-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION LETTERS PATENT APPEAL NO.55 OF 2002 IN WRIT PETITION NO.2448 OF 1995 Mahindra & Mahindra Limited. ... Appellant (Orig. Petitioner) Versus 1. Sunil Yeshwant Pandit 2. Shri P.S. Narkar, Presiding Officer, Labour Court, Nashik. ... Respondents (Orig. Respondents) CORAM : H.L. GOKHALE & CORAM : H.L. GOKHALE & CORAM : H.L. GOKHALE & SMT.R.S.DALVI, JJ. SMT.R.S.DALVI, JJ. SMT.R.S.DALVI, JJ. DATE OF RESERVATION OF JUDGMENT: 18th October 2005 DATE OF RESERVATION OF JUDGMENT: 18th October 2005 DATE OF RESERVATION OF JUDGMENT: 18th October 2005 DATE OF PRONOUNCEMENT OF JUDGMENT : DATE OF PRONOUNCEMENT OF JUDGMENT : DATE OF PRONOUNCEMENT OF JUDGMENT : 30.11.2005 30.11.2005 30.11.2005 Ms.Melanie D’Souza with Mr.C.U.Singh i/by M/s.Haresh Mehta & Co. for appellant. Ms.S.S.Chiparikar with Mr.D.Y. Chitnis for respondent No.1. Respondent No.2 being the Labour Court is formal party. ---- JUDGMENT : (Per H.L. Gokhale, J.) JUDGMENT : (Per H.L. Gokhale, J.) JUDGMENT : (Per H.L. Gokhale, J.) 1. This Letters Patent Appeal seeks to challenge the judgment and order dated 10th/11th January 2002 rendered by a learned Single Judge of this Court in Writ Petition No.2448 of 1995 filed by the appellant herein. The learned Single Judge dismissed the said Writ Petition by her order and -2- upheld the Award dated 11th May 1994 given by the Labour Court at Nashik in Reference (IDA) No.5 of 1987, which had set aside the dismissal of respondent No.1 from his service and granted him reinstatement with continuity in service and full back wages from the date of dismissal i.e. 31.1.1986 till reinstatement. 2. The relevant facts leading to this Letters Patent Appeal are as follows:- . The appellant is a Company engaged in the business of manufacturing jeep-type vehicles and tractors amongst other products. The appellant has one of its factories situated in the Industrial Estate at Satpur, Nashik. As per para-3 of the Writ Petition, the appellant employs about 1000 employees at the said factory. The 1st respondent was employed in that factory as a Fitter with effect from 1st September 1983. On 26th July 1985, at about 3.30 p.m. when he was leaving the factory driving his scooter after his working hours were over, the Security Supervisor at the factory gate found five straight shank drill bits of different types hidden underneath the mat of the scooter (on which the scooter riders place their feet). No explanation was -3- offered by respondent No.1 when he was asked about this discovery. 3. Respondent No.1 was issued a charge-sheet on 28th July 1985 and was suspended pending the enquiry. The charges levelled against him were as follows:- . (i) Theft or dishonesty in connection . with the employer’s business or property. . (ii) Acts subversive of discipline and good behaviour on the premises premises of the establishment. These charges are referable to Clauses 24(d) and (l) of the Model Standing Orders (as applicable to the Industrial Workmen) framed under the Industrial Employment (Standing Orders) Act, 1946. 4. Thereafter a departmental enquiry was conducted. Respondent No.1 was represented by one Mr.E.G. Woodman, a fellow workmen. The appellant-Management examined two witnesses in support of the charges. They were (i) Shri L.R. Deshmukh, Security Supervisor at the relevant time -4- at the factory gate and (ii) Shri T.H. Patil, the then Administrative Officer. Respondent No.1-workman examined himself and one Shri Abdul Karim, Supervisor in the body building shop. The Enquiry Officer submitted the report on 21st November 1985 and held that the charges had been proved. The appellant accepted those findings and issued an order dismissing him from service on 31st January 1986. 5. The 1st respondent raised a dispute under the Industrial Disputes Act, 1947 and it came to be referred to the Labour Court at Nashik by the order dated 23rd March 1987. The 1st respondent filed his Statement of Claim on 8th June 1987. Amongst others in para-2 of his Statement of Claim he contended that the vested interests working in the Company had fabricated a sinister plan to throw him out of the Company. The appellant filed its Written Statement on 16th August 1988. In para-5 of the Written Statement, it denied the knowledge of any such vested interests working in the Company who did not like the prosperity of the 1st respondent. It was thereafter stated that further statement about the fabrication of the sinister plan seemed to be figment of his own imagination and was denied by the Company. At the -5- end of para-3 of the Written Statement, it was brought to the notice of the Court that the original enquiry papers were misplaced, though the copies thereof would be produced. It is material to note that the 1st respondent has not raised any dispute about the correctness of the copies of enquiry papers, though he did contend that the enquiry was not conducted fairly and properly. The Management further prayed that the legality and validity of the enquiry be decided by framing an issue in that behalf and in case the Hon’ble Court were to decide against the Company, the Company may be permitted to lead evidence to substantiate the allegations against the workman. 6. The learned Judge of the Labour Court framed two issues to begin with viz. (i) Whether the domestic enquiry held against the workman is fair, proper and legal ? and (ii) Does the employer prove the misconduct alleged against the workman, if the domestic enquiry is vitiated for any reason? As far as the first issue is concerned, the workman filed an Application stating that he did not wish to lead any oral evidence as regards the legality and validity of the enquiry. The Company examined the Enquiring Officer Shri S.N. Shah. He deposed that he had -6- held the enquiry and he produced true copies of the original documents. Both the parties were represented by their Advocates and the Counsel for respondent No.1 had no objection for exhibiting the enquiry papers and hence, they were exhibited and were given Exhibit marks accordingly. The learned Labour Court Judge, after hearing the Advocates, held that the enquiry was fair and proper and on the second issue, he held that it did not survive. Accordingly, he passed the order on the preliminary issues on 2.4.1993 and directed the matter to proceed further. 7. Thereafter at the second stage of the proceedings, the learned Judge framed the following three issues:- . " (i) Whether the punishment of dismissal . awarded to the workman / second party is . shockingly disproportionate ? . (ii) Is the workman / second party . entitled to reinstatement with continuity . of service and full back wages ? . What order and relief ? " -7- The workman examined himself. He was living in a joint family and was not employed in spite of making best efforts. The Management examined one Shri Deepak Palnitkar, an Officer from the Personnel department to produce the order of termination and to prove its service. Thereafter the arguments were heard and the learned Labour Court Judge answered both those issues in the affirmative and passed the Award accordingly on 11th August 1994 directing the reinstatement of the 1st respondent with back wages and continuity in service. 8. This Award was challenged by the appellant by filing a Writ Petition bearing No.2448 of 1995 invoking Article 226 of the Constitution of India. The Petition was admitted by a learned Single Judge on 11th September 1995, and he granted the interim stay on implementation and enforcement of the impugned Award. The Petition thereafter reached for final hearing before another learned Single Judge. Amongst other submissions, it was contended before the learned Single Judge that in Part-I of the Award, evidence was confined to the issue of legality and validity of the enquiry and a finding was given that the enquiry was conducted in compliance with the principles of natural -8- justice. The second issue was as to whether the employer proved the misconduct if the enquiry was vitiated. Inasmuch as the learned Labour Court Judge answered the first issue in the affirmative, he answered the second issue by stating that the issue did not survive. Thus, the employer was not given any opportunity to prove the misconduct at that stage. At the second stage of the proceedings, the issues framed were only with respect to the adequacy of the punishment and the relief. The evidence was confined to those aspects. It was at that stage that in para-12 of the Award, the learned Labour Court Judge held that there was no material in the enquiry to prove that the concerned articles belonged to the Company and, therefore, came to the conclusion that the misconduct was not proved and then final relief was granted. It was, therefore, submitted on behalf of the appellant that although the learned Labour Court Judge was holding that the misconduct was not proved, the appellant-employer was not given any opportunity to prove the same. It was submitted that the employer had that right, as held in different judgments from time to time and the same had been denied. 9. The learned Single Judge, who heard the -9- Writ Petition, however, took the view that the approach of the learned Labour Court was a permissible one. She referred to the observations from paragraph 33 of the judgment of the Apex Court in Workmen of Firestone Tyre & Rubber Co. Workmen of Firestone Tyre & Rubber Co. Workmen of Firestone Tyre & Rubber Co. vs. Management reported in AIR 1973 S.C. 1227 vs. Management reported in AIR 1973 S.C. 1227 vs. Management reported in AIR 1973 S.C. 1227 to the effect that the Labour Court is now empowered under Section 11-A to reappraise the evidence and examine the correctness of the findings. It has come to its own conclusion about guilt or otherwise. She held that only in case the Court took the view that the findings were perverse that it will be necessary for the Labour Court to give an opportunity to the employer to prove the misconduct. In para-15, the learned Judge observed as follows:- " In the event that the Labour Court decides that the findings are not perverse but are such that it would come to a different conclusion, it is open for the Labour Court in exercise of Section 11-A to reappraise the evidence and come to a different conclusion. In such an event, it is not necessary for the Labour Court to give an opportunity to the employer to lead evidence. While exercising powers -10- under section 11-A, as held by the Supreme Court, the Labour Court virtually sits in appeal against the findings recorded by the enquiry officer. The Industrial adjudicator has the power to decide as to the adequacy of the evidence and the conclusion on facts drawn by the enquiry officer. It is not necessary to give the employer an opportunity to lead evidence in every case where the Labour Court differs with the findings of the enquiry officer, unless the findings are perverse. " The learned Judge, therefore, dismissed the Writ Petition by the impugned judgment and order dated 10th/11th January 2002. 10. It is this judgment and order which is assailed in the present Letters Patent Appeal. It was submitted on behalf of the appellant-Company that the view taken by the learned Single Judge was not correct. In a case where the enquiry is held to be fair and proper, the occasion to interfere arises only when the findings are perverse or where the action is malafide. The very fact that in a case of fair and proper -11- enquiry the Court has interfered, implies that according to the Court the findings are perverse, though it has not stated so in as many words. It was pointed out on behalf of the appellant, as held in Bharat Forge Company vs. A.B. Zodge Bharat Forge Company vs. A.B. Zodge Bharat Forge Company vs. A.B. Zodge reported in (1996) 4 SCC 374, reported in (1996) 4 SCC 374, reported in (1996) 4 SCC 374, that in a case wherein the enquiry is held to be fair and proper but the findings are perverse, an opportunity had to be given to the employer. A similar view was taken earlier by a Division Bench of this Court in Fida Film & Hotel Co.Pvt. Ltd. vs. Theatre Fida Film & Hotel Co.Pvt. Ltd. vs. Theatre Fida Film & Hotel Co.Pvt. Ltd. vs. Theatre Employees’ Union reported in 1986 I CLR 255 Employees’ Union reported in 1986 I CLR 255 Employees’ Union reported in 1986 I CLR 255 following the law laid down by the Apex Court in Ritz Theatre vs. Workmen reported in AIR 1964 Ritz Theatre vs. Workmen reported in AIR 1964 Ritz Theatre vs. Workmen reported in AIR 1964 S.C. 295 S.C. 295 S.C. 295. The learned Labour Court Judge had held in para-12 of his Award as follows:- " Accordingly I have gone through the enquiry proceedings where also the procedure of the said material is lacking and there is no material in the enquiry there is no material in the enquiry there is no material in the enquiry that the said articles were belonging to that the said articles were belonging to that the said articles were belonging to the company. the company. the company. The ld. Adv. for the first party has also cited several decisions as regards the ownership of the company of the material found, however, the said cases show that the material which was -12- found in possession of the workman was the product of those companies whereas in the present case, the drill bits are not the produce of the first party / company. " (Emphasis supplied) Thus the learned Labour Court Judge has, in fact, held that there is no material to hold that the misconduct had been proved, meaning thereby that the findings were perverse though he has not used the same term. The learned Labour Court Judge has observed that it is necessary to strictly prove the ownership of the said material, that the ownership of the material had not been proved and that in the absence thereof, the misconduct was not established. Thus, in a way he held that the findings were perverse. Thereafter he went into the question as to whether the punishment was disproportionate without giving the employer an opportunity to prove the misconduct. It was submitted that the learned Single Judge had erred in coming to the conclusion that since the Labour Court had not held the findings to be perverse, it was not necessary for it to give an opportunity to the employer to lead evidence. -13- 11. This Appeal was admitted on 25th February 2002 and it reached before another Division Bench on 7th April 2005. The Division Bench heard the Counsel for both the parties at length and came to the conclusion that the findings (and the approach) of the Labour Court and the learned Single Judge to the extent it denied an opportunity to the employer to lead evidence in support of the charges, were both erroneous. The Division Bench gave its reasonings in support of that conclusion and by consent of both the Counsel, passed a detailed order setting aside those findings. It was, however, requested by the Counsel for both the parties that since the matter was pending for a very long time, it would be desirable that the Labour Court be asked to record the evidence on the alleged misconduct and give its findings and submit the same to the High Court. The Division Bench passed an order accordingly. It is material to note that the Division Bench referred to the law laid down by another Division Bench in Vinod Wani vs. Vinod Wani vs. Vinod Wani vs. Permanent Magnets reported in 2002 II LLJ 1123 Permanent Magnets reported in 2002 II LLJ 1123 Permanent Magnets reported in 2002 II LLJ 1123 which had specifically referred and followed the law laid down in Bharat Forge Company (supra) Bharat Forge Company (supra) Bharat Forge Company (supra). The relevant paragraphs of this order dated 7th April 2005 containing the reasonings and the -14- operative part containing the relevant directions Nos.3 and 4 read as follows:- " We have heard this matter for a pretty long time. Both the counsel have ultimately found that in view of the judgment of this Court reported in 2002 II 2002 II 2002 II LLJ 1123 in the matter of Vinod V. Wani LLJ 1123 in the matter of Vinod V. Wani LLJ 1123 in the matter of Vinod V. Wani vs. Permanent Magnets Limited vs. Permanent Magnets Limited vs. Permanent Magnets Limited, the procedure which the Labour Court ought to have followed in the present matter, is as demonstrated in paragraph No.22 of the said judgment. Paragraph No.22 of the said judgment reads as under: " The first stage of the enquiry before the Labour Court ended by holding that the enquiry was fair and proper and as per the principles of natural justice. Second stage of the enquiry before the Labour Court ended by holding that the findings recorded by the enquiry Officer were perverse and the third stage starts that of giving an opportunity to the management to lead evidence in support of the charges framed against the employees and is subject to the condition that the management had reserved such a right in the written statement filed by the management. " Therefore, in the present case when the Labour Court came to the conclusion that the findings of the Enquiry Officer are vitiated at the second stage, the Labour -15- Court should have halted and given a third stage opportunity to the Employer. However, the Labour Court has clubbed the second stage, third stage and aspect of the disproportionality of the punishment at one and one stage thereby depriving the Employer-management to lead evidence in respect of the guilt of the workman. 5. Learned counsel for both sides have further pointed out one more aspect that of sending the whole matter back to the labour court for this purpose, will result into a great inconvenience to the workman. The present litigant-workman is litigating the case since 1985 and for last more than 20 years he is in the court and if the matter is remitted back, the workman will have to face second inning of litigation. Therefore, to overcome this trauma of second inning of litigation and equally to make available the opportunity to the employer to lead evidence in respect of the guilt of the workman, which was deprived of as a result of the erroneous exercise by the Labour court, both the counsel, by consent, have suggested us to -16- pass the order in following terms. Hence, the order. O R D E R O R D E R O R D E R (1) The Appellants-employer, who have reserved their rights to lead evidence in respect of the guilt/misconduct of the accused, in case findings are disturbed by the Labour Court, being had or perverse at a second stage of a proceeding, is hereby allowed to lead evidence afresh before the learned Labour Court in respect of the alleged misconduct of the respondent - workman. (2) We hereby permit the appellant - employer to lead evidence on the point as to whether during the pendency of the litigation, the respondent - workman was gainfully employed or not. (3) By consent of both sides, the findings of the Labour Court and the learned Single Judge to the extent of the above referred points are hereby set aside. The Labour Court shall consider the above referred two issues afresh on the basis of the -17- material and evidence which would be led before it. (4) The Labour Court shall allow both the parties to lead evidence on the above referred issues and evaluate the same on merit and record the findings on these issues and accordingly submit the same to this Court on or before 31st July 2005. " 12. After the matter was remanded for a limited purpose as above, the appellant led the evidence of the said officers once again viz. S/Shri T.H. Patil, L.R. Deshmukh and D.L. Palnitkar and they were cross-examined by the Advocate for respondent No.1. Respondent No.1 did not step into the witness box this time. Thereafter the learned Judge of the Labour Court was addressed by the Counsel for both the parties. The learned Labour Court Judge framed the issues as directed viz. (i) Whether the misconduct alleged by the Company is proved ? and (ii) Whether during the pendency of the litigation, the workman is gainfully employed ? 13. The learned Judge of the Labour Court gave the findings in the negative on both the issues on -18- 29th July 2005 whereafter the matter has reached before us. The appellant has thereafter sought to amend the Appeal Memo to challenge these findings by adding additional grounds The said amendment was allowed on 14.10.2005. The 1st respondent filed his affidavit-in-reply to deal with these added grounds by his Affidavit affirmed on 18th October 2005 and the Affidavit was taken on record. Counsel for both the parties have advanced their submissions before us. 14. As noted above, as far as the procedural problem with respect to the opportunity to the employer to lead evidence in support of the misconduct is concerned, it no longer survives. That opportunity was afforded in view of the order passed by consent of the parties by the earlier Division Bench on 7th April 2005. The employer has led its evidence, though the workman has chosen not to lead any evidence at this stage. As noted earlier, in view of Clause-3 of the Division Bench order dated 7th April 2005, the findings of the Labour Court rendered earlier as well as that of the learned Single Judge have been set aside by consent. The Division Bench, with a view to avoid further delay, has asked the Labour Court to record the evidence and give its findings while -19- keeping this Letters Patent Appeal alive. This has been done by consent. If this approach was not to be adopted the LPA could have been disposed of at that stage by passing an order to give opportunity to the employer to lead evidence and asking the Labour Court to decide the matter in the light thereof. It would have meant the Labour Court passing a final order thereafter. It would have led to a Writ Petition before a Single Judge by the aggrieved party and then another LPA. To avoid resultant delay, a consent order was passed by the earlier Division Bench and has sought the evidence and the findings while keeping the LPA alive. Thus, although this LPA is against the order of the learned Single Judge dated 10th/11th January 2002 confirming the earlier order of the Labour Court dated 11th May 1994 the questions with respect to findings rendered by the Labour Court earlier and acceptance of those findings by the learned Single Judge in a way no longer survive. Now, we have the fresh evidence after the opportunity was given to the employer to lead evidence in support of the misconduct and the findings rendered by the Labour Court thereafter on 29th July 2005. The learned Labour Court Judge has held that the misconduct is not established and that the workman was not employed in the -20- meanwhile. 15. Thus, although we are deciding the LPA, in a way we are exercising a jurisdiction to decide as to whether the findings of the Labour Court on remand are justified or not and in either case what should be the order. 16. Ms.D’Souza appearing for the appellant-Management submitted that since fresh evidence had been permitted to be adduced the validity of the action taken by the Management has to be scrutinised on the basis of this fresh evidence alone. Her submission was