SCA/1254/1996 1/101 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 1254 of 1996 with SPECIAL CIVIL APPLICATION NO 5412 OF 1995 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= RAMESHBHAI D PATEL - Petitioner(s) Versus UNITED CATALYST INDIA LTD - Respondent(s) ========================================================= Appearance : MR RAJESH P MANKAD for Petitioner(s) : 1, MR Ashish R. MAJMUDAR for Respondent(s) in both the matters. ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 11/07/2006 ORAL JUDGMENT Heard learned Advocate Mr. Rajesh P. Mankad for the workman and Mr. K.M. Patel with Mr. AR Majmudar SCA/1254/1996 2/101 JUDGMENT for the employer. In both the petitions, one and the same award passed by the labour court, Baroda in Reference No.263 of 1984 dated 17.1.1995 is challenged. The workman filed Special Civil Application NO.1254 of 1996 against denial of 50 % back wages. By filing special civil application No. 5412 of 1995, the employer has challenged the said award of reinstatement with 50 per cent back wages for intervening period, dated 17.1.1995 wherein this Court (Coram : Hon'ble Mr. Justice M.R.Calla) has passed following order on 26th September, 1995: “Mr. P.B. Majmudar for the petitioner. No one appears for the respondent despite service. Rule. It is submitted by Mr. Majmudar that in pursuance of the Award by the Labour Court, respondent workman was reinstated. He came for few days and has again fled away. It is also submitted that the respondent workman is engaged in his own business. In such circumstances, no orders are necessary to be passed unless the respondent workman takes up SCA/1254/1996 3/101 JUDGMENT any proceedings for recovery of back wages or for enforcing to work again with the petitioner.It will be open for the petitioner to apply for interim relief if necessity arises.” By impugned award dated 17.1.1995, labour court has granted reinstatement with continuity of service with 50 per cent back wages for an intervening period with all consequential benefits. Workman was working with the employer since 1979. Incident occurred on 2nd September, 1983. Then, memo/show cause notice dated 6th September, 1983 was served upon the workman. As per the impugned award, the workman was appointed and working with the employer with effect from 5.12.1978 and was receiving salary of Rs.1325.00. Alleged accident occurred on 2nd September, 1983. Thereafter, reply was given by workman on 9th September, 1983. Thereafter, according to the workman, he met to one Shri Lalajee Sheth at Bombay but he was not allowed to resume duty by the management and again he met Lalajee Sheth at Bombay and thereafter, according to instruction, he met the SCA/1254/1996 4/101 JUDGMENT officer concerned on 19th September, 1983 wherein the concerned officer asked him to tender letter of apology. He accordingly tendered letter of apology on 22.9.1983. After receiving letter of apology from workman, according to the workman, his services were illegally terminated on 23.9.1983 by the Company. These are the facts mentioned by the workman in his statement of claim. Reply was filed by the Company at Exh. 10 denying the averments made in the statement of claim and it was also contended that the workman is not covered by the definition of 'workman' under section 2(s) of the ID Act, 1947 and, therefore, reference is not maintainable. It was admitted by the company that he was drawing salary of Rs.1325.00 p.m. According to the company, the employee was in managerial position, working as shift in charge and he was having the power of supervision and control as well as to issue direction and, therefore, not covered by the definition of 'workman' under section 2(s) of the ID Act, 1947. The work of workman was technical in nature, complicated. Ordinary mistake has put company in damage and, therefore, due to negligence on the part of the SCA/1254/1996 5/101 JUDGMENT workman, one total lot has been found to be defective and due to that such loss suffered by the company, explanation from workman was called for on 2nd September, 1983 but his conduct was rough and he left the job without any permission and, therefore, show cause notice was served calling for explanation from the workman. Workman tendered letter of apology voluntarily. There was no force or coercion for obtaining the letter of apology and it is not the termination by the company but the workman has left job at his own. It is also the contention raised by the company in his written statement that the company has lost confidence because due to his negligence, heavy loss/damage has been suffered by the company and, therefore, reference is required to be rejected. Before the labour court, vide Exh. 19, 29, 30 and 38, both the parties produced relevant documents on record. Workman was examined vide Exh.15 and reiterated the facts mentioned in his statement of claim. In his deposition before the labour court, the workman made clear statement that he was not having any power to make appointment or to terminate SCA/1254/1996 6/101 JUDGMENT service of any employee and he was also not having any power to sanction leave of any employee. He was working as a Chemist analyst and to direct the workers about production. On the date of incident, , manager as angry with him and that is why, false allegations were made against him and he was insulted by the officer and was informed to get out from the place. Reply given by the workman was received by the company. No departmental inquiry was conducted against him. No written order of termination has been issued against him. As regards letter of apology, it was stated by him that it was given by him because of the fact that Shri Lalajee Sheth instructed him that he will be taken back in service. Accordingly, on that basis, letter of apology was given by him but after giving letter of apology, he was not taken back in service but his services were orally terminated by One Mr. A. Prakash, Officer-in-charge. In his cross examination, he stated that he was working on technical post, catalyst is being used in petrochemical refinery etc., 20 to 25 types of catalysts are being manufactured. When process has to be changed, machine has to be cleaned. He has to do SCA/1254/1996 7/101 JUDGMENT the work of raw materials, testing, process, supervision, temperature maintenance solution and to get the work done by instructing persons assisting him. It is also deposed by him that he remained unemployed but he was helping his brother in his business. It was not stated to him by Lalajee Sheth to give letter of apology but was only informed to meet Mr. A. Prakash. Apology letter was given with hope that the company will continue him in service. Reply was given to the notice dated 8.9.1983. By Exh. 17, oral evidence was closed by the workman. Then, on behalf of the company, one Manager Prakash Dattatrey was examined. It was deposed by him that the services of workman were not terminated by him. No termination order was issued and no departmental inquiry was conducted by the Company. Notice Exh. 13/1 was served on workman but it was refused by him and then it was served upon him by Regd. Post A.D. Workman was reporting for work and he was working as production in charge who is required to supervise and to guide in production activity. Power has also been given to workman to take necessary action against workmen those who were SCA/1254/1996 8/101 JUDGMENT working under him. Company is having Certified Standing Orders which were produced before the labour court. No departmental inquiry was initiated by the company. These facts were admitted by the Manager on behalf of the Company. After oral evidence of both the parties, matter was heard by the labour court and after considering the evidence on record, labour court came to the conclusion that the respondent is a workman as defined under section 2(s) of the ID Act, 1947. Labour court also came to the conclusion that the work of the workman was technical in nature and he was receiving salary of Rs.1325.00 and he was not having any power to appoint and/or to terminate services of any employee. Labour court has also come to the conclusion that the workman was not working in managerial capacity. Labour court has also come to the conclusion that no departmental inquiry was conducted against him in respect of the allegations levelled in the show cause notice. Unless and until the company proves misconduct against workman, whatever allegations made in the show cause notice dated 5.9.1983 are remains as it is as same are not proved against workman. As regards the letter of SCA/1254/1996 9/101 JUDGMENT apology, it was considered by the labour court that this letter was given by the workman with hope that he would be taken back in service but after receiving such letter of apology from workman, without any inquiry, his service was terminated orally and he was not taken back in service and, therefore, such an action on the part of the management is contrary to the principles of natural justice. Labour court has also come to the conclusion that when it was the case of the company that the services of workman were never terminated but workman left job at his own, then, the company ought to have asked the workman to report for duty but no such efforts were made by the company to call workman to report for duty. Therefore, considering the conduct of the company, labour court came to the conclusion that the services of workman were terminated by the company without holding any inquiry, without giving any opportunity to him and, therefore, such termination is also violative of section 25F of the ID Act, 1947. As regards contention of the company about loss of confidence, labour court has come to the conclusion that there is no evidence on record which would SCA/1254/1996 10/101 JUDGMENT suggest that the company lost confidence against the workman. No details about nature of work of workman have been given by the company before the labour court and ultimately, labour court has come to the conclusion that the Standing Orders are applicable, no departmental inquiry is initiated by the company and the contention of loss of confidence has not been proved by the company before the labour court. Labour court has considered the evidence of workman about unemployment and helping to his brother in his business. Labour Court granted 50 % back wages with consequential benefits and reinstatement with continuity of service. Witness for management Mr. A. Prakash has also deposed in his cross examination that that technical knowledge for work of plant at Baroda is necessary without which worker will not be able to do good job. This would suggest that the respondent workman would require technical knowledge while working as a chemist. As referred to above the facts which are on SCA/1254/1996 11/101 JUDGMENT record before the labour court, I have narrated in detail with a view to appreciate the submissions made by the learned advocates for the parties. Learned Advocate Mr. K.M. Patel appearing for the management has raised four contentions before this Court. One is the loss of confidence. Second is that he is not a workman. Third is that the letter of apology being admission of guilt, there is no necessity to initiate any departmental inquiry against the workman and fourth is that the charges against the workman are serious in nature. During the course of his arguments, learned Advocate Mr. Patel has referred to certain observations made by the labour court. In support of his contention, he referred to certain passage from the award. He relied upon the decision of apex court in case of S.K. Maini v. M/s. Carona Sahu Company Ltd. And others, reported in AIR 1994 SC 1825, paragraph 11. He emphasized his contention that the respondent is not a workman within the meaning of section 2(s) of the ID Act, 1947. He submitted that the apex court has considered that he is not a workman though either SCA/1254/1996 12/101 JUDGMENT incidentally he is required to do some clerical work or is not vested with power to appoint or discharge employees under him. Relying upon this decision, it was submitted by him that in the present case, respondent workman is not having power to appoint or terminate or incidentally doing some practical work as a chemist cannot be considered to be a workman. He submitted that his principal or main work is important and while doing that, he is out side the scope of workman. He submitted that the respondent is not a workman and therefore, whole reference ought to have been rejected by the labour court on that ground alone. He referred to the show cause notice and reply and also the apology letter tendered by the workman at page 27. It was his submission that once the apology has been given by the workman, it amounts to admission of his guilt and, therefore, there is no necessity of holding any inquiry by the management because the workman has voluntarily submitted letter of apology to the manager A. Prakash. He also placed reliance upon the apex court decision in case of Dharmarathakara Raibahadur Arcot Ramaswamy Mudaliar Educational SCA/1254/1996 13/101 JUDGMENT Institution versus Educational Appellate Tribunal and others reported in (1999) 7 SCC 332and submitted that no inquiry is necessary when one admits own's violations. He also submits that when no inquiry is necessary when there are undisputed facts for which there was no plausible explanation and affected person could not put forth any valid defence when opportunity was given by court, apex court has rejected plea on the facts of the case that the inquiry ought to have been conducted as provided under statutory rules but this is not necessary when allegations/charges are admitted and no plausible defence is placed before the authority concerned. Reliance was placed by him on para 8 of the said decision. Thereafter, he relied upon the decision of apex court in Addl. District Magistrate (City) Agra v. Prabhakar Chaturvedi and others, reported in AIR 1996 SC 2359. According to him, tendering of an apology letter amounts to clear admission on the part of the workman. According to him, when misconduct is admitted by the workman and explanation was given that incident occurred it was due to his carelessness, then, subsequently, request for SCA/1254/1996 14/101 JUDGMENT examining witnesses has been considered to be an after thought. Similarly, he submitted that in this case, the workman has tendered apology voluntarily and subsequently raised contention before the labour court that departmental inquiry was not initiated therefore, order of reinstatement is bad. Learned Advocate Mr. Patel also submitted that there is no question of terminating service of workman as no written order was issued by the management and, therefore, question of violation of section 25F/G/H is not arising at all. As regards his contention about the loss of confidence in the workman, he submitted that looking to the position of the workman as a chemist and looking to the nature of charges, if any deliberate attempt is made by the workman, then, it will result into blast in the factory and, therefore, position of workman as a chemist and nature of charges ought to have been taken into account by the labour court while granting relief. He also submitted that in the written statement to the statement of claim as well as in evidence of management, plea of loss of confidence has clearly been taken by the management but the same has SCA/1254/1996 15/101 JUDGMENT not been properly appreciated by the labour court while granting relief in favour of the respondent therefore, award of reinstatement is not sustainable. He also submitted that according to the deposition of the witness for management before the labour court, if the catalyst lower than the prescribed standard is used, then, it would affect quality of production and there would be blast. He, therefore, submitted that such person should not have to be granted reinstatement when the management has lost confidence in such a person. He submitted that at the relevant time, five chemists were working in the company and now company is having fifteen chemists in the establishment. He submitted that as per the evidence of the witness for the management before the labour court respondent workman was preparing all the raw material for preparing catalyst, work of preparation of mixture was being done by the workman. He referred to the daily news paper dated 5th September, 1985 wherein some news about theft was published but no name of workman is there. He also submitted that help to a brother in his business also amounts to gainful employment and, therefore, labour court SCA/1254/1996 16/101 JUDGMENT should not have granted 50 % back wages for intervening period. He placed reliance upon the apex court decision in UP State Brass ware Corporation Ltd. And Another versus Uday Narain Pandey, 2006 (1) SCC 479. He placed reliance upon paragraphs 40 to 44 and 61 of the said judgment wherein apex court has considered that the back wages cannot be considered to be an ordinary and normal relief when dismissal is set aside by the Court. No precise formula can be laid down as to when full back wages should be allowed. It will depend upon facts of each and every case as held by the apex court. Burden is upon the employee to prove that he was not gainfully employed and it is not upon the management to plead otherwise. Learned advocate Mr. Patel also submitted that section 106 of the Evidence Act is also considered by the apex court while deciding the issue about back wages. According to his submission, in the facts of this case, labour court should not have granted even 50 % back wages for intervening period as it was clearly found by the labour court that the respondent was helping his brother in his business. Ultimately, he submitted that these are four contentions raised SCA/1254/1996 17/101 JUDGMENT by him and in view of these factual aspects, award of reinstatement with 50 % back wages made by the labour court is required to be set aside and the reference is required to be dismissed by this court. On the other hand, learned Advocate Mr. Mankad appearing for the workman has supported the award of reinstatement and has submitted that the letter of apology given by the workman cannot be considered as an admission of guilt but it is merely an explanation or clarification given by the workman that the particular incident has taken place due to misunderstanding between the parties, therefore, it cannot be considered to be an admission of guilt and that in the said apology letter, nowhere it is mentioned that the allegations made in the show cause notice are accepted by him and, therefore, tendering of letter of apology does not amounts to admission of guilt and, therefore, on that basis, it is not open for the petitioner to dispense with inquiry or to take any action adverse to workman on the basis of such letter of apology. According to him, such letter of apology was given by the workman as per the SCA/1254/1996 18/101 JUDGMENT demand of officer concerned. Learned Advocate Mr. Mankad further submitted that the respondent workman was working as chemist, his work was technical in nature with some of assistant workmen and he was having very limited powers over those workmen for issuing direction which cannot be considered that he is having supervisory powers or that he was working as supervisor or in the managerial capacity. He also submitted that the total salary of the workman was below Rs.1600.00 and, therefore, he is covered by the definition of workman under section 2(s) of the ID Act, 1947. Referring to the letter of appointment, submitted that no such powers have been given to workman. He also submitted that in daily news paper, news about theft was published wherein workman was not involved and no FIR was lodged against workman. He referred to appointment orders of each year by increasing salary of workman from time to time. He also submitted that in each year, work of the workman was appreciated by the management and after appreciation of work of each year, rise in salary was given to him as a reward of such appreciation of work by the management to the workman. He also submitted SCA/1254/1996 19/101 JUDGMENT that right from 1978, the year in which he was appointed till 1983 upto the date of incident, not a single memo was issued to workman by the management and there was no any allegation made by management against workman but workman was confirmed by the management. He referred to memorandum dated 31st March 1983 wherein his salary was fixed at Rs.1325.00 p.m. As per earlier order dated 31st March, 1982, his salary was Rs.1150.00. Prior to that, as per order dated 25th March, 1981, his salary was of Rs.1000.00 and on 31st March, 1980, his salary was at Rs.750.00 p.m. As on 31st March, 1979, his salary was of Rs.600.00 p.m. Appointment order is dated 5th December, 1978. At the time of appointment of workman, his emoluments were fixed at Rs.500.00 p.m. Meaning thereby, he started job with the salary of Rs.500.00 p.m. And within the span of five years, reached to Rs.1325.00 in 1983. Relying upon this document, he submitted that if the work of workman was not satisfactory or if the integrity of workman was doubtful, then, management would not have given such rise every year to workman and the workman would not have reached at the salary of Rs.1325.00 in 1983 SCA/1254/1996 20/101 JUDGMENT from Rs. 500.00 fixed at the time of his appointment in the year 1978 and in view of this, contention of management abut loss of confidence is after thought and it was not mentioned in the show cause notice but raised only in written statement as well as in the deposition of witness for the management. He also submitted that no cogent evidence was produced by management before the labour court in support of its plea of loss of confidence in workman. According to him, post of chemist is not a post of confidence but it is technical in nature. He also submitted that the letter of apology was given on the basis of the fact that the workman had met on two occasions at Bombay Lalajee Sheth and ultimately he was asked by said Lalajee Sheth to met Mr. A.Prakash. It was given by him with hope that he will be taken back in service. He submitted that for what purpose, it was demanded by management. If management was not ready to reinstate or continue workman in service, then, there is no need to ask for any apology from the workman. He also submitted that the letter of apology was given with the hope that he would be continued in service and no adverse steps would be taken against SCA/1254/1996 21/101 JUDGMENT him by the management. With such expectation and having understood, the letter of apology was given as per demand which cannot be considered as admission on the part of the workman. In support of these contentions, he placed reliance upon the decision of the apex court in case of Biswajit Dev Roy And IOB and Others, reported in 1987 (1) LLJ 288. He also relied upon the apex court decision in case of Burmah Shell