Punjab-Haryana High Court
Municipal Corporation vs Presiding Officer, Labour Court And ... on 12 July, 1995
Equivalent citations: (1997)IIILLJ376P&H, (1995)111PLR603
Author: T.H.B. Chalapathi
Bench: T.H.B. Chalapathi
JUDGMENT G.S. Singhvi, J.
1. Award dated November 3, 1993, passed by the Labour Court, Amritsar, is being challenged in this petition filed by the Municipal Corporation, Amritsar.
In order to decide whether the impugned award suffers from an error of law so as to require our interference in exercise of certiorari jurisdiction under Article 226 of the Constitution of India, we may make brief reference to the facts.
2.Respondent No. 2 joined service of the State Transport, Punjab on January 19, 1978 on his appointment as a conductor. His services were subsequently taken over by the Municipal Corporation, Amritsar. A domestic inquiry was initiated against respondent No. 2 vide charge-sheet dated June 20, 1984 on the allegation that he has collected Rs. 3.40 from 5 passengers without issuing tickets to them and had thus committed embezzlement of the Corporation funds. A detailed inquiry was held by Sh.J.S. Juneja, S.D.O. (Electricity,) who submitted a report that one part of the charge has been proved and the other part of it has not been proved. On the basis of this report a show-cause notice (Annexue P1) was issued to Respondent No. 2 with a proposal to remove him from service. Respondent No. 2 submitted his reply and opposed the penalty of removal from service. Thereafter, the Commissioner, Municipal Corporation, issued order dated October 16, 1985 removing respondent No. 2 from service.
3. Aggrieved by this removal from service, Respondent No. 2 raised an industrial dispute which was referred to the Labour Court, Amritsar, vide Punjab Government notification dated December 14, 1988. Respondent No. 2 pleaded before the Labour Court that the punishment imposed upon him suffers from violation of the statutory rules as well as the principles of natural justice and that the findings recorded by the employer were perverse. The Municipal Corporation pleaded that Respondent No. 2 had been punished after a regular inquiry and, therefore, the Labour Court should not interfere with the action of the Corporation. After considering the rival cases, the Labour Court held that the order of punishment passed by the Corporation was patently arbitrary inasmuch as the competent authority had not applied its mind to the record of the case while imposing the penalty of removal from service on the workman. The Labour Court also held that the punishment was quite harsh and disproportionate to the gravity of allegations and, therefore, the same deserved interference under Section 11-A of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act').
4. First contention of Shri Varinder Pal Singh is that the Labour Court had no jurisdiction to enter into the merits of the findings recorded in the domestic inquiry. Learned counsel argued that holding of a disciplinary inquiry is an absolute prerogative of the Management and the Labour Court/Tribunal is not empowered to interfere with the exercise of discretion by the employer in this regard. Second contention urged by Shri Singh is that even if the findings recorded by the Inquiry Officer were erroneous, the Labour Court should not have acted as an Appellate Authority by substituting its own views regarding the allegations levelled against respondent-workman. Lastly Shri Singh argued that the Labour Court was not justified in interfering with the quantum of punishment awarded by the employer. He argued that the only power which vested with the Labour Court under Section 11-A of the Act was to remand the case to the employer for a fresh decision in accordance with law. Shri Mahajan, learned counsel appearing for the workman, argued that the jurisdiction of the Labour Court/Industrial Tribunal stands enlarged with the insertion of Section 11-A and now the Labour Court/Industrial Tribunal is vested with the power not only to reappreciate the evidence recorded during domestic departmental inquiry, but it has also the power to reverse the findings recorded by the employer on the mertis of the allegations. He submitted that the Labour Court is also vested with the power to substitute the punishment awarded by the employer with a lesser punishment.
5. A look at the impugned award and other records produced by the parties shows that the workman had rendered about six years service before being charged with the allegation of charging Rs. 3.40 from five passengers without issuing tickets to them. This allegation was founded on checking report submitted by Shri Balbir Singh, the then Traffic Manager, and Shri Harbhajan Singh, Adda Conductor, who had checked bus No. AF 4 on route No. 3 on which the petitioner was the Conductor. The Inquiry Officer noted that in his statement Shri Balbir Singh admitted that the passengers had told him that they were to get tickets from the Conductor. He also admitted that signatures of the Conductor were not obtained on the back of the tickets. P.W.2 Shri Harbhajan Singh states that five passengers were travelling without tickets. He, however, admitted that the passengers declined to give any statement. During cross-examination this witness showed his ignorance that some passengers had wrongly boarded the bus. The workman produced Shri Surinder Kumar as a defense witness apart from making his own statement. In his statement the workman asserted that he did not embezzle any amount. He further stated that the two passengers were students and were having daily passes and three passengers had boarded that bus under a mistaken impression. He further stated that the Acting Traffic Manager was annoyed with the Conductors' Union and had threatened to take action against the members of the Union and as he (workman) was its member, the Assistant Traffic Manager made him victim of his annoyance. In the cross-examination the workman admitted that he did not approach the General Manager against the threats given by Balbir Singh. After considering the evidence led by the parities the Inquiry Officer observed: -
"During cross-examination both P.Ws. admitted that the bus was signalled to stop and denied when asked, if the tickets were taken in possession during checking. Both have again admitted that the students do travel in the bus and the route of bus towards ASR is via Bye-pass, whereas P. W. 1 stated in negative about the presence of any passengers in the bus travelling wrongly, the P.W.2 has shown his ignorance from the same, he has again shown his ignorance, when asked, if the signatures of the conductor were taken on the back of the tickets and if the numbers of unpunched tickets were closed on the way bill, which shows he was a passive partner of the checking staff and only obeyed the P.W. 1, the then T.M."
After considering this report the Commissioner, Municipal Corporation, formed an opinion that the charge made against the workman was proved and it is serious enough to remove him from service. The mind of the Punishing Authority is also evident from the fact that in the final order also the punishing authority proceeded on the premise that the charge against the workman had been proved beyond doubt. This was clearly indicative of non-application of mind by the competent authority because even though the Inquiry Officer did not find the workman guilty of the charge in its totality and yet the punishing authority assumed that the charge had been fully proved. This serious defect has been noted by the Labour Court which has observed as under: -
"..... I have carefully considered the contention and find that there is force because the enquiry officer exonerated the workman of one charge and found him guilty in only one charge of embezzlement amounting to Rs. 1.20 and this fact was mentioned in the show-cause notice nor it was considered while awarding punishment. Therefore, it is crystal clear that the Punishing Authority had nof applied his mind and thus the enquiry is vitiated."
6. The Labour Court then opined that the punishment awarded to the workman was quite harsh and disproportionate to the gravity of allegations and warranted interference. He, therefore, directed the reinstatement of the workman with continuity of service.
7. On the question of power vesting with the Labour Court after the insertion of Section 11-A, we may observe that Section 11-A was inserted in the Act of 1947 by amendment dated December 15, 1971. Prior to the insertion of Section 11-A the Courts had indicated the limitation of the jurisdiction of the Labour Court, Industrial Tribunal or the National Tribunal to interfere with the findings of guilt and the quantum of punishment awarded by the Management in Indian Iron and Steel Co. Ltd. v. Their Workmen, (1958- I-LLJ-260) (SC). The Supreme Court discussed the nature of jurisdiction exercised by the Industrial Tribunal while adjudicating a dispute relating to dismissal or discharge and observed at pages 269-270:
"Undoubtedly, the management of a concern has power to direct its own internal administration and discipline, but the power is not unlimited and when a dispute arises, Industrial Tribunals have been given the power to see whether the termination of service of a workman is justified and to give appropriate relief. In cases of dismissal on misconduct, the Tribunal does not, however, act as a Court of appeal and substitute its own judgment for that of the management. It will interfere (1) when there is want of good faith, (ii) when there is victimisation or unfair labour practice, (iii) when the management has been guilty of a basic error or violation of a principle of natural justice, and (iv) when on. the materials the finding is completely baseless or perverse."
8. The same principle was reiterated in Punjab National Bank Ltd. v. Its Workmen, (1959-II-LLJ-666) wherein the Supreme Court held that, where the employer was not guilty of victimisation or unfair labour practice, the Tribunal will be generally reluctant to interfere with the order of punishment passed on the basis of proper domestic enquiry held in consonance with the principles of natural justice. In Management of Ritz Theatre (P) Ltd. v. Its Workmen, A.I.R 1963 S.C. 295, the Supreme Court held that, if on the basis of a properly held domestic enquiry, an order of dismissal is passed against the employee, it can be challenged only if it is shown that the conclusions reached at the departmental inquiry were perverse or the impugned dismissal is vindictive or malafide and amounts to unfair labour practice. In Hind Construction and Engineering Company Ltd. v. their Workmen, (1965-I-LLJ-462) their Lordships of the Supreme Court observed at P 465 :
"The award of punishment for misconduct under the Standing Orders if any, is a matter for the management to decide and if there is any justification for the punishment imposed the Tribunal should not interfere. The Tribunal is not required to consider the propriety or adequacy of the punishment or whether it is excessive or too severe, but, where the punishment is shockingly disproportionate regard being had to the particular conduct and past record or is such as no reasonable employer would ever impose in like circumstances, the Tribunal may treat the imposition of such punishment as itself showing victimisation or unfair labour practice".
In that particular case, the Supreme Court upheld interference in the quantum of punishment of dismissal by the Labour Court when it found that the punishment of dismissal for the act of absence of the employee could not have been imposed by any reasonable employer.
These judgments indicate the broad parameters within which the Labour Court or the Industrial Tribunal could interfere with the findings of guilt recorded by the management and the quantum of punishment imposed by it on its employee. This was the position till December 14, 1971.
9. The statement of objects and reasons set out in the Bill introducing Section 11-A of the Industrial Disputes Act reads thus:
"In India Iron and Steel Company Ltd. v. Their Workmen, (supra) the Supreme Court while considering the Tribunal's power to interfere with the management's decision to dismiss, discharge or terminate the service of a workman, has observed that in case of dismissal on misconduct the Tribunal does not act as a Court of appeal and substitute its own judgment for that of the management and that the Tribunal will interfere only when there is want of good faith, victimisation, unfair labour practice etc. on the part of the management." The International Labour Organisation in its recommendation (No. 119) concerning termination of employment at the initiative of the employer, adopted in June, 1963, has recommended that a worker, aggrieved by the termination of his employment should be entitled to appeal against the termination among others, to a neutral body such as an arbitrator, a Court, an arbitration committee or a similar body and that the neutral body concerned should be empowered to examine the reasons given in the termination of employment and the other circumstances relating to the case and to render a decision on the justification of the termination. The International Labour Organisation has further recommended that the neutral body should be empowered (if it finds that the termination of employment was unjustified) to order that the worker concerned unless reinstated with unpaid wages, should be paid adequate compensation or afforded some other relief. In accordance with these recommendations, it is considered that the Tribunal's power in an adjudication proceeding relating to discharge or dismissal of a workman should not be limited and that the Tribunal should have the power in cases wherever necessary to set aside the order of discharge or dismissal and direct reinstatement of the workman on such terms and conditions if any, as it thinks fit or give such other reliefs to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require. For this purpose, a new Section 11-A is proposed to be inserted in the Industrial Disputes Act, 1947...".
10. The ambit and scope of Section 11-A came to be considered by the Supreme Court in Workmen of Firestone Tyre and Rubber Co. v. The Management, (1973-I-LLJ-278). In that case, the Apex Court in the first place referred to the law laid down by the Court in respect of the jurisdiction of the Industrial Tribunal/Labour Court. It also referred to the statement of objects and reasons and proceeded to say at pages 294-295:
"The object is stated to be that the Tribunal should have power in cases, where necessary, to set aside the order of discharge or dismissal and direct reinstatement or may award lesser punishment. "Their Lordships further held that, (at page 295) "Evenamere reading of the section, in our opinion, does indicate that a change in the law as laid by this Court has been effected".
11. Their Lordships then took notice of the rival contentions raised on behalf of the employees and employers and then referred to some principles of interpretation of welfare legislations and held that even after Section 11-A has been inserted the employer and employee can adduce evidence regarding legality and validity of the domestic enquiry, if one had been held by an employer. The Court further held that the Tribunal has to consider the evidence and come to the conclusion one way or the other. Even, in cases, where an inquiry has been held by an employer and a finding of misconduct arrived at, the Tribunal can now differ from that finding in an appropriate case and hold that no misconduct is proved. The Court further observed at P 296: "It has to be remembered that a Tribunal may hold that the punishment is not justified because the misconduct alleged and found proved is such that it does not warrant dismissal or discharge. The Tribunal may also hold that the order of discharge or dismissal is not justified because the alleged misconduct itself is not established by the evidence. To come to a conclusion either way, the Tribunal will have to reappraise the evidence for itself. Ultimately, it may hold that the misconduct itself is not proved or that the misconduct proved does not warrant the punishment of dismissal or discharge. That is why, according to us, Section 11-A now gives full power to the Tribunal to go into the evidence and satisfy itself on both these points. Now the jurisdiction of the Tribunal to reappraise the evidence and come to its conclusion ensures to it when it has to adjudicate upon the dispute referred to it in which an employer relies on the findings recorded by him in a domestic enquiry. Such a power to appreciate the evidence and come to its own conclusion about the guilt or otherwise was always recognised in a Tribunal when it was deciding a dispute on the basis of evidence adduced before it for the first time. Both categories are now put on a para by Section 11-A."
12. On the question of quantum of punishment their Lordships held that prior to Section 11A the Tribunal had no power to interfere with the punishment imposed by the Management and it had to sustain the order of punishment imposed on the basis of proved misconduct unless it was harsh indicating victimisation, but under Section 11A, even if misconduct is held to be proved, the Tribunal may be of the opinion that the order of discharge or dismissal for the particular act of misconduct is not justified. The Tribunal may hold that the proved misconduct does not import punishment by way of discharge or dismissal and it can under such circumstances, award to the workman lesser punishment.
13. In Para 47 of the judgment, their Lordship of the Supreme Court took notice of the departure made by the Legislature in certain respects in the law laid down by the Supreme Court by observing that, for the first time power has been given to the Tribunal to satisfy itself whether misconduct is proved. This is particularly so even when findings have been recorded by an employer in an inquiry properly held. The Tribunal has also been given power to interfere with the punishment imposed by an employer. The proviso to Section 11-A emphasizes that the Tribunal has to satisfy itself one way or the other regarding misconduct, punishment and the relief to be granted to the workman only on the basis of material on record before it. In Para 48 their Lordships further observed that, if a proper enquiry is conducted by an employer and a correct finding is arrived at regarding misconduct, even though, it now has power to differ from the conclusions arrived at by the Management it will have to give very cogent reasons in not accepting the view of the employer.
14. In Para 62 of the judgment their Lordships again reiterated this position by making following observations:
"We have already expressed our view regarding the interpretation of Section 11A. We have held that the previous law, according to the decisions of this Court, in cases where a proper domestic enquiry had been held, was that the Tribunal had no jurisdiction to interfere with the findings of misconduct except under certain circumstances. The position further was that the Tribunal had no jurisdiction to interfere with the punishment imposed by an employer both in cases where the misconduct is established in a proper domestic enquiry as also in cases where the Tribunal finds such misconduct proved on the basis of evidence adduced before it. These limitations on the powers of the Tribunals were recognised by this Court mainly on the basis that the power to take disciplinary action and impose punishment was part of the managerial functions. That means that the law, as laid down by this Court over a period of years, had recognised certain managerial rights in an employer. We have pointed out that this position has now been changed by Section 11A. The Section has the effect of altering the law by abridging the rights of the employer inasmuch as it gives power to the Tribunal for the first time to differ both on a finding of misconduct arrived at by an employer as well as punishment imposed by him."
15. In Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha, (1980-I-LLJ-137) by majority decision the Supreme Court held that, while exercising power under Section 11A the Tribunal can examine the validity of an order of discharge simpliciter and if it appears that purported exercise of power to terminate service of the employee was in fact the result of misconduct alleged against the workman, the Tribunal will be justified in dealing with the dispute on the basis that the order of discharge is in effect an order of dismissal; and if the Industrial Court is satisfied that the order of discharge is punitive or that it amounts to victimisation or unfair labour practice it can interfere with the same.
16. In Jaswant Singh v. Pepsu Roadways Transport Corporation, (1984-I-LLJ-33), their Lordships of the Supreme Court upheld an award of the Labour Court directing reinstatement of the driver of the Road Transport Corporation in service who had been dismissed from service because, in view of the Supreme Court, the opinion formed by the Labour Court that the punishment of dismissal was rather heavy and was not called for, did not warrant interference by the Supreme Court.
17. In Management of Hindustan Machine Tools v. Mohammed Usman, (1983-II-LLJ-386) their Lordships of the Supreme Court upheld the award passed by the Labour Court of substituting the penalty of dismissal from service by stoppage of increments for two years on the basis of its finding that the punishment of termination is disproportionately heavy.
18. In Ved Parkash v. Delton Cables India (P) Ltd., (1984-I-LLJ-546) a three Judges Bench of the Supreme Court declared that dismissal of an employee on the charge of abuse of some workers and officers of the Management by him was unjustified. The Supreme Court held that, no responsible employer would ever impose in like circumstances, the punishment of dismissal to the employer and that victimisation or unfair labour practice could well be inferred form the conduct of the Management in awarding the extreme punishment of dismissal.
19. In Jitendra Singh v. Vaidya Nath Ayured Bhawan Ltd., (1984-II-LLJ-10) while examining the scope of Section 11-A the Supreme Court observed: at page 11.
"Wide discretion is vested in the Tribunal under this provision and in a given case on the facts established, the Tribunal can vacate the order of dismissal or discharge and give suitable direction".
20. In Baladev Singh v. Presiding Officer, Labour Court, AIR 1987 SC 104, the Supreme Court upheld an order (sic) passed by the Tribunal setting aside an award of termination of service of a driver of the Roadways for misconduct which resulted in some loss to the Corporation.
21. In Rama Kant Mishra v. State of U. P., (1982-II-LLJ-472), their Lordships of the Supreme Court interfered with an award of the Labour Court which had upheld the dismissal of an employee found guilty of using indiscreet, improper and abusive language and threatening postures. The Court held that mere use of such language without any other misconduct during 14 years of service did not warrant penalty of dismissal from service. The Court substituted penalty of dismissal by withholding of two increments with future effect.
22. In view of the above discussed legal position, we have no hesitation to hold that the Labour Court/Industrial Tribunal is vested with the power to consider the question of fairness of the inquiry. It also got the power to reappreciate the evidence produced during domestic/departmental inquiry and a further power to interfere with the punishment awarded by the employer where it is found that the employer has not considered the past record of the employee, the nature of the charge etc. while imposing the punishment. If the Labour Court/Industrial Tribunal, on an objective consideration of the record is satisfied that the order of punishment is shockingly disproportionate or patently unreasonable, it can interfere with the quantum of punishment.
23. In so far as this case is concerned, the employer did not at all apply its mind to the findings recorded by the Inquiry Officer before it recorded a conclusion that the charge levelled against the workman was proved beyond doubt. It also did not apply its mind on the issue of punishment, and straightaway concluded that the punishment of removal was warranted. The employer did not consider the past service of the workman and his conduct while taking a decision to impose the extreme penalty. The employer totally ignored the evidence of the workman which clearly established that the two passengers, regarding whom the allegation was that the tickets had not been issued, were the students. Therefore, the Labour Court was justified in exercising its discretion under Section 11-A.
24. No doubt the Labour Court has not also made an elaborate discussion on the issue of punishment and we may have remanded the case for fresh adjudication, but keeping in mind the fact that the employer did not at all apply its mind to the report of the Inquiry Officer while recording a conclusion that the charge stands proved beyond doubt and the punishment awarded to the workman was clearly contrary to the principles of natural justice, we are not inclined to remand the case to the Labour Court.
25. Before concluding, we may refer to an unusual feature of this case. This writ petition was filed by the Municipal Corporation, Amritsar, through its Executive Officer on July 28, 1994. Notice of motion was ordered to be issued on July 29, 1994, and operation of the award was also stayed by a Division Bench. Reply to the writ petition was filed on behalf of Respondent No. 2 on November 15, 1994. Thereafter, learned counsel for the petitioner sought time to argue the case. On two subsequent dates the case was adjourned on the request made by Respondent No. 2. Lastly this case was fixed on April 6, 1995 and was adjourned for today. In the meantime a second writ petition has been instituted by the petitioner on May 24, 1995 challenging the very same award which is under challenge in this petition. Interestingly, that petition has been filed by the Municipal Corporation, Amritsar, through its Commissioner. We have called for the file of that case and after perusing the same, we are constrained to observe that the petitioner has not disclosed in C.W.P. No. 7786 of 1995 that the earlier writ petition filed by it is pending before this Court and the operation of the award has been stayed. This conduct of the petitioner cannot but be deprecated.
26. For the reasons mentioned above, the writ petition is held to be without substance and is, therefore, dismissed. The parties are left to bear their own costs.