Ravichandran G. vs Presiding Officer, Labour Court and Another

D. Murugesan, J.—This writ appeal is directed against the order of the learned single Judge in allowing the writ petition. The appellant

(hereinafter shortly referred to as the workman) was employed as a salesman in the second respondent- management of Lakshmi Mills Ltd.,

Coimbatore (hereinafter shortly referred to as the management). The workman was issued with a show-cause notice, dated July 29, 1988

containing three charges, viz. :

(1) that he did not work on July 25, 1988 during work hours;

(2) that he forcibly took away the attendance register and attempted to sign without submitting leave application; and

(3) that he tried to attack the Manager with scissors.

The workman denied the charges. He also alleged enmity between him and the Manager and consequently the victimisation. Not satisfied with the

explanation, enquiry was ordered and the enquiry officer found that all the three charges were proved. The workman was issued with a second

show cause notice. Though a reply was submitted by the workman, he was dismissed from service on January 21, 1989. The dispute raised by the

workman in I.D. No. 503 of 1989 was adjudicated by the Labour Court, Coimbatore and by award, dated December 11, 1992, the workman

was ordered to be reinstated in service with back wages and other attendant benefits. The management filed the writ petition before this Court,

which was allowed by order, dated November 2, 2000.

According to the workman, only due to the enmity between him and the Manager and to victimise him, he was issued with the charges. To

support the said plea, he would contend:

(1) that he insisted the Manager by name P. Narayanasamy to account for the shortage of 425 metres of cloth for the year 1987-88 and

(2) that on July 16, 1988 just two weeks prior to the issue of chargememo, the workman complained to the management against the Manager, as

he was carrying on chit business in the showroom premises without the permission of the management and that on coming to know of the

unauthorized conduct of the chit business, he insisted repayment of three instalments paid by him to the Manager. Infuriated by the above, the

Manager submitted a report to the management with false allegations, which resulted in the issuance of charge memo.

On the contrary, it was the case of the management that the shortage of 425 meters of cloth was in fact accounted and verified by the auditor

and the allegation was, therefore, false. Secondly, the chit business run by Narayanasamy was in no way connected with the charges.

Before the enquiry officer, the management examined four witnesses, viz., M.W. 1 to M.W.4 and on consideration of evidence of those

witnesses along with the documents marked in Exhibits Ml to M3 the enquiry officer found the charges were proved. On the above rival pleas, the

dispute was adjudicated by the Labour Court. According to the plea of the workman as to the victimisation, the Labour Court disbelieved the very

basis of the charges as well as the evidence let in on behalf of the management and ultimately found that the charges were only foisted on the

workman. With such findings, the order of dismissal was set aside with consequential directions.

On a challenge to the said award, the learned single Judge found that the Labour Court did not give cogent reasons while it differed from the

findings of the enquiry officer and, in the absence of such reasons, the award cannot be sustained. Holding so, the learned Judge has set aside the

award.

Sri N.G.R. Prasad, learned counsel appearing for the workman, submitted that after Section 11-A was introduced in the Industrial Disputes

Act, 1947 (hereinafter shortly referred to as the Act), the Labour Court is vested with wide powers to appraise the evidence let in before the

enquiry. The Labour Court has rightly exercised such power in coming to the conclusion that the charges themselves were only foisted due to the

enmity and by way of victimisation. Such reason given by the Labour Court would be sufficient to hold that the order of dismissal was bad. In that

event, the learned single Judge is not right in holding that the Labour Court did not give cogent reasons to differ from the findings of the enquiry

officer.

On the other hand, Sri A.L. Somayaji, learned senior counsel appearing for the management contended that it is well established law that once

the enquiry officer holds that the charges are proved, though the Labour Court has the power to reappreciate the evidence, it should give cogent

reasons for disagreeing with the findings of the enquiry officer. He took us to the entire award and submitted that the Labour Court had not even

considered the evidence of M.W. 1 to M.W. 4 and did not give any reason as to why it did not agree with the evidence and the consequential

findings of the enquiry officer. In the absence of such reasons, the award must fail.

How far the Labour Court was right in approaching the issue and in coming to the conclusion that the charges themselves were foisted on the

workman only to victimise him is a matter for consideration by us. The power of the Labour Court/Tribunal to adjudicate a dispute was little

different till Section 11-A was introduced in the Act on December 15, 1971. In fact the powers of the Tribunal to interfere in the management

decision to dismiss, discharge or terminate the services of a workman came up for consideration before the Supreme Court in Indian Iron and

Steel Co., Ltd. and Another Vs. Their Workmen, . The Supreme Court has held that the management of a concern has the power to direct its own

internal administration and discipline, but such power is not limited and when a dispute arises, the Tribunal has the power to see whether the action

of the management in either terminating or dismissing or discharging the workman was justified and to give appropriate relief. The Supreme Court

has further held that in the case of dismissal, the Tribunal was considered as not a Court of Appeal and cannot substitute its own judgment for that

of the management. The power to interfere in the order of dismissal on the ground of misconduct was very limited only to the extent:

(i) when there is a want of good faith;

(ii) when there is victimisation or unfair labour practice;

(iii) when the management has been guilty of a basic error or violation of principles of natural justice; and

(iv) when on the materials, the finding is completely baseless or perverse.

After the above judgment and during June, 1963, the International Labour Organisation recommended that a worker aggrieved by the

termination of his employment should be entitled to appeal against the termination among others, to a neutral body, and that such neutral body

should be empowered to examine the reasons given in the termination of employment and the other circumstances relating to the case and to

render a decision on the justification of the termination. The International Labour Organisation further recommended that the neutral body should

be empowered, if it finds that the termination of employment was unjustified, to order that the worker concerned, unless reinstated with unpaid

wages, should be paid adequate compensation or afforded some other relief. The said recommendation was considered by the Government, and

incorporated the same in the statement of objects and reasons, while introducing Section 11-A in the Act. In fact, in the statement of objects and

reasons, it is also stated as follows:

In accordance with these recommendations it is considered that the Tribunal''s power in adjudication proceedings relating to discharge or

dismissal of a workman should not be limited and that the Tribunal should have the power, in cases wherever necessary, to 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 circumstances of the case may require. For this

purpose, a new Section 11-A is proposed to be inserted in the Industrial Disputes Act, 1947.

The law prevailed over the power of the Tribunal in adjudicating the proceedings relating to discharge or dismissal of a workman prior to the

insertion of Section 11-A and the power of the Tribunal to go into the same question after the insertion of Section 11-A came up for consideration

before the Supreme Court in The Workmen of Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. Vs. The Management and Others, . After

analysing the various judgments on the issue, the Supreme Court ultimately laid down the following principles, in the judgment, which read as

follows at p. 293 of LLJ:

(1) The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but if a dispute is

referred to a Tribunal, the latter has power to see if action of the employer is justified.

(2) Before imposing the punishment, an employer is expected to conduct a proper enquiry in accordance with the provisions, of the Standing

Orders, if applicable, and principles of natural justice. The enquiry should not be an empty formality.

(3) When a proper enquiry has been held by an employer, and the finding of misconduct is a plausible conclusion flowing from the evidence

adduced at the said enquiry, the Tribunal had no jurisdiction to sit in judgment over the decision of the employer as an appellate body; the

interference with the decisions of the employer will be justified only when the findings arrived at in the enquiry are perverse or the management is

guilty of victimisation, unfair labour practice or mala fides.

(4) Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal, in order to satisfy itself

about the legality and validity of the order, had to give an opportunity to the employer and employee to adduce evidence before it. It is open to the

employer to adduce evidence for the first time justifying his action; and it is open to the employee to adduce evidence contra.

(5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On

the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the

evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of

managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry.

(6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has

been held or after the enquiry conducted by an employer is found to be defective.

(7) It has never been recognised that the Tribunal should straightaway, without anything more, direct reinstatement of a dismissed or discharged

employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.

(8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his action,

should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power to refuse. The giving of an opportunity to

an employer to adduce evidence for the first time before the Tribunal is in the interest of both the management and the employee and to enable the

Tribunal itself to be satisfied about the alleged misconduct.

(9) Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed before a Tribunal for the first time,

punishment imposed cannot be interfered with by the Tribunal except in cases where the punishment is so harsh as to suggest victimisation.

(10) In a particular case, after setting aside the order of dismissal, whether a workman should be reinstated or paid compensation is, as held by this

Court in The Management of Panitole Tea Estate Vs. The Workmen, , within the judicial decision of a Labour Court or Tribunal.

The above was the law as laid down by this Court as on December 15, 1971, applicable to all Industrial adjudication arising out of orders of

dismissal or discharge.

Placing reliance on the above judgment, Sri N.G.R. Prasad, learned counsel for the workman submitted that the Labour Court would be

justified in holding that the issue of charges on the workman is only to victimise him. The Labour Court, in order to arrive at such conclusion,

considered Exhibit M9, viz., the complaint given by the workman to the management against Narayanasamy (MW 1) that he was running a chit

business in the showroom premises without permission and he wanted the three instalments paid by him towards the chit subscription to be

returned and that only in view of the same, the manager has forwarded a note as if the workman has committed the misconduct as alleged in the

charge-memo. The law on the power of the Labour Court to appreciate the evidence and to come to a different conclusion after introduction of

Section 11-A is well settled in the Firestone case (supra). There is no dispute as to the conduct of enquiry. In the event when a proper enquiry has

been held and the finding of misconduct is a plausible conclusion flowing from the evidence adduced from the enquiry, the Labour Court has no

jurisdiction to sit in judgment over the decision of the employer as an appellate body. On the other hand, the Labour Court would be justified to

interfere with the findings when it comes to the conclusion that the management is guilty of victimation. Though four witnesses were examined in the

enquiry, M.W. 1, by name Narayanasamy is the Manager of the showroom; M.W. 2, by name M.S. Gurumurthy is the senior salesman of the

showroom and M.W. 3 and M.W. 4, R. Mani and E. Daniel Mangala Raj respectively, are also the salesmen. In fact they have deposed in favour

of the management to sustain the charges. While considering the evidence of MW. 1 and MW. 2, the Labour Court also considered the fact that

the workman made a complaint on July 16, 1988 against MW 1 the Manager of the showroom as to the conduct of the chit business in the same

premises without the permission of the management and he had also asked the Manager to account for 425 metres of cloth in the year 1986-87. In

so far as the second complaint, the management had explained that the shortage of 425 metres of cloth was accounted and the same was duly

audited. The said issue was not discussed and no finding was rendered by the Labour Court. In so far as the first complaint, the Labour Court had

taken note of the fact that the workman joined as a subscriber in the chit conducted by Narayanasamy in the benami name of M. S. Gurumurthy,

MW. 2. Though he had paid a sum of Rs. 450 towards three instalments, on coming to know that M.W. 1 was conducting the chit business

without the permission of the management and that too in the benami name of MW. 2, wanted to withdraw from the chit and insisted for repayment

of the three instalments paid by him. Followed by the same, the other subscribers also started insisting for repayment. As M.W. 1 did not relent to

the request, the workman gave a complaint on July 16, 1988 to the management with a request to take action against M.W. 1. This has infuriated

the Manager to lodge a false complaint. The Labour Court further considered the fact that when questions were asked as to the conduct of chit

business, both M.W. 1 and M.W. 2 refused to answer on the ground that those questions are not relevant to the charges. The Labour Court found

that such conduct would prove that the charges have direct dealing with the complaint of the workman. The Labour Court also found that though

the complaint was given on July 16, 1988, no action was taken by the management only for the reason that both M.W. 1 and MW. 2 are the

employees in support of the management. The Labour Court also took into consideration of the fact that when admittedly the workman telephoned

to the Manager M.W. 1 and M.W. 2 requested leave for two days, i.e., on July 22, 1988 and July 23, 1988 on the ground that he was not well,

the charge that on July 25, 1988 when the workman reported duty in the morning refused to give leave application as required by MW. 1 cannot

be believed. Based on the above finding, the Labour Court ultimately came to the conclusion that the charges themselves were fabricated and

foisted on the workman at the instance of M.W. 1, the Manager. Therefore, the Labour Court disbelieved the very basis of charges and also

disbelieved the entire case of the management. The Labour Court also did not believe the evidence of M.W. 2, as he was the benami of M.W. 1 in

the conduct of chit business. The Labour Court found that M.W. 3 and M.W. 4 were only salesmen working under M.W. 1, the Manager and

MW. 2, the senior salesman and, therefore they had deposed only in favour of the management. For the said reason, it disbelieved their evidence.

The power to appreciate the evidence includes the power to find out whether the charges themselves were issued only in vindictive manner and

to victimise the workman. The Labour Court has found that the charges themselves were issued only to victimise the workman and consequently

the evidence of M.W. 1 and M.W. 4 were absolutely false and should be ignored. Where two views are possible while appreciating the evidence,

the view of the neutral body shall be preferred to the view of the enquiry officer. The view of the Labour Court is well supported by reasons. The

reason adduced by the Labour Court in our considered view, would be within the realm of its power in appreciating the evidence.

As regards the contention of the management that the Labour Court has failed to give cogent reasons while disbelieving the evidence let in

before the enquiry officer or disagreeing with the findings, it is to be said that when the very initiation of disciplinary proceedings by issue of show-

cause notice containing charges itself is dis-believed on the ground that the same was vitiated to victimise the workman, there is no question of

going into the evidence let in on behalf of M.W. 1 to M.W. 4. In fact the Labour Court had given reasons as to why it did not believe the case of

the management by referring to the enmity between the workman and M.W. 1 and M.W.2 as well as the complaint given by the workman. The

learned Judge has allowed the writ petition only on the ground that the Labour Court has not given cogent reasons in disagreeing with the findings

of the enquiry officer. In view of the findings, the order of the learned Judge cannot be sustained. In this context, it would be also relevant to note

that the power of the Court under Article 226 of the Constitution of India to re-appreciate the evidence is very limited. The said question came up

for consideration before the Supreme Court on more than one occasion. In Indian Overseas Bank Vs. I.O.B. Staff Canteen Workers'' Union and

Another, the Supreme Court while considering the power of the Courts under Article 226 of the Constitution of India has held as follows:

........ the findings of fact recorded by the Tribunal could not be disturbed for the mere reason that the findings were based on material or evidence

not sufficient or credible in the opinion of the Court to warrant those findings as long as they were based upon some material which were relevant

for the purpose or even on the ground that there was another view which could be reasonably and possibly taken.

In view of the above categorical pronouncement of the Supreme Court, we are not inclined to interfere with the award by reappreciating the

evidence. Accordingly, the order of the learned single Judge is set aside and the writ appeal is allowed. No costs. Consequently. C.M.P. Nos.

19812 and 19813 of 2000 are closed.