THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 19608 of 1996 DATED: 06.02.2007 Between: M/s. Blue Star Limited, 2-2-47, 47/1108, Bolaram Road, Secunderabad, rep. by its Branch Manager Mr. G.V.S. Ananda Kumar. .. Petitioner And The Hon’ble Industrial Tribunal-I 1st Floor, Chandra Vihar, M.J. Road, Hyderabad, Rep. by its Chairman and another .. Respondents THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 19608 of 1996 ORDER: Aggrieved by the order of the Industrial Tribunal No.1, Hyderabad, in M.P.No.92 of 1990 in I.D.No.2 of 1990, dated 29.06.1996, whereby the petitioner’s request for grant of approval of the punishment imposed by it on the second respondent herein on 09.08.1990, was rejected and the petition was dismissed, the present Writ Petition is filed. The second respondent herein was a Mechanic in the Service Department of the petitioner’s company. He was issued three charge sheets, dated 19.06.1989, 30.06.1989 and 20.07.1989, for certain misconducts. Thereafter he submitted his explanation and, on finding it not satisfactory, an enquiry officer was appointed. The enquiry officer submitted his report holding the second respondent guilty of misconduct. A show cause notice dated 09.07.1990 was issued proposing the punishment of dismissal and, on receipt of the explanation of the second respondent, the order dated 09.08.1990, whereby punishment of dismissal was imposed on the second respondent, came to be passed. When the order of punishment came to be passed, the dispute in I.D.No.2 of 1990 was pending before the Tribunal. The Government of Andhra Pradesh, vide G.O.Rt.No.70 dated 10.01.1990, had made a reference to the Industrial Tribunal for adjudication of the demands raised by the union and the management, which was numbered as I.D.No.2 of 1990. Since a connected dispute was pending before the Tribunal, the petitioner herein filed an application under Section 33 (2) (b) of the Industrial Disputes Act in M.P.No.92 of 1990 before the Tribunal. In his counter filed thereto, the second respondent contended that Disciplinary action was initiated and the order of punishment was imposed on him by an incompetent authority and that the findings of the Enquiry Officer were not based on the evidence of record. The domestic enquiry record was marked as Exs.P-5 to P-25. On the validity of the domestic enquiry the Tribunal, in its order dated 04.05.1996, upheld its validity. The second respondent filed I.A.No.139 of 1990 to decide the issue whether the authority, who passed the dismissal order, was competent to do so or not, and the Tribunal, by its order dated 15.07.1993, held that the authority, who had passed the order of dismissal, was not competent to do so. Aggrieved thereby, the petitioner filed W.P.No.667 of 1991 and, by order dated 31.01.1994, the impugned order in I.A.No.136 of 1990 was set-aside and the Tribunal was directed to decide M.P.No.92 of 1990 on merits and in accordance with law taking into account the overall contentions including the validity of the order of dismissal for which approval was being sought for, as also the competency of the person who had passed the order of dismissal. The petitioner thereafter examined P.Ws.1 to 3 and marked Exs.P-1 to P-40 as exhibits. The second respondent marked Exs.R-1 to R-19, but no oral evidence was adduced on his behalf. The Tribunal held that the misconduct alleged against the second respondent had been established but, however, the charge sheets issued against the second respondent was contrary to Clause- 7 of Exhibit R.19 settlement. On the question whether the then Branch Manager Sri A.S.Prakash Rao, who initiated disciplinary action and who had imposed the punishment of dismissal from service on the second respondent, was competent to do so or not, the Tribunal held that Sri A.S.Prakash Rao was not a competent authority. Both on the grounds that Clause-7 of Ex.R.19 settlement had been violated and that Sri A.S.Prakash Rao was neither competent to initiate disciplinary action nor to impose punishment, the petitioner’s request for grant of approval, to the order of dismissal from service passed against the second respondent on 09.08.1990, was rejected. Sri P.Nageswar Sree, learned Counsel for the petitioner, would submit that, while Ex.R-19 settlement, dated 15.11.1989 was marked with consent and Clause-7 thereof required the petitioner to have one meeting with the Union, prior to issuance of a formal charge sheet, to discuss the issues involved, no plea had been taken by the second respondent in its counter before the Tribunal that this requirement stipulated in Clause -7 of Ex.R-19 settlement had been violated. Learned Counsel would submit that, in the absence of any plea in this regard, since no oral evidence was adduced on behalf of the second respondent nor was any suggestion put to any of the witnesses examined on behalf of the petitioner that Clause 7 of Ex.P19- settlement had been violated, the Tribunal had grossly erred in recording such a finding based merely on submissions made during the course of hearing of the application. Learned counsel would submit that, since no evidence can be let in for a plea which has not been raised, and inasmuch as in the present case, neither was there a plea nor was any evidence adduced to establish that the conditions prescribed in Clause 7 of Ex.R-19 settlement had been violated, the findings of the Tribunal that Clause 7 had been violated is perverse and is based on no evidence. Learned counsel would submit that Sri A.S.Prakash Rao was competent both to initiate disciplinary proceedings against the second respondent and to impose punishment. He would take this Court through the various documents filed, and the Power of Attorney given, to contend that Sri A.S.Prakash Rao was the competent authority, having been delegated the power to do so. Learned counsel would also submit that since Sri A.S.Prakash Rao had been designated as the employer under the A.P. Shops & Establishment Act, 1988 (for short, ‘the Act’), all other contentions apart, he must be deemed to be an employer for the purposes of the Act and the Rules made thereunder and, inasmuch as Rule 20 of the A.P. Shops and Establishment Rules, 1990 (for short, ‘the Rules’), empowered an employer to initiate disciplinary proceedings and impose punishment, Sri A.S.Prakash Rao was competent to impose punishment on the second respondent. Learned counsel would submit that since both the grounds on which the petitioner’s application was rejected are contrary to law, the order of the Tribunal was required to be set-aside and approval of the action taken by the petitioner ought to be granted. Sri B.G. Ravinder Reddy, learned counsel for the second respondent, on the other hand, would submit that none of the documents filed before the Tribunal would establish that Sri A.S.Prakash Rao is the employer having been authorized or having been designated as such by the Board of Directors, which is the authority competent to do so under the Articles of Association of the petitioner’s company. Learned counsel would submit that the mere fact that the Assistant Personal Officer of the petitioner company had addressed a letter to the authority under the Act informing him that Sri A.S.Prakash Rao had been designated as the employer for the purposes of the Act would not suffice and it is only if Sri A.S.Prakash Rao had been designated as the employer, for the purposes of the Act and the Rules made thereunder, by the Board of Directors of the petitioner company, could he be held to be the employer enabling him to exercise the powers conferred under the Act and the Rules made thereunder. Learned counsel would refer to Rule 3 of the Rules to submit that, for the purposes of registration and renewal of registration, an application in the prescribed form was to be submitted by the employer to the Inspector of Factories and in the absence of such application being submitted by the Board of Directors of the petitioner’s company designating Sri A.S.Prakash Rao as an employer under the Act, Sri A.S.Prakash Rao could not be said to be an employer under the Act and consequently, he could not be said to be an authority competent to impose the punishment. Learned counsel also would rely on Section 72 of the Act to contend that the rights and privileges available to the second respondent and the Articles of Association and the service regulations of the company were not affected by the provisions of the Act or the Rules made thereunder. Learned counsel would submit that the Power of Attorney on which reliance was sought to be placed by the petitioner was not even stamped and as such its contents could not even be looked into to examine as to whether Sri A.S.Prakash Rao had been given the Power of Attorney. Learned counsel would submit that the action of the Board of Directors in ratifying the action of Sri A.S.Prakash Rao, in imposing punishment on the second respondent, was subsequent to the filing of the application, and since no punishment of dismissal could be ratified with retrospective effect, the Tribunal had rightly rejected the application filed by the petitioner. On the question of violation of Clause 7 of Ex.R-19-settlement learned counsel would submit that, since the petitioner had participated in the proceedings before the Tribunal and was well aware that Clause -7 of Ex.R-19 settlement had been violated, it was not open for it to raise such a contention for the first time before this Court. With regards the first contention of Clause-7 of Ex.R-19 settlement having been violated, I find considerable force in the submission of Sri.P.Nageswar Sree, learned Counsel for the petitioner, that in the absence of any plea being raised, regarding its non-compliance, by the second respondent in his counter before the Tribunal, and inasmuch as the second respondent had neither chosen to examine himself nor adduce any oral evidence in his defence, it was not open for the Tribunal to uphold a contention raised during the course of arguments. It is well settled law, as has been held in SHANKAR CHAKRAVARTI v. BRITANNIA BISCUIT CO. LTD. & ANOTHER[1], that a contention to substantiate which evidence is necessary has to be pleaded and, if there is no plea raising such a contention, there is no question of substantiating such a non-existing contention by evidence. The allegations which are not pleaded, even if there is evidence in support of it, cannot be examined because the other side has no notice of it and, if entertained, it would tantamount to granting an unfair advantage to the first mentioned party. In the present case, absence of a plea in the counter affidavit in this regard, coupled with the fact that no evidence was let in by the second respondent nor was any suggestion put to any of the management witnesses during cross examination, would necessitate the finding of the Tribunal being set-aside on the ground of its being perverse and as based on no evidence. The order of the Tribunal, rejecting the application on the ground that Clause-7 of Ex.R19- settlement had been violated, must accordingly be set aside. With regard to the contention that Sri A.S.Prakash Rao was not the authority competent to pass the impugned order of punishment, it is unnecessary for this Court to examine the contentions raised regarding the validity or otherwise of the Power of Attorney. Suffice it to note that in case Sri A.S.Prakash Rao is held to be the employer under the Act, he would be competent to impose the punishment on the second respondent, who is an employee of the establishment. While evidence was let in on behalf of the petitioner, the Tribunal did not examine this contention as to whether Sri A.S.Prakash Rao was the employer under the Act or not. The Tribunal held that simply because Sri A.S.Prakash Rao was shown as an employer in this document, it did not follow that he was vested with the powers to initiate disciplinary action and to terminate the services of an employee of the Branch. The conclusion of the Tribunal in this regard is clearly erroneous. Once a Branch Manager is held to be the employer under the Act and the Rules, it undoubtedly, empowers him to initiate disciplinary action against an employee of the Branch and to impose punishment on him. The question which, however, necessitates examination is whether Sri A.S.Prakash Rao could be said to be the employer under the Act both on the date when disciplinary action was initiated against the second respondent and on the date when the order of punishment came to be passed. This question has not been examined by the Tribunal. Section 72 of the A.P. Shops & Establishment Act, 1988, reads thus:- “72. Rights and privileges under other laws etc., not affected:- Nothing in this Act shall effect any rights or privileges which any employee in any establishment is entitled to, on the date on which this Act applies to such establishment, under any other law, contract, custom or usage applicable to such establishment, if such rights or privileges are more favourable to him than those to which he would be entitled under this Act.” All that Section 72 of the Act protects is the rights which have accrued in favour of an employee, under a contract or custom or usage applicable to an Establishment, which right he had when the Act was made applicable to the Establishment. Section 72 presupposes the employee being in service of the Establishment prior to the date on which the Act was made applicable to such an Establishment. In such an event, the rights and privileges, which he had prior to the date on which the Act was made applicable are protected, notwithstanding anything contained in the Act and the Rules made therein. Sri B.G. Ravinder Reddy, learned counsel for the second respondent, would submit that the second respondent was in service even prior to the date on which the Act came into force. The question as to whether the rights of the second respondent were protected under Section 72 of the Act and he was entitled to claim the benefit of the service regulations, notwithstanding that its provisions were not strictly in conformity with the Rules and the Act is also a matter which the Tribunal is required to consider. For the aforesaid reasons, the order of the Tribunal in M.P.No.92 of 1990 in I.D.No.2 of 1990, dated 29.06.1996 is set aside. The matter is remanded back to the Tribunal to examine the question referred to above on the basis of the material available on record. The Tribunal, after hearing both sides, shall pass an appropriate order in accordance with law. Since the application made in M.P.No.92 of 1990 has been pending for more than a decade, it is appropriate that the Tribunal adjudicates the matter as expeditiously as possible, in any event, not later than four months from the date of receipt of a copy of this order. The Writ Petition is disposed of accordingly. No costs. __________________________ (RAMESH RANGANATHAN,J) 06.02.2007 vv [1] AIR 1974 SC 1652