Gujarat High Court
Bharat Co-Operative Bank Ltd. And Anr. vs K.L. Baria, Judge, Labour Court And Anr. on 20 November, 1997
Equivalent citations: (1998)1GLR850
Author: H.L. Gokhale
Bench: H.L. Gokhale
JUDGMENT H.L. Gokhale, J.
1. These two writ petitions are filed to invoke the writ jurisdiction of this Court under Arts. 226 and 227 of Constitution to challenge orders passed by the Industrial Court at Vadodara. These petitions raise the following question :-
When an employer chooses to dismiss or discharge his employees without giving them an opportunity of being heard and when the employees challenge that order by raising a dispute in the Labour Court, whether during the pendency of that proceeding, the employees would be entitled to receive an amount equivalent to the subsistence allowance.
2. The facts leading to these two petitions are as follows :-
The first petitioner in both these petitions is a Co-operative Bank operating in the local area of Vadodra city. The second and petitioner is its Manager. The relationship between the first petitioner Bank and its employees is governed under the Bombay Industrial Relations Act, 1946 (hereinafter referred to as "B.I.R. Act, 1946").
3. The respondent No. 3 in Spl. C.A. No. 6026 of 1996 (one Mr. Nitin Patel) is working as a peon and the respondent No. 4 therein (one Sri Jagdish Sheth) is working as Clearing Clerk in Fatepura Branch of the first petitioner Bank. It was alleged by the petitioner that a cheque dated 23-1-1996 for Rs. 41,360/- which was meant for a third party was got credited by the respondent No. 3 in the Current Account of his father with the active connivance of the respondent No. 4.
The petitioners, therefore, discharge respondent Nos. 3 and 4 from their services straightaway by issuing the order dated 16-2-1996. That order is in Gujarati. The last five sentences of that order read as follows :-
"Thus, since you have acted in breach of trust and dishonestly with the Bank, the Bank has lost faith and confidence in you. Since it is not desirable to continue you in the Bank service in the wider interest of the Bank, the Board of Directors have passed the resolution and it is decided to relieve you from service forthwith. Accordingly, on the close of your working hours on 16-2-1996, you are removed from your service.
Since you have lost the faith and confidence of the Bank no Departmental Inquiry is necessary. In spite of that, if necessary, on the appropriate occasion arising, we will lead necessary evidence and prove your misconduct."
4. The respondent Nos. 3 and 4 denied these allegations and they challenged this order of termination by filing Spl. C.A. No. 1357 of 1996 through their representative Union, namely, Gujarat Bank Workers Union. That petition came up for consideration before me. Mr. Mansuri, learned Counsel appearing for the workmen in this matter appeared for the Union in that matter also. Similarly. Mr. B. S. Patel learned Counsel appearing for the petitioner-Bank in this matter appeared for the Bank in that matter. Mr. Mansuri denied that the two employees were responsible for whatever that had happened but alternatively submitted that in any case, it was not something for which the employees were required to be removed without being given an opportunity to defend the charge against him. He submitted that this removal was violative of the Standing Orders which made holding of the inquiry mandatory. He submitted that if the employer did not want the employee to remain in active service, he could be suspended pending inquiry and in that case, he would receive subsistence allowance, but he could not be discharged from service straightaway. Mr. Patel, learned Counsel appearing for the Bank submitted that the Bank was not amenable to the writ jurisdiction and in any case, the workers had a remedy to approach the Labour Court under the B.I.R. Act, 1946 and to seek appropriate interim relief, if they were so entitled. Inasmuch as the workmen do have a remedy under that Act, I did not entertain that petition. Mr. Mansuri submitted that in the eventuality of the workmen approaching the Labour Court, they should be entitled to receive the subsistence allowance during pendency of the proceedings before the Labour Court. He relied upon the observations of the Hon'ble Supreme Court in Fakirbhai v. Presiding Officer (AIR 1986 SC 1168) in his support. As against that Mr. Patel relied upon the order of the Hon'ble Supreme Court reported in M/s. Anup Engineering Ltd. v. Shreenarayan Kanaiyalal, 1995 (I) GLH 345 (SC), interfering with the order of Division Bench of this Court in Shreenarayan v. M/s. Anup Engineering, reported in 1995 I CLR 1118 and contended that subsistence allowance could not be awarded. In view of this controversy, it became necessary to clarify the position in this behalf although the petition was not being entertained. By my order dated 17-4-1996 relying upon the observations of the Hon'ble Supreme Court in Satyaveer Singh v. Union of India, AIR 1986 SC 555 and Delhi Transport Corporation v. D. T. C. Mazdoor Congress, AIR 1991 SC 101, I held that the normal rule is that an inquiry must be held, unless it is impossible to hold it due to violence etc., and further held that if there is no such difficulty and the employee is dismissed or discharged, he will be entitled to claim subsistence allowance during the proceeding in the Labour Court since he cannot be made to starve for no reason. It is learnt that the said order of mine has been carried in appeal in L.P.A. No. 1241 of 1996 on the ground that when the petition was not entertained, no such observations could be made. That appeal is admitted, however, no stay of the order passed in Spl. C.A. No. 1357 of 1996 was granted.
5. It appears that the respondent Nos. 3 and 4 subsequently filed a proceeding under Secs. 78 and 79 of the B.I.R. Act, 1946 being B.I.R. (T) Application Nos. 4 and 5 of 1996 respectively. In those applications, they moved interim applications for a direction to pay subsistence allowance. The learned Judge of the Labour Court at Vadodara after hearing both the parties granted the interim applications under Section 119-D of the Act by passing an order on 9.6.1996. The petitioner-Bank carried that order in revision by filing Revision Application Nos. 2 and 3 of 1996 before the Industrial Court and those two applications came to be dismissed by order dated 6th August, 1996. Being aggrieved by these two orders, the Bank has filed Special Civil Application No. 6026 of 1996. The respondent No. 1 to this petition is the learned Judge of the Labour Court, whereas the respondent No. 2 is the Member of the Industrial Court, and the respondent Nos. 3 and 4, as stated above, are the employees concerned. This petition came up for consideration on 11.9.1996 before Ms. Rekha Doshit, J. who admitted it and granted interim relief in terms of prayer Clause 8(b) of this petition, thereby the implementation of the impugned order was stayed. The respondent No. 4 has filed exhaustive reply to this petition.
6. The respondent No. 2 in Special Civil Application No. 7905 of 1996 is one Shri Shantilal Patel, another such employee of the first petition-Bank who is working as Senior Clerk-cum-Passing Officer. He is employed in the Bank for over 13 years. It was alleged against him that he had passed cheques drawn by his wife and himself in excess of the permitted overdraft limit. Hence by order dated 5th April, 1995 issued by the first petitioner-Bank, he was also discharged from service. The order is in Gujarati. That last few lines thereof, when translated in English, read as follows :-
"Thus, you have lost trust and confidence of the Bank and in the circumstances, it is not in the wider interest of the Bank to continue you any further in the services of the Bank. Therefore, by passing a resolution, the Board of Directors of the Bank have decided to discharge you from the service with immediate effect by giving you all the benefits other than gratuity.
In the circumstances, by issuing this order, you are hereby discharged simpliciter by giving you one month's notice pay - retrenchment compensation and other due pay".
The Respondent No. 2 challenged his termination by filing T. Application No. 14 of 1996 before the Labour Court at Vadodara. In that matter, he moved two interim applications for either being permitted to join on duty or being paid subsistence allowance. Those interim application Nos. 11 and 16 of 1996 came to be rejected by another Judge of the labour Court by his order dated 8th July, 1996. The respondent No. 2 filed a revision application bearing Revision Application No. 5 of 1996 against that order and moved an interim application No. 3 of 1996 therein. That interim application came to be allowed by the Member of the Industrial Court by his order dated 7th August, 1996, wherein he directed the payment of subsistence allowance at the rate of 75% of the wages for three months and disposal of the proceeding in the Labour Court expeditiously by 30.11.1996. Being aggrieved by that order, the petitioner-Bank has filed Spl. C.A. No. 7905 of 1996. The respondent No. 1 in that petition is the Member of the Industrial Court, whereas the respondent No. 2 is the employees concerned.
7. This Special Civil Application came up before my brother Calla J., on 26-3-1997 when he admitted it and fixed it for final hearing on 7-4-1997. The learned Judge, by same order, observed that in the meanwhile the employees were expected not to press for prosecution of the officers of the petitioner-Bank (for non-payment of the subsistence allowance).
8. There were some other developments in the Labour & Industrial Courts in the matter concerning this Shantilal Patel. The petitioner-Bank was neither complying with the order to pay subsistence allowance, not was it proceeding with the main case in the Labour Court. Hence, by his order dated 5-11-1996, the Industrial Court directed the Labour Court to take necessary steps for implementation of the order concerning subsistence allowance. The petitioner filed another Special Civil Application No. 9516 to challenge that order and obtained an ad interim stay thereof. That petition was listed with this matter. The matters appeared before my brother J. N. Bhatt, J. from time to time but the petitioners were not present. Bhatt, J. passed the following order on 6-12-1996 :
"The matters were called out more than once during the first half of the day. Nobody appeared when the matters were called out again. It was later on stated by, learned Advocate Mr. Variava for learned Advocate Mr. B. S. Patel that the matters may be adjourned at this stage. The learned Advocate for the workman is coming from outside. He painfully submitted that on account of the absence of the learned Advocate for the employer, he has gone back unattended five times. In the circumstances, the matters are hesitatingly adjourned with a condition that the petitioners shall deposit an amount of Rs. 1500/- in this Court within a period of three days from today. After the amount is deposited, office will notify the matters and further order will be passed".
This Special Civil Application No. 9516 of 1996 was subsequently withdrawn.
9. The petitioners were not paying the subsistence allowance, hence the employee Shantilal Patel was required to move applications in the Labour Court and they were carried in revision Industrial Court. In one such further order dated 17-12-1996, the Industrial Court was pleased to direct payment of subsistence allowance for a further period of three months. This order was challenged by the petitioners by filing one more petition being Special Civil Application No. 1616 of 1997, and obtained an ad interim stay thereof. However, this petition was also withdrawn on 26-3-1997 contending that Special Civil Application No. 7505 of 1996 would take care of the submissions made in Special Civil Application No. 1616 of 1997.
10. My brother Calla, J., had fixed Special Civil Application No. 7905 of 1996 for early disposal. He, however formed an impression that the petitioner were not proceeding with the matters. Therefore, by this order dated 18-7-1997, he relieved the employees of the undertaking imposed on them while admitting the matter. It reads as follows :
"No one appears for the petitioners even in the second round, although Mr. M. S. Mansuri is present on behalf of respondent.
Put up on 28-7-1997. Mr. Mansuri stands relieved of the undertaking given by him".
11. It appears that the petitioner-Bank was not proceeding with the main matter expeditiously. It was taking an obstructing attitude while recording evidence nor was it paying the subsistence allowance. The Industrial Court, therefore, by its order dated 29-8-1997 extended the time to complete the proceedings upto 15-9-1997 but that was on the footing that petitioner will clear the arrears of subsistence allowance before that date, failing which the petitioner will not be entitled to prove the misconduct in Court. The learned Judge also gave directions in that order dealing with the obstructive attitude of the petitioner. That order is sought to be challenged by filing Civil Application No. 8411 of 1997 in this pending Special Civil Application No. 7905 of 1996. This Civil Application No. 8411 of 1997 seeks to challenge the order dated 29.9.1997 by way of seeking amendment in the main Special Civil Application 7905 of 1996. Civil Application No. 8466 of 1997 is filed for early hearing of this Civil Application No. 8411 of 1997. Both these Civil Application No. 8411 of 1997 and Civil Application No. 8466 of 1997 are off-shoots of the main matter and hence they are being disposed of together with the main matter.
12. Since Special Civil Application No. 7905 of 1996 was directed to be disposed expeditiously, it was placed on the Board earlier. When it reached before me and when it was seen that Special Civil Application No. 6026 of 1996 was a connected matter, and pending, both were taken up for hearing together. Mr. K. S. Nanavati, Senior Advocate, Mr. B. S. Patel and Mr. Shah have made submissions for the petitioners from time to time whereas Mr. Mansuri with Ms. Desai has made submissions for the employees. Both the group of Advocates have taken me through the material on record and the relevant authorities. Finally on 23-10-1997, the arguments were completed, but in view of the ensuring Diwali vacation, the case was adjourned for verdict to 20-11-1997. In the meanwhile, there was no interim protection available to the petitioner in Special Civil Application No. 7905 of 1996 in view of Calla J.'s order dated 18-7-1997 relieving the employees of their undertaking. However, in spite of the fact that the employees are being paid subsistence allowance, in view of the suggestions made by me, Mr. Mansuri has been fair enough not to proceed prejudicially with the matters in the Labour Court.
13. Before I go to the rival contentions raised by the learned Counsels for both the sides, it is necessary to refer to the initial controversy raised by the petitioner. It was sought to be contended by Mr. Nanavati, learned Counsel appearing on behalf of the petitioner-Bank, that there was no provision for payment of subsistence allowance under the Standing Orders of the Bank. However, what is material to note is that plea was not raised earlier when Special Civil Application No. 1357 of 1996 came up for consideration before me. If that was the factual position, nothing prevented Mr. B. S. Patel appearing for the Bank in canvassing according in that matter. That petition on behalf of the two employees, now concerned in Special Civil Application No. 6026 of 1996, was not being entertained and they were being relegated to initiate proceedings before the Labour Court. Since their right to receive subsistence allowance during the proceedings before the Labour Court was being disputed, a clarification in that behalf was sought by Mr. Mansuri, learned Counsel appearing on behalf of the employees and, after looking into the authorities in this behalf, I observed in paragraph 9 as follows :
"It is true that with termination of service employer-employee relationship comes to an end and an employer may contend that there is no question of paying even subsistence allowance thereafter. However, when in a normal circumstance, the employer dispenses with an inquiry and denies subsistence allowance until misconduct is proved, that right to receive the said amount despite termination will have to be construed as surviving and available to the employee and the Labour Court will only be directing the employer to discharge his obligation until the misconduct is proved in the Court."
14. That apart, what is relevant to note is that the petitioner-Bank is covered under the B.I.R. Act, 1946. Under the provisions of the B.I.R. Act, it is mandatory for an employer to get the Standing Orders certified from the Commissioner of Labour as provided thereunder. Section 35(1) of the B.I.R. Act casts a responsibility on the employer to submit the Draft Standing Orders for approval of the Commissioner. It reads as follows :
"35. (1) Within six weeks from the date of the application of this Act to an industry, every employer therein shall for approval to the Commissioner of labour in the prescribed manner Draft Standing Orders regulating the relation between him and his employees with regard to the industrial matters mentioned in Schedule I :
Provided that where an undertaking in an industry is started after the application for this Act to such industry, the Draft Standing Orders shall be submitted within six months of the starting of the undertaking."
A mechanism to settle them is provided under the B.I.R. Act. Section 40(1) provides that Standing Orders settled under this Chapter, or where there are no such Standing Orders, the Model Standing Orders applicable under Section 35(5) shall be determinative of the relationship between the employer and his employees in relation to all industrial matters specified in Schedule I to that Act. Section 35(5) provides that until the Standing Orders in respect of an undertaking come into force after their settlement, the Model Standing Orders, if any, notified in respect of the industry shall apply to that undertaking. Now what is further relevant to note is that Schedule I to the B.I.R. Act lists the number of industrial matters on which provisions have to be made under the Standing Orders. Item 11 reads as follows :
"Item 11. Punishment including warning, censure, fine, suspension or dismissal for misconduct, suspension pending inquiry into alleged misconduct and the acts or omissions which constitute misconduct."
In the present matter, to put the entire issue beyond controversy, the employees concerned in Special Civil Application No. 6026 had produced before the Labour Court a copy of the Standing Orders framed by the Labour Commissioner as applicable to the banking industry. The document is in Gujarati and the sub-para below para 27 thereof records that, for the undertakings in the banking industry, the Labour Department of the Government of Gujarat had framed the Standing Orders under Section 36 of the Act under Resolution dated 22-4-1964 as modified by Resolution dated 11-5-1971 and as entered in Register on 8-5-1972. Not only that the employee had also produced a copy of the suspension order issued to one Mukeshbhai Kantilal Patel dated 1-6-1994 which suspended him pending a departmental enquiry and subsequently stated at the end of third paragraph :
"You will be paid suspension allowance as payable".
This letter and the Standing Orders are annexed at page 125-126 to the affidavit-in-reply of Jagdish Sheth in Special Civil Application No. 6026 of 1996 affirmed on 7th September 1996. No rejoinder has been filed to this reply to discharge their burden nor is it shown that petitioners are excluded from the applicability of these Standing Orders, though orally it is sought to be contended that the Standing Orders referred to and annexed to the reply are not applicable and that the Model Standing Order govern the field. The Standing Orders are a matter of record. The primary responsibility in this behalf is that of the employer and the bank was required to controvert this document by producing documentary evidence. They cannot be permitted to shift their stand from occasion to occasion and from employee to employee. As stated above, nothing prevented them from pointing out this when earlier referred Special Civil Application No. 1357 of 1996 was heard and decided on this very issue. If that was so, again, nothing prevented them from denying subsistence allowance to Mukeshbhai Kantilal Patel. The petitioner bank is a co-operative bank functioning for last over 50 years in the local area of Vadodara city. Co-operative Banks are very much covered under the B.I.R. Act and it was expected to put the record straight which they have not done. In the circumstances, it has got to be accepted that the Standing Orders annexed to the affidavit-in-reply as certified by the Labour Commissioner for banking industry are the ones which are applicable to the petitioner bank.
15. These Standing Orders provide for misconducts under Clause 21, punishments for the misconduct under Clause 22 and payment of subsistence allowance during the period of suspension under Clause 22(5). Amongst the misconducts that are enumerated, Clause 21(4) is as follows :
"To indulge into theft, dishonesty or misappropriation in connection with the properties of the bank or its customers or to interfere therewith or to attempt to do so."
Clause 22(5) when translated into English reads as follows :
"Those employees against whom steps are taken under sub-clause (c) of clause (1) of this Standing Order will be liable to be suspended during the course of inquiry and until the same is completed, for the periods deemed proper in the facts and circumstances of case or during the period when the employee might have sought time to give explanation. The order of suspension will come into force immediately on informing the employee. Having considered the explanation or after the inquiry if it is decided not to take steps under sub-clause (c) of clause (1), then the employee will be deemed to be on duty and for the entire period of suspension he will be paid full wages and he will be entitled to receive all the benefits. During the period of suspension, for the first 21 days he will be paid 50% of the basic pay + 50% of the dearness allowance and 100% of the house rent allowance. From the 22nd day, he will be paid 50% of the basic pay and all other allowances in full. No employee will remain suspended beyond the period of three months."
Sub-clause (1)(c) of Clause 22 provides for dismissal from service without notice by an order under the signature of the Manager or relieving him by reducing the punishment under Standing Order 20.
Mr. Mansuri submits that the orders of termination issued to the three employees in these two petitions clearly spell out misconduct of the type under Clause 21(4). The employee in Special Civil Application No. 6026 of 1996 were alleged to have diverted money meant for a third party to the account of the farther of Nitin Patel (respondent No. 3 therein). In Special Civil Application No. 7905 of 1997, the employee Shantilal Patel is alleged to have passed cheques drawn by his wife and himself in excess of the permitted overdraft limit. In fact, the termination letters allege that the said employees have acted in breach of trust and dishonesty with the bank. Mr. Mansuri submits that, in the circumstances, the employees has a right to defend the allegations made against them. If, according to the management, the allegations did not required them to be continued in service during pendency of the inquiry, they could be suspended from service but, in that case, they were entitled to receive subsistence allowance as provided under the Standing Orders.
16. Mr. Mansuri further submitted in this behalf that contravention of the Standing Orders was made an offence under Section 107 of the B.I.R. Act. Not holding an inquiry (though specifically the misconduct was covered under the Standing Orders), would also amount to introducing an illegal change in the service conditions of the employees. Effecting an illegal change is also made an offence under Section 106 of the B.I.R. Act. Mr. Mansuri submitted that the employees had their own defence on merits with respect to the allegations, but even taking the allegations as they stood, it was necessary to investigate them and hold the employees guilty which was the responsibility of the employer. This was not the first time that in any bank or in this bank such misconducts were being alleged. If for such misconducts the inquiries are to be dispensed with and the employees are straightway discharged from their services, it would amount to denying the opportunity to defend to the employees in the banking sector. Hence, if the employer choose to dispense with an inquiry which is a mandatory provision, the employees cannot be made to suffer. In such a situation, the Labour Court cannot be left powerless and it is not. The Court which is constituted to do justice between the parties is required to see that no unnecessary harm is caused to either of the parties during the course of litigation. It was open to the employer to suspend the employee in which case the employee would have been kept out of job of the employer. It would have served the interests of the employer and the employee would have also received subsistence allowance until the charge was established. However, if the employer chooses not to hold inquiry and straightaway dismisses the employee, this protection to receive the subsistence allowance until the charge is proved has got to be extended to the employee. In a situation like this, it is necessary that the Court should grant an amount equivalent to subsistence allowance during the pendency of the proceeding in the Labour Court. Otherwise, the provision for subsistence allowance will be made nugatory and the employees will be made to starve though the charge is yet to be proved. Section 119-D of the B.I.R. Act employers the Labour Court to pass such interim orders as it may consider just and proper and an order granting amount equivalent to subsistence allowance would certainly fall in such a category.
17. Mr. Nanavati, learned Counsel appearing for the petitioner on the other hand submitted that this was a case of loss of confidence and in such an event the employer cannot be denied the authority to terminate the employee forthwith. He has relied upon the judgment of the Supreme Court in the case of Somnath Sahu v. State of Orissa reported in 1969 (19) FLR 135 : [1969 (3) SCC 384], in this behalf and contended that where there is a contractual right to terminate service without assigning any reason, by giving one month's notice or one month's salary in lieu of notice, and the removal of the employee was effected in accordance therewith, the termination could not be faulted. As far as this part is concerned, Mr. Mansuri rightly pointed out that, as against this judgment, a constitution bench of the Hon'ble Supreme Court in a subsequent judgment in the case of Delhi Transport Corporation v. D. T. C. Mazdoor Congress, reported in AIR 1991 SC 101 has held that even where there are regulations which provide for removal from service without assigning any reason and without holding any inquiry, the same are bad in law and they have come to be struck down as violative of Art. 14 of the Constitution of India. A similar view was taken by P. B. Sawant, J. when he was in Bombay High Court in S. S. Muley v. J. R. D. Tata, reported in 1980 Lab IC 11 where he considered at great length the relevant regulation of the Air India Employees Service Regulations which conferred similar power of summary termination and the learned Judge struck down that regulation. Discharging or dismissing a workman not in good faith but in colourable exercise of employer's right in utter disregard of principles of natural justice or with undue haste have come to be statutorily recognised as unfair labour practice even for private sector industries. In the instant case, there were Standing Orders which made it mandatory for the employer to hold inquiry before the employee was dismissed.
18. As far as the submission with respect to loss of confidence is concerned, it has been already held by the Hon'ble Supreme Court in L. Michael v. M/s. Johnson Pumps India Ltd., reported in 1975 (30) FLR 140 : [1975 (1) SCC 574], as follows :
"The Tribunal has the power and, indeed, the duty to x-ray the order and to discover its true nature, if the object and effect, of the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated. But if the management, to cover up the inability to establish by an enquiry, illegitimately but ingeniously passes an innocent-looking order of termination simpliciter, such action is bad and is liable to be set aside. Loss of confidence is no new armour for the management; otherwise security of tenure, ensured by the new Industrial Jurisprudence and authenticated by a catena of cases of the Supreme Court, can be subverted by this no-formula. Loss of confidence in the Law will be the consequence of the loss of confidence doctrine."
Mr. Mansuri also pressed into service the judgment of the Hon'ble Supreme Court in the case of Chandulal v. Management of Pan American World Airways Inc. reported in AIR 1985 SC 1128 wherein the services of a workman were terminated on grounds that the workman was being involved in an act of smuggling, on basis of loss of confidence, without holding any domestic inquiry, the order of termination was vitiated as it did amount to be one with stigma and warranted a proceeding contemplated by law preceding termination. Want of confidence in an employee does point out to an adverse facet in his character as true meaning of allegation is that the employee has failed to behave upto expected standard of conduct which has given rise to a situation involving loss of confidence. In such circumstances termination would not amount to retrenchment and disciplinary proceedings were necessary as condition precedent to infliction of termination as measure of punishment.
19. The plea of termination simpliciter even if permitted under the Standing Orders is also not tenable for the reason that the present case is obviously one involving specific allegation of misconduct and therefore, a departmental inquiry is necessary to prove that allegation and the employee cannot be terminated by simple one month's notice. The power to simply terminate is held to be bad in law as stated in Delhi Transport Corporation's case (supra). Even if such power is there, it cannot be invoked where it is a case of specific allegation of misconduct.
20. With respect to breach of the provisions of the Standing Orders, Mr. Nanavati relied upon the judgment of the Hon'ble Supreme Court in the case of the Rajasthan State Road Transport Corporation v. Krishna Kant, reported in 1995 II CLR 180 (SC) to contend that they do not have a statutory force. However, whether they have a statutory force or not, the very judgment holds that the Standing Orders create statutorily imposed conditions of service. Principle No. 6 summarised by the Hon'ble Supreme Court in para 32 of the judgment clearly provides so. Principle No. 6 reads as follows :
"(6) The certified Standing Orders framed under and in accordance with the Industrial Employment (Standing Orders) Act, 1946 are statutorily imposed conditions of service and are binding both upon the employers and employees, though they do not amount to "statutory provisions". Any violation of these Standing Orders entitles an employee to appropriate relief either before the forums created by the Industrial Disputes Act or the Civil Court where recourse to Civil Court is open according to the principles indicated herein."
21. The next submission of Mr. Nanavati was that the employer's right to terminate employees without inquiry and to prove misconduct in a Court had come to be judicially recognised. He relies upon a number of judgments in this behalf, leading one therefrom being the case of Delhi Cloth & General Mills Co. Ltd. v. Ludh Budh Singh, reported in 1972 (1) LLJ 180. He relies upon Principle No. 1 laid down by the Hon'ble Supreme Court in para 61 of the said judgment which is as follows :
"(1) If no domestic inquiry had been held by the management, or if the management makes it clear that it does not rely upon any domestic inquiry that may have been held by it, it is entitled to straightaway adduce evidence before the Tribunal justifying its action. The Tribunal is bound to consider that evidence so adduced before it on merits and give a decision thereon. In such a case, it is not necessary for the Tribunal to consider the validity of the domestic inquiry as the employer himself does not rely on it."
22. However, Mr. Nanavati ignores the rationale that is behind this ratio. One finds that in the following para at page 196 of the judgment. It reads as follows :
"If it is held that in cases where the employer dismisses his employee without holding an inquiry, the dismissal must be set aside by the Industrial Tribunal only on that ground; it would inevitably mean that the employer will immediately proceed to hold the inquiry and pass an order dismissing the employee once again. In that case, another industrial dispute would arise and the employee would be entitled to rely upon the inquiry which he had held in the meantime. This course would mean delay and on the second occasion it will entitled the employer to claim the benefit of domestic inquiry. On the other hand, if in such cases the employer is given an opportunity to justify the impugned dismissal on the merits, the employee has the advantage of having the merit of his case being considered by the Tribunal for itself and that clearly would be to the benefit of the employee. That is why this Court has consistently held that if the domestic inquiry is irregular, invalid or improper, the Tribunal may give an opportunity to the employer to prove his case and in doing so the Tribunal tries the merits itself. This view is consistent with the approach which industrial adjudication generally adopts with a view to do justice between the parties without relying too much on technical considerations and with the object of avoiding delay in the disposal of industrial disputes. Therefore, we are satisfied that no distinction can be made between cases where the inquiry has in fact been held. We must, therefore, reject the contention that as there was no inquiry in the case it was not open to the respondent to justify the discharge before the Tribunal."
Thus, it is a concession given to the employer to prove the misconduct in the Court so that employee may not be driven to multiple proceedings. If the dismissal from service was set aside only on the ground of absence of inquiry, it would lead to another inquiry at the plant level by the employer and thereafter one more litigation in the Labour Court if the employee was aggrieved. It is to obviate this situation that, as the Supreme Court states, "the Tribunal may give an opportunity to the employer to prove his case and in doing so the Tribunal tries the merits itself". This is not a right but it is a concession with a view to do complete justice.
23. The next submission of Mr. Nanavati is that in the recent judgments the Hon'ble Supreme Court has clarified the legal position with respect to the controversy as to the date on which the order of dismissal would take effect, when the Labour Court after holding that domestic inquiry was defective, reaches the conclusion on the evidence adduced before it that the dismissal was justified. The Hon'ble Supreme Court has held that the order of dismissal takes effect from the date on which it was originally passed and not from the date on which it comes to be subsequently endorsed by the Labour Court. He relies upon the judgments of the Hon'ble Supreme Court in Punjab Dairy Development Corporation v. Kala Singh, reported in 1997 II CLR 385 and P. Thiruvirkolam v. Presiding Officer, reported in 1997 I CLR 1. Mr. Mansuri states that these were all cases of defective inquiries and not those where inquiry was not held. He submits that the judgment of the Supreme Court in D. C. Roy v. Presiding Officer, Labour Court, reported in AIR 1976 SC 1760 (which is under and Act similar to B.I.R. Act, 1946, namely M.P. Industrial Employment (Standing Orders) Act 1961) is required to be considered. This judgment has been considered by the Hon'ble Supreme Court in R. Thiruvirkolam case (supra) and what is held in the latter case after considering the earlier judgment would hold good. Mr. Nanavati submits that whether it is a case of no inquiry or a defective inquiry, the proposition in R. Thiruvirkolam's case (supra) lays down the law. Mr. Nanavati, therefore, submits that, since the employer want to prove the misconduct in Court he ought not to be fastened with the liability to pay the subsistence allowance. He submits that the employer-employee relationship come to an end when the order of dismissal is passed. He submits that it is the prerogative of the employer to take a decision as to whether an inquiry ought to be held or the employee should be dismissed straightaway. Hence, when an employee is so dismissed straightaway, there is every chance that order of dismissal would be confirmed later on and it will relate back. Hence, subsistence allowance should not be directed to be paid in the meanwhile as there is no question of paying subsistence allowance after the order of dismissal.
24. Mr. Nanavati also relies upon the judgment of the Hon'ble Supreme Court in the case of M/s. Anup Engineering Ltd. v. Shreenarayan, reported in 1995 (1) GLH 345 (SC) whereby the Hon'ble Supreme Court had interfered with the judgment of Division Bench of this Court in (Shreenarayan v. M/s. Anup Engineering Ltd) 1995 I CLR 1119. That was a case wherein employees had applied for full wages as interim relief in the Labour Court and on that prayer being rejected they had moved the High Court where the wages had come to be granted. The Hon'ble Supreme Court observed that, since the main issue to be decided in the proceeding before the Labour Court was pending, the interlocutory relief of payment of full wages ought not to have been awarded. On the same analogy, Mr. Nanavati submits that no subsistence allowance should also be awarded by way of interim relief.
25. On this issue what is relevant to note is that, as held by the Hon'ble Supreme Court in the case of Delhi Transport Corporation (supra), holding of inquiry is the rule. Dispensing with the same is an exception. Such an exception existed in the case of Satyaveer Singh v. Union of India, reported in AIR 1986 SC 555 where the Hon'ble Supreme Court held that dispensation of an inquiry will be valid. That was a case wherein the departmental inquiry was impossible due to violence. What is material to note is that the Anup Engineering case (supra) was also one where there was atmosphere of gherao, terror and there was an apprehension about safety of property of the company and the customers and, as reported in the very first para of the judgment of the High Court, it was an instantaneous order of dismissal and then an application was filed by the employee for full wages as interim relief in the Labour Court. This is quite a different situation. This is a situation where an inquiry is just not possible and in that case the employer will be within his right to dispense with the same and then prove the misconduct in Court. Unless there are such unsurmountable difficulties, an inquiry cannot be dispensed with which is required under the Standing Orders. But if it is so dispensed with in spite of such a position, the question is whether the employees should be denied any protection in the Labour Court and whether they should be made to wait till disposal of that case.
26. As far as this aspect is concerned, the law is well settled by the Hon'ble Supreme Court in Fakirbhai Fulabhai Solanki v. Presiding Officer, reported in AIR 1986 SC 1168. That was a case, where for a charge of playing cards on duty, an employee was sought to be dismissed. After a departmental inquiry, he was found guilty but because he was a protected workman, the management applied for permission of the Tribunal under Section 33(3) of the Industrial Disputes Act (the I.D. Act for brief). The employee was suspended pending disposal of the Application before the Tribunal. He filed an application before the Tribunal under Section 33-A of the I.D. Act. The Tribunal decided the application of the employer and the complaint of the employee together. It entertained the employer's application and granted permission to dismiss the workman and rejected the complaint filed by the employee.
27. As recorded by the Hon'ble Tribunal in that judgment, in the Standing Orders applicable in that matter, there was no provision for payment of any subsistence allowance during pendency of the application made by the management under Section 33(3) of the I.D. Act. The company was Alembic Chemical Works Co. Ltd., situated at Vadodara. On behalf of the employee, who carried the matter to the Supreme Court, it was contended that in the absence of any provision for subsistence allowance it was not possible to defend the matter effectively before the Tribunal and therefore, the permission was vitiated since it amounted to denial of reasonable opportunity to defend. On behalf of the employer in that matter, reliance was placed on the judgment of the Hon'ble Supreme Court in the case of Management of Hotel Imperial v. Hotel Workers Union, reported in AIR 1959 SC 1342. In that matter, the Hon'ble Supreme Court was concerned with the question as to whether a term to suspend an employee could be read into Section 33 of the I.D. Act, when the employer has already held an inquiry and he wants to dismiss him for misconduct but he cannot do so because of Section 33 which requires him to seek permission. The Hon'ble Supreme Court in that case observed as follows :
"The undisputed common law right of the master to dismiss his servant for proper cause has been subjected by Section 33 to a ban; and that in fairness must mean that, pending the removal of the said statutory ban, the master can after holding a proper inquiry temporarily terminate the relationship of master and servant by suspending his employee pending proceedings under Section 33."
In Hotel Imperial case (supra), the Supreme Court had relied upon an earlier judgment in Ranipur Colliery v. Bhupen Singh, reported in AIR 1959 SC 833 wherein it was held that it was reasonable that an employer having done all that he could do to bring the contract of service to an end, he should not be expected to continue to pay to the employee thereafter.
28. In Fakirbhai's case (supra), the Hon'ble Supreme Court later on relied upon the observations of another judgment rendered earlier in Khem Chand v. Union of India, reported in AIR 1963 SC 687 and held as follows in para 10 :
"In such a case the right of the workman to receive some reasonable amount which may be fixed either by the Standing Order or in the absence of any Standing Order by the authority before which the application is pending by way of subsistence allowance during the pendency of the application under Section 33(3) of the Act, with effect from the date of suspension should be implied as a term of the contract of employment having regard to the observations in Khem Chand's case (supra). In the two earlier decisions referred to above this aspect of the matter has not been considered."
Thus, the Hon'ble Supreme Court preferred to follow the proposition in Khem Chand's case (supra) and observed that in the two earlier decisions, namely, Hotel Imperial and Ranipur Colliery (supra) this aspect of the matter had not been considered.
29. Mr. Nanavati tried to distinguish the case of Fakirbhai (supra) by submitting that it was a case under Section 33(3) of the I.D. Act. He emphasised, as stated by the Hon'ble Supreme Court in para 5 of the judgment, that it was on the footing that from the provisions of Section 33(3) it follows that a workman does not cease to be workman until the Tribunal grants permission to dismiss him. In that case, the relationship between the master and the servant does not come to an end altogether until permission is granted. It is true that there are such observations in that judgment since the controversy did arise concerning Section 33(3) of the I.D. Act. But, that was not the only basis of the judgment. The basis of the judgment was violation of principles of natural justice. For this reason what the Hon'ble Supreme Court has observed after referring to Hotel Imperial and Ranipur Collieries cases (supra) in Para 8 of Fakirbhai's judgment is most relevant. It reads as follows :
"But in neither of the above two decisions the Court considered the question from the angle from which we have approached the problem. In neither of them the Court had the occasion to consider whether the denial of payment of subsistence allowance during the pendency of the proceedings under Section 33(3) of the Act would amount to violation of principles of natural justice. They approached the question from the angle of the common law right of a master to keep a workman under suspension either during the pendency of a domestic inquiry into an act of misconduct alleged to have been committed by a workman or during the pendency of an application under Section 33 of the Act. Those were perhaps halcyon days when such applications were being disposed of quickly. If the Court had realised that such applications would take nearly six years as it has happened in this case their view would have been different. An unscrupulous management may by all possible means delay the proceedings so that the workman may be driven to accept its terms instead of defending himself in the proceedings under Section 33(3) of the Act. To expect an ordinary workman to wait for such a long time in these days is to expect something which is very unusual to happen. Denial of payment of atleast a small amount by way of subsistence allowance would amount to gross unfairness."
The Hon'ble Supreme Court did not stop there. It also laid down as to how in such a situation the subsistence allowance shall be fixed. In para 11 it is stated as follows :
"It is likely that in some cases filed under Section 33(1) or Section 33(3) of the Act (which are 'permission' clauses and not 'approval' clauses) pending before any authority, the management may not be paying any subsistence allowance to the workman concerned. We, therefore, clarify that in such cases it shall be open to the management to pay within a reasonable time to be fixed by the authority, the subsistence allowance for the period during which the workman is kept under suspension without wages and to continue the proceedings. Such subsistence allowance shall be the amount fixed under the Standing Orders, if any, which the management is liable to pay to the workman if he is kept under suspension during the pendency of such application or in the absence of any such Standing Order by the authority before which such application is pending.
30. In view of what is discussed above, what emerges is as follows : Holding of a departmental inquiry particularly where it is so provided in the service regulations or Standing Orders is a rule and dispensing with the same is an exception. If an employer does not want an employee to be in actual service during the pendency of an inquiry, he may suspend him but during that period he has to pay him subsistence allowance as provided in the Standing Orders. In the absence of any such Standing Orders also, the adjudicating authority can grant such allowance. Where there are unsurmountable difficulties in holding inquiry and where such difficulty is created by the employees, the employer cannot be blamed if he straightaway proceeds to discharge or dismiss the employee. However, in a normal situation in the event an employer dispenses with an inquiry and dismisses an employee and thereby denies subsistence allowance until the misconduct is proved (which is the employee's normal right), the right to receive an equivalent amount despite termination will have to be construed as surviving and available to the employee in the Labour Court. In a different context in the State of Punjab v. Kailash Nath, reported in 1989 I CLR 60 (SC), the Hon'ble Supreme Court listed in a general way the items which would fall in conditions of service which included receiving subsistence allowance during suspension. It is stated as follows :
"In the normal course what falls within the purview of the term "conditions of service" may be classified as salary or wages including subsistence allowance during suspension, the periodical increments, pay scale, leave, provident fund, gratuity, confirmation, promotion, seniority, tenure or termination of service, compulsory or premature retirement, superannuation, pension, changing the age of superannuation, deputation and disciplinary proceedings."
In the circumstances, where an employee makes out such a case, he will be entitled to receive the subsistence allowance during the pendency of the proceedings before the Labour Court where the employer seeks to prove the misconduct for the first time.
31. The employers need not get disturbed by the above proposition. As stated above, where an employer holds an inquiry and where he wants to keep away the workman, he always holds the right of suspension. In a case where it is just not possible to hold inquiry because of violence or insurmountable difficulties, the employer can always explain it to the Court. But even where the employer dispenses with an inquiry in normal situation and the workman seeks an amount equivalent to subsistence allowance in the Court, it is a competent Court which is seized of the matter. In such a case, the Court will always remember that it is under its orders that the subsistence allowance is being granted though an order of dismissal has already been issued and, if that is confirmed, it will relate back. Hence, the Court will endeavour to proceed with the matter expeditiously. All the aspect of the matter will be under the control of the Court. If the employees unnecessarily prolong the matter and seek adjournments, the Court can certainly effectively intervene which will have an effect on the subsistence allowance which is being paid. When the Court is seized of the matter, there are ways and means by which it can deal with such situations when they arise before it and they need not be particularly spelt out. From the point of view of principles of natural justice and fairplay the right to receive subsistence allowance under the orders of the Court in such situations will have to be read as subsisting beyond the date of termination. If for any reason, as stated above, the proceeding in the Court gets prolonged for which the employer is not responsible, he can always seek appropriate modification of the order granting subsistence allowance. This flows from the judgment in Fakirbhai's case (supra) which still hold good. Whether under the Standing Orders there is a provision of payment of subsistence allowance or not, as claimed by Mr. Nanavati will not make any difference in view of the proposition in para 11 of Fakirbhai's case (supra).
32. Mr. Nanavati submitted that interim relief which will amount to full relief ought not to be granted and he relied upon the judgment of the Supreme Court in the case of Hotel Imperial, reported in AIR 1959 SC 1342. It is true that the Supreme Court has observed in para 23 of that judgment that, "ordinarily, interim relief should not be the whole relief that the workmen would get if they succeeded finally". However, in para 21 of that very judgment the Court has stated as follows :
"There can be no doubt that if, for example, question of reinstatement and/or compensation is referred to a Tribunal for adjudication, the question of granting interim relief till the decision of the Tribunal with respect to the same matter would be a matter incidental thereto under Section 10(4) and need not be specifically referred in terms to the Tribunal. Thus, interim relief where it is admissible can be granted as a matter incidental to the main question referred to the Tribunal without being itself referred in express terms."
What is further material to note are the facts of that case. In that matter, the employees concerned had applied for interim relief to the Tribunal and the Tribunal (as recorded in para 6 of the Supreme Court's judgment) had directed on 5-12-1955 payment of wages by way of interim relief to some of the employees concerned plus a sum of Rs. 25/- per head in lieu of food till the decision in the matter of dismissal of those workmen is taken. On the Labour Appellate Tribunal dismissing the employer's case, the employers had approached the Hon'ble Supreme Court and as stated in para 7 of the judgment, had prayed for stay of its order. The Hon'ble Supreme Court by its order dated 5-6-1956, stayed the order of the Industrial Tribunal on condition that the employers would pay to the employees a sum equal to half of the amount adjudged payable by the orders dated 5-12-1955 in respect of the arrears accrued due till then and continue to pay in the same proportion in future until determination of the dispute between the parties. In para 23 of the judgment, before observing that ordinarily interim relief should not be the whole relief, the Hon'ble Supreme Court confirmed the order passed by it on 5-6-1956 by observing :
"We are of the opinion that the order is the right order to pass in the matter of granting interim relief to the workmen in this case."
Thereafter, the Hon'ble Supreme Court has observed that the Tribunal had granted full wages because of the view that it took, viz., suspension was not possible. Their orders might have been different if they had held otherwise. It is further observed that :
"It seems to us just and fair in the circumstances, therefore, to order that the appellants shall pay to their respective workmen concerned half the amount adjudged payable by the order dated 5-12-1955 with respect to the entire period, as the case may be, from October 1, 1955 to December 10, 1955 or July 15, 1956 by which date, as we have already pointed out, practically all the workmen were taken back in service."
33. Here what is being granted is an amount equivalent to subsistence allowance which is initially only 50% of the normal wages. As stated above, it is an order which will be invited by an unscrupulous employer. What is being awarded to the workman initially is only 50% of the wages and it is only if the inquiry in the Court does not get concluded within the stipulated time, despite diligence, that the allowance may get further revised, but that should not deter us and lead to depriving of the subsistence to the employees. Recently, in the context of the Contract Labour (Regulations and Abolition) Act, 1970 in the case of Air India Statutory Corporation v. United Labour Union, reported in 1997 I CLR 292, the Hon'ble Supreme Court observed as follows :
"The Act is a social welfare measure to further the general interest of the community of workmen as opposed to the particular interest of the individual entrepreneur. It seeks to achieve a public purpose, i.e., regulated conditions of contract labour and to abolish it when it is found to be of perennial nature etc. The individual interest can, therefore, no longer stem the forward flowing tide and must, of necessity, give way to the broader public purpose of establishing social and economic democracy in which every workman realises socio-economic justice assured in the Preamble, Arts. 14, 15 and 21 and the Directive Principles of the Constitution."
What is stated therein applies with full force to the provisions of the Industrial Relations Acts like the I.D. Act and the B.I.R. Act, 1946. As far as the I.D. Act is concerned, even where an employer wants to close down his establishment, he is required to retain the employees on his establishment and to run it for a period of 90 days during which he has to apply to the appropriate Government for closure under Section 25(o) of the I.D. Act. Same arrangement is provided with respect to lay-off under Section 25(m) of the I.D. Act and while upholding the validity of these provisions, the Hon'ble Supreme Court made similar observations in Papanasam Labour Union v. Madura Coats Ltd. reported in JT 1991 (1) SC 71 in para 19 as follows :
"There may be various other contingencies justifying an immediate action of lay-off but then the legislature in its wisdom has thought it desirable in the greater public interest that decision to lay-off should not be taken by the employer on its own assessment with immediate effect but the employer must seek approval from the concerned authority which is reasonably expected to be alive to the problems associated with the concerned industry and other relevant factors, reasons pleaded for permitting layoff, such authority may arrive at a just and proper decision in the matter of according or refusing permission to lay-off. Such authority is under an obligation to dispose of the application to accord permission for a lay-off expeditiously and, in any event, within a period not exceeding two months from the date of seeking permission. It may not be unlikely that in some cases an employer may suffer unmerited hardship upto a period of two months within which his application for lay-off is required to be disposed of by the authority concerned but having undertaken a productive venture by establishing an industrial unit employing a large number of labour force such employer has to face such consequence on some occasions and may have to suffer some hardship for some time but not exceeding two months within which his cause for a lay-off is required to be considered by the concerned authority otherwise it will be deemed that permission has been accorded. In the greater public interest for maintaining industrial peace and harmony and to prevent unemployment without just cause, the restriction imposed under sub-section (2) of Section 25-M cannot be held to be arbitrary, unreasonable or far in excess of the need for which such restriction has been sought to be imposed.
34. In the circumstances, in my view, there is no error in the orders passed by the Industrial Court in both the proceedings. In Special Civil Application No. 6026 of 1996 the Industrial Court had confirmed the order of the Labour Court which awarded an amount equivalent to the subsistence allowance by the impugned order. In Special Civil Application No. 7905 of 1997, the Industrial Court has interfered with the order of the Labour Court which had denied the subsistence allowance earlier. I have gone through both these orders carefully and, in my view, the orders are well-reasoned and justified.
35. In Civil Application No. 8566 of 1996, by seeking amendment in the main petition, the order dated 29-8-1997 is challenged. That order records that, in spite of a number of orders, the employees have not been paid the subsistence allowance. The Industrial Court, therefore, directed the petitioner-bank to pay the subsistence allowance by a particular date failing which the right of the employer to prove the misconduct in the Court would be closed. The above order is a conditional order. The Industrial Court was constrained to pass that order in view of non-payment of the subsistence allowance in spite of orders from time to time. The petitioner-bank could have paid these amounts under protest which also they have not done. As observed earlier, the permission to prove misconduct in the Court is by way of a concession and not by way of a right. If that permission is not being availed of with proper spirit, then the Court has no option but to pass such an order. As far as this High Court is concerned, similar orders of striking of defences have been upheld by the Division Bench of this Court in the case of G. R. Bhatt v. D. N. Sanghvi, reported in [1996 (1)] XXXVII (1) GLR 813. In para 39 of that judgment, the Division Bench of this Court has referred to the observations of another Division Bench in M.C.A. Nos. 31 and 32 of 1992 decided on 13-2-1992. That judgment relied upon the dicta of the Supreme Court in I.T. Officer v. Mohammad Kunhi, reported in AIR 1969 SC 430 where the Hon'ble Supreme Court held :
"It is firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective."
In para 8(c) of the order in that M.C.A., the Division Bench held that in an appropriate case the Tribunal can direct that for non-compliance of its order defence may be struck off. Para 8 reads as follows :
"(8) The provisions of the Bombay Primary Education Act clearly show that the Tribunal has been formed with powers to decide the disputes between the teacher and the School management. Thus, there is an express grant of power. This express grant of power carries with it by necessary implication the authority to use all reasonable means to make grant effective. Thus, the power also includes the power of doing all such acts, or of employing such means as are essentially necessary for execution. Therefore, the Tribunal should ordinarily exercise its power of imposing effective and meaningful conditions even while issuing interim orders to see that the interim orders are complied with. This can and should be done by the Tribunals. We may illustrate as to what can be done by the Tribunal :
(a) The Tribunal can direct the opponent to remain present in Court and report compliance of its interim order;
(b) The Tribunal can direct that in case the amount is not paid as per the direction by its interim order, the amount shall carry interest at the appropriate rate which in the present day market condition can be between 15 to 21 per cent;
(c) The Tribunal can and should indicate that in case there is failure to comply with its order, defence of the opponent may be struck off. After giving an opportunity to the opponent, if the opponent fails to show sufficient cause relieving him from the consequences of the non-compliance of the order, its defences may be struck off. Later on, in fit cases on compliance of the order or on any other suitable condition the opponent may be permitted to appear and defend.
(d) The Tribunal in appropriate cases can award cost and in given cases, it can be even exemplary costs. Even for non-compliance of the interim orders, costs can be awarded.
This list is merely illustrative one and by no means should be treated as exhaustive. The Tribunal can and should act with innovative imagination and employ all necessary means to make the conferment of power meaningful and effective".
36. As I have recorded in the earlier para of this judgment, in spite of clarification given by this Court in Special Civil Application No. 1357 of 1996 and in spite of there being no stay against those observations, the petitioner-bank chose not to pay the subsistence allowance in spite of a number of orders by the Labour and Industrial Courts. It filed petitions after petitions and civil applications in this Court. As observed by two of my Brother Judges separately earlier, the petitioners were not at all diligent in proceeding with the matter. The petitioners had not raised the question on the so-called non-availability of the right of subsistence allowance under the Standing Orders (though it does not make much difference as stated above) when earlier Special Civil Application No. 1357 of 1996 was heard and they chose to raise it later on contrary to the copy of the Standing Orders produced on record and contrary to their own past acts. It has been contended on behalf of the employees that there are serious allegations against the Directors of the Bank and queries of the Reserve Bank of India are pending. Those issues are outside the scope of this matter and hence I am not going into them, but what is stated in this para with respect to the conduct of the petitioner-bank as far as this matter is concerned is undoubtedly disturbing to say the least.
37. As I have noted earlier, the entire basis for permitting an employer to prove the misconduct in Court is that, if for want of any inquiry the dismissal is set aside, the employer will have to reinstate the employees when he will again hold inquiry and pass some prejudicial order. That will again be challenged in the Labour Court thereby meaning two further innings. The employer is permitted to prove the misconduct in Court to avoid multiplicity of proceedings in the interests of the workman also. What is material to note is that, if the dismissal order was to be set aside for not holding any inquiry, the employee would have received full wages or reinstatement or, if the employer wanted to prove the misconduct at the departmental level and wanted to keep away the employee, he would have thereafter suspended him. This would have given subsistence allowance to the employee during the pendency of that inquiry. That very inquiry is now being held in Court as permitted by the Hon'ble Supreme Court in Ludh Budh Singh's case (supra). Therefore, as per the dicta of the Supreme Court in Fakirbhai's case (supra), the subsistence allowance will have to be paid during that period. The liability and the obligation of the employer under the Standing Orders to pay the subsistence allowance will be deemed to be continued beyond the date of termination until the misconduct is proved. This flows by reading the proposition in Ludh Budh Singh and Fakirbhai's case together. Thus, subsistence allowance will be payable for the period as provided in the Standing Orders, the idea being that the proceeding on that part will be completed before the Labour Court during that period. If the departmental proceeding was not completed during that period, for example, within three months as in the present case, the employee would be entitled to full wages even at the departmental level. Similarly, if the enquiry is not completed during those three months, the employee will be entitled to full wages only after three months. However, that is a matter to be controlled by the Court concerned. If there are delaying tactics on the part of the employer, the Court will not be without power not to grant full wages or to reduce it appropriately. This will again be within the discretion of the Labour Court as observed in Fakirbhai's case (supra).
38. Mr. Nanavati submitted that in the first place, the order of discharge or dismissal comes into force when the employer makes it effective and all the obligations of the employer as well as the employee come to an end. If the order of discharge is in any way bad, the employee will be later on compensated by award of back wages (if he remains unemployed) and reinstatement, and hence there is no justification to grant subsistence allowance after termination of service. Now, the hope that some day one will get back wages is no solace and cannot be a substitute for the problems faced by an employee on such summary termination. The subsistence allowance, by its very nature, is to be paid to tide over the immediate human difficulties, so that the person survives at least until his misconduct is proved. Once the misconduct is proved, it is a situation established to be arising out of the misdeed of the employee and he is responsible for subsequent consequences. Till then, however, the employer cannot escape his liability inasmuch as the charge is being proved in Court at employer's instance instead of his discharging his obligation at the departmental level.
39. The second submission of Mr. Nanavati was based on the ratio in R. Thiruvirkolam (supra). Mr. Nanavati submitted that, if the order of dismissal (when justified and established in Labour Court) was to relate back, there was no justification to award subsistence allowance in the meanwhile and the employer will not be able to get the refund of it. Again, as stated above, subsistence allowance is to be paid to tide over the immediate difficulties and, by very nature of it, the same is non-refundable. This is also stated by the Hon'ble Supreme Court in another context, recently in Regional Director, Employees' State Insurance Corporation v. M/s. Popular Automobiles in 1997 II CLR 1003, where it states :
"It has to be kept in view, as noted earlier, that subsistence allowance paid to a suspended employee is not recoverable or refundable even though ultimately the suspended employee is removed from service on the proof of misconduct for which he was proceeded against in departmental inquiry. The Kerala Payment of Subsistence Allowance Act, 1972 also clearly provides in Section 3 sub-section (2) that an employee shall not in any event be liable to refund or forfeit any part of the subsistence allowance admissible to him under sub-section (1). But even apart from the said statutory provision on the general principles applicable to subsistence allowance paid to an employee pending departmental enquiry no such allowance is refundable by him in case the employee gets ultimately removed from service on proof of misconduct."
What applies to subsistence allowance at departmental level will also apply equally to such an allowance or amount equivalent to such an allowance paid in Labour Court, since the inquiry in the Labour Court is being held at the instance of the employer, something which he ought to have done at departmental level. Hence, the doctrine of relation back will not affect the grant of subsistence allowance in any way.
40. Thus, where there are Standing Orders providing for payment of subsistence allowance during suspension (as in the present case), the consequence will undoubtedly be as stated above. However, even in those cases where the Standing Orders do not provide for payment of subsistence allowance during the period of suspension (as claimed by Mr. Nanavati) or where there are no Standing Orders governing the field, the consequences with regard to payment of subsistence allowance during the proceedings before the Labour Court would not be different. This is because the basis of such a provision as laid down in Ludh Budh Singh's case (supra) is that it is a concession given to the employer to prove the misconduct in Court which he ought to have proved in the departmental inquiry. Hence, where the employer is given this concession, fairness requires that as a matter of a corollary right the employee be also protected against starvation during this period, so that his opportunity to defend become meaningful. That is the basis behind the principle of natural justice developed in Fakirbhai's case (supra). Where there are provisions in the Standing Orders, the Labour Court will be guided by them with respect to the amount and the period as provided therein. In those cases where there are no such provisions, it will be a matter of discretion to be exercised by the Labour Court with respect to the amount and the period though the Court will be expected to act in a similar manner. In Hotel Imperial case (supra) the controversy was in another context and yet the Supreme Court cleared half the wages by way of interim relief which is also a pointer in this behalf.
41. In view of what is stated above, I find no merit in either of the two petitions and both of them are dismissed with costs. Rule stands discharged in both the matters. The stay in Special Civil Application No. 6026 of 1996 stands vacated. The petitioner-bank will pay a cost of Rs. 5000/- (Rupees five thousand) in each of the two petitions. In Civil Application No. 8566 of 1996 the challenge to the order dated 2-8-1997 is examined and held untenable. That Civil Application is, therefore, rejected. Since the application is disposed of, there is no need of any separate order on Civil Application No. 8411 of 1997 which seeks its expeditious disposal, and the same is also disposed of. Apart from directing payment of costs as stated above, the petitioner-bank is directed to pay the employees all the arrears of subsistence allowance as directed by the Courts below within two weeks from today failing which the respondents-employees will be at liberty to take recourse to the remedies available to them.
42. After paying the arrears of subsistence allowance (with a tabulation thereof and a copy to the employees' Advocate), the petitioner-bank may apply in the concerned proceedings for review of the order denying permission to prove misconduct in Court and the Court is expected to pass appropriate order after hearing both the sides. In the event of the trial proceeding further, the learned Judge is expected to proceed expeditiously and endeavour to dispose of the main matter as far as possible within three months thereafter. The trial will proceed preferably day-to-day. With respect to the obstructions raised by the parties while recording of the evidence, the learned Judge will pass appropriate orders and proceed with the trial. However, in the event of his forming a reasonable opinion that a party is unnecessarily obstructing, he will be within his powers to pass appropriate orders including such as those indicated in G. R. Bhatt's case (supra).
43. Mr. B. S. Patel appearing for the petitioner-bank applies for stay of this order for a period of four weeks for preferring an appeal. He points out that in one of the two matters, namely, Special Civil Application No. 6026 of 1996, there has been stay which has been running since 11-9-1996. Mr. Patel also points out that Special Civil Application No. 7905 of 1996 was admitted on 26-3-1997 by Calla, J., and at that time he had expected that the worker's Counsel will instruct his clients not to press for prosecution of the officers of the bank, Mr. Patel, therefore, submits that the stay granted as above be continued used for a period of four weeks.
44. As against that, Mr. Mansuri submits that, in the second matter, the restriction on the employees imposed at the time of admission was removed by relieving their Counsel from the undertaking by order passed on 18-7-1997. In both these matters, the employees concerned have been terminated summarily from 16-2-1996 and 5th April 1995 respectively. All three of them have put in long years of service and they are not being paid even subsistence allowance after their termination. He, therefore, submits that the request for stay may be rejected. Alternatively, he submits that at least the petitioner ought to be directed to deposit the amount payable under the orders passed by the Court below and, in that case, the employees will not withdraw those amounts for a period of four weeks.
45. In my view, the alternative submission by Mr. Mansuri is reasonable. This is a case where subsistence allowance is prayed by the employees and the matters have been pending for quite some time. No prejudice will be caused to the petitioner-bank if the amounts are directed to be deposited by way of a term for granting stay of this order. Hence, it is directed that, in case the bank wants to carry this order is appeal, this order will remain stayed for a period of four weeks, provided the bank deposits the entire amounts due under the orders of the lower Courts in the Labour Court within two weeks from today (instead of paying directly to the employees as directed in the earlier part of this judgment). Mr. Mansuri states that the amounts so deposited will not be withdrawn for a period of four weeks.
46. The writ along with a copy of this judgment be sent down forthwith to the Labour Court and the Industrial Court. Liberty to the parties to produce a copy of this judgment before the authorities, if required.
Orders accordingly.