1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. APPEAL NO.NO.1094 OF 1997 IN WRIT PETITION NO.3131 OF 1991 M/s. Sylvester & Co. Sylvester Building, 20, S. Bhagat Singh Road, Opp.. Old Custom house, Fort, Bombay-400 023. ...Appellant. Versus 1.Their Workman through Transport & Dock Workers' Union, Bombay, P.D'Mello Bhavan, P. D'Mello Road, Carnac Bunder, Bombay-30. 2. P. D. Apshankar, Presenting Officer, Central Government Industrial Tribunal No.2, Bombay. ...Respondents. ....... Mr.J. P. Cama, Senior Advocate i/b. M/s. Sanjay Udeshi & Co. for the Appellant. Mr. S. M. Dharap for Respondent No.1. ...... CORAM : R.M. S. KHANDEPARKAR & DR. D.Y. CHANDRACHUD, JJ. June 13, 2007. JUDGMENT (PER DR.D. Y. CHANDRACHUD, J.): 2 On a reference to adjudication under Section 10 of the Industrial Disputes Act, 1947 made by the Central Government on 15th October 1987, the Industrial Tribunal held: (i) By an award, Part-I, dated 1st September 1989, that the Central Government was the appropriate Government within the meaning of Section 2(a) and the Tribunal had jurisdiction; (ii) By an award, Part-II, dated 1st February 1991, that the termination of the services of the workman without holding a disciplinary enquiry was invalid and the workman was entitled to reinstatement with full back wages and continuity of service from 1st July 1986. The management challenged the awards in proceedings under Article 226 of the Constitution. The Learned Single Judge of this Court, by an order dated 3rd March 1997, affirmed the award. The judgment of the Learned Single Judge has been impugned in the present proceedings in appeal. 2. The Appellant carries on business of a Clearing and Forwarding agent. The workman was engaged as a Docks Clerk on 1st October 1978. On 27th June 1986, the management terminated the services of the workman on the ground of a loss of confidence. The subject of the letter was as follows: 3 “Loss of confidence due to persistent and deliberate lapses in duties inefficiency, habitual and frequent absenteeism, misappropriation of Company's money, misrepresentation of facts & false claim of overtime etc.” The letter of termination records that since his appointment, the workman had committed “major lapses/omissions and dereliction in duties” which were then indicated as follows: “1) Withholding 9 Way Bills pertaining to Voltas Limited for over a week, instead of handing these over to the office on the very day, thereby making the company liable for demurrage – Company's warning dated 27.12.78. 2) Frequent absentism without prior intimation/permission and availing excess leave when not due. Memoranda dated 13.6.79, 30th October 1981, 24th April 1982 & 8th May 1982. 3) Cheating company in collaboration with Mukadam (showing engagement of extra labour) warning dated 30-11-78. 4) Delay in payment of wharfage and effecting delivery - Memo dated 18.3.80. 5) Dereliction in duties & disobeying office instructions – Memoranda dated 7th April 1980, 3rd May 1980 & 7th May 1980. 6) Inefficiency – Memo dated 2nd Sept. 1980. 7) Defrauding Company by claiming excess delivery charges – Memo dated 26th November 1980. 8) Gross dereliction in duties & flouting 4 instructions and replying show cause notice for over 2 months – Memo dated 29th April 1981. 9) Not submitting the accounts of incidental expenses incurred in time as required – Memo dated 22nd April 1982. 10) Misbehaviour with Foreman of Stevedores and giving misleading information to office – Memo dt. 11.8.82. 11) Incurring unnecessary expenditure without permission sanction -Memo dated 20th December 1982. 12) Telling lies and violating office instructions – Memo dated 5th February 1983. 13) Reporting for duty habitually late in spite of warnings – Memo dated 5th February 1983.” The letter records that in spite of repeated advice and warnings, the workman had continued to indulge in several “lapses, omissions and commissions” which where spelt out thus: “i) Failing to register the containers at Manganese Ore Depot, in spite of specific instructions given to you and thereby incurring demurrage – Memo dated 19th September 1984. ii) Despatching wrongly the sample fibres to various transporters without keeping office copies of the challans. Memo dated 17th July 1985. iii) Fraudulent claim of overtime - Memo dated 13th August 1985. iv) Negligence in tracing container No.TRIU 5 2800696-your explanation dated 3.4.86 for failing to trace the container is grossly unsatisfactory. Because of your deliberate negligence in tracing the container, the company is liable to steamer agents charges of Rs.4500/- together with container detention charges. This should have been recovered from you but lenient view was taken and you were warned vide memo dated 10/4/86. v) Post dated leave application for 8 days leave. You have applied vide your application dated 24.5.86 for 8 days leave for the period 23.5.86 to 30.5.86. Although your said leave application is dated 24.5.86, it was received in this office on the morning of 23.5.86 by hand delivery. You resumed duty on 31.5.86 and have produced medical cum fitness certificate dt. 31.5.86. On carefully scrutinising the medical-cum-fitness certificate dated 31.5.86, issued by Dr. S.M. Nivdunge of Chembur, it is clear that your suddenly remaining absent from 23.5.86 without any prior intimation and then submission of post dated leave application (dated 24.5.86) on 23.5.86 itself, and then production of medical cum fitness certificate, the contents of which are prima facie doubtful, gives an impression that you have made up the entire story in support of your unjustified and sudden absence. Because of your frequent, sudden and habitual absence and Company has been put to serious inconvenience and consequent loss in business. Your explanation in this regard is also found most unsatisfactory. vi) A sum of Rs.500/- was given to you on 20.5.86 for grounding of containers but it is very surprising to find that you have neither submitted your account as to how you have spent this money nor have you returned the balance to office till date.” 6 The management stated that it had lost confidence and was accordingly dispensing with the services of the workman, in the following terms: “Because of your aforesaid persistent lapses, unauthorised, habitual absence, dereliction in duties, misappropriation of company's money, habitual and deliberate late attendance etc., the company has lost confidence in you and has reluctantly been compelled to dispense your services with discharge simpliciter wef 1st July 1986.” 3. The Transport and Dock Workers' Union raised an industrial dispute before the Assistant Labour Commissioner (Central) and upon a failure of conciliation, the Central Government made a reference to adjudication on 15th October 1987. In paragraph 7 of the Written Statement, the employer pleaded that the Tribunal had no jurisdiction to entertain the dispute as the appropriate Government was not the Central Government. The Tribunal tried the issue of jurisdiction as a preliminary issue and by its award dated 1st September 1989 came to the conclusion that the appropriate Government was the Central Government. Consequently, the Tribunal held that the reference was validly made. Evidence was adduced before the Tribunal. By an award dated 1st February 1991, the Tribunal held that the discharge of the 7 service of the workman amounted to retrenchment within the meaning of Section 2(oo) and was invalid for want of compliance with the provisions of Section 25F. Consequently, the Tribunal was of the view that even if the management was correct in its submission that the termination was not by way of punishment, but a discharge simpliciter, the act of termination was invalid for want of compliance of the provisions of Section 25F. The Tribunal also noted that the contention of the workman was that his termination from service was by way of punishment and was not an act of discharge simpliciter. The Tribunal ruled that in case it was held that the dismissal was by way of punishment, the act of termination was invalid because no disciplinary enquiry was held and the charge of misconduct was not proved. On either view of the matter, the Tribunal came to the conclusion that the act of termination was illegal and the workman was entitled to reinstatement with continuity of service and full back wages. 4. The management having challenged the awards of the Industrial Tribunal, the Learned Single Judge of this Court in a judgment dated 3rd March 1997, came to the conclusion that the awards of the Tribunal, both on the question of jurisdiction and on 8 merits, could not be faulted. On the question of jurisdiction, the contention of the management was that no relationship of employment existed between the workman and the major port – the Bombay Port Trust – and that consequently the appropriate Government could not be the Central Government. The Learned Single Judge held that it was not in dispute that the workman was engaged as a Docks Clerk and that the management was carrying on business of clearing and forwarding and of import and export. The workman had stepped into the witness box and the Tribunal had noted that the evidence of the workman was not seriously challenged. The management had not discharged the burden to lead appropriate evidence regarding the business and the nature of the work that was required to be carried on as a Dock worker. The evidence showed that the workman was required to go to the Docks and his work and duties had connection with the work of clearing and forwarding. The finding of the Tribunal was held to be based on evidence. On merits, the Learned Single Judge, while confirming the Part-II award, noted that the letter of termination dealt, in the first part, with 13 items alleging major lapses on the part of the workman during 1978 to 1983, while the second part dealt with alleged lapses and omissions including misbehaviour 9 and cheating during the period 1984 to 1986. The Learned Single Judge held that there was no evidence on record to show as to why a domestic enquiry was not held when serious charges of misconduct were levelled against the workman and the workman was justified in his grievance that the order of termination had been passed without following due process of law. The judgment of the Learned Single Judge contained a detailed appreciation of evidence. Before the Learned Single Judge, the management had, relying on judgments of the Supreme Court, submitted that an opportunity ought to have been granted by the Tribunal to substantiate the alleged misconduct by leading evidence. The Learned Single Judge held that the Tribunal had furnished an opportunity to the management to lead evidence to prove a justification for terminating the services of the workman by a simple discharge. Moreover, the Learned Single Judge was of the view that the management had sought permission of the Labour Court only to prove that it acted bona fide and that it had not applied before the Labour Court to lead evidence to prove the charges. On the aforesaid reasoning, the plea of the management was not accepted and the awards of the Industrial Tribunal were confirmed. 10 5. In assailing the judgment of the Learned Single Judge, Counsel appearing on behalf of the employer has urged the following grounds of challenge: (i) The appropriate Government within the meaning of Section 2(a) of the Industrial Disputes Act, 1947 is not the Central Government but the State Government and, therefore, the reference to adjudication by the Central Government was not competent; (ii) In a termination for loss of confidence, individual cases of misconduct need not be proved and the material on the basis of which confidence has been lost has to be placed on the record; (iii) If the termination in the present case is held to be a termination on the ground of misconduct an opportunity ought to have been given by the Industrial Tribunal to the employer to substantiate the charge of misconduct by leading evidence and this opportunity was denied despite a specific plea in that regard made in the Written Statement; (iv) The judgment of the Learned Single Judge contained a detailed reappreciation of the evidence, an exercise which ought not to have been carried out in the jurisdiction under Article 226 of the Constitution and an order of remand would be warranted. On the other hand, on behalf of the workman, it has been submitted that; (i) The evidence on record would show that there was a reasonable and proximate 11 nexus between the nature of the business of the employer and a major port and the appropriate Government in the present case would be the Central Government since this was an industrial dispute concerning a major port; (ii) The employer in the present case gave up his right to justify the termination by not holding a disciplinary enquiry though the allegations in the letter of termination individually amounted to acts of misconduct; (iii) The Standing Orders provide for the holding of an enquiry and the employer must establish that it was impossible to hold a disciplinary enquiry; loss of confidence is not a rule but an exception and a case to that effect must be made out on the basis of exceptional circumstances. 6. These submissions can now be considered: Appropriate Government : 7. Section 2(a) of the Industrial Disputes Act, 1947 defines the expression “appropriate Government”. In relation to those industrial disputes which fall within the purview of sub-clause (i), the Central Government is the appropriate Government, while in relation to all other industrial disputes, sub-clause (ii) provides that the State Government would be the appropriate Government. 12 Sub-clause (i) of clause (a) can, for convenience of exposition, be divided into several parts. The first part deals with an industrial dispute concerning any industry carried on by or under the authority of the Central Government or by a Railway Company. The second part deals with an industrial dispute concerning any such controlled industry as may be specified in this behalf by the Central Government. The third part deals with industrial disputes concerning various other establishments which are specifically enunciated. For the purposes of the present case, the dispute between the Appellant and the Respondent before this Court is confined to the following words of Section 2(a)(i), namely, “(a) appropriate Government means – (i) ... in relation to an industrial dispute concerning ... a major port, the Central Government ...” The expression “major port” is defined in clause (la) of Section 2 to mean a major port as defined in clause 8 of Section 3 of the Indian Ports Act, 1908. The expression “major port” is defined by the Indian Ports Act, 1908 to mean any port which the Central Government may by notification in the Official Gazette declare or may under any law for the time being in force have declared to be a major port. 13 8. The provisions of Section 2(a)(i) came up for interpretation before the Supreme Court in Serajuddin and Co. vs. Their Workmen.1 In that case, the State of West Bengal referred a dispute to adjudication and a preliminary objection to the validity of the reference was raised on the ground that it was not the State Government but the Central Government which was the appropriate Government. The Tribunal overruled the objection against which a Special Leave Petition was filed before the Supreme Court. The Appellant carried on mining operations in the State of Orissa and the function of its office at Calcutta was to exercise general control over the mining operations and look after the sale of mineral products of the mine. The argument of the employer was that the Head Office of the Appellant at Calcutta was an integral part of the mine and any industrial dispute between the office and its employees was an industrial dispute concerning the mine under Section 2(a)(i) in which case the appropriate Government was not the State Government but the Central Government. The relevant words of Section 2(a)(i) which fell for interpretation were an 'industrial dispute concerning a mine'. The argument before the Supreme Court was that the expression 1 1962(3) SCR 934 14 “industry” in Section 2(j) was wide enough to include the Head Office of a Mining Company though it may be situated away from the place where the mining operations are actually carried out and it is in the light of the definition of the word “industry” contained in Section 2(j) that the words “in relation to a mine” must be construed. The Supreme Court while rejecting the submission noted that where in Section 2(a)(i) it was intended to refer to an industry as such, the definition used the word “industry” as for instance where a reference is made to an industrial dispute concerning a controlled industry as specified by the Central Government. On the other hand, while referring an industrial dispute in regard to a mine, the definition did not refer to an industrial dispute concerning mining industry, but merely referred to an industrial dispute concerning a mine. The definition of the expression “mine” not having been made by the Act, the Court held that recourse would have to be taken to the dictionary meaning and to the definition in the Mines Act of 1952. The Supreme Court held that Section 2(j) of the Mines Act, 1952 defined a mine as an excavation wherein operation for the purposes of searching for or obtaining mineral ore is being carried on. The definition in Section 2(j) excluded an office of a mine which was separately defined by 15 Section 2(k). Hence, the Supreme Court was of the view that the head office wherever it may be situated cannot be said to do mining operations within the meaning of the definition. Hence, a dispute between the employees engaged at the Head Office at Calcutta and the employer was not an industrial dispute concerning a mine. 9. The judgment of the Supreme Court in Serajuddin (supra) has been followed by the Supreme Court in Damodar Mangalji & Co. vs. Regional Director.2 In that case, the appellant challenged a notification issued by the Government of Goa, Daman and Diu under the ESI Act, 1948 contending that the notification in its application to mining industry was beyond the scope of the Act for the reason that the appropriate Government in respect of a mine was the Central Government and not the State Government. The Supreme Court while rejecting the submission of the employer held as follows : “In Serajuddin & Co. case the dispute relating to the head office of a mining company was referred to the Industrial Tribunal by the West Bengal Government under the Industrial Disputes Act, 1947. It was held that the West Bengal Government was the appropriate Government and the decision turned on the 2 (2001) 3 SCC 321 16 interpretation of Section 2(a)(i) of the ID Act which defines “the appropriate Government”. The crucial words that fell for interpretation were “in relation to an industrial dispute concerning a banking or insurance company or mine or an oilfield or a major port”. It was held that the word “mine” as used in Section 2(a)(i) of the ID Act referred to a mine as defined in the Mines Act and that a dispute with reference to the head office of the mine was not a dispute concerning a mine which must mean mine as defined under the Mines Act. Therefore, this Court, having interpreted the expression “the appropriate Government” in the Industrial Disputes Act in Serajuddin & Co. case which is identical with the expression “the appropriate Government” as defined under the Act, we think the view taken by the High Court is correct and calls for no interference.” 10. The ambit of the expression “in relation to an industrial dispute concerning a major port” has fallen for consideration in several decided cases. Before dealing with those cases, it would merit emphasis that the relevant words used by the statute are that the industrial dispute should concern a major port. The expression “concerning a major port” emphasises the existence of a nexus between the industrial dispute and the major port. What is of concern to a major port has to be defined with reference to the ambit of the operation of the major port. If the nature of the dispute is such as to bear a reasonable and rational relationship to a major port, the element of nexus would be found to be present. 17 11. In Tulsidas Khimji vs. Jeejeebhoy,3 an industrial dispute was raised following the termination of the employment of certain workmen from the Clearing and Forwarding Department and Godown Department of a partnership firm. The firm carried on business as (1) clearing and shipping agents, (2) insurance agents, (3) godown keepers and (4) cotton supervisors and controllers. The reference which was made by the Central Government was sought to be impugned on the ground that the appropriate Government was not the Central Government. The judgment of the Division Bench of this Court noted that the contention urged before the Court was not taken before the Tribunal and could not be allowed to be entertained in writ proceedings, as a result. Moreover, the management had served a notice of the proposed retrenchment on the Central Government thereby accepting the position that the Central Government was the appropriate Government. Having regard to the peculiar circumstances, therefore, as they obtained in that case, the judgment in Tulsidas Khimji's case proceeded largely on the premise that the challenge to jurisdiction was not raised before the Tribunal and the 3 1961 I LLJ 41 18 management had in fact accepted that the appropriate Government was the Central Government. The Division Bench, however, did observe that in so far as the activities of the Godown Department were concerned, it was admitted that 25% of the space in the godown was utilised for storing goods for clearing and shipping. In view of all these circumstances, the Court held that it could not be said that the activity of the godown department had no relation to a major port. The Division Bench consequently concluded thus: “Since the dispute raised is with regard to the retrenchment in the clearing and forwarding department and the godown department, the activities of which, as we have seen, can be said to be concerning a major port, it would come within the scope of S.2(a). The Central Government, therefore, had authority to make the reference and the Central Government Industrial Tribunal had jurisdiction to deal with it.” 12. The Andhra Pradesh High Court had occasion to consider the ambit of the expression “concerning a major port” in Continental Construction (P) Ltd. Visakapatnam v. The Government of India.4 The appellant had entered into a contract with the Vashakhapatnam Port Trust for the construction of Break- Waters and Jetties, in connection with the construction of the outer harbour at Vishakhapatnam. A dispute having arisen between the 4 1977 Lab I.C. 1199 19 employer and its workmen, it was referred for adjudication by the Central Government. Mr.Justice O. Chinnappa Reddy (as the Learned Judge then was), rejected a Writ Petition filed by the employer challenging the maintainability of the reference on the ground that the Central Government could not have made the reference. Mr.Justice Jeevan Reddy (as the Learned Judge then was) speaking for the Division Bench in appeal, took note of the width of the expression “concerning” which is defined in the Webster's Third New International Dictionary as “relating to, regarding, respecting, about”. The Court noted that the expression “concerning” is a word of wide amplitude and, prima facie, any industrial dispute affecting or connected with a major port would fall within the said definition. That was the submission of the Central Government. The Division Bench held thus: “We are, however, of the opinion that the word 'concerning' must be construed in a reasonable manner, and referring to such industrial disputes which have got a proximate, intimate and real connection with the Corporations or authorities mentioned in the said definition, and not a connection which is far fetched, remote and hypothetical.” On facts, the Division Bench held that the industrial dispute between the Appellant and its workmen was