Ram Kumar Agarwala and Bros. vs Proggan Chandra Dey

Chatterjee, J.—This is a petition under Article 227 of the Constitution against an order of the learned Judge, the Fourth Industrial Tribunal The point which was referred to the said Tribunal and which is material for our purpose is as follows:

Whether the transfer of Sri Amiya Kumar Sen Gupta and subsequent refusal to employ him by the management is justified; to what relief, if any, he is entitled.

The Tribunal held:

The transfer order in respect of Sri Sen Gupta was illegal and unjust. Within 15 days from the date of the publication of this award in the Official Gazette, Sri Sen Gupta shall be allowed to work in his former position as was on the 14th February, 1961. Sri Sen Gupta further be paid all his dues as wages upto-date within that period.

Against this order of the Tribunal this Court was moved and this Rule was issued

The Petitioner is the employer, and according to the Petitioner there are standing rules called Service Rules of Ram Kumar Agarwala & Brothers and companies under their management and control. Rule 2 states as follows:

For the purpose of these rules the companies named below and their employees shall for the time being be deemed to be under the management and control of M/s Ram Kumar Agarwala & Brothers.

Then the names of seventeen companies follow. The relevant provision regarding transfer is in Rule 4, Sub-rule (g). The said Sub-rule (g) reads as follows:

The partners shall be entitled to transfer the services of the employees of Ram Kumar Agarwala & Bros, and/or any company or companies under their management or control to any other company or companies under the management and control and at any centre or centres from time to time, according to the exigencies of business, and the terms and conditions of service as applicable to employee at the time of transfer shall continue to be applicable after such transfer or transfers.

There is thus a specific provision regarding transfer and further there is also a specific provision regarding the terms on such transfer. The relevant term is that an employee on transfer shall get the same terms and conditions of service as was applicable to him at the time of transfer. But the employer''s witness No. 1, the office superintendent Mr. Mitra stated:

If a person is transferred on lien to another factory elsewhere he will be governed by this Service Rule, but if he is transferred elsewhere without lien he will be governed by the standing order of the factory where he is transferred.

The learned Judge, Fourth Industrial Tribunal, on that evidence held as follows:

Practically speaking by the proposed transfer Sri Sen Gupta was thrown in a new employment with changed terms and conditions of service against his will and consent.

But on the Service Rules it cannot be said that the condition of the transfer was that his service conditions would be changed.

The Tribunal next considered whether Sri Sen Gupta was transferred because he was exceptionally efficient for the administration of the store department. The question as to whether the management required a transfer or not is not a matter for decision of any Industrial Tribunal because there is no ''industrial dispute'' in it. The phrase ''industrial dispute'' has been defined in the Industrial Disputes Act as follows:

Industrial dispute means any dispute or difference between the employers and employees or between employers and workmen or between workmen and workmen which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person.

If a workman is transferred, there is no question of his non-employment or his employment. The same employment continues. There is no dispute relating to the terms of employment, because under the Service Rules the terms and conditions of employment on transfer will remain the same as before transfer. Hence, there will in the circumstances of this case be no dispute on transfer regarding employment or the terms of employment. Finally, merely by the transfer, the conditions of labour will not be changed. The conditions that governed him before transfer would still govern him because of Rule 4, Sub-rule (g) of the Service Rules. Therefore, whether an employee should be transferred or not or whether his transfer was required by exigencies of the circumstances or not, is not a matter of an ''industrial dispute''. Ordinarily mere order for transfer cannot be a matter for any Industrial Tribunal. The Supreme Court in the case of the The Management of the Syndicate Bank Ltd. Vs. The Workmen, , held as follows:

There is no doubt that the Banks are entitled to decide on a consideration of necessities of banking business whether the transfer of an employee should be made to a particular branch. There is also no doubt that the management of the Bank is in the best position to judge how to distribute its employees between the different branches.

Therefore, ordinarily apart from the question of mala fide, an order for transfer is, not a matter relating to any industrial dispute because the ingredients of such a dispute does not exist. But if the order for transfer is mala fide, different considerations arise.

But the learned Judge considered the merits of the order of transfer and held:

I cannot hold that Sri Sen Gupta was exceptionally efficient for the administration of the store department.

The learned Judge need not, therefore, have considered the merits of the order of transfer-and need not have arrived at any finding on that point. This finding is not relevant.

The main question is whether the order for transfer was mala fide or not. Whether a particular order is mala fide or not, is ordinarily a question of fact and ordinarily the High Court will not interfere in revision with such a finding, because the finding is an inference of fact from facts. Mr. Chakraborty on behalf of the employer Petitioner referred to the aforesaid judgment of the Supreme Court where the Supreme Court held as follows:

It is true that if an order for transfer is made mala fide for some ulterior purpose like punishing an employee for his trade union activities the Industrial Tribunal should interfere to set aside such an order of transfer because the mala fide exercise of power is not considered to be the legal exercise of power given by law.

Mr. Chakraborty further submits that the Supreme Court thereafter observed as follows:

But the finding of mala fide should be reached by Industrial Tribunal only if there is sufficient and proper evidence in support of a finding. Such a finding should not be reached capriciously or on flimsy grounds.

Mr. Chakraborty then points out that the Supreme Court set aside that finding and decided in favour of the Bank. According to Mr. Chakraborty, therefore, the High Court in revision has power to set aside the finding as that finding was arrived at ''capriciously or on flimsy grounds''.

Mr. Sanyal on behalf of the employee has referred me to the decision of Kundan Sugar Mills Vs. Ziyauddin and Others, . The Supreme Court held as follows in the aforesaid case:

That apart from statutory provision, the rights of an employee or an employer are governed by the terms of contract between them or by the terms necessarily implied therefrom, but in the absence of an express agreement between the employer or employee it cannot necessarily be implied that the employer has a right to transfer the employee to any of its concern in any place and that the employee has a duty to join the concern to which he may be transferred. In the instant case it would not be a condition of service of employment of the concerned workman either express or implied that the employer has a right to transfer them to the new concern started by the employer subsequent to the date of the employment.

The employers and the employees in this case are governed by the Service Rules and the rules provide that a partner shall be entitled to transfer an employee from one to another of the seventeen companies referred to, according to the exigencies of the business and the terms and conditions on transfer will remain the same. The matter of exigencies of a business is not a matter for the Industrial Tribunal to decide, but the matter of a show of exigencies of business is a matter for the Industrial Tribunal. Mr. Chakraborty has also referred to another decision of the Supreme Court in the case Barielly Electric Supply Company Ltd. v. Sirajuddi (1960) I L.L.J. 356, where Gajendragadkar, J. held as follows while discussing the question of mala fide:

Such a finding should not be made light heartedly or in a casual manner as has been done by the Tribunal in the present case:

In that case one coolie was transferred from one department to another department. Mr. Sanyal has referred to a decision in Standard Vacuum Oil Company v. Their Employees (1954) II L.L.J. 354, where it was held as follows:

The existence of a power to transfer and its scope and exercise of it are entirely two different questions. Colourable exercise by the employer of his power to transfer a workman from one establishment at one place to another at a different place can always be the subject-matter of an industrial dispute.

It was further held in that case that where there were Service Rules regarding the transfer the provisions of those rules should only be considered. The aforesaid decisions state one principle, viz., when there are conditions for transfer in the Service Rules those rules should be the governing matter. But when there is a colourable exercise of the aforesaid powers, the Tribunal has the authority to consider the same and that matter was the main question which was considered by the Tribunal. According to Mr. Sanyal the question of mala fide is a question of fact and this Court has no power to interfere under Article 227 of the Constitution with the findings of fact. Whereas Mr. Chakraborty referred to the said decisions of Gajendragadkar, J. and says that this Court still has the power to revise the judgment of the Tribunal provided the finding be reached ''capriciously or on flimsy grounds''.

The question is whether the High Court has power in revision to set aside the inference of fact made from facts. According to the aforesaid judgment of Gajendragadkar, C.J. the Industrial Tribunal should not reach a finding ''capriciously or on flimsy grounds'', but if there is a finding of fact arrived at by the Industrial Tribunal and if it appears to a Court of revision that the finding was made on flimsy grounds or capriciously the question is whether the High Court has power in revision under Article 227 of the Constitution to set aside that finding of fact. It is true that the Supreme Court specified what findings would be proper, but the aforesaid judgment is no authority for the proposition that a finding of fact based on flimsy evidence may be set aside by the High Court under Article 227 of the Constitution. Mr. Sanyal has urged that the finding that the transfer was mala fide is an inference from fact based on evidence. Mr. Sanyal further says that even if those findings of fact themselves are bad, the High Court has no power to set aside an inference of facts from such findings based on evidence, flimsy or otherwise. It goes without saying that the High Court''s power to set aside findings of fact in a petition under Article 227 of the Constitution is very limited.

On that matter I may refer to the case of Edward v. Bairstow (1955) 3 A.E.R. 48, where it has been held:

If it should appear to the Appellate Court that no person properly instructed in the law and acting judicially could have reached that particular determination, the: Court may proceed on the assumption that a misconception of law has been responsible for the determination.

The Appeal Court referred to above had no power to set aside a finding of fact. Their power was limited to erroneous decisions in law. The Supreme Court in the case of Oriental Investment Company v. Commissioner of income tax AIR 1958 S.C. 49 considered the aforesaid decision and accepted it. Hence, I am inclined to hold that if there is a finding of fact which appeared to a Court of revision that no person properly instructed in the law and acting judicially could have reached that particular determination, the Court may proceed on the assumption that some misconception of law is responsible for the aforesaid determination. The aforesaid finding regarding the mala fide nature of the order of transfer was arrived at on a consideration of several matters. The first of which is that, on transfer he would not continue to have the same terms and conditions as he had before the transfer. This was due to misconception of law. Secondly, the Tribunal considered whether the transfer was required because of the exigencies of management. This matter is not relevant for the determination of the said industrial dispute, as stated already, due to some misconception of law regarding the meaning and the scope of an industrial dispute, the said matter was considered. The question whether there was a show of exigencies of the business to justify the transfer may, however, be considered. Thirdly, the Tribunal decided that the order for transfer was not made by a partner. The reference to the Tribunal was not on the question whether the order for transfer was valid or not. Hence, the point need not have been considered. The question was whether the order of transfer was justified. If the order was invalid no question of justification would arise. But the letter dated February 23, 1961, is on the record to show that a partner passed the order. This third finding is also irrelevant on the question of mala fide exercise of power of transfer.

The fourth finding is that it would be difficult for him to attend the factory at Lilluah. This difficulty arising out of the condition for transfer is included in the conditions of service. This matter is, therefore, not relevant for determining mala fide nature of tie order.

The last finding is that he was transferred to the factory for his trade union activities. But in the factory he would have greater scope for trade union activities than in the head office.

Hence, the result is that the inference regarding the mala fide nature of the order of transfer was made from findings, one of which was based on misconception of law regarding the interpretation of Service Rules. The second finding regarding the validity of the order of transfer is not relevant, the third finding regarding the efficiency of the workman is based on misconception of law regarding the meaning and scope of an ''industrial dispute''; the fourth finding is irrelevant and the fifth finding is attacked on the ground that it was on ''flimsy evidence'' and ''capriciously'' arrived at. The inference of mala fide was made from the aforesaid findings. Hence, that inference might have been due to misconception of law regarding the terms and conditions of service on transfer and it might also have been due to error in law regarding the meaning and scope of an industrial dispute; the efficiency or otherwise of the workman was an irrelevant matter but was considered relevant. The fourth finding is no evidence of mala fide and the fifth finding is a relevant finding on fact.

Hence, this inference regarding the mala fide nature of the order might have been due to misconception of law regarding scope of the enquiry. In such a case the principle laid down in Edward v. Bairstow Supra applies with force, because the judgment itself disclosed that misconception of law, might have been responsible for the finding. Hence, this inference of fact is one which may be challenged in a Court of revision case. Finally, an order for transfer made mala fide means the transfer was made on a show of exigencies of business but really to punish the workman for his trade union activities or other activities. A workman is punished if the terms and conditions of service are affected or he is compelled to resign. No punishment was imposed by the order of transfer. His employment would remain the same. The terms and conditions of service on transfer would also remain the same. In order to join he would have to travel a further distance of a few miles. But it is a condition of service under Rule 4 and, therefore, it is no punishment. Transferability is a condition of service; this was so recognised by the Supreme Court in the case of Kundan Sugar Mills Supra. Hence, I come to the conclusion that the order of the Judge was due to misconception of law regarding the terms and conditions on transfer and misconception of law regarding the scope of the enquiry. Hence, I hold that no Court of fact should have arrived at that finding if it was properly instructed on matters of law.

But the other question whether the subsequent refusal of Sri Amiya Kumar Sen Gupta was justified must be answered in favour of the workman. Whatever may be the Service Rules, the office superintendent stated clearly before the Tribunal that his conditions of service would change. Therefore, he had enough apprehension which justified his action in not joining at Lilluah. The subsequent refusal of the management to employ him at the head office does not appear to be justified in view of the statements made by the office superintendent, which statement would ordinarily mean that the management was inclined to give a go by to the Service Rules. Therefore, I agree with the Tribunal below that the subsequent refusal to employ Amiya Kumar Sen Gupta in the head office was not justified because of the statements made by the office superintendent which cannot be taken to be irresponsible statement. I, therefore, agree that he is entitled to all payments and remunerations in terms of the order of the Tribunal. But the finding regarding the mala fide nature of the order for transfer is set aside. He is granted 15 days'' time to join at Lilluah.

The Rule is made absolute to the aforesaid extent. The order of the Tribunal is modified to the aforesaid extent. No order for costs.