Karnataka High Court
M/S Karnataka Industrial Co-Operative ... vs G.P. Gopal And Anr. on 26 July, 1995
Equivalent citations: [1996(74)FLR2395], ILR1995KAR2912, 1995(5)KARLJ49
ORDER
1. The employer challenges the interim order passed by the Labour Court, Bangalore on IA-I. The worker, a driver working under the petitioner-bank, was dismissed from service after an alleged domestic enquiry held on January 6, 1983. The dismissal ended in a dispute and was referred to the Labour Court. The Labour Court raised preliminary issues on the validity of the domestic enquiry. It is admitted by both the parties that the Labour Court has held that there was no valid enquiry and the finding of the domestic enquiry was set aside on the ground that the enquiry was conducted vitiating the principles of natural justice. Subsequent thereto IA-I was filed by the worker for an interim relief at the rate of 100% of the wages last drawn by him at the time of his dismissal. After hearing the respective counsel for the parties the Labour Court passed the following Order :
"The application is allowed. The second Party is directed to either to reinstate the first party back into service and pay him the last drawn wages by him without extending any other benefits or to pay him 90% of the last drawn wages from the date of interim application pending disposal of this dispute."
The said order is challenged by the employer in this writ petition.
2. One of the contentions urged by the management at the outset is that there is a factual error in the order passed in that it has proceeded on the basis that the employer had not filed objections to the application. The employer's Counsel had produced the copy of the objections filed before the Labour Court along with the writ petition and marked as Annexure - C. After perusal of the order, I feel that the omission on the part of the Labour Court to notice the objections filed by the employer has not in any way adversely affected the merits of the case. Therefore on this ground alone the order need not be set aside and remanded.
3. Sri Prabhakar, learned Counsel for the petitioner, challenged the order on various grounds. According to him, if the order of dismissal is sustained finally on the basis of the evidence let in the doctrine of relation back will apply and the dismissal order will come into force from the date it was originally issued and if so, the worker will not be entitled to any backwages. In such an event, the payment of interim relief cannot also be sustained. He relied on the doctrine of the Supreme Court in P. H. Kalyani v. Air France, (1963-I-LLJ-679). He further contended that if the Labour Court ultimately justifies the dismissal order then it will be very difficult as well to recover the interim compensation paid to the worker by the interim order. He further submitted that if the dismissal of the worker is justified after adducing evidence the worker may not be entitled the very relief by way of backwages and hence the quantum awarded even if justified is excessive.
4. I am of the view that the above cited decision will not come to the aid of the petitioner. In that case the worker was dismissed from service after conducting an enquiry. According to the worker the domestic enquiry held was vitiated by bias. The Labour Court set aside the domestic enquiry holding that the same was vitiated. It may be seen from the judgment that this was not set aside solely on the ground of violation of principles of natural justice. The Supreme Court has adverted to this fact in Para 6 of its Judgment and has stated as follows :
"On the other hand it has been urged on behalf of the respondent that the Station Manager could not in the circumstances of this case be said to have violated the principles of natural Justice because the mistakes were admitted by the appellant and the inquiry was really formal and all that the Station Manager had to do was to recommend what he considered suitable punishment for the misconduct, which had taken place. It is also pointed out that the actual punishment was awarded by the Regional Representative and not by the Station Manager. There is some force in these contentions on behalf of the respondent in the circumstances of the present case. But we do not think it necessary to pronounce finally on the question whether in such circumstances there would be violation of natural justice. It is now well settled by a number of decisions of this Court that it is open to the Tribunal to go into the propriety of an order of dismissal itself. When there is a defect in the domestic inquiry."
It does show that the Supreme Court affirmed the setting aside of the domestic enquiry not merely on the ground of bias but also on merits as well. They proceeded to consider as to what would be the effect if the Labour Court set aside the domestic enquiry on grounds other than the violation of principles of natural justice. In this behalf the following passage is sought to be relied upon by the learned Counsel for the petitioner to sustain his contention that if the domestic enquiry is set aside for whatever reasons and if the dismissal order is sustained before the Labour Court the same would relate back to the date on which the original order of dismissal was passed :
"... The present is a case where the employer has held an inquiry though it was defective and has passed an order of dismissal and seeks approval of that order. If the inquiry is not defective, the Labour Court has only to see whether there was a prima facie case for dismissal, and whether the employer had come to the bona fide conclusion that the employee was guilty of misconduct. Thereafter on coming to the conclusion that the employer had bona fide come to the conclusion that the employee was guilty i.e. there was no unfair labour practice and no victimisation, the Labour Court would grant the approval which would relate back to the date from which the employer had ordered the dismissal. If the enquiry is defective for any reason, the Labour Court would also have, to consider for itself on the evidence adduced before it whether the dismissal was justified. However on coming to the conclusion on its own appraisal of evidence adduced before it that the dismissal was justified its approval of the order of dismissal made by the employer in a defective inquiry would still relate back to the date when the order was made."
From this passage the learned Counsel for the petitioner relies on the underlined sentence to sustain his argument raised in para 3.
This finding according to him reaffirm the law to the effect that whatever be the finding on domestic enquiry the moment the Labour Court enters its finding that the dismissal is valid it relates back to the date of dismissal itself. I am afraid this interpretation is not correct. If the passage is read out as a whole once cannot but come to that conclusion that it relates to the facts of that case. That sentence should be read alongwith the previous sentences and has therefore to be confined to the facts of that case and situation. In that decision their Lordships adverted to the facts of the case and noticed that the employer has held an inquiry and that enquiry was found defective by the Labour Court. Thereafter on coming to the conclusion that the employee was guilty of misconduct it held that the Labour Court would grant the approval from the date the employer passed the order of dismissal. This observation was made exclusively with reference to the facts of that particular case. It is in that background the Supreme Court held that the order related back to the date dismissal. The observation made cannot be read in isolation and applied to all and other set of facts of the case. This is further made clear by subsequent decision of the Supreme Court. We may now advert to the decision of the Supreme Court . Similar contentions were advanced before the Supreme Court (apparently relying on the above passage) to the effect that the moment the dismissal order was justified by the management by adducing evidence subsequently the order of dismissal will relate back. The said argument is dealt with by the Supreme Court at para 13 as follows :
"The second contention must also therefore fail. We would however, like to add that the decision in P. H. Kalyani's case, (supra) is not to be construed as a charter for employers to dismiss employees after the pretence of an inquiry. The inquiry in the instant case does not suffer from defects so serious or fundamental as to make it non est. On an appropriate occasion, it may become necessary to carve an exception to the ratio of Kalyani's case so as to exclude from its operation at least that class of cases in which under the facade of a domestic inquiry, the employer passes an order gravely detrimental to the employee's interest like an order of dismissal. An inquiry blatantly and consciously violating principles of natural justice may well be equated with the total absence of an inquiry so as to exclude the application of the 'relation-back' doctrine. But we will not pursue the point beyond this as the facts before us do not warrant a closer consideration thereof."
This clearly shows what the Supreme Court had in its mind what the consequences would be if the domestic enquiry is set aside as non est applying the principle of natural justice. The Supreme Court had clearly enunciated that when the enquiry is defective the dismissal order would he non est only if the domestic enquiry is set aside on the grounds of violation of principles of natural justice. In other cases the Labour Court would permit the management to substantiate the justness of the order of dismissal by leading evidence. In such an event the dismissal order will come into effect only if ultimately, the management sustains the same before the Labour Court by leading evidence. This is clear from the decision of the Supreme Court reported in (1980-I-LLJ-137) where it stated as follows (Para 150) "Kalyani (supra) was cited to support the view of relation back of the Award to the, date of the employers termination orders. We do not agree that the ratio of Kalyani corroborates the proposition propounded. Jurisprudentially, approval is not creative but confirmatory and therefore relates back. A void dismissal is just void and does not exist. If the Tribunal, for the first time, passes an order recording a finding of misconduct and the breathes of life into the dead shell of the Management's order, predating of the nativity does not arise. The reference to Sasa Musa (1959-II-LLJ-388) in Kalyani enlightens this position. The latter case of D. C. Roy v. Presiding Officer, Madhya Pradesh Industrial Court, Indore (Supra) specifically refers to Kalyani's case Susa Musa's case and holds that where the Management discharges a workman by an order which is void for want of an enquiry or for blatant violation of rules of natural Justice, the relation-back doctrine cannot be invoked. The jurisprudential difference between a void order, which by a subsequent judicial resuscitation comes into being de novo, and an order, which may suffer from some defects but is not still-born or void and all that is needed in the law to make it good is a subsequent approval by a tribunal which is granted cannot be obfuscated."
Thus it is absolutely clear that when the dismissal order is non est on the grounds of violation of principles of natural justice it is a non est order and no amount of evidence can breathe life into the still born order. The doctrine of relation back is then excluded. The same view expressed by the Supreme Court in a later decision :
'The second ground urged in support of the appeal appears to be well founded. The learned Counsel is right in relying on the observations in Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha, (1980-I-LLJ-137), that if the order of punishment passed by the management is declared illegal and the punishment is upheld subsequently by a Labour Tribunal, the date of dismissal cannot relate back to the date of the illegal order of the employer. The appellant is, therefore, entitled to his salary from August 16, 1976 to January 20, 1980 and the entire amount should be paid by the respondent Bank within a period of three months from today. If the amount is not paid or offered to the appellant as directed, the respondent Bank will be liable to pay interest thereon at the rate of 12% per annum for the future period commencing on the date of expiry of three months from today till the same is realised."
In view of the above cited decision when the dismissal of the employee is in violation of principles of natural justice it is a non est order, and when the order is justified by the management it comes into life again only when finally the Labour Court upholds the order.
5. Sri Prabhakar, learned Counsel for the petitioner cited before a certain decisions of other High Courts, which with great respect is not in consonance with the statement of law declared by the Supreme Court. In particular he cited (1992-II-LLJ-872) (Bom). With great respect I am of the view that what is expressed therein is not in consonance with the view of the Supreme Court. A perusal of the judgment does not disclose as on what ground the domestic enquiry was set aside. If as a matter of fact it was set aside on the ground other than violation of principles of natural justice then the order will not be non est and unless it is finally set aside that order stands. If the validity thereof is upheld then the doctrine of relation back will apply and the order will be in force from the date on which the management passed the order. If this be the facts of the case then what is laid down in the said decision is totally in conformity with the view expressed by the Supreme Court. As the complete facts are not discernible from the decision the said decision will not be of much help to the petitioner. The learned Counsel then relied on (1972-II-LLJ-588) (Mys). In that decision the question considered was the effect of a dismissal of an employee without holding a domestic enquiry. The Court considered the question as to what is the effect if the Industrial Tribunal or the Labour Court upholds such dismissal on the basis of evidence adduced by the employer before it. Will the employee be entitled to get his wages from the date of his dismissal till the date of the award of the Tribunal upholding such dismissal on the basis of the evidence adduced ? This question is answered applying the decision of the Supreme Court in P. H. Kalyani v. M/s. Air France, Calcutta, (supra). We have noticed that the Supreme Court therein was considering a case of the domestic enquiry being set aside on a ground other than the violation of the principles of natural justice and the observation referred to above should be understood in that context. This is made clear by the decisions of the Supreme Court and . Hence the decision reported in (1972-II-LLJ-588) (Mys) has to be understood in terms thereof. The learned Counsel also then invited my attention to the decision reported in 1976 33 FLR 7 (Ker). That is a case where the order under challenge was non est having been issued without complying the requirement of principles of natural justice and hence it comes within the purview of (supra) decision. Therefore the observations therein are not of any help to the petitioner. The learned Counsel also invited my attention to the decision reported in (1993-II-LLJ-1022) (Bom.). I am of the view that the observation therein goes against the contention of the petitioner. The said decision states as hereunder :
"The principle that can be deduced from the above cases is that it is the holding of an enquiry or the non-holding of it which will determine the doctrine of 'relation back'. It would depend on facts of a particular case. There may be cases where there may be no enquiry at all before an order of dismissal is passed. There may be cases where there is merely a facade of enquiry, an enquiry in blatant violation of principles of natural justice. In such cases doctrine of relation back will not apply. There may be yet another set of cases where an enquiry is held and an order of dismissal is passed. The enquiry may not suffer from blatant violation of the principles of natural justice but may suffer from some defects which render the order of dismissal bad. In such cases the order of dismissal is not one which is still - born or void. Such an order can be made good by evidence and subsequently approved by the Labour Court/Industrial Tribunal. In such a case the doctrine of 'relation back' will apply. In addition the character of misconduct ascribed to the employee plays an important part in the application of the principle of relation back."
This interpretation will in no way advance the contention of the petitioner. The petitioner then drew my attention to the decision of the Supreme Court in . He relied on the following passage therein :
"But there is no provision either in this statute or in the Act which states that an order of dismissal or discharge is illegal if it is not preceded by a proper and valid domestic enquiry."
It is nobody's case that an order of dismissal is illegal. But the contention is that the said order is arbitrary. If the order is arbitrary, and is passed in violation of principles of natural justice then the order is non est. If it is non est, then certain legal consequences follow. Hence merely because an order is not illegal, these consequences referred to above cannot be avoided.
6. The learned Counsel for the petitioner contends that if the dismissal order passed by the management without complying the requirement of the principles of natural justice is not per se illegal then the observation of the Supreme Court that such an order is a non est order may not be correct. I am afraid this submission may not be correct. The employer has a right to dismiss the employee in an arbitrary and illegal order. But, the right of employer is interdicted and curtailed by various labour legislations. Therefore when the adjudication of the rights of the parties under the industrial law takes place the contention of the employee that the dismissal is arbitrary and illegal in the light of various provisions of the labour legislation is examined. In such a situation even if the order is legal its legality is subject to rights of the worker under the industrial law. The moment the dismissal order is shown as passed even without hearing the worker and it is held to be invalid, then the worker earns a right to claim interim order of compensation as for all purposes the relationship of master and servant is not brought to an end and status of the worker is that of a person to whom the right to work is wrongly denied by the employer.
7. The next contention of the petitioner's Counsel is that quantum of 90% of the last drawn wages as fixed by the Labour Court is excessive. He relied on the decision of this Court reported in 1985 67 FJR 136 wherein this Court stated that the principle of Section 10A of the Industrial Employment (Standing Orders) Act, 1946 can be invoked while quantifying the quantum of interim compensation payable. Sri Gopalagowda, learned Counsel, strongly opposes this contention. According to him if by virtue of the Supreme Court decision the dismissal is non est then the worker could be ordered to be taken back to service. When by operation of law, the order of termination is non est, then for all practical purposes he is a full fledged employee. If that be so, he can be suspended as well. Then if the principle of Section 10A of the Industrial Employment (Standing Orders) Act, 1946 is extended the workman becomes a suspended employee facing enquiry. Then going by the Section the employer shall pay the worker the subsistence allowance at the rate of 50% of the wages earned by the workman immediately from the date of suspension for the first six months and thereafter 75% for the remaining period of suspension. The question then would be what is the notional date of suspension. When the Tribunal finds that the dismissal order of the worker is non est then he is deemed to be a full fledged employee and the deemed suspension could take place only thereafter. If that be so, he can be deemed to have been placed under suspension when the management files statement denying the claim of the worker for interim order. Because, it is only on that day the employer again exercises his right to deny the benefit of employment to the worker. This can only be by suspending the worker. If that is the position I am afraid the petitioner would be in a worse position than he is now placed. The worker will have to be paid much more than 90% as last drawn wages as awarded by the Labour Court.
8. It may be noticed that by virtue of the dictum of the Supreme Court , (1980-I-LLJ-137) and it is clear that as this is a case where the worker has been dismissed without complying the requirement of principles of natural justice the doctrine of relation back will not apply; in such an event the worker is entitled to full wages from the date of dismissal till the employer justifies the dismissal by evidence adduced. This may be on the date of the final order in the reference. Therefore, if the employer is called upon to pay 90% of the last drawn wages there is no question of recovering the same from the worker, as the Tribunal will be bound to award full wages to the worker for the period from the date of dismissal a till the award is passed, I find no error on law in the order passed by the Labour Court on IA - I. This Writ Petition is hence dismissed without costs.