Management of Essorpe Mills (P) Ltd. vs Presiding Officer, Labour Court and Another

Sathasivam, J.—Aggrieved by the Award of the Labour Court in I.D. No. 22 of 1987 dated May 9,1991, the Management has filed the

above writ petition.

The case of the petitioner is as follows: It came to the knowledge of the petitioner-Management that the 2nd respondent herein was involving in

acts of misconduct falling within the mischief of Standing Order No. 35, under the Industrial Employment (Standing Orders) Act, 1946. Running of

a canteen in the petitioner Mill is a statutory duty. Accordingly the Mill Management had established its own canteen and it had printed coupons to

be issued to workmen to enable them to buy edibles and snacks. Since the 2nd respondent was found in possession of bogus canteen tickets not

officially printed and issued and he was selling the same to other employees, thereby causing detriment to the management and committing an act

amounting to cheating. Citing these aforesaid acts as acts of misconduct, he was given a notice on August 1, 1985 calling upon him to show cause

why disciplinary action should not be taken against him for such acts. He submitted an explanation dated August 16, 1985 wherein he had

admitted the first charge, but only pleaded that he was doing it beyond working hours. As regards the second charge, he denied the same. Hence a

full-fledged enquiry was conducted in which witnesses in support of the charge were examined and enough opportunity was given to the 2nd

respondent to participate therein. After considering the evidence recorded in the domestic enquiry, the Enquiry Officer gave a report that the two

charges have been established. Accepting the findings of the Enquiry Officer, the petitioner- Management, taking the view that the charges proved

against the 2nd respondent are serious in nature and after taking note of his past record, issued an order on February 25, 1986, terminating the

services of the 2nd respondent, against which he raised an Industrial Dispute. The Labour Court, first respondent herein after holding that the

domestic enquiry was fair and reasonable, has passed an Award setting aside the order of termination and directed reinstatement with continuity of

service, but only with half wages. The said Award is being challenged in this writ petition by the management.

In the light of the above pleadings, I have heard Mr. N. Balasubramanian, learned counsel for the petitioner and Mr. Kalyanana Raman, learned

counsel for 2nd respondent-workman.

Mr. N. Balasubramanian, learned counsel for the management has vehemently contended that in the light of the conclusion arrived at by the

Labour Court in the preliminary issue, namely, the domestic enquiry was fair and reasonable, committed an error in modifying the order of

termination into reinstatement with back wages to the extent of 50 per cent. He also submitted that in the light of its own finding on the preliminary

issue, by modifying the punishment, the Labour Court has exceeded its jurisdiction vested u/s 11-A of the Industrial Disputes Act. On the other

hand, Mr. Kalayana Raman, learned counsel for the second respondent-workman has contended that taking note of the unblemished length of

service for a period of 19 years, the Award of the Labour Court modifying the order of termination in the reinstatement with 50 per cent

backwages is certainly in order and it requires no interference by this Court at this stage.

I have carefully considered the rival sub-missions.

Even though except the facts leading to the imposition of punishment are unnecessary, in order to appreciate the conclusion arrived at by the

Labour Court as well as the rival contentions, it is but proper to refer the charges made against the second respondent-workman. The two charges

levelled against the workman are as follows:

i) During working hours and within the premises of the Mills, he was selling the snacks prepared by him privately at his house to the other workers;

ii) He was in possession of bogus canteen tickets, which he was selling to the other employees.

There is no dispute that in the preliminary order dated October 9, 1990, the Labour Court on the basis of oral and documentary evidence, came to

the conclusion that the domestic enquiry was fair, reasonable and in accordance with law. In the light of the answer rendered in the preliminary

issue, the Labour Court considered the quantum of punishment imposed on the workman. It was brought to my notice that the Labour Court

having found in favour of the management with regard to the enquiry, it is not open to it to consider the same once again in the 1 final order and

take a different conclusion. The learned counsel for the petitioner has very much relied on the following conclusion arrived at by the Labour Court:-

(Vernacular matter omitted)

According to him, the said conclusion is directly contrary to its own conclusion arrived at in the preliminary issue. It is true that while disposing of

the preliminary issue regarding the domestic enquiry, the Labour Court after considering the evidence came to the conclusion that the said enquiry

was conducted in accordance with law. As stated earlier, we are concerned with the order of the Labour Court relating to modification of the

punishment, namely, reinstatement with 50 per cent back-wages instead of dismissal from service.

Elaborate argument was advanced by the learned counsel for the petitioner with regard to the power of the Labour Court u/s 11-A of the

Industrial Disputes Act (hereinafter referred to as ""the Act""), Section 11-A of the Act is as follows :-

Powers of Labour Courts. Tribunals and National Tribunals to give appropriate relief in case of discharge or dismissal of workmen.

11-A. Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National

Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be,

is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct

reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of

any lesser punishment in lieu of discharge or dismissal as the circumstance of the case may require:

Provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be shall rely only on the

materials on record and shall not take any fresh evidence in relation to the matter.

After the introduction of Section 11-A of the Act, it is open to the Labour Court, Tribunal in the Course of the adjudication proceedings, if it is

satisfied that the order of discharge or dismissal was not justified, it is open to them to set aside the order of discharge or dismissal and direct

reinstatement of the workman on such terms and conditions. It also enables them to give other reliefs to the workman including the award of any

lesser punishment in lieu of discharge or dismissal depending on the circumstances of the case. In the light of the said statutory provisions, now I

shall consider the decision referred to by both sides. Learned counsel for the petitioner has very much relied on the following passage in the case of

T. Seeralan Vs. The Presiding Officer II Additional Labour Court and Others, atp.86:

Regarding charge of theft, both the Disciplinary Authority and the Tribunal, on a meticulous analysis of evidence on record, have held that the

charge had been proved. Once such a finding is rendered, which is an offence punishable under Indian Penal Code, it would be against interests of

other workmen and industrial development, if adequate punishments are not imposed when offences under Indian Penal Code are established. He

could have been prosecuted. Company having chosen to proceed by a domestic enquiry, based on the Standing Order, this Court considers that

there is very little scope for any generosity to be shown or to bring into existence minor punishments for such derelictions. Committing theft had

been considered as a penal offence in the interest of society to maintain law and order in the country and to strike out standards, when they occur

in industries, would be detrimental to the interests of the Nation, if a different approach is made mainly because he is a workman under I.D. Act.

Hence, the punishment imposed by the Tribunal, is rather on the concessional side, and the fervent plea put forth by Mr. Devadas, learned counsel

for the petitioner, to order reinstatement is an unreasonable contention.

It is true that in that decision, the learned Judge has stated that there is very little scope for any generosity to be shown or to bring into existence

minor punishments for such derelictions. In the light of the charges made against the workman in the case on hand, I am of the view that the said

decision is not much helpful to the petitioner''s case.

The other decision referred to by the learned counsel for the petitioner is in the case of Sri Gopalakrishna Mills Pvt. Ltd. Vs. Labour Court and

Another, . In that decision, with regard to the scope and power of the Labour Court/Tribunal, Their Lordships have concluded thus at pp 429-

430: -

The learned counsel for the 2nd respondent refers to a recent decision of a Division Bench of the Court in Management of Binny Limited Vs.

Additional Labour Court and Another, , where the order of the Tribunal modifying the punishment u/s 11-A, after finding that the dismissal was

based on a properly conducted enquiry, as one of reinstatement without continuity of service and back wages, was upheld by this Court. In that

case the Court found that the charges levelled against the workman was one of theft of certain articles and the charge has been duly found proved

by the Labour Court. The Labour Court, however, set aside the order of dismissal passed by the management and ordered reinstatement of the

workman on the ground that the workman concerned has put in 11 years of service without any blemish and, therefore, he may be reinstated

without continuity of service and without backwages.

The said order was upheld by this Court on the ground that Section 11-A confers jurisdiction on the Labour Court to set aside the order of

dismissal and to direct reinstatement of the workman on such conditions and terms as the Labour Court deemed fit, and that the Labour Court has

not exercised its discretion arbitrarily in that case. According to the learned Judges the workman was not found guilty of a similar misconduct or

any other misconduct during his 11 years of service under the management and that important factor has weighed very much with the Labour Court

in the course of exercising its discretion u/s 11-A. We do not understand the said decision as saying that the number of years of service should be

taken as a relevant criterion for modifying the punishment or showing leniency in the matter of punishment. The Labour Court as well as the learned

Judges in that case have referred to the facts that the past conduct of the workman during the 11 years of his service has been without any blemish,

and therefore, the Labour Court''s discretion can be exercised to show some leniency. As a matter of fact in that case the past conduct of the

workman has been taken to be a relevant factor. If that is the principle laid down in that case then we do not see how that decision will help the

2nd respondent in this case. His past conduct has been found by the Labour Court to be blameworthy and the Labour Court specifically says that

if his past conduct were to be taken into account, the punishment imposed by the management cannot be interfered with. If past conduct is a

relevant criterion in finding out whether the punishment is proportionate to the charges, then the Labour Court in this case is not justified in setting

aside the order of dismissal and ordering reinstatement ignoring the past conduct of the 2nd respondent which had been taken into account by the

management while imposing the penalty. We are not in a position to say that in this case, the Labour Court has exercised its discretion judicially.

The Labour Court has ignored the serious nature of the charges and proceeded to direct reinstatement without continuity of service and

backwages, without considering the question as to whether reinstatement is expedient and proper in the circumstances of the case.

As has been pointed out by the Supreme Court in Delhi Cloth and General Mills Co., Ltd. Vs. Workmen and Others etc., is the expression

''misconduct'' covers a large areas of human conduct, a distinction should be made between technical misconduct which leaves no trail (sic.) of

indiscipline and misconduct resulting in damage of employer''s property and serious misconduct such as acts of violence against the management or

other employees or riotous or disorderly behaviors to grave indiscipline. Therefore, it is not possible to treat all cases of misconduct alike. The

nature and the quantum of punishment have, therefore, to depend on the nature of the charges. In this case the charge proved, is one of gross

indiscipline and with reference to such a charge, the order of dismissal cannot be taken to be unjustified as has been held by the Labour Court.

It is clear that if the Labour Court has exercised its discretion judicially while modifying the punishment, it is not possible for this Court to interfere

lightly.

The other decision referred to is in the case of Christian Medical College Hospital Employees'' Union and Another Vs. Christian Medical

College Vellore Association and Others, .In that decision. Their Lordships in para 14 have held as follows at pp 273-274

.....Secondly, the circumstances in which the Industrial Tribunal or the Labour Court may set aside the decision arrived at by the management in

the course of a domestic enquiry held by the management into an act of misconduct of a workman are evolved by series of judicial decisions. In

Indian Iron and Steel Co., Ltd. and Another Vs. Their Workmen, this Court has observed that the powers of an Industrial Tribunal to interfere in

case of dismissal of a workman by the management are not unlimited and the Tribunal does not act as a Court of appeal and substitute its own

judgment for that of the management. It will interfere (a) where there is want of good faith, (b) when there is victimisation or unfair labour practice;

(c) when the management has been guilty of the basic error or violation of the principles of natural justice; and (d) when on the materials before the

Court the finding is completely baseless or perverse. It cannot, therefore, be said that the Industrial Tribunal or the Labour Court will function

arbitrarily and interfere with every decision of the management as regards dismissal or discharge of a workman arrived at in a disciplinary enquiry.

The power exercisable by the Industrial Tribunal or the Labour Court cannot, therefore, be equated with the power of veto conferred on the Vice

Chancellor under Clause (b) of either of the two subsections of Section 51-A of the Gujarat University Act, 1949. As we have already said earlier

the decision of the Industrial Tribunal or the Labour Court is open to judicial review by the High Court and by this Court on appeal. Section 11-A

which has been introduced since then into the Act which confers the power on the Industrial Tribunal or the Labour Court to substitute a lesser

punishment in lieu of the order of discharge or dismissal passed by the management again cannot be considered as conferring an arbitrary power

on the Industrial Tribunal or the Labour Court. The power u/s 11-A of the Act has to be exercised judicially and the Industrial Tribunal or the

Labour Court is expected to interfere with the decision of a management u/s 11-A of the Act only when it is satisfied that the punishment imposed

by the management is highly disproportionate to the degree of guilt of the workman concerned. The Industrial Tribunal or the Labour Court has to

give reasons for the decision. The decision of the Industrial Tribunal or of the Labour Court is again as already said subject to judicial review by

the High Court and this Court.

It is clear that the power u/s 11-A of the Act has to be exercised judicially and the Labour Court or the Industrial Tribunal is expected to interfere

with the decision of the management u/s 11-A only if it is satisfied that the punishment imposed by the management is highly disproportionate to the

degree of guilt of the workman concerned. In our case, the Labour Court after considering the nature of the proved charges, unblemished service

for a period of 19 years thought that lesser punishment would be sufficient; accordingly modified the punishment of dismissal into reinstatement with

50 per cent backwages.

In Engine Valves Ltd. Vs. Labour Court, Madras and another, , the following conclusion of Their Lordships have been very much pressed into

service at p.383:-

The decision of this Court in Madras Fertilizers case, relied upon by the learned counsel for the respondents only lays down that where the

Labour Court has not made a proper exercise of the discretion vested in it u/s 11-A of the Act, this Court in the exercise of its power under Article

226 of the Constitution of India can certainly do what the Labour Court failed to do. Having regard to the principles referred to above, we are of

the view that the power and discretion conferred u/s 11-A of the Act, have to be exercised judicially and judiciously and that there should be

sufficient indication in the order itself of the fact that the Court exercising power u/s 11-A of the Act was aware of and alive to the norms and

requirements of Section 11-A of the Act. The Court exercising powers u/s 11-A of the Act after finding the misconduct to have been proved is

first obliged to advert itself to the question of necessity or desirability to interfere with the punishment imposed by the management and, if the

management could not justify the punishment imposed thereafter it must consider the question as to the relief that is to be granted to the employee.

In so considering the relief to be granted, the Court has an obligation to consider whether the punishment imposed is disproportionate or

shockingly severe to the charges held proved and if so whether a reinstatement has to be ordered or whether any other lesser punishment has to be

imposed. A specific finding must be recorded whether it was expedient and proper to reinstate the employee or whether award of compensation in

lieu of reinstatement will meet the requirements and ends of justice of the case concerned. Absence of reasons to invoke the power and interfere

under provisions of Section 11-A in a particular case would render the very exercise of powers arbitrary and perverse and the order consequently

would stand vitiated.

Here again it is stated that the discretion conferred u/s 11-A of the Act has to be exercised judicially and judiciously and there should be sufficient

indication in the order itself. In our case, the Labour Court has adduced sufficient reasons for modifying the punishment. The following passage in

Dharmapuri District Co-operative Sugar Mills Vs. The Presiding Officer, Labour Court, Vellore and another, is very much relied on by the

Learned counsel for the petitioner at p.837:-

An analysis of the above judgments the position that emerges is that the Court should not entertain a misplaced sympathy towards a workman and

should not prejudice the issue from the angle of rehabilitation. The question of rehabilitation and reformation could arise in a case of minor

delinquency or misconduct. Where the charges are grave in nature, can the Labour Court exercising power u/s 11-A of the Act, impose on a

management a workman whose presence is likely to affect the morale and discipline of the entire factory? Should the management be embarrassed

by the reinstatement of such a workman by denying the managerial function to which a management is entitled to, having regard to the facts and

circumstances of the case. In our opinion, the acceptance of such a proposition would only lead to interfering with the managerial function to the

extent of destroying the discipline and control in the entire factory. We are clearly of the opinion that Section 11-A of the Act is not intended to

embarass the management to such extent. Section 11-A of the Act was introduced to obviate the difficulty felt by the Labour Courts, Tribunals,

etc., in modifying the judgment of discharge or dismissal on flimsy grounds solely with a view to render justice to the parties. The Labour Courts

and Tribunals cannot mechanically use the words ""the punishment being disproportionate to the charges."" As observed by the Supreme Court of

India unless the Labour Court finds the punishment to be highly disproportionate to the charges, the Labour Court should not interfere. One other

aspect of the case may also be noticed before dealing with the judgments cited by Sri N.G.R. Prasad. On the facts of this case, the Labour Court

had set aside the domestic enquiry and proceeded to take evidence. On the evidence the Labour Court has rendered certain findings, to which we

have already made a reference. Having found the second respondent guilty of the charges, while exercising the function of imposing a punishment,

the Labour Court is in fact in the position of management and the sentiments expressed by the management, when they terminated the services of

the second respondent have to be kept in mind and we do not think that different principles will apply to the Labour Court while determining the

punishment to be awarded to the guilty worker.

In Scooters India Limited Vs. Labour Court and Others, , Their Lordships have concluded that Section 11-A of the Act confers wide powers

on the Labour Court to interfere with the order of discharge or dismissal. In this regard, the following conclusion is relevant for our case: -

It is true that the respondent was issued charge memos on three different occasions viz., March 23, 1981, April 30, 1981 and July 21, 1981, and

separate enquiries were held in respect of the charges contained in each of the three charge memos. It is equally true that the charges framed

against the respondent pertained to acts of major misconduct. All the charges were held proved in the respective enquiries and the Presiding

Officer of the Labour Court has held that the enquiries conformed to the statutory prescriptions and the principles of natural justice and were not

vitiated in any manner and as such the findings rendered by the Inquiry Officer and accepted by the Disciplinary Authority were not open to

challenge. Even so the Presiding Officer of the Labour Court held as follows:

Having regard to all these circumstances and the reasons given above I would hold that the order of termination was not justified in the

circumstances of this case. I would therefore set aside the order of termination of service and direct that the workman shall be reinstated within one

month the award becoming enforceable. The workman has unfortunately to blame himself for much of the bad blood which has developed

between him and the management and therefore his conduct, motivated by ideals which are not relevant has been far from satisfactory, in so far as

it was rough, bordering on rudeness and with highly exaggerated sense of his duties. In these circumstances it will meet the ends of justice if back

wages to the extent of 75 % are allowed to the workman. I would make my award accordingly but there shall be no order as to costs.

The High Court, while sustaining the award passed by the Labour Court, adverted to Section 6(2A) of the Act which is analogous to Section 11-

A of the Industrial Disputes Act and pointed out that the Section confers wide powers on the Labour Court to interfere with an order of discharge

or dismissal of a workman and to direct the setting aside of the discharge or dismissal and ordering the reinstatement of the workman on such

terms and conditions as it may think fit, including the substitution of any lesser punishment for discharge or dismissal as the circumstances of the

case may require and as such the Labour Court was well within its jurisdiction in setting aside the order of termination of services of the respondent

and instead ordering his reinstatement together with 75% back wages.

Even though the Labour Court has slightly taken a different stand with regard to the involvement of the workman in the charges leveled against

him, I am of the view that even if we eschew the said conclusion by virtue of Section 11-A of the Act in a deserving case, it is open to the Labour

Court/ Tribunal to interfere and modify the punishment imposed by the management. As pointed out by Their Lordships in the various decisions,

the order of the Labour Court u/s 11-A of the Act must be a judicial one. As a matter of fact, taking note of the 19 years of unblemished service

with the petitioner-management and of the fact that past records during the relevant time were good, the Labour Court has passed a reasonable

order and modified the punishment from dismissal into reinstatement with 50 per cent back-wages. In such circumstance, it cannot therefore be

said that the Labour Court has exercised its power in an arbitrary manner and not in a judicial manner. Hence, it cannot therefore be said that

merely because the Labour Court has found the enquiry to be fair and lawful and the findings not to be vitiated in any manner, it ought to have

interfered with the order of termination of service passed against the respondent in exercise of its powers under the provisions of the Act. Once it is

found that the Labour Court has exercised its discretion judicially with regard to punishment, it is not possible for this Court to interfere very lightly

while exercising jurisdiction under Article 226 of the Constitution of India. I am satisfied with the reasons furnished by the Labour Court.

Further, the very denial of 50 per cent of back wages to the workman was considered by the Labour Court to be sufficient punishment for the

misconduct proved against him and this I view adopted by the Labour Court in the facts of the case cannot be said to be either unreasonable or

contrary to law. The Labour Court, which is exercising the jurisdiction for reducing punishment u/s 11-A of the Act, had undoubtedly wide

discretion in the matter of reduction of punishment. On perusal of the impugned award, I find that the Labour Court has taken into consideration all

the relevant factors while passing the impugned award and therefore when it directed reinstatement with only 50 per cent back wages, it committed

no such illegality as to justify interference by this Court in exercise of its writ jurisdiction.

In the result, I do not find any merit in the writ petition and the same is, therefore, dismissed, but in the circumstances of the case without costs.