450 CWePeNoe11114of2009 1e INTHE HIGH COURT FOR THE STATES OF PUNJAB ANDHARYANA AT CHANDIGARH CWP Nol1114 of2009 DateofDecision26 111009 1 MarutiSuzukiLimited Oeeeetitioner Versus Officer Industrial Tribunalmcumoour Court Gurgaon andanother 1C PresentlMr M Sarin Sr Advocate with Mr HarshAggarwal Advocateand 0 Mr Nitin Sarin Advocate C for thepetitioner Ms Abha Rathore Advocate C5 for Nol I 2 CeWePeNoe14904of2009 a Z Maruti Suzuki Limited e 4 e etitioner e 0 Versus I Offlcer Industrial Tribunallm4bour Court 08 andanother espondents Present Mr M1 Sarin Sr Advocatewith 7 Mr HarshAggarwalAdvocateand Z Mr Nitin Sarin Advocate 0 for thepetitioner Mr HS Sethi Advocate for No CORAM2HONBLE MRe JUSTICE K KANNAN L 1 Whether of local papersmay be allowed to see the 2 To be referredto the or not 2 4 3 Whetherthejudgment shouldbe reported in theDigest2sl K KANNAN Je I The bone of contentionseTermination simpliciter or bv wav ofpunishment 1 The above two writ petitionschallenge the correctness Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 451 CWeP No11114 of2009 2m 7 of the awards directingtwo of the workmen namelyMohan Sharmaand Joginder Singhto be reinstated while seuing aside the orders of termination of service by the servlces of the workmenwithout stigmaThe pointurgedbythe was that in instanceswherethe managementpassed ordersof tenninationsimpliciter and awardedto the workmenthe 1 amounts that were due to them without forfeitingany of their 0 claims for gratuityprovident 81nd etc the workmen could have C no recourse to an action of such termination On the C5 I other hand the Labour Court accepted the contentionsof the Z workmen that a Court was entitled to examine the real lnotivationsof the managementfor removaland the servicesthat C I stood terminated without an enquirywhen the a5 had entertaineddoubts about the integrityof the workmenandaffinned byan earlierorderthattheywere guiltyof emmo Z theft of vehicles the terminationwas reallyin the nature of a and termed as simplicitertermination it amounted to a retrenchment The termination orders made without framing againstthe workmen and theallegedmisconductwere contraryto law 2 Leamed Senior Counsel for the management Mr Sarin makes no bones about the originalsuspicionthat it entertainedthat the workmen were involved in theft of vehicles The pointthat he was howevertryingto make was that in spite rl Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 452 CWPe Noe11114of2009 m3 4 of suchsuspicionwhat with the was not to takepunitiveaction againstthe workmen but provide foran honourableexittothe workmen bygivingtothem what was due for the servicesrenderedby them and merelyrecording the fact that the managementhad lost the confldence in the workmen The leamed counselwould refer to severalauthorities to bringhome the pointthat when a had lost 0 0 confidence lIl the workman it was entitled to terminate the C5 sen7lces by resort to relevant clause in the standing order that providedfor termlnation and in such case therewas no need to Z constitute an enquiry No misconduct was attributedto the workmen and therefore the Labour Court is not entitled to I examme whether any misconduct was proved The leamed 08 counsel for the would respond to 7 the argumentswith equalvehemence to several Z decisions to show that even orders simpliciter could be merely facadeand it could veil a true intent of of the guideas it were by a different motivation for a concealedagendaLeamed counsel Sh HS Sethi andMs Abha Rathorewould therfore urgethat the Court is not without power to flnd whether it was merelytennination simpliciteror a terminationbyway IL The factual details 3 The facts that would be relevant for consideration lv d Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 453 CWeP Nol1114 of2009 4 which both admit are that 20 vehicles had been stolen from the Marutifactorywhich theyclaimedhad not beensold and 16 of the vehicleswere recoveredthrough before Criminal Courts for custodyof the vehicles on proofof The managementcontendedthat theyhad the Orst inklingof some theftsc8mingthrough some secret informationon l 3081992 A FIR was lodgedagainstthetwo workmenhereand 0 0 nine othersandwhen the matter was entrustedto the policethey I recoveredthe vehicles actingon allegeddisclosure statements C5 I madeby the workmen and othersabout the theftsand the exact Z location of the vehicles The workmen had in the meantime been placed on 011 1992 and the recovenes I were made and produced beforethe Criminal Court The cases 08 before the Criminal Court were pendingandthe managementhad decidedduringthe pendency of the caseto terminatethe services 17 Z of the workmen allegedto have been involved in the incident tl Originalorder was passed on 29051995 settingout the incident of allegeddisclosurestatements andmakingouta groundfor the loss ofthe confldencethattheincident involved The initial order of 29051995 discharge of the workmen without anystigmain terms of clause 2511 of the Standing Order but ultimately the ordersof tenninationthemselvescameto be issued on 310995 by providingto them of three rnonths salaryand salaryfor the notlce periodtogetherwith 1t6 Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 454 CWP No11114 of2009 allowance leave encashmentgratuityretrenchment etc The pointof contention how the termination came aboutand what motivationsdrove them for takingsuch a decisionare to be seen throughhow the matterwas addressedat thetimewhen ordersof terminationof servicehad been issuedto theworkmenand how the workmen to the same The 1m r first objection to the terminationcomes throughclaim statements 0 raisedby the workmen and referencessoughtbefore the Labour 3 I Court when the workmen contendedonlyto the point C5 I theeffect oftennination ofservices without any enquiry Z IIL Claim statments mtermination without enauirv the focal point C 4 The considerationof the claim statementsof I the workmen Mohan ShyamSharmaand JoginderSinghwould 08 be relevant In the claim statement before the Labour Court m Z Mohan Shyam Sharma had contended in 3 to 5 which are as followsl 3 That the was drawing a salaryof Rsl00001 per month at the time of terminationof his servicesillegallybythe 4 That the service of the applicantwas tenninated without issuingany chargesheetof without holding anyinquiryagainstthe applicant and even without issuingshow cause noticepriorto theterminationof the service ofthe applicant NJ Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 455 r CWP No11114 of2009 m6e 5 That the service of the applicantwas tenninated the principle of naturaljusticeand against theestablishedlaw Joginder Singhhad statedin his claim statement from paras5 to 10 as followsl That on the basis of lengthof service and 11 the applicant was promoted to level 05 0 we Ol03992 vide letterdated2904992 This C I establishes that the work and conduct of the C5 I had been ever sicl duringthe Z entirecourse ofhis 6 That therefore vide order dated C 30091992 the was placed under 08 with immediateeffect with continuedto thetime of terminationof servicesof the applicant 7 Z 7 That no charge was issued nor any enquiry was held Ll againstthe and thuswithoutthe lSsuance ofthe speciflchargesheetin respectofthe alleged criminal as per FIR it cannot be and deemed that the applicanthad committed any misconduct The applicant never committed any such thetl of the vehicles nor made any admission as allegedin the order dated 2905995 enclosed with the Iv Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 456 J CeWePe Noe11114of2009 7 7 order dated31101995 The disclosure statementwhich the is referringand has rnade a base for the servicesof the 1S false and obtained under threat coercion andduress the same is not bindingupon the This is not at all to be documentsof 1r free will even otherwise on the basis of the said 0 allegeddocument two persons have already been C I from the criminal case wherein the C5 I LearnedJudgeheld that it was hard to presumethat Z theyhad committedany offence and thus theywere r I 8 That underthelaw the was 08 boundto issue chargesheet to the applicantand hold an enquiryagainsthim to arrive at proper 7 Z conclusion and thus 111 the absenceof same the L1 order of terminationpassedby the management1S not legallysustainableand on this groundalone the tennination order dated 30 1995 is liable to be quashed 9 That the service of the applicanthave been terminated manager service9Maruti Udyog Limited Gurgaonwhereas 111 fact the of the applicantwas made by the 1PJ Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 457 CeWePNo11114 of2009 8 eJ GeneralManagerMaruti UdyogLimited Gurgaon andthus 111his case the terminationhas been made by the Authoritylower in rank to the appointing authorityand as such on this groundalso the tenninationis liable to be set aside 10 That the services of the has been m terminatedby the managementwef 31101995 0 wronglyillegally malafldelyexercisingunfair C labour practicesin violation of principleof natural 0 I justiceand contraryto the provisionsof ID Act Z 1947 and thus the is entitled to be reinstatedwith continuity of service all back wages andotherlegalentitlements Il I 08 5 The contentions could be as that the workmen were claimingthat theyhad unblemishedservice and 7 Z that no charge sheethad been levied before tennination of the service The workmen themselveshad not been guiltyof any rnisconductandtheterminationhadbeen effectedbyan authority who was lower in rank to the authorityThe ordersof tenninationwere illegalmalaflde and amountedto an exerciseof the power byunfair labour practice and in violation of principles of naturaljusticeand the provisions of the IndustrialDisputes Act Lpe Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 458 CWRe No11114 of2009 9 1i IV True character of orders of termination simpliciter terminationor dismissal for misconduct the tests 6 The defence in both the contentionsof the workmen were that the tennination could not havebeen effected without enquiry The matter will have to be therefore examinedwhetherfor the nature of ordersthat were passedthere i wasany for an enquiryThe impugned 0 order of terminationfor both the workmen were issued on the C I same datenamely 3101995 Exceptas regards the C5 relatingto the amount of which was beingsent I alongwith theletter therelevantterms arel Z Please note that your servlces are hereby r terminatedwith immediateeffect on payrnent of three I a5 rnonthssalaryin lieu of threemonths notice in terms of m clause2511 ofthe Certifled Standing Orders read with 7 Z Clause 40 of your letter dated 22041981 applicable to you Even thoughyour terminationof services ln accordancewith ClauseNo5 of theCertified Standing Orders which constitutescontract between the parties does not amount to retrenchmentthe management1S also payingto you 15 dayswages for each yearofservice as 33 7 These letters do not attribute any misconduct The lettersoftermination havebeenissuedin affinnation of 44 Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 459 l CWP No11114 of2009 10 1 1 the power vestedin the to terminatethe services for underthe Certified Orders which in clause 251 readsas follows Except as lll the contract of servlce the managementmay terminatethe servicesof the workman after givingthe following notice or after m payment ofwagesin lieu thereof 0 Clause 251l reads in the case of terminationof a pennanent C I workman one months notice No enquiryis for C5 I terminationsimpliciterIf we go merelybythe letterof contract Z it would be not difficult for us to see that the management went bytheterms to a T and the terminationthat it broughtabout was I The issue now is whetherthis could be treatedas a5 terminationsimpliciter and the workmen are entitledto insist that evenpassingsuch a letterof termination an enquiry was required 7 Z to be constitutedand it could not have been madewithout such m enquir 8 Herein lies the of the approachof the counsel The Senior Counsel for the petitionerSh Sarin would submitthat the workmen had at no pointof time allegedthat the termination was a or it was a deliberateployto conceal a different lntent or it amountedto any victimization There was no warrant for the Court to examne what prompted the managementto take the decision that it a Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 460 CeWPeNoellll4 of2009 11e ld did The Court while examining the contentionof the workmen that the management was adoptingan unfair labour practice and did not even hold an enquiry must onlybe satisfied whether there was lack of bona fldes on the part of the The managementhad lost confldence in the workmen since theyhad to cope with a realitythat 20 of the 1m r vehicles were stolen from the factorybut 16 vehiclescould be 0 C recovered from the competentCriminal Court on 8lrnishing bonds after a criminal complaintand the alleged C I confessionalstatementled to recoveryand production of vehicles Z before the criminal court The extent of reliabilityof such confessionalstatementsbefore Police Offlcers could be a matter 0 of relevance for a Criminal Court to grapplewith but for a 08 decision whethertheyshouldpersistwith the service of certain workmen on whom theyhad a suspicioncould the 7 Z court placeno fetterson the groundthat some of the workmen Qm had been for criminal offences of theft breach of trust etc and that no action could be taken without an enquiryof proofof The had lost confldence 111the workmen and it was stated So by an express order of the management on 2905995 Theydid not however want to hound the workmen byimputinganychargeof thefl and on due considerationofthe servicerenderedbythem one beingyoungin agewho had longyearsof servlce and another who was old and VL Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 461 CeWP No11114 of2009 m12e was goingto soon retire the managementchose not to take the pathof confrontation of the workmen and decided to merely terminate the services and affordedto them all the monetary benefitsthat had accrued to them This decisionof termination for want of confldence could not be said to be mala Ode The Labour Court while answering a referenceto decidewhetherthe 0 termination was proper or not had no more to examinethe 1SSue 0 C3 than what the pennitted The merely of lack of enquiryand for the order of terminationof C5 I servlce therewas no needfor an enquiry Z 9e Leamed counsel for the managementwould therefore relyon decision of the Honble Supreme Court in A India Conloradon Bombav Vs VeA Rabello and another AIR 08 1972 SC 1343 that if the servlce providedfor termination of service and when the managementhad lost V Z conOdence in an employee from suspicionabout his ll for the job in which he was tennination could not be termedto be mala flde and could not be subjectof review by industrial Reliance was also made to a decisionof the Honble SupremeCoun in The worlanen of Sudder Oflice Cinnamara a9 4 SCC 6 which while dealingwith the case of removal of some articles from a godownln an unauthorized manner served the godownclerk with a chargesheetbut without enqUllY Iu4 Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 462 CWP No11114 of2009 13 17 to tenninate the services on the groundthat the lost confldence He was also paidall the beneflts whichhe would have eamedin case of simplicter terminationof service The Honble Supreme Court rejected the contentionofthe Union on behalf of the workmanthatthe order of thetermination wasa adoptedbythe to cover up what 1 was really an order of dismissal and to examine the 0 relevantstanding orders found that even the Labour Court had C not foundthatthe action of themanagement was in any way mala 0 I flde or amounted to unfair labour practiceor a case of Z victimization and found ultimately that thoughit mightappear that the management was chargingthe workmen in respectof a r I matter which may be a misconduct under the StandingOrders 08 ultimately it merelypassedan order of termination simpliciter that would not amount to dismissalbywayof The m Z Honble Court was actuallydealingwith an extreme situationwhere had even laid down a charge sheet and started an enquirybut without any 8irther action to tenninate the workman The Honble Supreme Court found that the fact that the managementpaid all the alllOUIltS due to the workman without forfeitinganyclaims as regards was sufficient to infer thatthe action taken bythemanagementcould not be said to be one by wayof dismissal d that it was onlya case of terminationof Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 463 11 CeWPeNo11114of2009 14e t6 J The above two decisions spellout the service that if the was of service without castingany aspersionon the workmen and when the power rested in the to tenninatethe servicesas per the Standing Order it was competent for the to do so no unfair labourpractice tm or malafldes or victimization was on theworkmen 0 10 Learn6dcounsel appearing for the workmen soughtto C I the abovedecisionsby referenceto otherdecisionsof C5 I the Honble Supreme Court onlyin the contextof how the Court Z has a dutyto see whetherthe management was tryingto conceal its real intentionsand referredto severaldecisionsand it will be my endeavourto see whether the decisions flt with the facts I a5 which havebeenalreadyenumerated or thereexistsany deviation that would make the decisionscited by the leamed 7 Z counsel In ICC Sharma Vs Delhi Stock Exchane and others 200514 SCC 4 the Honble Supreme Court dealing with a case of tennination of servlce with immediateeffect on payment of three months salaryin exerclse of powers under the lettersof and the had been madedirectly before the High Court under Article 226 of the Constitution without referene to an before the Labour Court The case was thereforebeingdecidedbythe HighCourt onlyby the exchange of lettersbetweenthe managementand the workman that found that there had been bad blood between Ivla Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 464 0 1 CeWePeNo11114 of2009 15 1 the and although held that the terminationof service was malaOde and the Court took into note the loss of condence by the and for This decision was consideredin the context ofthe beingan of the Stateand the service being by Article 311 ofthe Constitution This does not tr provideto us the guidethat 1S in industrial 0 C where the case has no trappings of Art 311 and I which hasto be examinedin the context of the provisions of the CD I IndustrialDisputes Act Refeningto Le Michael and Another Z Vs Mls Johnson Pumps Lt19751 1 SCC 574 Ms Abha Rathore contended that the decision dealt with a case of r I employee of provedefflciency and six years 08 but had been from service to be a termlnatlOIl simpliciterwith one months notice pay The 7 Z employee the order as wronghllmalaflde illegaland tl an act of victimization for in Union activities The claimedloss of confldencebecauseof out secret information of the company The question that arose was whether it was a colourable exercise of the power of simpliciter to deprivethe workman of the availablein case ofdismissal The Court held that in a reasonable case of confldential or post beingmisused or a sensitiveor strategic positionbeingabused it may be a highrisk lu Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 465 CeWP Noe11114of2009 16e 1 to keepthe employeeonce has started and a enquirycannotbe forced on the master There a tennination may be bona flde not colurable and loss of confidence may be evidence of goodfaith of the Even while that the loss of confidence will be basisfor terminationsimplicitertheHonble Supreme m Q Court cautionedthatipsedixit of the employer that he had lost 0 confldence may not be sufflcient to jettisonthe latter C0 I withoutlevellingand provingthe conduct which C I had undermined the confldence The Court stated that the Z must rest on some tangible basis and the power has to be exercisedby the employer in goodfaith which r I means honesty with due care and prudenceThe decision in L 08 Michaels case allows for a Court the width of discretion to examme the motive where a workman soughtan 7 Z that thetennination was activatedby malafldes and it was a case Qm of victimization of a workman who was involved in union activities The Court was therefore whethertherehad beenany tangible basison which thesuspicion could be rested It found that there existed none and intervenedin favour of the workman but still leavingit to the managmentto constitutedue enqulry if it has sufficient material to proceedagainstthe workman for misconductor any othergroundvalid in lavThis decision againin my view will have no application ln a case luc Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 466 CWPe No11114 of2009 17 1 J wheretheworkmanhad not attributedany motivationsagainst the V Loss of con8dence a need for obiective consideration 11 The leamed counsel Ms Abha Rathore would contend that even a pleaby the workman that the tennination has been effected without enquirymust be understoodto mean that the motivations of the were not proper Such an 0 C inference in rny view will be wholly unjustified The C5 could be expected to proveonlywhat is statedin the claim statement If theworkmans contentionwas that no enquiry Z had been made all that lt was to be said in replywere the facts that would be relevant for considerationwhether the I termination was in the nature of in a case where the 08 was offeringall thebenefltsand had statedno more 7 than the fact that it has lost its confldence and that it was not Z expected to constitutean enquiryIn KanhaivalalAgrawaland others Vs The Factorv Manager Gwalior Sw Companv Lindted 2004 SLR 360 the Honble Supreme Court held that loss of confidencecannot be based upon the mind of the managementbut objectivefacts would have to lead to a deflniteinferenceof in the mind ofthe management the trustworthinessor the reliabilityof an employee In Delhi Tranwort Conloration Vs DTC Mazdoor Conress and others199081SLR 361Cl a challenge to the regulation llAA Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 467 CWP No11114 of2009 m18m 1 1 91 containedin Delhi Road TransportAuthorityCondition of and Servicesl 1952 providingfor terminationofservice on givingone monthsnotice or pay in lieu thereof without assigningany reason was held on its arbitrary lackingin clarityand are essentialfor the for action Such r unrestrictedand power givento the for 0 the services of the employee was found to be bad C I Thereis no such challenge to the relevantclausein the Standing 0 Ordernor are we upholding the terminationon the onlyground Z that the is entitledto terminate without anybasis or even without recording an objective assessment of C I whether there could be a valid groundfor suspicion 1 08 Consumer Cosop WholesaleStore LuL Vs SL Thcral 2000 11 RSJ 300 ls a decision of the Honble Delhi HighCourt that 7 Z noted with approval the observationof the Labour Court that a pleaof theloss of confidenceof the employer cannot be accepted as a matter of routine This pleahas to be specifically taken by the employer in thepleadings and it hasto be provedbyevidence In Nar Singh Pal Vs Union ofIndia and others2000 Lab LC 1 a casual labour in a Government who had attained to a temporarystatus was for criminal 3 offences of gatemanand when the tennination was effected on the basis of the very same incident the termination Ae Uma 2014.04.05 11: 24 Scanned True Copy of Original PHHC,Chandigarh Sahil Soni 2016.03.21 12:23 I attest to the accuracy and integrity of this document 468 CeWP No11114 of2009 m19m without a proper enquirywas held to be punitive 10 natureand liableto be set aside The leamedcounselhas also refenedto severalother decisionsrelatingto workmen terminatedto whom the of Article 311 of the ConstitutionappliedI do not propose to examinethem Slnce theyare bydifferent 1 constitutionalconsiderations C 12 From the authoritiesreferredto by the leamed counsel 0 C on behalf of theworkmen