Gujarat High Court
Agriculture Produce Market Committee, ... vs Manojbhai Dahyabhai Sonagra on 14 July, 2025
NEUTRAL CITATION
C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7719 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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Approved for Reporting Yes No
YES
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AGRICULTURE PRODUCE MARKET COMMITTEE, HALVAD & ANR.
Versus
MANOJBHAI DAHYABHAI SONAGRA
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Appearance:
LD.SR.ADV. MR. B S PATEL WITH MR CHIRAG B PATEL(3679) for the
Petitioner(s) No. 1,2
MS VILAS A PURANI(9038) for the Respondent(s) No. 1
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 14/07/2025
ORAL JUDGMENT
1. Rule, returnable forthwith. Learned advocate Ms.Purani waives service of notice of Rule on behalf of the respondent No.1.
2. This petition is filed under Articles 226 and 227 of the Constitution of India challenging the award dated 24.04.2025 passed by the learned Presiding Officer, Labour Court, Morbi in Reference (LCR) No.12 of 2020, whereby the petitioner was directed to reinstate the respondent with continuity of service and 50% back wages. The learned Labour Court has also directed payment of penal interest at the rate of 18% per annum from the date of the award till actual realization.
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3. Gist of the Case:
3.1. The respondent was initially appointed on a seasonal basis in the APMC on 06.10.1998. On 02.10.2002, the respondent was issued an authority letter on behalf of the APMC, and subsequently, on 18.03.2003, the APMC issued a performance certificate acknowledging the respondent's engagement as a daily wager.
Thereafter, on 15.04.2003, following an interview conducted by the APMC, the respondent was confirmed as an ad-hoc employee on daily wages.
3.2. Subsequently, on 10.05.2004, the respondent submitted an application seeking benefits of permanency, pursuant to which he was appointed to the post of Clerk on an ad-hoc basis on 20.06.2004. This appointment was later cancelled on 15.01.2005. After a fresh interview conducted on 01.07.2005, the respondent was appointed as a permanent Clerk in the APMC. The respondent continued to work in this capacity from 01.07.2005 up to 25.07.2018, as per the rules and regulations of the APMC.
3.3. On 26.01.2018 (Republic Day), though all employees were required to remain present unless granted leave, the respondent remained absent. The absence occurred in the backdrop of an Page 2 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined incident dated 19.01.2018 involving alleged theft of goods belonging to traders. Upto 30.01.2018, the respondent avoided resuming duty and did not furnish any explanation in connection with the complaints received from traders. On 30.01.2018, the respondent submitted an application seeking leave for an indefinite period, citing the aforesaid incident.
3.4. On 31.01.2018, FIR being I-C.R. No.8 of 2018 was registered with Halvad Police Station, District Morbi, for the offence punishable under Section 379 of the Indian Penal Code, based on a complaint filed by a trader of APMC, namely, Jitendrabhai Ramanikbhai Patel. Subsequently, on 10.02.2018, a notice was issued to the respondent, calling upon him to furnish his explanation and remain present on 16.02.2018. The respondent failed to appear and submitted an evasive and vague reply dated 28.02.2018.
3.5. Since the respondent failed to tender a satisfactory explanation in relation to the incident of theft, the elected committee of APMC resolved that they lost confidence in the respondent, as well as honesty and integrity were found to be doubtful. Accordingly, the committee passed a resolution dismissing the services of the Page 3 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined respondent, which was communicated vide order dated 27.02.2018.
3.6. In the context of the FIR, the In-charge Police Inspector, LCB, Morbi, submitted a report dated 20.08.2018 exonerating the respondent from the criminal charges and filing 'C' summary. Thereafter, the respondent made representations to the APMC seeking revocation of the dismissal order. Since no reply was received to such representations, the respondent filed a Reference before the Labour Court, Morbi, seeking quashment of the dismissal order and reinstatement to his original post with all consequential benefits.
3.7. The respondent filed a statement of claim before the learned Labour Court and produced documentary evidence in support of the case. The petitioner appeared and contested the proceedings. Considering the oral and documentary evidence adduced by both sides, the learned Labour Court allowed the Reference and passed the impugned award in favour of the respondent, which is the subject matter of challenge before this Court.
4. Heard the learned senior advocate Mr. B.S. Patel with Page 4 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined learned advocate Mr. Chirag Patel for the petitioner and learned advocate Ms. Rina Kamani for the respondent-workman.
5. Learned senior advocate Mr. B.S. Patel submits that the learned Labour Court has awarded the relief in favour of the respondent without considering the fact that the petitioner had lost confidence in the respondent pursuant to the FIR. It is submitted by the learned senior advocate Mr. B.S. Patel that in the event of loss of confidence, as per the decision rendered by the Apex Court in the case of Karnataka SRTC v. M.G. Vittal Rao, reported in (2012) 1 SCC 442, the respondent can be dismissed without any inquiry or notice. Learned senior advocate Mr. Patel further submits that granting the relief of reinstatement to the respondent amounts to trusting such an employee whose integrity has already become doubtful, which is impermissible in law, as held by the Apex Court in Sudhir Vishnu Panvalkar v. Bank of India, reported in AIR (1997) SC 2249.
5.1. Learned senior advocate Mr. Patel submits that the respondent was drawing a salary of Rs.28,000/- and therefore does not fall under the definition of "workman" under Section 2(s) of the Industrial Disputes Act, 1947. However, without Page 5 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined considering the said aspect, the impugned award has been passed. It is further submitted by the learned senior advocate Mr. B.S. Patel that though sufficient opportunity was granted to the respondent to explain the incident of theft, he failed to do so and instead sought indefinite leave by making an application dated 30.01.2018, which was not granted. Despite that, the respondent remained absent without authorization. Learned senior advocate Mr. Patel submits that granting the relief of reinstatement to such an employee would amount to encouraging indiscipline among other employees of the APMC.
5.2. Learned senior advocate Mr. Patel submits that the award of 50% back wages and 50% ancillary benefits to the respondent amounts to giving premium to the respondent for his indefinite and unauthorized absence, and therefore, the impugned award deserves to be interfered with by allowing the present petition.
5.3. Learned senior advocate Mr.Patel has relied on the following decisions in support of his contentions:
1.Kamal Kishore Lakshamn vs. Management of M/s.Pan American World Airways Inc. and others, reported in AIR Page 6 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined (1987) SC 229
2.Minakshiben Laxmanbhai Paraliya vs. State of Gujarat, SCA No.22681 of 2019
3.J.K.Synthetics Ltd. vs. K.P.Agrawal and Anr., reported in (2007) 2 SCC 433
4.State Bank of India and anr vs. Bela Bagchi and ors., reported in (2005) 7 SCC 435
5. Indian Airlines Ltd. vs. Prabha D. Kanan, reported in (2006) 11 SCC 67
6.AIR India Corporation, Bombay vs. V.A.Rebellow and Anr., reported in (1972) 1 SCC 814
7. Dipti Prakash Banerjee vs. Satyendra Nath Bose National Centre for Basic Sciences, Calcutta and ors, reported in (1999) 3 SCC 60
8.Hari Ram Maurya vs. Union of India and ors, reported in (2006) 9 SCC 167
9.Triveni Engineering and Industries Ltd.
vs. State of U.P. and others, reported in 2020 SCC OnLine ALL 2215
6. As against the same, learned advocate Ms. Rina Kamani appearing for the respondent has submitted that the respondent was serving as a clerk since the Page 7 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined last 20 years and though he served continuously without any complaints, he served satisfactorily with the petitioner. Learned advocate Ms. Kamani submits that there was a misappropriation of funds and goods; he was victimized for being a witness of one ACB complaint, which was filed against the office bearer of APMC. The complaint filed by the complainant, namely, Samirbhai Amratbhai Patel, for making a duplicate receipt of the market fees by forging the document and misappropriating the funds of the APMC to the tune of Rs. 23,19,754/-. The respondent has helped the said complainant by providing all documentary evidence which is part of the record of the APMC.
6.1. With regard to the complaint which is filed against the respondent, as per the submissions made by the learned advocate Ms. Kamani, on a non-judicial stamp of Rs. 50, the complainant has stated to the police officer that his brother had sold the goods, which was not in the knowledge of the complainant, and therefore, due to an inadvertent mistake, the complaint was filed. Considering the statement, the 'C' summary report was submitted, which was accepted by the learned Court.
6.2. Learned advocate Ms. Kamani submits that due Page 8 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined to the ACB complaint, on a number of occasions, the respondent was pressurized, and even life threats were also issued; however, as the respondent did not surrender, a colourable exercise was adopted by the office bearers of the APMC. Learned advocate Ms. Kamani submits that the respondent has provided a detailed explanation in his communication dated 30.01.2018, and as there were more than 200 leaves credited in his leave card, he sought leave for an indefinite period under the apprehension of arrest.
6.3. Learned advocate Ms. Kamani submits that in the said communication, it was informed to the committee that the CCTV of the place be checked and the statement of the person who purchased the alleged theft goods be also taken, so that the truth would reveal on the surface. However, instead of inquiring in a neutral manner, the order of dismissal was passed without providing any sufficient opportunity to defend the case by initiating the disciplinary proceedings.
6.4. Learned advocate Ms. Kamani submits that the learned Reference Court, after considering all the evidence in detail, passed an award granting the relief of reinstatement, back wages, and other Page 9 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined consequential reliefs. Learned advocate Ms. Kamani has also relied on the decision rendered by the Apex Court in the case of Temple Precision Metal Product Pvt. Ltd. vs. E. Palaniswamy, in Special Leave to Appeal (C) No(s). 13880/2022, and submits that the impugned award is passed after assigning detailed reasons; therefore, no interference is required and the petition is required to be dismissed.
7. Having considered the arguments advanced by the learned advocates for the respective parties and on referring to the records, it emerges that the respondent was serving as a clerk since the last 20 years and drawing wages of Rs. 28,000/- monthly. An application was made before the police station by one of the traders on 27.01.2018 for selling the goods lying in the APMC without the consent of the owner. The respondent was called for explaining the allegation made in the application, which was given through an application dated 30.01.2018 addressing the Secretary of APMC, Halvad, claiming to be made a scapegoat in view of the ACB complaint which was filed in the year 2015, where the respondent stood as a witness as well as provided the documentary evidence to the complainant of the ACB complaint regarding preparing the forged receipt claiming the Page 10 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined market fees.
7.1. In that ACB complaint which is registered before the Morbi District Court being ACB Case No.3 of 2023, seven accused were named, including the Secretary, Deputy Secretary, Clerk, daily wager employee, and peon, etc. Though the said complaint was filed on 01.04.2015, the same culminated into FIR in the year 2013. The alleged misappropriation in the said complaint was to the tune of Rs. 23,19,754/-.
7.2. In addition to that, the respondent has requested the authority to get the CCTV footage of the place of incident to establish his innocence, as well as also requested to inquire from the purchaser, who is the owner of Nitin Trading. Thereafter, again, the petitioner was called on 10.02.2018 for personal hearing on 16.02.2018; however, due to the apprehension of arrest, it appears that the respondent did not appear, but had sent the communication through his brother on 20.02.2018.
7.3. It was informed through the communication that as he applied for indefinite leave vide communication dated 30.01.2018, which was granted by the higher authority, he is in the process of taking legal advice as well as in the Page 11 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined process of collecting the evidence to surface the truth, fact remain that he did not remain present before the Secretary of APMC.
7.4. The Resolution was passed by the committee dismissing the present respondent from service in view of the allegation made in the FIR, against which the application and an appeal along with an application for delay condonation were preferred before the Director, Agriculture Marketing and Rural Finance, Gandhinagar.
8. The reliance was placed by the respondent on the 'C' summary report, which was submitted by the LCB Police Station contending that after the registration of the FIR, the efforts were made to arrest the respondent; however, the whereabouts were not known. Therefore, the statement of the complainant, namely, Jitendrabhai, was recorded wherein he stated that his brother, namely, Lalitbhai, had stolen a sack of fennel seeds without the knowledge of the complainant, and therefore, due to mistake, the complaint and the FIR were lodged. The said 'C' summary report was submitted on 20.08.2018 and was accepted by the learned Magistrate and an FIR was filed accordingly. On being exonerated from the charges in view of the 'C' summary report, the respondent has filed the appeal which was ultimately Page 12 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined permitted to be withdrawn on 29.08.2024, as the petitioner has filed the Reference challenging the order of termination on 10.08.2020.
9. It is an undisputed fact that before passing the order of dismissal, no departmental inquiry was initiated, neither the evidence was adduced before the learned Labour Court to justify the order of dismissal. The only contention raised by the petitioner was that the dismissal order was on the ground of loss of confidence, and therefore, the departmental inquiry is not mandatory. It is true that as per the law laid down by the Apex Court, if the termination was resorted to because of loss of confidence, the employee could not be put to greater disadvantage of non-conducting the disciplinary proceedings. However, as per the law laid down by the Apex Court in the case of Sudhir Vishnu Panvalkar vs. Bank of India, reported in AIR (1997) SC 2240, the APMC has to justify the order of termination on the ground of loss of confidence before the learned Labour Court during the course of adjudication of the industrial dispute and the employer is bound to establish that the dismissal order was raised on tangible basis and the power has been exercised by the employer objectively, in good faith, with utmost honesty, and due care as well as prudence.
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10. In the event when such power is challenged on the ground of being a colorable and mala fide act or an act of victimization or unfair labour practice, the employer must disclose to the Court the grounds of his impugned actions so that the same may be tested judicially. To establish that the dismissal is bona fide and the same is immune from challenge, the petitioner has examined the sole witness, namely, Maheshkumar Dharamsinhbhai Patel, below Exhibit 33, who was the Secretary of the APMC. During the course of cross-examination of this witness, it is admitted that prior to termination neither any notice nor the chargesheet was issued and Exhibit 8 communication dated 30.01.2018 was received and the same was replied to by the Chief Minister's Office. It is admitted that the petitioner was called on 16.02.2018; however, he did not appear, therefore, one more date was given, i.e., 20.02.2018, and the decision was taken for the dismissal of the service of the respondent on 22.02.2018, and according to the Resolution, the service of the respondent was terminated on 27.02.2018..
11. It is admitted that the criminal complaint on the basis of which the dismissal order was passed was filed in view of the 'C' summary report submitted by Page 14 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined the concerned police station. It is also admitted that mark 8/13, which is the reply given by the respondent explaining his position, was not tested, and the dismissal order was passed without making payment of any retrenchment compensation. Except for this evidence, no other evidence was adduced to justify the dismissal order by the employer.
11.1.As against the same, the respondent was also cross-examined by the petitioner, wherein he admits that on 31.01.2028, the FIR came to be filed by one Jitendrabhai in the police station. It is admitted by the respondent that on 10.02.2018 and 16.02.2018, notice was replied to, and because of the apprehension of arrest, the respondent did not remain present from 30.01.2018 to 27.02.2018.
12. If one would refer to the FIR which was the basis for dismissal, then it emerges that the allegation of theft of fennel seeds worth Rs.77,000/- was made against the present petitioner on the basis of the information given by the owner, namely, Dilipbhai Patel of Nitin Trading, who states that the present respondent had shifted the bags of fennel seeds from Shed No.2 for the purpose of sale without a bill. As the respondent in his explanation has requested the office bearers of Page 15 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined the APMC to get the CCTV footage of Shed No.2 as well as to implead this Dilipbhai Patel as an accused, as from his own statement it emerges that he purchased the stolen goods from the present respondent. However, instead of examining the case on that line, straightaway the dismissal order was passed on the ground that though the opportunity was given to remain present, the respondent did not avail that opportunity and hence the allegations were believed to be true.
13. In these circumstances, can this dismissal order be said to be a bona fide order and beyond the colourable exercise of victimization? In the opinion of this Court, it would be answered in the negative form. As from day one, the respondent is giving the explanation that the FIR is with regard to the ACB complaint which was lodged in the year 2015 and culminated in the FIR in the year 2023 against the office bearers of the APMC, who have misappropriated the funds of Rs.23,19,754/- by forging the receipts to take the advantage. The respondent has stated that he was the witness in the chargesheet and has provided all the materials to the complainant of the ACB FIR, namely, Samirbhai Amratbhai Patel.
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14. It is submitted by the learned senior advocate Mr. Patel that in the absence of any explanation, the petitioner was not having any other option except to believe the allegation made in the FIR. However, instead of believing the allegation, the employer could have examined the explanation by testing the CCTV footage as well as the statement of the purchaser. In the absence of the same, the case projected of loss of confidence is mere whims and fancy.
15. In the opinion of this Court, the employer has to bring the reasons to the satisfaction of the Court and request the Court to rely upon the reasons to hold that the employer is entitled to lose confidence in the employee. Otherwise, it will leave a chaotic situation and would also give an upper hand to the employer to sack an employee with a simple assertion that he has lost confidence in the employee.
16. This Court has referred the decision relied upon by both the parties as under:
16.1.In the case of M.G. Vittal Rao (supra), it is held that once the employer has lost confidence in the employee and the bona fide loss of confidence is affirmed, the order of punishment must be considered to be immune from challenge.Page 17 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025
NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined Discharging the office of trust and confidence requires absolute integrity, and in case of loss of confidence, reinstatement cannot be directed.
16.2.The Apex Court in the case of Francis Klein & Co. (P) Ltd. v. Workmen, reported in AIR (1971) SC 2414, laid down the test for loss of confidence to find out as to whether there was a bona fide loss of confidence in the employee, observing that (i) the workman is holding the position of trust and confidence, (ii) by abusing such position, he commits an act which results in forfeiting the same, and (iii) to continue him in service would be embarrassing and inconvenient to the employer or would be detrimental to the discipline or security of the establishment. The loss of confidence cannot be subjective, based upon the mind of the management. The objective facts which would lead to a definite inference of apprehension in the mind of the management regarding the trustworthiness or reliability of the employee must be alleged and proved. In that case, the domestic inquiry was found to be legal, and dismissal from service was held to be legal and proportionate to the charges.
16.3.Referring to the decision rendered in the case of Page 18 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined J.K. Synthetics Ltd. (supra), wherein the Apex Court has relied on the decision of Kendriya Vidhyalaya Sangathan, reported in (2005) 5 SCC 124, and held that as far as the question of determining the entitlement of a person to back wages is concerned, the employee has to show that he was not gainfully employed and the initial burden is on him. After and if he has placed material in that regard, the employer can bring on record the material to rebut the claim.
16.4.In the case of Bela Bagchi and others (supra), the Apex Court has held that good conduct and discipline are inseparable from the functioning of every officer-employee of the Bank, and when the employee has acted without authority, even if there is no loss or profit which resulted in the case, acting beyond one's authority is by itself a breach of discipline and misconduct.
16.5.In the case of Indian Airline (supra), it is held that the subjective satisfaction of the Board of Directors was based on the confession of the employees and the evidence collected by the Directorate of Enforcement. The fact that subsequently the employee has been exonerated or had been discharged from the criminal case Page 19 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025 NEUTRAL CITATION C/SCA/7719/2025 JUDGMENT DATED: 14/07/2025 undefined may not be much significant, as the validity of the order must be judged having regard to the facts and situation as obtaining on the day on which the same was passed.
16.6.Similar was the ratio in the case of V.A.Rebellow and another (supra) as well as Dipti Prakash Banerjee (supra).
17. In the considered opinion of this Court, the plea of want of confidence raised by the petitioner was not substantiated before the learned Labour Court. In the absence of any cogent evidence to justify the ground of dismissal, the learned Labour Court has rightly come to the conclusion that the dismissal was not sustainable in law. Accordingly, the learned Labour Court has rightly directed reinstatement of the respondent with 50% back wages and continuity of service. This Court finds no error or perversity in the reasoning or the conclusion arrived at by the learned Labour Court. Hence, no interference is required, and the petition deserves to be dismissed.
18. Resultantly, this petition stands dismissed.
(M. K. THAKKER,J) M.M.MIRZA Page 20 of 20 Uploaded by M.M.MIRZA(HC01407) on Wed Jul 16 2025 Downloaded on : Wed Jul 16 22:39:39 IST 2025