PFIZER LTD. v.

MAZDOOR CONGRESS AND ORS.

AUGUST 16, 1996

[J.S. VERMA AND B.N. KIRPAL, JJ.]

Labour Law:

Maharashtra Recogllitioll of Trade Ullio11s and Preventio11 of Ullfair C Labour Practices Act, 1971 : Sections 26 a11d 28 a11d Items !(a) to (j) of Schedule Iv.

Ullfair labour practice-Termi11atio11 of service-Al/egatio11 that employer acted with u11due haste while dischargi11g or dismissing all employee-Detenninatio11of-Held:110 ge11eral principles could be laid dow11 D ill this regard-Being a questio11 of fact, it had to be detennined on basis of evidence on record-In the circumstances of the case, there was no undue haste 011 the part of the employer.

Constitution of l11dia, 1950 : Article 227.

New plea-Pennissibility of in writ proceedings-Te1mination of service-Complaint against--Filed in Labour Court under S.28 of MRTU & PULP Act-However, 110 specific colltention that employer acted with undue haste and thereby committed u11fair labour practice specified in Item I (f) Sch W of Act was raised either before Labour Court or in revisio11 before Industrial Court 11or any evidellce led to that effect-Both Labour and I11dustrial Courts found employer had committed no unfair labour practice-Evell in writ petition no such co11te11tion was raised-Held : High Court was not justified i11 allowing the employees to raise such a colltention while hearing the petition and setting aside concurrent findings of Courts below by G making out new case-ln the circumstances of the case, there was no undue haste on part of employer.

The appellant was engaged in the manufacture of pharmaceutical products. The respondents 2 and 3 were engaged as security staff at the factory of the appellant (watchman and havaldar respectively). On 7.8.1975 H one temporary workman named P employed by the appellant at its factory 716

PFIZER LTD. v. MAZDOOR CONGRESS 717

was caught by respondents 2 and 3 while he was trying to take away certain A products or the appellant. The said workman was handed over to the police authorities to whom he had disclosed that besides himseU respondents 2 and 3 were also involved in a conspiracy to commit theft of the products of the appellant.

Subsequently on 9.8.1975 respondents 2 and 3 were arrested by the police. On 10.8.1975 the statements of the said respondents were recorded pursuant to which recovery was made of the stolen property. After the arrest, the said respondents were absent from duty Without leave. On 14.8.1975 the appellant had before it information regarding the involvement or the said respondents in the theft or its property. Thereafter, the appellant terminated the services or the said respondents on the ground that it had lost confidence in their suitability as members or its watch and ward staff in accordance With its certified standing order No. 25(4). In the meanwhile, the police tiled chargesheets against the said respondents under Section 381 read With Section 34 of the Indian Penal Code, 1860.

Respondents 2 and 3 tiled identical complaints before the Labour Court under Section 28 of the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practice Act, 1971 challenging their termination of services on the ground that the appellant had committed unfair labour practice under Item l(a) to (I) or Schedule IV of the Act. The Labour Court dismissed the complaints. The Industrial Court allowed the revision petition tiled by the said respondents and remanded the matter to the Labour Court With certain directions.

Before the Labour Court only the contention of unfair labour prac- F lice falling under Item l(a) or (c) or Schedule IV of the Act was raised.

The Labour Court dismissed the complaints. In the revision petition tiled before the Industrial Court the same contention was raised. The Industrial Court also dismissed the revision petition. Respondents 2 and 3 tiled writ petition under Article 227 of the Constitution before the High Court challenging the aforesaid order of the Industrial Court. Before the High G Court the said respondents raised a new contention that the appellant had committed unfair labour practice as contemplated by Item I (I) of Schedule IV of the Act. The High Court allowed the Writ Petition r, n the ground that the appellants had indulged in unfair labour practice covered by Item 1(1) of Schedule IV of the Act. Being aggrieved the appellant preferred the H

A present appeal.

On behalf of the appellant it was contended that the concurrent finding of fact arrived at by the Labour Court and the Industrial Court to the effect that the appellant had committed no unfair labour practice ought not to have been set aside by the High Court exercising limited B jurisdiction under Article 227 of the Constitution; and that the appellant had acted bo11aftde in terminating the services of respondents 2 and 3 in accordance with its standing orders which diJ not amount to unfair labour practice.

C Allowing the appeal, this Court

HELD : 1.1. There was no justification whatsoever for the High Court to have allowed respondents 2 and 3, while hearing a petition under Article 227 of the Constitution, to raise a new contention that there had been an unfair Labour practice as contemplated by Item 1 (I) of Schedule D IV of the Maharashtra Recognition of Trade Union and Prevention of

Unfair Labour Practice Act, 1971 and the appellant had acted with undue haste. No such contention was urged before the Labour Court or in revision before the Industrial Court. Even in the writ petition filed in the High Court under Article 227 of tlte Constitution, challenging the order of

E the Labour Court and the Industrial Court dismissing the complaits

under Section 28 of the said Act, no specific contention had been raised to the effect that there was any undue haste on the part of the appellant in issuing the termination order and which could be regarded as an unfair labour practice. Merely because in an affidavit filed 1iefore the Labour Court there was a general statement of unfair labour practice covered by F Items l(a) to (I) could be no ground for the High Court to come to the conclusion that a case under Item 1(1) had been made out. [726-C-E]

1.2. Whether there was any undue haste on the part of the employer while discharging or dismissing an employee is a question of fact which has to be determined on the basis of evidence on record. The compla.int G under Section 28 of the said Act was filed by respondents 2 and 3. If it was their case that there was an unfair Jabour practice on the part of the appellant as contemplated by Item 1(1), then it was incumbent upon the said respondents to state facts on the basis of which the Labour Court could come to the conclusion that there was an undue haste as con- H templated by Item 1(1). The complaints filed by the said respondents do

not contain any particulars of undue haste; nor was there any evidence led A on the part of the said respondents. The High Court erred clearly in making out a new case and in setting aside the concurrent findings of the Labour Court and Industrial Court. [726G-H; 727-A]

2. It would depend upon the facts of each case whether an employer has acted with undue haste while discharging or dismissing an employee.

It is neither possible nor desirable to lay down or spell out any general principles in this regard. Each case will have to be judged on its own facts.

In view of the undisputed facts of the present case the only question is whether or when the termination letters were issued could it be said that the appellant had acted in undue haste. It is difficult for this Court to appreciate how, on the facts of this case the High Court could possibly have come to the conclusion that there was any undue haste on the part of the appellant in removing these respondents from service. Hence High Court Judgment set aside. (727-C-D; G]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3969-70 D of 1990.

From the Judgment and Order dated 22/26.2.90 of the Bombay High Court in W.P. No 2844/84 and 2599 of 1980.

R.F. Nariman, P.H. Parekh and Ms. Sunita Sharma for the Appel- E lant.

Dr. R.S. Kulkarni, B.K. Pal and Ms. Meenakshi Vij for the Respondents.

The Judgment of the Court was delivered by

KIRPAL, J. These are appeals by special leave from the judgment of

the Bombay High Court whereby the petition under Article 227 of the Constitution, filed by respondents 2 and 3 herein, was allowed and the orders of the Labour Court and the Industrial Court which had upheld the termination of their services was quashed with a direction to the appellant G to give all consequential benefits to the said respondents.

The appellant is, inter alia, engaged in the manufacture of pharmaceutical products. At the material time Waman S. Surve and R.B. Sail, respondents 2 and 3 were engaged as security staff (watchman and havaldar respectively) at the factory of the appellant situated at Thane, Bombay. H

A It appears that on 7th August, 1975 one temporary workman named Parkar employed the appellant at its aforesaid factory was caught by the appellant's security staff while he was trying to take away certain products . of the appellant. Parkar was handed over to the police authorities and during the course of investigation he is stated to have disclosed to the

B police that besides himself two other workmen of the appellant employed in watch and ward section, namely, respondents 2 and 3 herein were involved in a conspiracy to commit theft of the products of the appellant.

On 8th August 1975 the said respondents 2 and 3 were arrested by the police. It is the case of the appellant that during the course of C interrogation both the said respondents confessed that they were involved in the theft of the appellant's products and their statements were recorded on 9th and 10th August, 1975 by the police in the presence of two panclzas.

Based on the said information the police is stated to have raided the houses of respondents 2 and 3 and recovered stolen property therefrom, which D consisted of medicines manufactured by the appellant company.

After the arrest on 8th August, 1975, the said respondents 2 and 3 were absent from duty. On 14th August, 1975 a letter was written by the appellant to respondent No. 2 herein to the effect that he had been absent from duty with effect from 8th August, 1975 without intimation or permis- E sion. It was also stated therein that the company understood that respondent No. 2 had been arrested by the police in connection with the material which was stolen from the apµellant's company. The letter further stated that while the company did not wish to sit in judgment on whether respon· dent No. 2 was in fact involved in any criminal action or not, it was F perturbed that a member of its watch and ward staff should even be suspected of involvement by the police. The company further stated that it had lost confidence in his suitability as a member of its watch and ward staff and had come to the conclusion that it was not in the interest of the company to continue him in service. Accordingly, the company terminated the services of respondent No. 2 in accordance with the Company's cer- G tified standing order No. 25 (4). A formal letter of termination was also sent along with this communication. An identical letter of termination was written by the appellant to respondent No. 3 except that the absence of respondent No. 3 from duty was with effect from 9th August, 1975.

H Afte.- the aforesaid recoveries were made the police filed char-

, - ,-

' J

PFIZER LTD. v. MAZDOOR CONGRESS [KIRP AL, J.] 721

gesheets against respondents 2 and 3 and a criminal complaint for offence A punishable under Section 381 read with Section 34 of the Indian Penal Code.

Respondents 2 and 3 filed identical complaints on 13th November, 1975 before the Labour Court under Section 28 of the Maharashtra Recognition of Trade Union and Prevention of Unfair labour Practice Act, 1971 (hereinafter referred to as the 'said Act') challenging their termination of services by alleging that the appellant herein had committed unfair.labour practice under Ite!D 1 (a) to (f) of Schedule IV of the said Act. The appellant filed its written statement stating the full facts and contended that it had not committed any unfair labour practice.

About one year after the filing of the complaints, respondents 2 and 3 filed an application dated 19th October, 1976 for permission to amend

the original complaint with a view to introduce an allegation that they had been falsely implicated in the criminal case by the appellant company D because of union rivalry. The appellant resisted this application by contending that the allegations were totally misconceived and a new case was sought to be made out. By order dated 10th January, 1977 the Labour Court rejected the said application, inter alia, observing that if the amendments were allowed than the subject matter of the complaint would fall E within the jurisdiction of the Industrial Court and not the Labour Court.

Against the said order of the Labour Court, refusing to allow the amendments, a writ petition was filed by the said respondents in the Bombay High Court but the same was withdrawn on 4th April, 1978.

The Labour Court by an order dated 21st September, 1978 dismissed the complaints filed by the respondents under Section 28 of the

said Act by holding that they had failed to make out any case of unfair labour practice. A revision petition was filed by the said respondents before the Industrial Court which was allowed on 21st July, 1979 and the applications filed by respondents 2 and 3 under Section 28 of the said Act G were remanded to the Labour Court for being decided as per the directions given by the Industrial Court in its said order of 21st July, 1979. The Labour Court was specifically directed to consider the allegations of respondents 2 and 3 that they were falsely implicated in the criminal case.

The Labour Court was directed to allow the soid respondents to lead H

A evidence in order to show whether the appellant herein had committed any unfair labour practice as had been alleged.

Before the order dated 21st July, 1979 was passed by the Industrial Court, remanding the matter back to the Labour Court, the criminal trial of respondents 2 and 3 was completed and by order dated 29th July, 1978 respondent No. 2 was acquitted on account of lack of adequate evidence but respondent No. 3 convicted. Thereafter the said respondent No. 3 filed an appeal before the Court of Additional Sessions Judge at Thane. By order dated 4th December, 1979 the said appeal was allowed and the conviction was set aside. A perusal of the C judgment 'of the additional Sessions Judge shows that the conviction of respondents No. 3 was set aside because of lack of adequate and reliable evidence.

When the Labour Court was seized of the matter, pursuant to D their order of remand dated 21st July, 1979, respondents 2 and 3 filed three different applications. In the first application they sought permission to amend their complaint so that they could insert a paragraph to the effect that termination or discharge for loss of confidence amounted to retrenchment within the meaning of Section 2 ( oo) of the Industrial Disputes Act, 1947 and the condition precedent to such termination had E not been fulfilled and, therefore, the order of termination was void and inoperative. The second application was for a direction to the appellant herein to produce their records and proceedings together with the findings given by the members of the inquiry committee which had been set up to inquire into certain instances of assault on a trade union p leader. The third application was for issue of summons to the members of the said inquiry committee to give evidence in respect of the inquiry held by them. The Labour Court by its order dated 4th March, 1980 rejected all the three applications. Revision applications filed before the Industrial court by respondents 2 and 3 were summarily rejected on 17th July, 1980. Thereafter with petition being No 2599 of 1980 was filed and G admitted by the Bombay High Court on 15th September, 1980.

Pursuant to the order of remand dated 21st July, 1979 the Labour Court, as directed by the Industrial Court, received evidence from the parties. Respondents 2 and 3 filed their affidavits which were treated as H their examination in chief and they were cross examined on behalf of

PFlZER LTD. v. MAZDOOR CONGRESS [KIRPAL, J.) Tl3

the appellant herein. As against this on behalf of the appellant, its A security officer and one S.K. Akolkar, Senior Police Sub-Inspector of Thane Police Station who had investigated the criminal case, was examined as witnesses. During the course of hearing before the Labour Court the papers and proceedings of the criminal Court were produced including the judgment of the Judicial Magistrate who had B acquitted respondent No. 2 but convicted respondent no. 3 and also the judgment of the Additional Sessions Judge, Thane who had allowed the appeal of respondent No. 3. Before the Labour Court, as is evident from its order dated 28th December, 1981 only two points were agitated on behalf of the respondents and they were; firstly as to whether respondents 2 and 3 had been falsely implicated in a criminal case on a false and concocted evidence and; secondly whether the victimisation alleged by them falls under Item 1 Schedule IV of the said Act. The victimisation which was alleged by respondents

2 and 3 was that Dr. Datta Samant, a labour leader was assaulted outside the appellant's factory gate on 18th March, 1975. A committee D was set up by the company consisting of Mr. V.R. Kale and Mr. M.S.

Datta and the respondents 2 and 3 were alleged to have been pressurised by Mr. Datta to falsely implicate the office bearers of respondent 1 as being responsible for the said assault. It was further alleged that when respondents 2 and 3 refused to cooperate with the appellant company, the cdmpany's management was displeased and, with a view to victimise the respondents, it took recourse to the action of terminating their services which amount to unfair labour practice under Item 1 (a) of Schedule IV. The Labour Court noticed that discharge

or punishing an employee or office bearer or acting union member on account of his trade union activity is an unfair labour practice falling F under Item 4 (a) and (f) of Schedule II. The Labour Court, however, came to the conclusion that respondents 2 and 3 had neither been falsely implicated in the criminal case as mentioned in Item 1 (c) of Schedule IV nor was there any unfair labour practice carried out by the appellant company qua the said respondents in the manner as G specified in Item 4 (a) and (f) of Schedule II of the said Act.

Against the dismissal of the complaints by the Labour Court the said respondents filed two revision applications before the Industrial Court.

Before the Industrial Court also it is only this contention of unfair labour H

A practice falling under Item 1 (a) or (c) of Schedule IV \\hich was agitated.

By a reasoned order dated 10th February, 1984 the Industrial Court dismissed both the revision applications and upheld the findings of fact recorded by the Labour Court.

B Respondents 2 and 3 then filed a petition under Article 227 of the Constitution being writ petition No. 2844 of 1984 before the Bombay High Court challenging the aforesaid order dated 10th February, 1984 of the Industrial Court.

By judgment dated 22nd/26th February, 1990 a single judge of the C Bombay High Court disposed of both the writ petitions No. 2599 of 1980,

whereby the order of the Labour Court disallowing the three applications was challenged, as well as main writ petition No. 2844 of 1984 whereby the complaints under Section 28 of the said Act were rejected by the Labour Court and which decision was upheld by the Industrial Court. By the D impugned judgment the High Court quashed and set aside the main orders of the Labour and Industrial Court and declared that the appellant's company had indulged in unfair labour practice covered by Item 1 (f) of Schedule IV of the said Act. It further directed that the appellant shall cease and desist from indulging in unfair labour practice and reinstate the workmen in their original position with all consequential benefits, full back E wages and continuity of service.

While allowing the writ petition the High Court held that it was difficult to conclude that the appellant company had acted in a malafide manner and had victimised the workmen on account of their trade union F activities, as had been alleged by them. The reason for the High Court allowing the writ petition was that the said workmen had made out a case of unfair labour practice inasmuch as action had been taken by the appellant with undue haste. In this connection the High Court observed as follows :

"Assuming for the sake of argument that the respondent-company thought it proper to terminate the services of the workmen for loss of confidence as they were arrested by the police in an alleged case of theft, it should not be forgotten that the action taken by them was with undue haste because the workmen were arrested by the police on a certain statement made by an accused person

by name Parker who was earlier arrested and for all that we know A that the said Parkar had given false or wrong information to the police while in custody of the police or he did it under pressure of the police or perhaps the present workmen were really involved in a case of theft. The esondentcompany should have at least waited for a reasonable time and inquired into the allegations of theft made against B the workmen who were members of the staff of watch and ward department and who were responsible for detection of many thefts in the past. Merely because they remained absent from duty for a couple of days and afterwards it came to the notice of the respondent-company that they were suspected by the police for committing theft, the respondent-company should not have in an ugly haste C terminated their services so fast as they did which certainly would an10unt to discharge or dLsmissal of a workman with undue haste, an act of unfair labour practice covered by item 1 (0 of Schedule IV of the MRTU & PULP Act. It may be incidently mentioned here that both the workmen were acquitted of the charge of theft levelled D against them, one at the trial stage and the other at the appellate stage.

Challenging the correctness of the said decisions Mr. R.F. Nariman, learned senior counsel for the appellanl subn1itted that the concurrent finding of fact arrived at by the Labour Court and the Industrial Court, to E the affect that the appellant had committed no unfair labour practice, ought not to have been set aside by the High Court exercising limited jurisdiction under Article 227 of the Constitution. He further submitted that if the facts of the case are examined the only conclusion which could be arrived at was that the appellant company had acted bona fide and the action of terminat- F ing the services of respondents 2 and 3 was in accordance with its standing orders and did not amount to any unfair labour practice as contemplated by the said Act.

Dr. R.S. Kulkarni, learned senior counsel for the respondents on the other hand while supporting the judgment of the High Court submitted G that the decision of the Labour Court and the Industrial Court was perverse and, therefore, the High Court was justified in granting relief to respondents 2 and 3.

Under Section 28 of the said Act complaints can be filed relating to H

A unfair labour practices. Section 26 of the said Act states that unfair labour practices are those which are listed in Schedule II, III and IV of the said Act.

Schedule II enumerates unfair labour practices on the part the employers, inter alia, in relation to trade union activities. Schedule IV lists the general unfair labour practicewhich may be alleged against the employers. Item 1

B clause (!) of Schedule IV is as under :

"(b) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste;"

There wa' no justification whatsoever for the High Court to have C allowed respondents 2 and 3, while hearing a petition under Article 227 of the Constitution, to raise a new contention that there had been an unfair labour practice as contemplated by Item 1 (!) and the appellant had acted \vith undue haste. Nq. such contention was urged before the Labour Court or in revision before the Industrial Court. Even in the writ petition filed in the D High Court under Article 227 of the Constitution, challenging the order of the Labour Court and the Industrial Court dismissing the complaints under Section 28 of the said Ac!, no specific contention had been raised to the effect that there was any undue haste on the part of the appellant in i.'5uing the termination order and which could be regarded as an unfair labour practice. Merely because in an affidavit filed before the Labour Court there E wa' a general statement of unfair labour practice covered by Item 1 (a) to

(1) could be no ground for the High Court to come to the conclusion that a case under Item 1 (1) had been made out because respondents 2 and 3 had not led any evidence in this behalf and nor was this contention specifically raised and argued, as already notice, before the Labour Court and the F Industrial Court or even in the writ petition filed before the High Court.

Whether there was any undue haste on the part of the employer while discharging or dismissing an employee is a question of fact which has to be determined on the basis of evidence on record. The complaint under Section 28 of the said Act was filed by respondents 2 and 3. If it was their case that G there was an unfair labour practice on the part of the appellant herein as contemplated by Item 1 (!), then it was incumbent upon the said respondents to state facts on the basis of which the Labour Court could come to the conclusion that there was an undue haste as contemplated by Item 1 (!).

The complaints filed by the said respondents do not contain any particulars H of undue haste and nor was there any led on the part of the said respondents. The High Court clearly erred in making out a new case and in setting A aside the concurrent findings of the Labour Court and the Industrial Court.

It is not in dispute that on account of loss of confidence and because of the absence of respondents 2 and 3 from work without leave the standing orders of the company did empower it to discharge the said respondents on that ground. This being so, even if the High Court could have gone into the question as to whether there was any undue haste on the part of the appellant, in our opinion the conclusion arrived at by the High Court against the appellant herein is without any evidence or basis.

It would depend upon the facts of each case whether an employer has acted with undue haste while discharging or dismissing an employee.

It is neither possible nor desirable to lay down or spell out any general principles in this regard. Each case will have to be judged on its own facts. keeping in mind the undisputed facts of the present case the only question

is whether or when the termination letters were issued could it be said that D the appellant had acted in undue haste. To recapitulate on 7th August, 1975 the company's employee Parkar had disclosed that respondents 2 and 3 were involved in the conspiracy o[ theft of the company's medicines. The said respondents were arrested on 9lh August, 1975 and they were "bsent from duty as from that d11le. On 10th August, 1975 the statements of said respondents are stated to have been recorded pursuant to which recovery E was stated to have been made of the stolen property. Charge-sheet against the said respondents was filed alleging offence having been committed under Section 381 read with Section 34 of the India penal Code. The said respondents were not ordinary clerks in the office of the appellant but they were part and parcel of the watch and word section, respondent No. 2 being the watchman and respondent No. 3 the havaldar. These two respondents were supposed to protect the property of the appellant company and

on 14th August, 1975 the appellant company had before it information regarding the alleged involvement of these two persons in the theft of its property. It is difficult for us to appreciate how, under these circumstances, G the High Court could possibly have come to the conclusion that there was any undue haste on the part of the appellant company in removing these respondents from service. The order terminating the services of re, spondents 2 and 3 was passed nearly 5/6 days after the arrest of respondents 2 and 3 and during which period they had been absent without leave. It cannot be said that there was any undue haste on the port of the appellant H

728 SUPREMECOURTREPORTS l1996]SUPP.4S.C.R.

A company which could possibly lead to the conclusion that it was guilty of unfair labour practice. The High Court clearly erred in allowing respondents 2 and 3 to make out a new case and then in coming to a conclusion which is clearly untenable. The orders of the Labour and Industrial Courts did not call for any interference.

B For the aforesaid reasons, these appeals are allowed. The impugned judgment of the High Court dated '2nd/26th February, 1990 is set aside and the judgments and orders of the Labour Court and the Industrial Court are restored. There will be no order as to costs.

v.s.s.

Appeals allowed.