M/S. Lahore Sargodha Transport Company vs The State of Punjab and others

B.R. Tuli, J.—The petitioner is a firm consisting of four partners and is carrying on transport business. There was no harmony amongst the partners and it is alleged that the share of Karam Singh, partner, was auctioned on May 30, 1966. The other partners issued transfer orders to respondents 3 and 4 on May 30, 1966, which they did not obey. They were, thereafter, dismissed from service by the three partners on June 11, 1966. Respondents 3 and 4 submitted demand notice through their Union on December 17, 1966, for reinstatement. The petitioner-firm did not concede their demand with the result that the matter was referred to the Punjab Government. By a notification dated 19/2 rd June, 1967, the Governor of Punjab being of the opinion that an industrial dispute existed between the workmen and the management of the petitioner-firm referred. the following dispute for adjudication to the Labour Court, Jullundur:-

Whether the termination of services of Sarvshri Jograj Singh Driver and Parkash Dev Booking Clerk is justified and in order? If not, to what relief are they entitled?

At that time, Bakshi Manohar Singh was the presiding Officer of the labour Court, Jullundur, and the management and workmen filed their respective statements before him. The term of Bakshi Manohar Singh expired on February 28, 1968 and in his place Shri I.D. Pawar was appointed by notification dated July 15. 1968 By a notification dated October 5, 1968, Shri E.F. Barlow was appointed as the presiding Officer, Labour Court, Jullundur. in place of Shri I.D. Pawar Shri E.F. Barlow was succeeded by Shri Sewa Singh who gave his award on February 6, 1970, which was published in the Punjab Government Gazette dated March 6, 1970, holding that respondents 3 and 4 had been illegally dismissed from service and were entitled to be reinstated with full back wages and continuity of service. He made an order in these terms and directed respondents 3 and 4 to report for duty within 10 days. The petitioner-firm being dissatisfied with that award bas filed the present petition.

The Learned Counsel for the petitioner-firm has argued that by notification dated April 19, 1957, the Labour Court at Amritsar with Shri Gian Chand Behl as the presiding Officer had been constituted from the date of the publication of the notification up to 28th February, 1958 and, therefore, there was no Labour Court, Amritsar, thereafter of which the headquarters could be transferred to Jullundur by a later notification when Shri Sher Singh Bakshi was appointed the presiding Officer The notification dated April 19, 1957, is in the following terms:-

In exercise of the powers conferred by section 7 of the Industrial Disputes Act, 1947. as amended by section 4 of the Industrial Disputes (Amendment And Miscellaneous Provisions) Act, 1956 (No. 35 of 1956) and all other powers enabling him in this behalf, the Governor of Punjab is pleased to constitute a Labour Court with the headquarters at Amritsar, and to appoint Shri Gian Chand Behl, retired District and Sessions Judge, as its Presiding Officer with effect from the date of the Publication of this notification in the Official Gazette up to 28th February, 1958.

In addition to his duties as presiding Officer of the Labour Court, Shri Gian Chand Behl shall, for purpose of disposal of pending proceedings in relation to Industrial disputes, continue to serve as Chairman of the Second Industrial Tribunal, Punjab, Amritsar, which was constituted under the Industrial Disputes Act 1947, as in force before the commencement of the aforesaid Act No. 35 of 1958 There will however, be no change in the existing terms and conditions of his service and he will not be entitled to any additional remuneration for this additional charge.

The Learned Counsel for the petitioner submits that the use of the word ''and'' between ''to constitute a Labour Court with the headquarters at Amritsar and ''to appoint Shri Gian Chand Behl'' makes it clear that the term of Court as well as the appointment of its Presiding Officer was only up to February 28, 1958. I find myself unable to agree. As I read the notification, the Labour Court was constituted without any limitation as to time and it was only the period of continuance in office of Shri Gian Chand Bahl as Presiding Officer of that Court which was limited to February 28, 1958. I am supported in this view by a judgment of a Division Bench of this Court in The Atlas Cycle Industrial Ltd. v. The State of Punjab and others ILR 1961 (2) Pun. 421, wherein the following notification was under consideration:-

In exercise of the powers conferred by section 7-A of the Industrial Disputes Act, 1947, as inserted by section 4 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956 (No. 36 of 1956), and all other powers enabling him in this behalf, the Governor of the Punjab is pleased to constitute the Industrial Tribunal with headquarters at Jullundur and to appoint Shri Avtar Narain Gujral, B.A., L.L.B., as its Presiding Officer with effect from the date of the publication of this notification in the Official Gazette up to 3rd June, 1957.

The learned Judges, with regard to this notification, held as under:-

The portion of the notification quoted above clearly shows that the Governor of Punjab purported to pass two orders-

(1) for the constitution of the Industrial Tribunal with headquarters at Jullundur, and

(2) the appointment of Shri Avtar Narain Gujral as its presiding Officer. The notification issued on the 3rd June 1959, which is No. 5950-Lab-1-59/347-R.A., provided for only one of the above matters, i.e. the appointment of Shri Kesho Ram Passey as the presiding Officer of the Industrial Tribunal, Punjab. The latter notification did not at all refer to the constitution of the Tribunal evidently because the Tribunal had previously been constituted for an indefinite term and was still in existence. It is true that the term of appointment of Shri Avtar Narain Gujral had come to an end on the 3rd June, 1959, but it did not mean that the Tribunal itself had come to an end. By the expiry of the term of Shri Gujral a vacancy occurred with regard to the presiding Officer of the Tribunal and the Government filled up that vacancy by appointing Shri Kesho Ram Passey.

In view of that judgment, I do not find any substance in the submission made by the Learned Counsel for the petitioner.

The Learned Counsel then argued that there is no provision in the Industrial Disputes Act authorising the Government to change the headquarters of a Labour Court from one place to another. This suit mission is without merit as the Labour Court was constituted for the whole State of Punjab with headquarters at Amritsar and those headquarters could be changed from Amritsar to any other place within the State. Any notification can be amended or modified in this respect. If the Government can fix the headquarters of a Labour Court when it is constituted it has equally the powers to change its headquarters if found necessary later on.

The third submission of the Learned Counsel on the point of jurisdiction is that the reference came to an end when Bakshi Manohar Singh ceased to be the Presiding Officer of the Labour Court, to which the reference was made. The Division Bench judgment of this Court, referred to above, is a complete answer to this submission. The Labour Court was constituted for indefinite period and when the term of Bakshi Manohar Singh expired, there occurred a vacancy which was filled up by the State Government in July, 1968. The reference was to the Labour Court, Jullundur, and not to Bakshi Manohar Singh as its Presiding Officer. Subsequent changes in the Presiding Officers of the Labour Court were valid on similar grounds. There is, therefore, no substance in the submission of the Learned Counsel for the petitioner that the Labour Court, Jullundur, which gave the award had no jurisdiction in the matter.

It was admitted before the Labour Court by the management that no charge-sheet was issued to respondents 3 and 4, nor was a any enquiry held before terminating their services and on this ground the Labour Court came to the conclusion that the order terminating the services of respondents 3 and 4 was illegal as it had been passed without, observing the principles of natural justice. The Learned Counsel for the petitioner relies on a judgment of their Lordships of the Supreme Court in Oriental Textile Finishing Mills Amritsar v. Labour Court Jullundur C.A. No. 1071 of 1966, decided on August 31, 1971, and submits that no enquiry was necessary to be held in the present case. In that case, it was found that there was a persistent and obdurate refusal by the workmen to join duty notwithstanding the fact that the management had done everything possible to persuade them and gave them opportunities to come back to work but they had without any sufficient cause refused, which constituted misconduct and justified the termination of their services. The workmen were unwilling to join duty till the workmen who were suspended were also taken back. Their Lordships observed that there was nothing to justify the allegation that the management wanted to terminate their services under some pretext with a view to recruit them afresh and deprive them of accrued benefits. There was nothing that it could do further in view of the unjustified attitude taken by the workers by staying away from work particularly after they were given over a month''s time within which to commence work. On those facts, it was held that the order terminating their services was not improper and that the Tribunal was not justified in directing their reinstatement and payment of wages merely on the ground that no domestic enquiry was held. In an earlier portion of the judgment their Lordships held-

It appears that merely because workman go on strike, it does not justify the management in terminating their services. In any case, if allegations of misconduct have been made against them, those allegation have to be enquired into by charging them with specific acts of misconduct and giving them an opportunity to defend themselves at the enquiry.

The facts of the instant case are not parallel to the facts of the case before their Lordships of the Supreme Court. In the present case, there were four partners out of whom three were on one side and one on the other. The partnership deed was not produced before the Tribunal and, in the absence of any contract to the contrary between the partners, according to section 12 of the Indian Partnership Act, 1932, every partner has a right to take part in the conduct of the business and any difference arising as to ordinary matters connected with the business has to be decided by a majority of the partners, but every partner has the right to express his opinion before the matter is decided. There is no allegation that the order of transfer of respondents 3 and 4 was decided upon at a meeting of the partners wherein every partner had the opportunity to express his opinion. The order of transfer issued to respondents 3 and 4 by three of the four partners was, therefore, not a legal one. It is alleged, by the workmen that in case of Parkash Dev, the order of transfer was stayed by Karam Singh, the dissenting partner and Jog Raj Singh was granted leave for going to Moga for getting the bus repaired. The plea of the petitioner-firm that Karam Singh had ceased to be a partner or Director of the firm has not been believed by the Labour Court and, in my opinion, for good reasons. Because of the dissenssion amongst the partners, the employees should not be made to suffer. It is a clear case in which the three partners somehow came to hold the opinion that respondents 3 and 4 were siding with Karam Singh and, therefore, ordered their transfer. Later on, they lodged a First Information Report with the Police alleging that Karam Singh and respondents 3 and 4 had taken away a bus of the firm and had mis-appropriated some funds. The three accused persons were tried but were acquitted by the Magistrate on April, 9, 1969. The order of dismissal of respondents 3 and 4 was also passed by the three partners without associating Karam Singh with them. That order was also without authority and illegal, as it was not in accordance with section 12 of the Indian Partnership Act. In these circumstances, the Labour Court correctly came to the conclusion that the dismissal of respondents 3 and 4 was illegal.

The Learned Counsel for the petitioner has then, argued that the Labour Court proceeded ex-parte on October 23, 1967, despite the fact that the counsel of the petitioner had given timely information that he had fallen ill by an application but the same was dis-allowed and, without information to the petitioner-firm, one witness Hukam Parkash, Proprietor of Aggarwal Motor Store was examined for the respondents who could not be cross-examined by the petitioners. There is no allegation that any application was submitted to the Labour Court to set aside the ex-part proceeding and re-examine that witness although admittedly the petitioner-firm took part in subsequent proceedings before that Court. The proceedings before the Labour Court cannot, therefore, be quashed on the ground that on one hearing a witness was examined in the absence of the petitioner-firm. The petitioner-firm had notice of that hearing and it should have taken steps to send a representative to attend before that Court. Having failed to do so, it cannot take advantage of its own default.

The Learned Counsel for the petitioner has next argued that the order of reinstatement of respondents 3 and 4 was not justified in view of the strained relations between the parties. Reliance has been placed on the judgment of their Lordships of the Supreme Court in Hindustan Steels Ltd., Rourkela Vs. A.K. Roy and Others, , wherein the following observations were made in paragraph 14 of the report.-

The question, however, still is whether the Tribunal was, in the circumstances of the case justified in directing reinstatement. It is true that some of the decisions of this Court have laid down that where the discharge or dismissal of a workman is not legal or justified, the relief which would ordinarily follow would be reinstatement. The Tribunal, however, has the discretion to award compensation instead of reinstatement if the circumstances of a particular case are unusual or exceptional so as to make reinstatement inexpedient or improper. The Tribunal has, therefore, to exercise its discretion judicially and in accordance with well recognised principles in that regard and has to examine carefully the circumstances of each case and decide whether such a case is one of those exceptions to the general rule. If the Tribunal were to exercise its discretion in disregard of such circumstances or the principles laid down by this Court, it would be a case either of no exercise of discretion or of one not legally exercised. In either case the High Court in exercise of its writ jurisdiction can interfere and cannot be content by simply saying that since the Tribunal has exercised its discretion, it will not examine the circumstances of the case to ascertain whether or not such exercise was properly and in accordance with the well settled principles made. If the High Court were to do so, it would be a refusal on its part to exercise jurisdiction.

In para 16 of the report their Lordships further observed.-

But if the management truly believed that it was not possible to retain the workman in the company''s service on grounds of security and consequently could rot place confidence in him any longer the present case would be one of those exceptional cases where the general rule as to reinstatement could not properly be applied. This of course does not mean that in every case where the employer says that he has lost confidence in the workman, and therefore, has terminated his service that reinstatement cannot be granted and the Tribunal has to award compensation. On the other hand, if on an examination of all the circumstances of the case, the Tribunal comes to the conclusion that the apprehensions of the employer were genuine and the employer truly felt that, it was hazardous or prejudicial to the interests of the industry to retain the workman in his service on grounds of security, the case would be properly one where compensation would meet the ends of justice.

The matter was not urged before the Labour Court that the continuance of respondents 3 and 4 in the service of the petitioner-firm would he hazareous to its business or security of its vehicles or other assets and that the management had lost all confidence in them and, therefore the learned Labour Court correctly ordered their reinstatement. This matter has not been agitated in the writ petition either except saying that the reinstatement was not justified. I, therefore, find no force in the submission of the Learned Counsel, that reinstatement of respondents 3 and 4 was rot justified in this case.

The last submission made by the Learned Counsel for the petitioner is that back wages for the full period have been allowed to respondents 3 and 4 without finding that they had remained unemployed during the interim period when they were out of the service of the petitioner-firm. This matter pertains to facts and had to be pleaded before the Labour Court. Not having been pleaded there, no fault can be found with the award of the Labour Court. Even in the writ petition, the petitioner did not state the period during which respondents 3 and 4 had remained in employment of somebody else for which period they were not entitled to back wages. The submission made by the Learned Counsel is, therefore, repelled.

For the reasons given above, I find no merit in this writ petition which is dismissed but without any order as to costs.