HON’BLE THE CHIEF JUSTICE SRI G.S. SINGHVI AND HON’BLE SRI JUSTICE C.V. NAGARJUNA REDDY Writ Appeal No.14 of 2006 Between: FGP Limited, represented by its General Manager (HR), Mr.V. Sundar Rao … Appellant And The Presiding Officer, Labour Court-III, Hyderabad and another … Respondents Counsel for the appellant: Shri C.R. Sridharan Counsel for respondent No.1: Government Pleader for Labour Counsel for respondent No.2: Shri V. Narasimha Goud ::JUDGMENT:: April 04, 2007 Per G.S. Singhvi, CJ This appeal is directed against order dated 10.11.2005 passed by the learned Single Judge in Writ Petition No.16019 of 1996 whereby he set aside the award passed by the Presiding Officer, Labour Court-III, Hyderabad in I.D.No.282 of 1993 and remanded the case for fresh decision. The appellant – FPG Limited (earlier known as M/s.GHP Limited) is a company incorporated under the Companies Act, 1956, having registered office at Mumbai. It was engaged in manufacture and sale of fibre glass and its products. It had a factory at Thimmapur in Mahabubnagar District of Andhra Pradesh, which it had earlier taken over from CEAT Limited. Respondent No.2 – G.S.S. Reddy was appointed as an Operator in the factory of CEAT Limited in 1981. On September 03, 1988, an enquiry was instituted against respondent No.2 on the charge of having used abusive language against the Shift Incharge. On September 08, 1988, another charge sheet was served on him for holding enquiry on the allegation that he had threatened a Senior Executive of the company. The enquiry officer submitted report dated 25.10.1988 in respect of the first charge with the finding that the same stands proved. In respect of the second charge, the enquiry officer submitted report sometime in November, 1988 with the finding that the said charge is also proved. Thereafter, Divisional Vice-President (Manufacturing), CEAT Tyres of India Limited (Glass Fibre Division) (hereinafter referred to as ‘the disciplinary authority’) issued notice dated 3.12.1988 proposing dismissal of respondent No.2 from service. On receipt of the notice, respondent No.2 submitted letter dated 16.12.1988 for supply of copy of the enquiry report so as to enable him to submit an exhaustive reply. For the sake of convenient reference, that letter is reproduced below: To, The Divisional Vice-President (MFG), Ceat Tyres of India Limited, THIMMAPUR. Sub: - Explanation to the Show Cause Notice in Proc. No. CGFD:KVG:88:8571, dt.3-12-88. … I state that I am not in receipt of the findings of the Enquiry Officer day with the show cause notice, therefore I am unable to submit my explanation to the same. You are therefore requested to furnish me a copy of the same to enable me to submit an exhaustive reply. Thanking you. Yours faithfully, Sd/- 16/12/1988 (G.S.S. REDDY)” The disciplinary authority did not supply copy of the enquiry report and straightaway passed order dated December 20, 1988 dismissing respondent No.2 from service. Paragraph 1 of that order, which makes a mention of the consideration of the reply allegedly submitted by respondent No.2 reads as under: “This has reference to the chargesheets Nos.CGFD:BRR:88:6739 dt.3-9-88 & CGFD:BRR:88, dt. 8-9-88 and the domestic enquiries held separately in respect of the said chargesheets on 14-9-88, 28-9-88, 10-10-88, 25-10-88, 8-11-88 and 15-11-88. After receiving the proceedings of the enquiries and the findings of the Enquiry Officer, a letter of Show Cause was sent to you on 3-12-88, to enable you to submit additional explanations, if any, which you may wish to offer, for management’s consideration. In reply to the above Show Cause, we received your explanation dt.16- 12-88. The management has gone through the same but does not find anything in it to justify a lenient view being taken in your case.” Respondent No.2 challenged his dismissal by filing an application under Section 2-A (2) of the Industrial Disputes Act, 1947 (for short, ‘the Act’), which was registered as I.D.No.289 of 1990. Later on, the same was renumbered as I.D.No.282 of 1993. The learned Presiding Officer, Labour Court-III, Hyderabad vide his order dated 27.8.1994 upheld the validity of the domestic enquiry. I.A.No.219 of 1995 filed by respondent No.2 for review of that order was dismissed on 11.3.1995. However, I.A.No.28 of 1995 filed by the management was allowed by the Labour Court and it was allowed to examine one witness and produce 14 documents. Thereafter, the learned Presiding Officer considered the matter with reference to Section 11-A of the Act and passed award dated 23.3.1996 whereby he substituted the penalty of dismissal with that of deferment of two increments and ordered the reinstatement of respondent No.2 with continuity of service and attendant benefits, but without backwages. The predecessor of the appellant challenged the award to the extent of reinstatement of respondent No.2 and the latter challenged the award to the extent of denial of backwages and imposition of punishment of withholding two increments. The writ petitions filed by them were registered as Writ Petition Nos.16019 of 1996 and 8319 of 1997 respectively. The learned Single Judge, after a detailed consideration of various contentions urged before him and making reference to various judicial precedents, held that in terms of Clause 25.2 of the Certified Standing Orders of the company, the management was duty bound to supply copy of the enquiry report to respondent No.2 because he had made a specific prayer to that effect vide application dated 16.12.1988. The learned Single Judge noted the argument of the learned counsel for the appellant that the ratio of the Supreme Court’s judgment in Union of India v. Mohd. Ramzan Khan[1] cannot be invoked by respondent No.2 because the order of punishment was passed much prior to that judgment and held: “It is not in dispute that the punishment imposed on the 2nd respondent workman, on 20.12.1988, was prior to the judgment in Mohd.Ramzan Khan (supra) delivered on 20.11.1990. Unlike in Mohd.Ramzan Khan (supra) where the requirement of furnishing a copy of the inquiry report was held to be part of the rules of natural justice, in the present case, such a requirement is prescribed under the certified standing orders of the company. Clause 25.2 of the certified standing orders requires a copy of the inquiry report to be given to the delinquent employee, if asked for. Since the 2nd respondent workman had specifically asked for such a copy of the inquiry report the petitioner was required, under the certified standing orders, to furnish a copy there of. It is settled law that the certified standing orders of the company bind both the employer and the workmen. The certified standing orders are conditions of service framed by the employer which are approved/certified by the prescribed statutory authority, after hearing the workmen concerned. These Standing Orders are binding upon both the employer and the employees and constitute the conditions of service of the employees. (Bagalkot Cement Co. Ltd. V. R.K. Pathan[2] ; Buckingham and Carnatic Co. Ltd v. Venkataiah[3]; Workers of Dewan Tea Estate v. Management[4]; Workman v. Buckingham and Carnatic Mils[5] and Rajastan SRTC v. Krishna Kant[6]). The employer was obligated, in view of Clause 25.2 of the certified standing orders, to furnish a copy of the inquiry report. Failure to furnish a copy of the inquiry report, in the present case, is not merely in violation of principles of natural justice but also in violation of the certified standing orders, and as such reliance on Mohd.Ramzan Khan (supra) is misplaced. Accepting the submission of Sri C.R. Sridharan, learned Counsel for the petitioner, would mean that even in cases where the Employer has acted contrary to and in flagrant violation of the binding certified Standing orders, the judgment in Mohd.Ramzan Khan (supra) would enure to its benefit and require such violation to be ignored. The judgment of the Supreme Court in Mohd.Ramzan Khan (supra), giving prospective operation to the requirement of furnishing a copy of the inquiry report, has no application to the facts of the present case.” The learned Single Judge then considered the issue of ‘prejudice’ in the context of the judgment of the Constitution Bench in Managing Director, ECIL v. B. Karunakar[7], State Bank of Patiala v. S.K. Sharma[8], Krishan Lal v. State of J & K[9] and held: “…The law laid down by the Supreme Court in Karunakar (supra) and Krishan Lal (supra) requires the Court/Tribunal to give the employee an opportunity to show cause as to how he was prejudiced because of non-supply of the report and if, after hearing the parties, the Labour Court comes to the conclusion that non-supply of the report would have made no difference to the ultimate findings and the punishment given, the Labour Court is not entitled to interfere with the order of punishment. Both Karunakar (supra) and Krishan Lal (supra) mandate the Labour Court to give the employee an opportunity to show as to how he was prejudiced because of non-supply of a copy of the inquiry report. Admittedly, in the present case, no such opportunity has been provided by the Labour Court, to the workman, while examining the validity of the domestic inquiry.” The argument of the learned counsel for the appellant that respondent No.2 is estopped from questioning the order of punishment because, in the application filed by him under Section 2- A (2), he had not pleaded ‘prejudice’, was rejected by the learned Single Judge by recording the following observations: “As noted earlier, Karunakar (supra) required an opportunity to be provided to the delinquent employee of showing as to how he was prejudiced by reason of non- furnishing a copy of the enquiry report. It was therefore incumbent on the Labour Court to provide such an opportunity to the workman, as mandated by Karunakar (supra) and Krishan Lal (supra). The dicta in Karunakar (supra) and Krishan Lal (supra) is clear and categorical in that the labour Court is mandated to give such an opportunity to the delinquent workman. This principle is reiterated in State Bank of Patiala (supra) wherein it was held that the approach and test adopted in Karunakar (supra) should govern all cases where the complaint is one of not affording a proper hearing or of violation of a procedural rule or requirement governing the enquiry. Failure to plead prejudice, in the application filed by the workmen under Section 2-A (2) of the Industrial Disputes Act, is therefore of no consequence as the labour Court is mandated by law, as laid down in the aforementioned judgment of the Supreme Court, to provide such an opportunity. Even otherwise, in his application, the workman had pleaded, in ground No.1, that along with the show cause notice a copy of the findings of the inquiry officer and the depositions made in the domestic enquiry were not furnished to him. In his explanation, to the show cause notice issued by the petitioner dated 03.12.1988, the workman had specifically stated that not being furnished the findings of the inquiry officer along with the show cause notice had resulted in his not being able to submit his explanation to the show cause notice. The employer was requested to furnish a copy of the inquiry report to enable him to submit an exhaustive reply. One of the principles of natural justice is that a person against whom action is proposed to be taken has to be given an opportunity of hearing. This opportunity has to be an effective opportunity and not a mere pretence. In departmental proceedings where a charge-sheet is issued and the documents which are proposed to be utilised against that person form the basis of the charge-sheet but copies thereof are not supplied to him in spite of his request, and he is, at the same time, called upon to submit his reply, it cannot be said that an effective opportunity to defend was provided to him. (State of U.P. v. Shatrughan Lal[10]). While the word “prejudice” may not have been used, the aforesaid letter of the workman, submitted in reply to the show cause notice, in effect, speaks of prejudice inasmuch as not being furnished the enquiry report is contended as having resulted in his not having been able to submit his explanation exhaustively to the show cause notice. The Labour Court, in accordance with the law laid down in Karunakar (supra) and Krishan Lal (supra), ought to have give such an opportunity to the delinquent workman and its failure to do so cannot be justified on the hyper-technical plea that the workman had not pleaded prejudice in the application filed by him under Section 2-A(2) of the Industrial Disputes Act. Needless to state that providing such an opportunity would have only enabled the workman to show as to how prejudice was caused and it was thereafter for the labour Court to decide whether the evidence adduced by the workman, on the aspect of prejudice, would justify upholding the validity domestic enquiry.” The learned Single Judge also negatived the plea of loss of confidence raised on behalf of the appellant and remitted the case to the Labour Court for fresh adjudication after giving opportunity to respondent No.2 to show cause that he had been prejudiced on account of non-supply of the enquiry report. The operative portion of the direction given by the learned Single Judge reads as under: “The award in I.D.No. 282 of 1993 (old I.D.No.289 of 1990) is set aside, and the matter is remanded to the labour Court which shall give an opportunity to the 2nd respondent- workman to show cause as to how prejudice was caused to him on account of non-supply of the enquiry report and, on the basis of evidence adduced in this regard, adjudicate the validity of the domestic enquiry. Outcome of the decision, on the preliminary issue of the validity of the domestic enquiry, would form the basis for further action to be taken by the labour Court. In case the validity of the domestic enquiry is upheld the matter has to be examined under Section 11-A of the Industrial Disputes Act. In case, however, the domestic enquiry is held to be vitiated the employer may be permitted, if it has already made such a request, to adduce evidence and to permit evidence to be adduced by the workman contra, and thereafter, in exercise of the powers conferred under Section 11-A of the Industrial Disputes Act, re-appreciate the evidence and determine the quantum of punishment. Needless to state that the Labour Court shall adjudicate the dispute without being influenced by any observation made by this Court with regards the quantum of punishment imposed on the workman.” Shri C.R. Sridharan, learned counsel for the appellant assailed the finding recorded by the learned Single Judge on the issue of prejudice and argued that remand of the case to the Labour Court is liable to be set aside because respondent No.2 had never pleaded prejudice on account of non-supply of copy of the enquiry report. Learned counsel emphasized that in the application filed by him under Section 2-A (2), the workman did not plead that his defence had been handicapped on account of non-supply of enquiry report and argued that in the absence of such a plea, the learned Single Judge could not have entertained the plea of respondent No.2 regarding violation of the rules of natural justice and issued direction to the Labour Court to give opportunity to respondent No.2 to show that his cause had been prejudiced. Shri Narsimha Goud, learned counsel for respondent No.2 supported the order under challenge and argued that the learned Single Judge did not commit any error by remanding the case to the Labour Court with a direction to give opportunity to respondent No.2 to establish ‘prejudice’. Shri Goud emphasized that at the very first available opportunity, respondent No.2 made a request for supply of the copy of the enquiry report, but the management of the appellant did not respond to his request and arbitrarily passed the order of punishment by making a false note regarding consideration of his explanation. Learned counsel then referred to ground Nos.1 and 2 contained in the application filed by respondent No.2 under Section 2-A (2) and argued that the plea of ‘prejudice’ is very much implicit in the totality of the pleadings of respondent No.2. We have thoughtfully considered the respective submissions. Though it may appear repetitive, we consider it necessary to mention that in response to notice dated 3.12.1988 issued by the disciplinary authority, respondent No.2 had unequivocally expressed his inability to submit his explanation due to non-supply of copy of the enquiry report and made a request that the same be furnished to him for the purpose of submitting an exhaustive reply. The disciplinary authority contemptuously ignored the request of respondent No.2 and went to the extent of making a false note that he had submitted explanation dated 16.12.1988 and there was nothing therein to take a lenient view. In our opinion, no person of reasonable prudence could treat letter dated 16.12.1988 sent by respondent No.2 as reply to the show cause notice. It is, thus, evident that the disciplinary authority had passed the order of punishment with a pre-determination and closed mind. This factor is strongly indicative of the ‘prejudice’ caused to respondent No.2 on account of non-supply of enquiry report and denial of opportunity to submit his explanation against the proposed penalty. In ground No.1 of the application filed by him, respondent No.2 made a mention of the show cause notice and the application filed by him for supply of copy of the enquiry report and submitted that due to non-supply of the enquiry report, he could not submit explanation. He also made submissions on the merits of the allegations and pleaded that he had been victimized due to trade union activities. If the contents of application are read along with letter dated 16.12.1988 sent by the petitioner to the disciplinary authority, it is not possible to accept the spacious argument of the learned counsel for the appellant that respondent No.2 had not pleaded ‘prejudice’ on account of non-supply of the copy of the enquiry report. Therefore, we do not find any valid ground to interfere with the order of the learned Single Judge. No other point has been argued. In the result, the appeal is dismissed. As a sequel to dismissal of the writ appeal, WAMP No.42 of 2006 filed by the appellant for interim relief is also dismissed. G.S. SINGHVI, CJ April 04, 2007 C.V. NAGARJUNA REDDY, J svs [1] (1991) 1 LLJ 29 [2] AIR 1963 SC 439 [3] AIR 1964 SC 1272 [4] AIR 1964 SC 1458 [5] (1970) 1 LLJ 26 [6] (1995) 5 SCC 75 [7] (1994) 1 LLJ 162 [8] (1996) 3 SCC 364 [9] (1994) 4 SCC 422 [10] (1998) 6 SCC 651