Case: Municipal Corporation Of Greater Bombay Vs. The B.E.S.T. Workers' Union

Lab LJ 790 (Madh Pra) (supra). We have already referred to the fact that the Labour Court has relied on this decision as supporting its view. The said High Court had to consider the provisions of sub-section (3) of S. 16 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, hereinafter referred to as the Berar Act. The said Berar Act was enacted to make provision for the promotion of peaceful and amicable settlement of industrial disputes by conciliation and arbitration and for certain other purposes. Section 16 dealt with Reference of disputes to Labour Commissioner. Sub-section (1) provided that powers can be conferred on a Labour Commissioner by the State Government by notification to decide an industrial dispute etc. A right was conferred by sub-section (2) on an employee working in an industry, to which the notification applied, to invoke the jurisdiction of the Labour Commissioner for granting reinstatement and payment of compensation. The said sub-section further provided that such an application for this purpose had to be made by an employee within six months from the date of dismissal, etc. The material part of sub-section (3) was as follows :"On receipt of such application, if the Labour Commissioner after such enquiry as may be prescribed, finds that the dismissal, discharge, removal or suspension was in contravention of any of the provisions of this Act or in contravention of a standing order made or sanctioned under this Act or was for a fault or misconduct committed by the employee more than six months prior to the date of such dismissal, discharge, removal or suspension, he may direct..........".The reliefs that could be granted were substantially in the same terms as in paragraph (D) of the Act but in sub-section (3) of Section 16 of the Berar Act there is no provision regarding the fault or misconduct coming to the notice of the employer, as in cl. (i) of paragraph (D) of the Act. From the judgment of the Madhya Pradesh High Court, we find that a workman was dismissed for misconduct on August 31, 1956. The allegations of misconduct related to embezzlement of three sums of money. The last item of embezzlement was on June 28, 1955. The Labour Commissioner, whose jurisdiction was invoked by the workman, took the view that the employer came to know of the misconduct only on April 9, 1956 when the auditors report was received and hence the order of dismissal had been properly passed within six months from the date of knowledge. On a revision being filed by the workman, the State Industrial Court reversed the decision of the Labour Commissioner and set aside the order of dismissal holding that the question of knowledge does not come into the picture in view of the clear terms of sub-section (3). The employer challenged this decision before the High Court under Articles 226 and 227 of the Constitution. The only contention that was raised before the High Court, as is seen from the judgment, was that Section 16 (3) should be liber ally construed by allowing the management to establish that they obtained knowledge of the embezzlement only within a period of six months prior to passing the order of dismissal. The High Court rejected this contention on the ground that the statute is clear and that an employer cannot be permitted to put forward their own inaction in defence. Another reason given by the High Court for rejecting this contention was that the statute has prescribed a period of limitation for determining the services of a delinquent employee as a measure of punishment and that such a period of limitation cannot be enlarged or extended by a Court. The contention that has been placed before us on behalf of the appellant regarding the interpretation to be placed on Clause (i) of paragraph (D) of the Act, was not pleaded before the High Court. In the Act, there is a clear provision regarding the misconduct coming to the notice of the employer. A similar provision was not in the Berar Act. The High Court has interpreted S. 16 (3) in isolation without having due regard to the scheme of the Act and the context in which the said section occurs. The same principles laid down by us for interpreting Section 78 (1) (D) (i) of the Act should have been borne in mind in interpreting Section 16 (3) of the Berar Act also. For instance, in a particular case, an employer may be able to satisfy the Tribunal that he had been kept out of knowledge of the misconduct due to the fraud of the opposite party and, therefore, he came to know of the said misconduct only within a period of six months prior to the date of passing the order. Similarly an employer may also be able to satisfy the Tribunal about the reasons for the delay caused in passing the orders. These and similar circumstances have not been considered by the High Court. The view of the High Court that the provision in Section 16 (3) is a period of limitation is erroneous. As we are of the opinion that the decision of the Madhya Pradesh High Court is erroneous, the support sought by the Labour Court on this decision is of no avail.22. As pointed out by us earlier, the Labour Court has upheld all the contentions of the appellant on facts. In fact, as pointed out already it has also held that if it had power to condone the delay for passing the orders of dismissal, it would have unhesitatingly ordered the same. The appellant has properly explained the delay as having been caused beyond its control. The only ground on which the two orders of dismissal were set aside was because of the fact that they have been passed beyond the period of six months. From what is stated above, it follows that the interpretation placed by the Labour Court on Section 78 (1) (D) (i) is erroneous.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]A reading of Section 78 as a whole leaves the impression in our minds that the legislature wanted the provision to be a comprehensive one. It contains all the powers of the Labour Court in the matter of all disputes mentioned therein and it also gives jurisdiction to punish certain offences under the Act. The scheme of Section 78 (1) appears to be that a Labour Court has to have power to decide all the disputes covered by paragraph (A). Paragraph (B) gives the Labour Court power to try offences punishable under the Act and cognizance of such offences can only be taken under Section 82. Paragraph (C) and (D) set out what reliefs the Labour Courts are empowered to give including directions as may be found necessary in thatmust be stated that a very superficial reading of sub-clause (i) of clause (D) may support the contention of Mr. Gupte. But, in our opinion, that is not the way to interpret a provision in the statute. On the other hand, the relevant provisions will have to be construed in the context in which they appear and having due regard to the objects which are sought to be served by the Act in question. It cannot be doubted that for the purpose of deciding whether reinstatement with back wages has to be ordered or whether payment of compensation, in addition to back wages, without reinstatement has to be ordered, the Labour Court will have to consider the circumstances of a particular case and the nature of the misconduct alleged on the part of the employee as also the nature of contravention of any provision of law or standing order. If the Labour Court was bound to take into account all these circumstances to consider what type of relief has to be granted, we fail to see why the Labour Court is not entitled to consider the circumstances which led the management to the passing of the orders more than six months prior to the misconduct coming to the notice of an employer. In our opinion, it cannot be the object of the Act that notwithstanding the fact that the workman, who has been found guilty in a proper domestic enquiry and punished for such misconduct, has to be given relief either by way of reinstatement with back wages or compensation and back wages without reinstatement, when once he has shown that the order of punishment was passed beyond the period of six months referred to in Section 78 (1) (D) (i). Such a position is not warranted by the statute. Nor will it be conducive to industrial peace and the cordial relationship that should exist between an employer and andue regard to the various aspects discussed above, we are of the opinion that the provisions contained in Section 78 (1) (D) (i) are not mandatory but only directory. The Labour Court will certainly have power to give relief to an employee if an order of dismissal, etc. is passed by the employer after the expiry of six months from the date when the misconduct came to the notice of the employer provided the employer has not been diligent in initiating disciplinary proceedings and if he is not able to offer satisfactory and adequate reasons for the delay in passing the orders imposing punishment. The provision only emphasises that an employer should be vigilant in taking disciplinary action against an employee for misconduct, once the said misconduct has come to his notice and that, as far as possible, the proceedings including the final orders imposing punishment must all the completed within a period six months. This will be the normal rule. Such an interpretation does not impinge upon either the rights of an employer to initiate disciplinary action or the rights of an employee to have a proper and fair enquiry conducted against him. If the employer is able to satisfy a tribunal about the reasons for not being able to pass the order imposing punishment within the period of six months, the Tribunal has no power to set aside the order merely on the ground that the period of six months has elapsed.21. The Labour Court, in the case before us, has proceeded on the basis that the provision in S. 78 (1) (D) (i) is a period of limitation prescribed by the statute which cannot be extended or enlarged by the Court.This approach, in our opinion, is erroneous. There is no question of any period of limitation provided by the said provision nor does the question of extending or enlarging the period arises in thiscontention that has been placed before us on behalf of the appellant regarding the interpretation to be placed on Clause (i) of paragraph (D) of the Act, was not pleaded before the High Court. In the Act, there is a clear provision regarding the misconduct coming to the notice of the employer. A similar provision was not in the Berar Act. The High Court has interpreted S. 16 (3) in isolation without having due regard to the scheme of the Act and the context in which the said section occurs. The same principles laid down by us for interpreting Section 78 (1) (D) (i) of the Act should have been borne in mind in interpreting Section 16 (3) of the Berar Act also. For instance, in a particular case, an employer may be able to satisfy the Tribunal that he had been kept out of knowledge of the misconduct due to the fraud of the opposite party and, therefore, he came to know of the said misconduct only within a period of six months prior to the date of passing the order. Similarly an employer may also be able to satisfy the Tribunal about the reasons for the delay caused in passing the orders. These and similar circumstances have not been considered by the High Court. The view of the High Court that the provision in Section 16 (3) is a period of limitation is erroneous. As we are of the opinion that the decision of the Madhya Pradesh High Court is erroneous, the support sought by the Labour Court on this decision is of no avail.22. As pointed out by us earlier, the Labour Court has upheld all the contentions of the appellant on facts. In fact, as pointed out already it has also held that if it had power to condone the delay for passing the orders of dismissal, it would have unhesitatingly ordered the same. The appellant has properly explained the delay as having been caused beyond its control. The only ground on which the two orders of dismissal were set aside was because of the fact that they have been passed beyond the period of six months. From what is stated above, it follows that the interpretation placed by the Labour Court on Section 78 (1) (D) (i) is erroneous