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

2. The appellant in both the appeals, the Municipal Corporation of Greater Bombay, is a body corporate constituted under the Bombay Municipal Corporation Act 1888. For the purposes of providing and operating motor transport and for supplying electricity to the consumers in the City of Bombay, the appellant has established under the provisions of the Bombay Municipal Corporation Act, an undertaking called the Bombay Electric Supply and Transport Undertaking. The affairs of the said Undertaking are managed by a committee called the Bombay Electric Supply and Transport Committee, as per the provisions of the Bombay Municipal Corporation Act. The workman, Shri U. R. Naik, was employed as Assistant Fitter in the Transportation Engineering Department at Dadar workshop of the appellant. Similarly, Shri E. Menezes was employed under the appellant as Line Mechanic. It is common ground that on July 18, 1969, when the Sub-Inspector of Police attached to the V. P. Road Police Station, was on patrol duty with his other staff, at about 9.30 p.m., he came across Shri U. R. Naik along with another person, Kundaikar, and found each of them carrying a gunny bag in their hands. As the bags appeared to be rather very heavy, the movement of the said persons arose the suspicion of the Police officials, who stopped the said persons and searched the bags. On a search of the bags, it was found that each bag contained 22 brass bearings. As Shri U. R. Naik and his companion, Kundaikar, were not able to offer any satisfactory explanation as to how they came to be in possession of the articles found in the bags, they were taken into custody. On further investigation and from the statements given by Shri Naik, it was found that the latter was an employee under the appellant as Assistant Fitter and that the brass bearings found in his possession had been removed from the appellants workshop with the active help and co-operation of another employee, E Menezes, who was at the material time employed under the appellant as a Line Mechanic. In consequence Shri E Menezes was also arrested shortly thereafter. After further enquiries, the brass bearings were identified by the concerned officers as properites belonging to the appellant. Ultimately on July 20, 1969, the appellant lodged a complaint of theft against the two workmen, U.R.Naik and E.Menezes.3. The appellant also charge-sheeted the two workmen on 18/19th August, 1969. Shri U R Naik was charge-sheeted under Standing Order 20(C) for fraud or dishonesty in connestion with the business of the undertaking. Shri E Menezes was charge-sheeted under Standing Order 20(C) and Standing Order 20 (1) for having committed an act subversive of discipline. An enquiry was conducted by Shri Talpade, Assistant Labour Officer (Transportation) of the appellant. At first it was a common enquiry against both the workmen in which the evidence son to be retained in service. On this of the Police officers and certain officers of the appellant were examined. Later on, the enquiry was seperated against each employee and further witnesses, both on behalf of the appellant as well as the workmen concerned, were examined. The Enquiry Officer found Shri Naik guilty of the offence with which he was charged and it was found that the offence proved against this workman was of a very grave and serious nature and as such the workman was not a fit perfinding an order dismissing Shri Naik Assistant Fitter, from the services of the appellant was passed on February 11, 1970. An appeal by Shri Naik to the executive Engineer and a further appeal to the Assistant General Manager were all dismissed. Similarly, Shri E Menezes was also found guilty of the offences with which he was charged. It was further found that as the offences proved against the workman were of a grave and serious nature, he was not a fit person to be retained in the services of the appellant. Accordingly an order dismissing Shri E Menezes from service was passed on March 18, 1970. The appeals filed by this workman to the Executive Engineer and the Assistant General Manager proved of no avail.4. Shri Naik sent to the appellant an approach notice, as required by the Act, on June 6, 1970, but without any avail. Similarly, Shri Menezes also sent an approach notice on July 31, 1970, but without any avail. Shri Naik filed application No 553 of 1970 before the Fifth Labour Court at Bombay challenging the order of the appellant dismissing him from service on various grounds. He attacked also the Domestic Enquiry that was held, as illegal and improper and the finding recorded therein as perverse. He prayed for setting aside the order dated February 11, 1970, and for being reinstated in service with full back wages. Shri E Menezes filed application No 554 of 1970 before the same Court praying for similar reliefs in respect of the order of dismissal passed against him on March 18, 1970. He also attacked the order and the enquiry proceedings on the grounds relied on by Shri Naik. The two applications were filed under Sections 78 and 79 of the Act.5. Both the applications were heard together by the Labour Court. Evidence also was adduced by the appellant justifying the action taken against the two workmen. One of the grounds of attack against the orders of dismissal was that they were illegal and void, as they have been passed for fault or mis-conduct committed by the employees, which came to the notice of the employer more than six months prior to the date of the orders. To meet this contention, the appellant adduced evidence before the Labour Court explaining the circumstances that led to the orders of dismissal being passed beyond the period of six months. The evidence was to the effect that though the enquiry proceedings had commenced within a short time, nevertheless they had tot be postponed from time to time because the Union representing the workmen was not ready on certain days and also because of the postponement of the enquiry due to the sickness of the employees concerned. Another reason given by the appellant was that the enquiry had to be postponed from time to time as the Sub-Inspector of Police, who investigated the complaint of theft, was not available for giving evidence.6. The Labour Court rejected almost all the contentions on facts raised by the workmen regarding the legality and propriety of the enquiry proceedings. The findings of the Labour Court in this regard are:-That the enquiry has been conducted by a competent authority and that the workmen were given full and adequate opportunity to place their evidence and to examine witnesses on their behalf. The Enquiry Officer was justified from the evidence on record in coming to the conclusion that the workmen are guilty of mis-conduct under Standing Order No. 20 (c). The findings recorded by the domestic Tribunal are based on the evidence on record and that the conclusions arrived at are just, legal and proper. The criticism of the Union that the finding arrived at by the Domestic Tribunal was perverse has to be rejected. The two workmen have failed to establish any case under Section 78 (1) (A) (a) (i) of the Act.7. Regarding the contention raised by the Union on behalf of the workmen that the orders of dismissal are illegal, as having been passed after six months from the date of the notice of the mis-conduct, the Labour Court held that the provisions of Section 78 (1) (D) are mandatory and that the time limit of six months specified in Section 78 (1) (D) (i) of the Act cannot be enlarged by the Labour Court. The Labour Court found support for this view in the Division Bench judgement of the Madhya Pradesh High Court in Raipur Co-operative Central Bank Ltd. v State Industrial Court, Indore, 1963-1 Lab LJ 790 (Madh Pra). It was pressed by the appellant before the Labour Court that the delay in passing the orders of dismissal was caused due to the adjournments being granted to the Union because of the illness of the Workmen concerned or due to the inability, for other reasons, of the workmen to be present. Another reason given by the appellant was that the Sub-Inspector of Police, who investigated the offence of theft, was not available for some time to give evidence before the Enquiry Officer. In view of these circumstances, the plea of the appellant was that the relevant provisions will have to be construed not as mandatory but as only enabling and discretionary powers of the Labour Court which have to be exercised having due regard to all attendant circumstances. The Labour Court in considering this plea of the appellant held that the delay in passing the orders was caused in view of the circumstances relied on by the management and as the delay has been caused due to circumstances beyond the control of the appellant, this was fit case for condoning the delay if in law the court had the powers to do so. The Labour Court, however, held that the relevant provisions are mandatory and hence it has no power to condone the delay, even though the circumstances warranted such condonation in this case. In this view, the Labour Court held that as the orders of dismissal have not been passed within six months of the mis-conduct coming to the notice of the employer, they are illegal and have to be set aside under Section 78 (1) (D) (i) of the Act.8. The Labour Court then considered the relief to be granted to the two workmen. It held that as the offence for which the two workmen were dismissed, was of a very serious nature entailing loss of confidence of the employer in the employee, reinstatement should not be ordered. The Labour Court, therefore, directed the appellant to pay each of the workmen his back wages from the date of dismissal till the date of the order and also, in addition, to pay compensation in the sum of Rs. 1,500/-. In the result, the two applications filed by the workmen were ordered granting them relief of back wages and compensation. Civil Appeal No 1774 of 1971 is against the order passed in application No. 553 of 1970 and Civil Appeal No. 1775 of 1971 is against the order passed in application No. 554 of 1970.The learned Additional Solicitor General very strenuously attacked the reasoning of the Labour Court when it held that the provisions of Section 78 (1) (D) are mandatory. His contentions in this regard are ased from the appellants workshop with the active help and co-operation of another employee, E Menezes, who was at the material time employed under the appellant as a Line Mechanic. In consequence Shri E Menezes was also arrested shortly thereafter. After further enquiries, the brass bearings were identified by the concerned officers as properites belonging to the appellant. Ultimately on July 20, 1969, the appellant lodged a complaint of theft against the two workmen, U.R.Naik and E.Menezes.3. The appellant also charge-sheeted the two workmen on 18/19th August, 1969. Shri U R Naik was charge-sheeted under Standing Order 20(C) for fraud or dishonesty in connestion with the business of the undertaking. Shri E Menezes was charge-sheeted under Standing Order 20(C) and Standing Order 20 (1) for having committed an act subversive of discipline. An enquiry was conducted by Shri Talpade, Assistant Labour Officer (Transportation) of the appellant. At first it was a common enquiry against both the workmen in which the evidence son to be retained in service. On this of the Police officers and certain officers of the appellant were examined. Later on, the enquiry was seperated against each employee and further witnesses, both on behalf of the appellant as well as the workmen concerned, were examined. The Enquiry Officer found Shri Naik guilty of the offence with which he was charged and it was found that the offence proved against this workman was of a very grave and serious nature and as such the workman was not a fit perfinding an order dismissing Shri Naik Assistant Fitter, from the services of the appellant was passed on February 11, 1970. An appeal by Shri Naik to the executive Engineer and a further appeal to the Assistant General Manager were all dismissed. Similarly, Shri E Menezes was also found guilty of the offences with which he was charged. It was further found that as the offences proved against the workman were of a grave and serious nature, he was not a fit person to be retained in the services of the appellant. Accordingly an order dismissing Shri E Menezes from service was passed on March 18, 1970. The appeals filed by this workman to the Executive Engineer and the Assistant General Manager proved of no avail.4. Shri Naik sent to the appellant an approach notice, as required by the Act, on June 6, 1970, but without any avail. Similarly, Shri Menezes also sent an approach notice on July 31, 1970, but without any avail. Shri Naik filed application No 553 of 1970 before the Fifth Labour Court at Bombay challenging the order of the appellant dismissing him from service on various grounds. He attacked also the Domestic Enquiry that was held, as illegal and improper and the finding recorded therein as perverse. He prayed for setting aside the order dated February 11, 1970, and for being reinstated in service with full back wages. Shri E Menezes filed application No 554 of 1970 before the same Court praying for similar reliefs in respect of the order of dismissal passed against him on March 18, 1970. He also attacked the order and the enquiry proceedings on the grounds relied on by Shri Naik. The two applications were filed under Sections 78 and 79 of the Act.5. Both the applications were heard together by the Labour Court. Evidence also was adduced by the appellant justifying the action taken against the two workmen. One of the grounds of attack against the orders of dismissal was that they were illegal and void, as they have been passed for fault or mis-conduct committed by the employees, which came to the notice of the employer more than six months prior to the date of the orders. To meet this contention, the appellant adduced evidence before the Labour Court explaining the circumstances that led to the orders of dismissal being passed beyond the period of six months. The evidence was to the effect that though the enquiry proceedings had commenced within a short time, nevertheless they had tot be postponed from time to time because the Union representing the workmen was not ready on certain days and also because of the postponement of the enquiry due to the sickness of the employees concerned. Another reason given by the appellant was that the enquiry had to be postponed from time to time as the Sub-Inspector of Police, who investigated the complaint of theft, was not available for giving evidence.6. The Labour Court rejected almost all the contentions on facts raised by the workmen regarding the legality and propriety of the enquiry proceedings. The findings of the Labour Court in this regard are:-That the enquiry has been conducted by a competent authority and that the workmen were given full and adequate opportunity to place their evidence and to examine witnesses on their behalf. The Enquiry Officer was justified from the evidence on record in coming to the conclusion that the workmen are guilty of mis-conduct under Standing Order No. 20 (c). The findings recorded by the domestic Tribunal are based on the evidence on record and that the conclusions arrived at are just, legal and proper. The criticism of the Union that the finding arrived at by the Domestic Tribunal was perverse has to be rejected. The two workmen have failed to establish any case under Section 78 (1) (A) (a) (i) of the Act.7. Regarding the contention raised by the Union on behalf of the workmen that the orders of dismissal are illegal, as having been passed after six months from the date of the notice of the mis-conduct, the Labour Court held that the provisions of Section 78 (1) (D) are mandatory and that the time limit of six months specified in Section 78 (1) (D) (i) of the Act cannot be enlarged by the Labour Court. The Labour Court found support for this view in the Division Bench judgement of the Madhya Pradesh High Court in Raipur Co-operative Central Bank Ltd. v State Industrial Court, Indore, 1963-1 Lab LJ 790 (Madh Pra). It was pressed by the appellant before the Labour Court that the delay in passing the orders of dismissal was caused due to the adjournments being granted to the Union because of the illness of the Workmen concerned or due to the inability, for other reasons, of the workmen to be present. Another reason given by the appellant was that the Sub-Inspector of Police, who investigated the offence of theft, was not available for some time to give evidence before the Enquiry Officer. In view of these circumstances, the plea of the appellant was that the relevant provisions will have to be construed not as mandatory but as only enabling and discretionary powers of the Labour Court which have to be exercised having due regard to all attendant circumstances. The Labour Court in considering this plea of the appellant held that the delay in passing the orders was caused in view of the circumstances relied on by the management and as the delay has been caused due to circumstances beyond the control of the appellant, this was fit case for condoning the delay if in law the court had the powers to do so. The Labour Court, however, held that the relevant provisions are mandatory and hence it has no power to condone the delay, even though the circumstances warranted such condonation in this case. In this view, the Labour Court held that as the orders of dismissal have not been passed within six months of the mis-conduct coming to the notice of the employer, they are illegal and have to be set aside under Section 78 (1) (D) (i) of the Act.8. The Labour Court then considered the relief to be granted to the two workmen. It held that as the offence for which the two workmen were dismissed, was of a very serious nature entailing loss of confidence of the employer in the employee, reinstatement should not be ordered. The Labour Court, therefore, directed the appellant to pay each of the workmen his back wages from the date of dismissal till the date of the order and also, in addition, to pay compensation in the sum of Rs. 1,500/-. In the result, the two applications filed by the workmen were ordered granting them relief of back wages and compensation. Civil Appeal No 1774 of 1971 is against the order passed in application No. 553 of 1970 and Civil Appeal No. 1775 of 1971 is against the order passed in application No. 554 of

Court's reasoning:
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