IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No.: 1787 of 1993. Reserved on: 07.12.2007. Decided on: 25.02.2008. Him Ispat Mazdoor Sangh & Others. … … Petitioners. Versus Presiding Officer & Others. … … Respondents. Coram: The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting?1 Yes. For the Petitioners: Mr. Shrawan Dogra, Advocate. For Respondent No.3: Mr. Sanjeev Kuthiala, Advocate. Rajiv Sharma, Judge: A challenge has been laid by the petitioners to the award passed by the Labour Court in reference No.18/1990, dated 18.2.1993. The brief facts necessary for the adjudication of this petition are that the petitioner No.1-Union has raised demand notice on 6.11.1989. The conciliation proceedings in sequel to the demand notice were held on 17.11.1989 and thereafter the same were to be held on 27.11.1989. The petitioners No.2, 3 and 4 were put under suspension on 23.11.1989 and the charge sheet was served on them on 23.11.1989 itself. Reply was filed by these petitioners to the charge sheet whereby the charge leveled in the charge sheet were denied. The conciliation proceedings instead of Whether reporters of local papers may be allowed to see the judgment? yes. - 2 - being held on 27.11.1989 were held on 25.11.1989 and thereafter the conciliation proceedings took place on 4.12.1989. However, in between, the 19 workmen were terminated on 29.11.1989 by the Management and the lock out was declared on 1.12.1989. The Conciliation Officer submitted his report to the State Government pursuant to which the following reference was made by the State Government to the Labour Court on 8th January, 1990:- “1. Whether the termination of services of S/Sh. Beant Singh, Mill Incharge and Gagan Singh helper by the Management of M/S Him Ispat Ltd. Kandrori, Distt. Kangra is legal and maintainable? If illegal, to what relief and service benefits S/Sh. Beant Singh and Gagan Singh are entitled? 2. Whether the workers of M/s Him Ispat Ltd., Kandrori started slow down from 20.11.89 onwards or not? If so whether it is justified or not? If not whether it is un-fair labour practice or not? If so what penalty should be imposed on the workers? 3. Whether the dismissal from the services of the 19 workers (list enclosed) by the Management of M/s Him Ispat Ltd. Kandrori on 29.11.89 is legal and maintainable? If illegal to what relief and service benefits the above mentioned workers are entitled? 4. Whether the Action of the Management of M/s Him Ispat Ltd., Kandrori to declare lock-out in the factory w.e.f. 1.12.1989 is justified and in order? If not to what relief and amount of compensation the aggrieved workers are entitled?” In sequel to the reference made by the State Government, the petitioner-Union through its authorised representative filed statement of claim. The Management filed detailed reply to the statement of claim to which rejoinder/replication was also filed by the Union. The Labour Court passed the award in favour of the Management on 18th February, 1993. The petitioners have laid challenge to the award dated 18.2.1993. - 3 - Mr. Shrawan Dogra has submitted that during the pendency of the writ petition, this Court has passed the order on 8.11.2001 in Company Petition No.1 of 1998 whereby respondent No.2-Company was ordered to be bound-up and official liquidator attached to this Court has been appointed as liquidator for taking further action as per the law. The petitioners have filed CMP No.1555 of 2003 under Order 1 Rule 10 CPC for adding the official liquidator as respondent No.3. The application was allowed by the Court and official liquidator was added as respondent No.3. Though the respondent No.2 had earlier filed detailed reply, respondent No.3 also filed reply to the main petition. The petitioners had also filed rejoinder to the reply filed by respondent No.2. Mr. Shrawan Dogra had assailed the award dated 18.2.1993, inter alia on the following grounds:- i) The Labour Court has come to a wrong conclusion that Beant Singh, petitioner No.18 was not a workman. Mr. Shrawan Dogra further submitted that the Labour Court has mis-construed and mis-appreciated the appointment letter issued to petitioner No.18 vide Ex.PW-1/C while determining whether Shri Beant Singh was a workman or not. According to him, taking into consideration the functions/duties being discharged by said Shri Beant Singh read with his statement as PW-1, Beant Singh was a workman and was covered under the ambit of expression “workman” as per section 2 (S) of the Industrial Disputes Act, 1947. Mr. Shrawan Dogra also contended that the petitioner No.18 could not be terminated/retrenched without holding a regular inquiry against him vide letter dated 31st October, 1989. ii) The termination of Shri Gagan Singh vide letter dated 11.9.1989 is also bad in law since the domestic inquiry against him has not been held in accordance with law. - 4 - iii) The termination of 19 petitioners vide communication dated 29th November, 1989 was bad in law since neither any inquiry was held against these workmen nor were they paid any compensation as per the provisions of Industrial Disputes Act, 1947. Once the conciliation proceedings have commenced after raising the demand notice dated 6.11.1989, the services of 19 workmen could not be terminated. iv) So far as the question of the findings recorded by the Labour Court with regard to go-slow and lock-out effected by the Management with effect from 1.12.1989 are concerned, the same have lost its relevance after the Company has been ordered to be wound up by this Court on 8.11.2001. v) The Labour Court has mis-read and mis-appreciated the evidence and the findings recorded by the Labour Court are perverse and liable to be interfered by this Court in its writ jurisdiction. vi) The Labour Court could not invoke the principles of Article 311 of the Constitution of India to justify the stand of the Management that it was not possible to hold inquiry against the 19 workmen. Mr. Sanjeev Kuthiala had supported the award dated 18.2.1993. I have heard the learned counsel for the parties and perused the record carefully. The Court has to consider firstly whether the services of Shri Beant Singh, petitioner No.18 have been terminated in accordance with law or not. Shri Beant Singh was appointed on 20.11.1984 vide Ex.PW-1/A. He was promoted to the post of “Incharge Rolling” vide EX.PW-1/C. He was promoted by creating a new post to achieve the higher goal and he was entrusted with duties and responsibilities in addition to his present duties to operate the mill. It will be apt to reproduce at this stage the two letters - 5 - ‘Ex.PW-1/A’ and ‘Ex.PW-1/C’ to determine whether the petitioner’s status had changed from workman to managerial or administrative post. The letter Ex.PW-1/A reads thus:- “HIL/S- Dated: 20-11-84. Mr. BEANT SINGH, S/o Sh. PIAR CHAND, Vill. & P.O. BANKHANDI, Teh. Dehra Gopipur, Distt. Kangra. (H.P.). Reg: Appointment offer. Dear Sir, Please refer to your interview dt. 19-11-84, for the position of SENDZIMER MILL OPERATOR in our company. We offer employment on the following terms :- 1. You will be paid a salary of Rs.1200 + 500 as the special allowance per month. The special allowance is liable to be varied from time to time, at the discretion of the Management. 2. You will be on probation for a period of six months, which can further be extended if necessary at the discretion of the company. 3. Your services are terminable at any time without assigning any reason during probation period. 4. You shall be governed by the general rules and regulations of the company in force from time to time. 5. Your services are transferable to any other unit, branch of establishment of the company of promoted by the company wherever situated. 6. You shall be in wholetime employment of the company and shall not accept any other work whether for remuneration of honorary without written permission of the company. 7. You will discharge diligently and faithfully all such assignments as are given to you from time to time. 8. In case, you are found guilty of misconduct and/or act in breach of the terms of service, you will be liable for legal action. 9. Your services are terminable by giving one months notice from either after confirmation or service. - 6 - 10. If you agree to the above terms and conditions, please sign in the space hereinafter in acknowledgement of accepting the said job on the terms and conditions aforesaid and return the signed copy of the letter. Thanking you. Yours faithfully, For HIM ISPAT LIMITED, Sd/-- (PARDEEP CHANDERA) MANAGING DIRECTOR. I agree and accept the above appointment letter with the terms and conditions. The text of Ex.PW-1/C, dated 8th February, 1989 reads thus:- “Ref:- HIL/PM/88-89/484. 8th February, 1989. Mr. Beant Singh S/o Sh. Pyar Chand Mill Operator, HIM ISPAT LIMITED. KANDRORI. Sub:- PROMOTION TO THE POST OF “INCHARGE ROLLING.” Sir, In appreciation of your work and performance, the management is pleased to promote you to the post of “Incharge Rolling” w.e.f. 1st January, 1989 on the following terms and conditions:- 1. That, you will be paid monthly gross salary Rs.2850/- only (Rs. Two thousand eight hundred fifty only) in your running grade, as per break-up given below:- Basic Rs. 2361.00 D.A. Rs. 300.00 SPL. Allowance Rs. 189.00 Total RS. 2850.00 2. This being the new post created to achieve the higher goals, the following duties and responsibilities are added in addition to your present duties to operate the mill. - 7 - a. You will assist in the operation of the mill to achieve the production target and shall be responsible to organize the material flow to get the maximum out put from the mill in quantity and qualitiwise. b. You will organize the man-power based on plans laid-down by the production Engineering department and in case of shortage of manpower, poor quality or out-put, leave vacancy, your will operate the mill yourself and thus achieve the desired production target. c. For better control and coordination between production Engineering deptt. and other deptts. Regarding the repair/maintenance of the mill, you will come in shifts as decided by the management such that you and your colleague cover maximum of the time. d. You shall assist the management to chalk-out and follow-up the preventive maintenance schedule of the rolling mill and shall be responsible for the general behaviour and morale of the rolling mill crew. 3. That you will be entitled for the next annual increment in January, 1990. That management expects you to work-hard and put your best efforts to match the incentive given to you. Other terms and conditions of your appointment shall remain unaltered. Yours faithfully, FOR HIM ISPAT LIMITED. Sd/-- CHIEF EXECUTIVE CC:- Acctts. Deptt.” It is evident from the combined reading of Ex.PW-1/A and Ex.PW- 1/C that Shri Beant Singh was appointed as mill operator and in addition to his duties as mill operator, he was assigned additional duties of Incharge rolling as enumerated vide Ex.PW-1/C, letter dated 8th February, 1989. Primarily, Shri Beant Singh has remained as mill operator though his salary was enhanced to Rs.2850/- as per letter dated 8th February, 1989. These two documents have now to be considered vis-à-vis the - 8 - statement of PW-1 made before the Labour Court. He has categorically stated before the Labour Court that he joined his duties initially as machine operator on 25.12.1985. He has clearly stated in his cross- examination that he was not changing the shifts of the workers. He has further stated in his cross-examination that he was not Incharge of the section, but he was running the machines and Shri M.P. Singh was Deputy Works Manager. In his examination-in-chief he has stated that he was given the additional charge of office work. He has also stated that he was not dealing with promotion, demotion, granting advance payment, sanctioning of leave etc. It is, thus, evident from Ex. PW-1/A and Ex.PW- 1/C read with his statement that the petitioner No.18 was working as a workman but not in administrative or Managerial capacity. The Labour Court has recorded wrong findings that Shri Beant Singh was working in managerial or administrative capacity. The Labour Court was required to determine primarily the functions/duties discharged by Shri Beant Singh. The fact of the matter is that Shri Beant Singh was working as mill operator and was only assigned few additional duties, that too, in furtherance to achieve higher production. Now the Court has to see whether the termination/retrenchment of Shri Beant Singh is in accordance with law or not. It is admitted by Shri M.C. Joshi while appearing as RW-9 that neither charge sheet was issued nor any inquiry was held at the time of termination of Shri Beant Singh. The termination dated 31st October, 1989 is penal in nature and casts stigma on the petitioner No.18 Shri Beant Singh. What has been stated in letter dated 31st October, 1989 is that Shri Beant Singh had dis- obeyed his superiors and has indulged in the activities not expected from the staff of the company coupled with the fact that many instances of indiscipline have been observed and reported against him. It is, thus, clear that the services of the petitioner, Beant Singh have been - 9 - terminated due to misconduct, but without holding any domestic inquiry. Shri Beant Singh was required to be served with charge sheet and thereafter the regular inquiry was to be held against him. Consequently, it is held that the retrenchment/termination of Shri Beant Singh, petitioner No.18 vide letter dated 31st October, 1989 is void ab initio. The Court has now to consider whether the termination of Shri Gagan Singh was held in accordance with law or not. Mr. Shrawan Dogra had strongly contended that the inquiry initiated against Shri Gagan Singh was a sham since he has not been afforded reasonable opportunity to defend himself during the course of domestic inquiry conducted by the Personnel Manager, Mr. M.C. Joshi. Mr. Sanjeev Kuthiala had rebutted the submission made by Mr. Shrawan Dogra and has has submitted with vehemence that the inquiry was held against Shri Gagan Singh in accordance with law. The charges of misconduct against Mr. Gagan Singh as per charge sheet dated 1.8.1989 reads thus:- “1. Slow-down the work and instigation thereof. 2. Abusing, threatening and intimidation of Sh. Devi Dutt and creating disorderly behaviour at the work-premises. 3. Physical assault on Sh. Devi Dutt.” Mr. M.C. Joshi, Personnel Manager was appointed as Inquiry Officer to hold inquiry against Mr. Gagan Singh. The Management had produced 5 witnesses to support the charges against Shri Gagan Singh. Shri Gagan Singh had produced 3 witnesses besides appearing as his own witness. The Inquiry Officer after taking into consideration the entire evidence produced during the course of the inquiry has held that the charges leveled against Shri Gagan Singh were proved. The Inquiry Officer has minutely considered the statements of the witnesses produced by the Management and by the delinquent Shri Gagan Singh. The Inquiry report dated 8th September, 1989 is a well reasoned and is - 10 - based on evidence. This Court will not interfere in the Inquiry report while exercising the writ jurisdiction under Articles 226 and 227 of the Constitution of India. The finding recorded by the Labour Court that the domestic inquiry against Mr. Gagan Singh was held in accordance with law is up-held. However, it is evident from the sequence of events as quoted in the Inquiry report that it was an isolated incident of resorting to go-slow and mis-behaving with his colleagues and thus the extreme penalty of dismissal could not be inflicted upon him. Consequently, it is held that the penalty of dismissal inflicted upon Gagan Singh is dis-proportionate to the alleged mis-conduct and the punishment of fine up to 2% of his wages for three months is imposed upon Shri Gagan Singh. Now the Court has to consider whether the services of 19 workmen could be terminated without holding any domestic inquiry or without paying them any compensation visualized under the provisions of the Industrial Disputes Act, 1947. Demand notice was raised through the President of the petitioner-Union on 6.11.1989. The conciliation proceedings were to be held after the issuance of demand notice on 17.11.1989. Three workmen, namely, Yash Pal, Chander Shekhar and Uttam Chand were put under suspension on 23rd November, 1989. Charge sheet was issued to them and they had filed reply to the same. The next date for holding the conciliation proceedings was fixed for 27.11.1989. But, the conciliation proceedings took place on 25th November, 1989 and thereafter the same were to take place on 4th December, 1989. However, the Management dismissed 19 workmen on 29th November, 1989 during the pendency of conciliation proceedings. It is admitted by the Personnel Manager, Mr. Joshi while appearing as RW-9 that no domestic inquiry was held before terminating these 19 workmen. The services of the 19 workmen could not be dismissed - 11 - without holding the regular domestic inquiry against them and the workmen were entitled to get one month’s notice or compensation in accordance with law. The Presiding Judge has recorded a perverse finding that preliminary inquiry was held against these 19 workmen. What was held by Shri P.C. Sharma by way of preliminary inquiry which finds mention at page 309 of the record of the Labour Court is that the same was with regard to go slow-down adopted by the workmen. The Labour Court has come to the wrong conclusion that that workmen had not associated themselves during the course of the preliminary inquiry. The preliminary inquiry as mentioned above was confined only to see prima facie whether the workmen had resorted to go slow or not and the same was not in any manner dealing with misconduct of the workmen. The Personnel Manager, Mr. Joshi while appearing as RW-9 has categorically admitted in his cross-examination that no inquiry was held before dismissing them vide communication dated 29th November, 1989. The Labour Court has wrongly invoked Article 311 of the Constitution of India to justify the stand of the Management that the inquiry could not be held in such surcharged atmosphere. The workmen’s conditions of service are regulated under the Industrial Disputes Act, 1947. If their services were to be dispensed with on the ground of mis-conduct, a regular inquiry was required to be held and if at all it was not possible to hold a regular departmental inquiry, in that eventuality the cogent reasons were required to be recorded by the Management justifying why domestic inquiry could not be held against 19 workmen. The Management has not produced any contemporaneous record before the Labour Court that it was not possible to hold the domestic inquiry against the workmen before dismissing them. Moreover, it is also evident from the language employed in communication dated 29.11.1989 that serious mis-conduct - 12 - has been attributed to all of them and the same is also on the face of it a stigmatic. Thus, on the basis of the observations made hereinabove, the findings recorded by the Labour Court that it was not possible for the Management to hold inquiry before terminating 19 workmen as per communication dated 29th November, 1989 is liable to be interfered with and the same is set aside. The matter is also required to be viewed from another angle. The Union has raised the demand notice and the conciliation proceedings were going on at the time when the services of 19 workmen were dispensed with on 29th November, 1989. It is evident from the language employed in Section 33 of the Industrial Disputes Act, 1947 that no punitive action is to be taken against the workman during the conciliation proceedings. The conciliation proceedings as noted above were held on 17th November, 1989, thereafter on 25.11.1989 instead of 27.11.1989 and thereafter the same were to be held on 4.12.1989. However, the Management had dismissed 19 workmen without holding any domestic inquiry on 29th November, 1989. The Labour Court has failed to take note of Section 33 of the Industrial Disputes Act, 1947. The dismissal of the 19 workmen mentioned in communication dated 29th November, 1989 is bad in law for not following the provisions of Section 33 of the Industrial Disputes Act, 1947 as well. The Court has to finally see whether in the changed scenario after the liquidation of respondent No.2-Company vide order dated 8.11.2001 in Company Petition No.1 of 1998, the Court should look into the aspect of go-slow adopted by the workmen and the lock-out ordered by the Management with effect from 1.12.1989. The Court is of the firm opinion that after the liquidation of the Company and the appointment of the liquidator, the issue of go-slow and lock-out need not be gone into in this - 13 - petition, more particularly any endeavour by this Court to go into this aspect will only be academic. The up-shot of the above discussion is that: (i) The termination/retrenchment of Beant Singh was void ab initio and he is entitled to all the consequential benefits including the arrears of wages and seniority etc. (ii) The domestic inquiry conducted against Sh. Gagan Singh was in accordance with law but the penalty imposed upon him was disproportionate to the alleged misconduct. (iii) The dismissal of 19 workmen as per communication dated 29th November, 1989 is declared void ab initio and the workmen are entitled to all the consequential benefits i.e. reinstatement and arrears of wages etc. (iv) This Court will not go into the question of go-slow and lock out being academic in nature. (v) The finding recorded by the Labour Court that it was not possible for the Management to hold regular domestic inquiry against 19 workmen is declared bad in law. A regular inquiry was required to be instituted against the 19 workmen before dismissing/terminating them as per letter dated 29th November, 1989. (vi) The Management could not dismiss/terminate 19 workmen during the course of the conciliation proceedings. Consequently, the writ petition is partly allowed. The award dated 18th February, 1993 is modified to the following extent:- 1. The termination of Shri Beant Singh vide letter dated 31st October, 1989 is declared illegal and he is held entitled to reinstatement with all consequential benefits being workman. 2. The termination of the services of Sh. Gagan Singh is declared null and void being disproportionate. However, the - 14 - punishment of fine upto 2% of his wages for 3 months is imposed upon him. 3. The dismissal/termination of 19 workmen as per communication dated 29th November, 1989 is illegal and the same is set aside and they are held entitled to reinstatement with all consequential benefits including the arrears of salary etc. However, it is clarified that since the respondent No.2-Company has been ordered to be wound-up by this Court vide order dated 8.11.2001 and the appeal is pending before this Court, the workmen will be entitled to their dues strictly as per the provisions of Section 529-A of the Companies Act, 1956. There shall be no order as to costs. February 25, 2008. (Rajiv Sharma) (sck). Judge