Case: United Bank of India Vs. Tamil Nadu Banks Deposit Collectors Union &amp; Another

Two persons named Koshi Kottikeran and Liakath Ali were engaged as Commission agents with the appellant Bank in its Coimbatore Branch. On 11.10.1984 and 12.12.1984 engagements of Koshi Kottikeran and Liakath Ali came to be terminated by the appellant-Bank. Respondent No.1-The Union raised two disputes purported to be an industrial dispute with regard to alleged termination of the aforesaid two persons. The matter was referred to the Industrial Tribunal, Tamil Nadu (in short the Tribunal) I.D. Case Nos.26 and 44 of 1987. Appellant Bank took the stand that these two persons were not workmen and in any event the dis-engagement was legal, justified and permissible. The Tribunal passed a common award answering the reference against the claimant and in favour of the management.Aggrieved by the award the respondent No. 1-Union preferred Civil Writ Petition No. 15538 of 1997 before the Madras High Court.Learned Single judge by order dated 15.10.1997 dismissed the writ petition. The Union carried the matter further in writ appeal. By the impugned order the Division Bench of the High Court allowed the writ appeal. The High Court came to hold that a Tiny Deposit Collector was a workman. Therefore, it is a valid dispute, and the dispute referred to can be adjudicated by the Tribunal. It referred to the letters of disengagement and came to hold that the termination orders disclosed that they were simple orders of termination. That being so no specific reason for termination of services was disclosed. They did not refer to any misconduct and therefore there was no justification for the Tribunal to permit the appellant-bank to rely upon documents and materials to justify the orders. It was also held that there was absolutely no acceptable evidence placed before the Tribunal to justify the orders of termination. Accordingly writ appeal was allowed.

Court's reasoning:
t is true that three of these cases, except Phulbari Tea Estates case were on applications under Section 33 of the Industrial Disputes Act, 1947. But in principle we see no difference whether the matter comes before the tribunal for approval under Section 33 or on a reference under Section 10 of the Industrial Disputes Act, 1947. In either case if the enquiry is defective or if no enquiry has been held as required by Standing Orders, the entire case would be open before the tribunal and the employer would have to justify on facts as well that its order of dismissal or discharge was proper. Phulbari Tea Estates was on a reference under s. 10, and the same principle was applied there also, the only difference being that in that case, there was an enquiry though it was defective. A defective enquiry in our opinion stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper.9. Again in Delhi Cloth and General Mills Co. Vs. Ludh Budh Singh [1973(3) SCR 29] this Court held asa domestic enquiry has been held by the management and the management relies on the same, it is open to the latter to request the Tribunal to try the validity of the domestic enquiry as a preliminary issue and also ask for an opportunity to adduce evidence before the Tribunal, if the finding on the preliminary issue is against the management. However elaborate and cumbersome the procedure may be, under such circumstances, it is open to the Tribunal to deal, in the first instance, as a preliminary issue the validity of the domestic enquiry. If its finding on the preliminary issue is in favour of the management, then no additional evidence need be cited by the management. But. if the finding on the preliminary issue is against the management, the Tribunal will have to give the employer an opportunity to cite additional evidence and also give a similar opportunity to the employee to lead evidence contra, as the request to adduce evidence had been made by the management to the Tribunal during the course of the proceedings and before the trial has come to an end. When the preliminary issue is decided against the management and the latter leads evidence before the Tribunal, the position, under such circumstances, will be, that the management is deprived of the benefit of having the finding of the domestic Tribunal being accepted as prima facie proof of the alleged misconduct. On the other hand, the management will have to prove, by adducing proper evidence, that the workman is guilty of misconduct and that the action taken by it is proper. It will not be just and fair either to the management or to the workman that the Tribunal should refuse to take evidence and thereby ask the management to make a further application, after holding a proper enquiry, and deprive the workman of the benefit of the Tribunal itself being satisfied, on evidence adduced before it, that he was or was not guilty of the alleged misconduct.In Workmen of Fire Stone Tyre Rubber Company v. Management [1973 (1) LLJ 78] it was inter alia held asEven if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, had to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action, and it is open to the employee to adduce evidence contra.(5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry.(6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective.(7) It has never been recognised that the Tribunal should straightaway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.(8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power to refuse. The giving an opportunity to an employer to adduce evidence for the first time before the Tribunal is in the interest of both the management and the employee and to enable the Tribunal itself to be satisfied about the alleged misconduct.(9) Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed before a Tribunal for the first time, punishment imposed cannot be interfered with by the Tribunal except in cases where the punishment is so harsh as to suggest