry conducted against the workman is illegal and invalid. The Tribunal has held that the departmental inquiry conducted against the respondent by the petitioner is illegal, unreasonable and contrary to the principles of natural justice. Now, as the departmental inquiry has been held to have been vitiated by the Industrial Tribunal, therefore, petitioner shall have to prove the same against the respondent before the Industrial Tribunal by leading proper evidence. 4. Learned advocate Mr. Gandhi for the petitioner submits that the very same question was considered by this Court in Patel Filters Limited versus Barkatbhai V. Narsindani and another reported in 2000(1) GLR SCA/11230/2007 3/59 JUDGMENT Page 562, wherein, workman of that case raised all such contentions that the departmental inquiry was vitiated because lawyer was not permitted by the enquiry officer to defend the case of the workman in departmental inquiry and, therefore, departmental inquiry was held against the workman without help of the lawyer which has been held to be illegal and contrary to the principles of natural justice by the labour court. Said order was challenged by the employer Patel Filters Ltd. Before this Court by filing Special Civil Application No. 6546 of 1999 which was decided by this Court on 1st October, 1999. Learned advocate Mr. Gandhi also submitted that the decision of the apex court in The Cooper Engineering Ltd. v. P. P. Mundhe (1975-II- LLJ-379)= AIR 1975 SC page 1900 was cited before this Court and yet the Court has examined legality and validity of the order of the labour court holding that the inquiry is vitiated and ultimately, petition was allowed on the ground that the case of The Cooper Engineering Ltd. (supra) cannot be accepted as universal principle of law to be applied in all cases irrespective of its merits. Learned advocate Mr. Gandhi has placed reliance on Para 7 of the said decision which is, therefore, reproduced as under: “7. I do agree the endeavour of the court should be to hear and decide all the issues arising in a matter simultaneously nor should a party be permitted to while away time by challenging the orders on preliminary SCA/11230/2007 4/59 JUDGMENT issues and not permitting the court to decide the real issues. But this is not a case where the issue in question could have been decided along with other issues. The nature of the issue is such which has to be decided as a preliminary issue. This is the view taken by the Hon'ble Supreme Court in the matter of The Cooper Engineering Ltd. (supra). Ordinarily, the courts do not entertain petition against the decision on preliminary issues where such issues can as well be challenged after final adjudication. However, it can not be accepted as universal principle of law to be applied in all cases irrespective of its merits. In the present case, the issue raised is a clear question of law and the relevant facts are undisputed. Since the question does not raise disputed questions of facts, I feel the matter can be entertained against the decision on preliminary issue also and that is what I am inclined to do.” 5. Learned Advocate Mr. Mansuri for the respondent submitted that in such circumstances, as per the view taken by the apex court in The Cooper Engineering Ltd. v. P. P. Mundhe (1975-II- LLJ-379), this order can be challenged by the petitioner after the final result, if it goes against the petitioner and at this stage, court should not interfere with the order and SCA/11230/2007 5/59 JUDGMENT should refuse to interfere at this stage, because, otherwise, the proceedings will be held up and final adjudication will not be over within reasonable time because, according to him, respondent was dismissed from service on 28.10.1993. According to him, more than 14 years have passed and if the matter will remain pending before this court and if the stay is granted by this court then, for another four to five years, the petition will remain pending in this court against such order of the Industrial Tribunal. He submits that if the ultimate result goes against the petitioner, then, the petitioner can challenge such order of the Industrial Tribunal on all the grounds while challenging the order of the Industrial Tribunal dated 31st January 2007 and therefore, this petition cannot be entertained by this court. 6. I have considered the submissions made by the learned Advocate Mr. Gandhi as well as Mr. Mansuri. I have also considered the observations made by this Court in aforesaid decision, para 7 in particular. However, it is necessary to consider the observations made in para 21 and 22 by the apex court in The Cooper Engineering Ltd. v. P. P. Mundhe (1975-II- LLJ-379). Observations made by the apex court in para 21 and 22 of the said judgment are reproduced as under: “21. Propositions (4). (6) and (7) set out above are well-recognised. Is it, however, SCA/11230/2007 6/59 JUDGMENT fair and in accordance with the principles of natural justice for the Labour Court to withhold its decision on a jurisdictional point at the appropriate stage and visit a party with evil consequences of a default on its part in not asking the Court to give an opportunity to adduce additional evidence at the commencement of the proceedings or, at any rate in advance of the pronouncement of the order in that behalf ? In our considered opinion it will be most unnatural and unpractical to expect a party to take a definite stand when a decision of a jurisdictional fact has first to be reached by the Labour Court prior to embarking upon an enquiry to decide the dispute on its merits. The reference involves determination of the larger issue of discharge or dismissal and not merely whether a correct procedure had been followed by the management before passing the order of dismissal. Besides, even if the order of dismissal is set aside on the ground of defect of enquiry a second enquiry after reinstatement is not ruled out nor in all probability a second reference. Where will this lead to? This is neither going to achieve the paramount object of the Act, namely, industrial peace, since the award in that case will not lead to a settlement of the dispute. The dispute, being eclipsed, pro tempore, as a result of such an award, will SCA/11230/2007 7/59 JUDGMENT be revived and industrial peace will again be ruptured. Again another object of expeditious disposal of an industrial dispute (see S. 15) will be clearly defeated resulting in duplication of proceedings. This position has to be avoided in the interest of labour as well as of the employer and in furtherance of the ultimate aim of the Act to foster industrial peace. 22. We are therefore clearly of opinion that when a case of dismissal or discharge of an employee is referred for industrial adjudication the labour court should first decide as a preliminary issue whether the domestic enquiry has violated the principles of natural justice. When there is no domestic enquiry or defective enquiry is admitted by the employer there will be no difficulty. But when the matter is in controversy between the parties that question must be decided as a preliminary issue. On that decision being pronounced it will be for the management to decide whether it will adduce any evidence before the Labour Court. If it chooses not to adduce any evidence it will not be thereafter permissible in any proceeding to raise the issue. We should also make it clear that there will be no justification for any party to stall the final adjudication of the dispute by the Labour Court by questioning SCA/11230/2007 8/59 JUDGMENT its decision with regard to the preliminary issue when the matter if worthy can be agitated even after the final award. It will be also legitimate for the High Court to refuse to intervene at this stage. We are making these observations in our anxiety that there is no undue delay in industrial adjudication.” 7. After considering the observations made by the Hon'ble apex court in para 21/22 of the said judgment, the apex court has not made it clear that that any question of law, if it is involved, it should have to be decided by the High Court and if the question of law is not involved, then, it should not have to be decided. Such demarcation or exception has not at all been observed by the Hon'ble apex court. Apex Court has observed that the preliminary point must have to be decided by the labour court but when such decision on the preliminary point is challenged by either of the parties before the higher forum, then, there is no justification to stall the final adjudication of the dispute before the labour court by questioning its decision with regard to the preliminary issue but if the matter is worthy, it can be agitated even after the final adjudication of the reference and passing of the award. In case of departmental inquiry conducted against the employee, workman has challenged the departmental inquiry as bad by raising contention in statement of claim and employer raised contention that the departmental SCA/11230/2007 9/59 JUDGMENT inquiry is legal and valid. In such circumstances, labour court shall have to examine first as to whether the departmental inquiry is legal and valid or not. Answer given will be either in the affirmative or in the negative. If the departmental inquiry is held to be legal and valid, then, it is for the workman to challenge the same and if it is held to be invalid, then, it is for the employer to challenge it but such challenge by either party is held to be unjustified by the apex court because it is ultimately stalling further proceedings of adjudication pending before the labour court which is not at all in the interest of the either of the parties and, therefore, whatever may be the decision of the labour court on preliminary issue, whether it is a pure question of law or facts or a mixed question of law and facts, same can be challenged by the party while challenging the ultimate award if it is against such party because ultimate object is that the further proceedings before the labour court should not be held up and there is no justification to stall the proceedings under the guise of challenging the order passed by the labour court on preliminary issue. Therefore, decision of the apex court is very much clear. There is no demarcation or exception as understand made by the apex court as regards pure question of law or pure question of facts and/or mixed question of law and facts. Even if the question of law is involved, it can be challenged after final adjudication if the ultimate result is against such party. There is no bar for challenging SCA/11230/2007 10/59 JUDGMENT such question of law after final adjudication but that does not mean that the High Court can interfere whenever High Court likes to interfere. As per Article 141 of the Constitution of India, law declared by the Supreme Court is to be binding on all courts. The law decided by the Supreme Court shall be binding on all courts. Ratio is that there is no justification from either side to held up the proceedings while challenging preliminary issue before the High Court and the High Court is legitimately expected not to interfere in such matters and, therefore, according to my opinion, merely question of law arising while examining order passed by the labour court on preliminary issue will not give jurisdiction to interfere with such order on preliminary issue and to stall the proceedings before the court below. There is no scope in such two parts as understood by this court because there may be only one result, either the departmental inquiry may be held to be valid or invalid, it may be involving a question of law or question of law and facts but the judicial discipline requires not to interfere in such petition because there is no justification with either of the parties to challenge this issue and to stall the further proceedings because same can be challenged after final adjudication if it goes against such party. 8. It is necessary just to understand the industrial law which is not similar to civil law. The proceedings under industrial law which related to SCA/11230/2007 11/59 JUDGMENT right to livelihood and therefore, certain restrictions are imposed by Apex Court in number of decisions. The dismissal or discharge order passed by employer challenged by workman under the industrial forum must have to be adjudicated by Labour Court under the machinery of Industrial Disputes Act, 1947. The dismissal or discharge may be based upon departmental inquiry or may not be based upon departmental inquiry. If the allegations are made against the workman and no departmental inquiry was conducted, then, employer can request the Labour Court to permit them to lead proper evidence before the Labour Court for proving charge against the workman. Once, departmental inquiry was conducted and dismissal order was passed, then, it is for the workman to raise contention against such departmental inquiry that it is vitiated because of no opportunity was given which violates basic principles of natural justice. The employer can defend his inquiry and mentioned it that departmental inquiry conducted against the workman is legal and valid. However, it is open for the employer to ask for opportunity in case if departmental inquiry is vitiated by Labour Court. The preliminary issue is that whether departmental inquiry is proper or not must have to be examined by Labour Court first as a preliminary issue. If preliminary issue decided by Labour Court either in favour of workman or in favour of employer. On both the occasions, either party can challenge it before High Court and can request this Court to entertain this petition and stay the further SCA/11230/2007 12/59 JUDGMENT proceedings. Normally, this practice to challenge preliminary issue order to the higher forum adopted by employer with a purpose to obtain the stay against the further proceedings. Number of cases on having decision on preliminary issue, the further proceedings have been stayed by High Court pending before the Labour Court. Therefore, Apex Court, in various cases, in case of D.P. Maheshwari v. Delhi Administration reported in 1983 (Lab.I.C.) 1629, The Cooper Engineering Ltd., v. P.P. Mundhe reported in AIR 1975 SC 1900 = 1975-II-LLJ 379 and other cases, decided that not to entertain such challenge on preliminary issue on behalf of the employer and both the issues can be decided finally by the Labour Court and same can be examined by Labour Court on the basis of the evidence on record. The object of Industrial Disputes Act, 1947 must have to be achieved to have as early as possible final adjudication on the industrial dispute which maintain industrial peace between the workmen and employer and it may not give a cause of another industrial dispute during the pendency of reference before the Labour Court. Similarly, a preliminary issue relating to departmental inquiry result may come either way and either party is entitled to challenge it, but, in case of The Cooper Engineering Ltd., (supra), Supreme Court has, in terms, held that not to entertain such challenge by either party to the High Court either question of law may involved or not. The reason behind it that in case if inquiry is held to be legal and valid, then, workman can challenge the finding SCA/11230/2007 13/59 JUDGMENT given by inquiry officer whether finding is baseless or perverse or not and thereafter, workman can request the Labour Court to consider his case under Section 11A of the Industrial Disputes Act, 1947 that whether punishment imposed by employer is proportionate to the misconduct in question or not. These two remedies are available with the workman i.e. to challenge the finding and (ii) to request the Labour Court to exercise the power under Section 11A of the Industrial Disputes Act, 1947. So, challenge to order passed by Labour Court on preliminary issue holding inquiry is legal and valid have no fruitful purpose or there is no justification by workman. Similarly, in case, if, departmental inquiry is vitiated in whatsoever reason including the question of law examined by Labour Court, the remedy is available to the employer to request the Labour Court to permit the employer to lead evidence or proving the charge against the workman before the Labour Court. If, employer is able to prove the charge by leading fresh evidence after inquiry is declared vitiated, then, Labour Court may confirm the dismissal order and challenge to order on preliminary issue that inquiry is vitiated becomes meaningless. If, employer satisfactorily proved the charge against the workman by leading fresh evidence, then, that order will relate back to the original order of dismissal. So, employer has not to pay a single rupee when he succeeds in proving the charge against the workman. Therefore, either way challenge by either party the order of Labour Court on preliminary issue, SCA/11230/2007 14/59 JUDGMENT is, ultimate dependent upon the final outcome of reference, meaning thereby that, order passed on preliminary issue cannot be decided the result of reference or fat of reference, but, it merely gives remedy to workmen and employer on different angle, but, ultimately, workmen and employer are not sufferer if preliminary issue decided by Labour Court in respect to departmental inquiry, which can be challenged along with final adjudication. Therefore, this was the object in the mind of Apex Court which reflected in Para 21 of case of The Cooper Engineering Ltd., (supra) and on that basis, the ratio decided by Apex Court in case of The Cooper Engineering Ltd., (supra) in uncertain terms not to encourage the challenge by either party as there is no justification for finalasing the petition against the order passed by Labour Court on preliminary issue. The ratio is very clear and no exception is carved out or kept open by Apex Court which gives discretionary powers to High Court to interfere with an order on preliminary issue if question of law is involved. This is not a civil proceedings, but, this is purely special enactment having subject nature of a dispute and having special effect of order on preliminary issue decided by Labour Court. So, analogy of civil proceedings will not be applicable at all to the challenge of order passed by Labour Court on preliminary issue relating to departmental inquiry. 9. It is a duty of this Court to follow the binding SCA/11230/2007 15/59 JUDGMENT precedent of Apex Court without interpreting such ratio by High Court or without exercising the discretionary power upon binding precedent, this Court must have to understand and apply the precedent under Article 141 decided by Apex Court without using any kind of discussion and using discretion, otherwise, it amounts to ignore the binding precedent of Apex Court by High Court. 10. Recently, the Apex Court in case of Oriental Insurance Co. Ltd. v. Smt. Raj Kumari and Ors. reported in 2007 AIR SCW 7149 has examined this question. The relevant Para 11 to 15 are quoted as under : “11. Reliance on the decision without looking into the factual background of the case before it is clearly impermissible. A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a Judge while giving a judgment that constitutes a precedent. The only thing in a Judges decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well- settled theory of precedents, every decision contains three basic postulates (i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or SCA/11230/2007 16/59 JUDGMENT perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the judgment. The enunciation of the reason or principle on which a question before a Court has been decided is alone binding as a precedent. (See: State of Orissa v. Sudhansu Sekhar Misra and Ors. (AIR 1968 SC 647) and Union of India and Ors. v. Dhanwanti Devi and Ors. (1996 (6) SCC 44). A case is a precedent and binding for what it explicitly decides and no more. The words used by Judges in their judgments are not to be read as if they are words in Act of Parliament. In Quinn v. Leathem (1901) AC 495 (H.L.), Earl of Halsbury LC observed that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which are found there are not intended to be exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are found and a case is only an authority for what it actually decides. 12. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact SCA/11230/2007 17/59 JUDGMENT situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclids theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. V. Horton (1951 AC