Bombay High Court
R.D. Pillay vs Indian Dyestuff Industries Ltd. on 13 March, 1992
Equivalent citations: [1992(65)FLR977], (1993)IIILLJ671BOM
Author: B.N. Srikrishna
Bench: B.N. Srikrishna
JUDGMENT B.N. Srikirshna, J.
1. These two cross Writ Petitions, under Articles 226 and 227 of the Constitution of India, arise out of and impugn the Award, dated 3rd January, 1990, made in Reference (IDA) No. 35 of 1982, by the Third Labour Court, Thane, in proceedings under the Industrial Disputes Act, 1947 (hereinafter referred to as "the Act").
2. Since these are cross Writ Petitions, instead of referring to the parties as they are arryed in their respective petitions, I shall refer to the petitioner in Writ Petition No. 2697 of 1990 and the first respondent in Writ Petition No. 3229 of 1990 as "the workmen"; the first respondent in Writ Petition No. 2697 of 1990 and the petitioner in Writ Petition No. 3229 of 1990 shall be referred to as "the employer".
3. The employer is a company which deals in dyestuffs and intermediates. The workman was employed in its service on 1st June, 1979 as a Helper in the Engineering Department. On 20th August, 1981, he was served with an Order by which his service stood terminated with effect from 31st August, 1981. The reason given for the termination of his service, as stated in the order, may be usefully quoted verbatim. The order states :-
"You were appointed purely on temporary basis and this period was extended up to 31st August, 1981. Since the Company no more needs your services now, the same will stand terminated as on 31st August, 1981, after office hours.''
4. The workman challenged the termination of his service, and raised an industrial dispute on his demand that he should be reinstated with continuity of service and full back-wages. This demand having been rejected, the ensuing industrial dispute was referred by the appropriate Government to the Labour Court at Thane vide Reference (IDA) No. 35 of 1982.
5. The parties appeared before the Labour Court, and filed their respective pleadings. It was the case of the workman before the Labour Court that, though he had been styled as "a temporary workman", he had been continued in service from 1st June, 1979, a period of two years and about two months, till his service was abruptly terminated with effect from 1st September, 1981. It was alleged that he had been deliberately styled as "temporary workman", in order to deprive him of the wages, benefits and facilities available to the permanent workmen of the employer-company under a settlement with the trade union of the workmen. The workman contended that he was a permanent workman under law, for all practical purposes, and that his sudden removal from service was punitive, or, at any rate, if not punitive, amounted to retrenchment contrary to the provisions of the Act.
6. In its written statement, the employer took the stand that the workman had been employed purely on a temporary basis with a view to enable him to learn a trade, but, since, despite extensions of the temporary periods from time to time, he had failed to show improvement in work, the employer was left with no alternative but to put an end to the service of the workman with effect from 1st September, 1981. It was denied that the workman's service was terminated mala fide. On the other hand, it was alleged that the workman had been taken into temporary service, only at the instance of his father, who was, at the relevant time, attached to the factory of the employer as an Excise Inspector, to oblige him, though the workman was unqualified and unsuitable for employment in the employer's factory.
7. During the trial, the workman's evidence consisted of the oral testimony of the workman on his behalf. The employer sought to prove his case by examining one Barodawala, workshop-in-charge in the factory at the material time, one Kapadia, the Overseer of the concerned department, and one Nalinkant Shctth, Assistant Labour Officer at the relevant time. The employer also produced and placed reliance upon 6 re-ports made by Barodawala to the then Chief Engineer, pointing out that the workman's performance was utterly unsatisfactory despite repeated advice and warnings. On this evidence, the learned Judge of the Labour Court came to the conclusion that it was not possible to accept the case of the employer that the workman's service had been terminated by way of discharge simpliciter. He also held that the workman's service had been terminated by way of a punitive discharge for unsatisfactory work. Though the Labour Court took the view that there was sufficient material before the employer to reach the conclusion that the workman's performance of work was unsatisfactory, inasmuch as the termination of his service had not been preceded by any enquiry, it held that the principles of natural justice were violated, and, therefore, the workman, though not entitled to reinstatement, was entitled to compensation of Rs. 31,250/-, on the basis of one month's wages for each month of the workman's 26 months' service under employer. Both parties, being dissatisfied with the said Award, have impugned the same by their respective petitions.
8. Generally, where a subordinate Court of competent jurisdiction has arrived at findings of fact which it had jurisdiction to do, this Court is reluctant to disturb findings of facts in exercise of its powers under Article 226 and/or 227 of the Constitution of India. So is this Court reluctant to interfere with exercise of judicial discretion in granting discretionary relief. But, where the Court finds that the findings of facts are perverse, or that the appreciation of evidence or the grant of discretionary reliefs has been vitiated by misdirection in law, there is no hesitation in interfering with the order made by the subordinate Court.
9. Mr. Kochar, learned advocate appearing for the workman, contended that the present is one such exceptional case warranting interference by this Court. He vehemently criticized the findings of facts recorded by the Labour Court as perverse and the exercise of discretion under Section 11-A of the Act as misdirected. He, therefore, urged that this Court interfere with the Award and direct reinstatement with full back-wages. This, of course, is rejoined by Mr. Pawaskar, learned advocate appearing for the employer. He maintains that, though, upon the findings recorded, the Labour Court had no jurisdiction to grant any relief even by way of compensation, he would not grudge the amount of compensation, granted under the Award. It is on these rival contentions that I have to undertake the exercise of scrutinizing the Award of the Labour Court with a discerning eye to ascertain whether it warrants interference in writ jurisdiction.
10. What strikes me as somewhat incongruous, at the outset, is that the order of termination of service dated 20th August, 1981, puts forth no reason other than the employer 'did not need' the workman's service. There is not even a suggestion contained therein that the employer was in any manner dissatisfied with the work or performance of the workman. This is a circumstance completely lost sight of by the Labour Court. The Labour Court seems to have been impressed by the fact that the workman was taken into employment because his father was an Excise Inspector attached to the employer's factory at the relevant time, and that, despite being unqualified for the job, he had been engaged as a temporary workman, only to oblige his father. As to the fact of this so-called obligation, there is no direct evidence on which the Labour Court could have relied. It is Barodawala who stated that the workman' s father was working as an Inspector in the Excise Department and that, upon his request, the workman was employed as a Helper. Personal knowledge of this fact, he had none. At the relevant time, one G.T. Desai was Manager of Administration, and was looking after the Excise Department, and because ofthis, Barodawala says:
"I presume that the father of the concerned W/m had requested G.T. Desai for his appointment in the Co."
Besides this, there was no other evidence before the Labour Court, on which it could have returned a positive finding that the workman had been engaged in employment only to oblige his father who was working as an Excise Inspector at the relevant time. So much for the finding on this issue of obliging the workman's father. I am unable to accede to the submission of Mr. Pawaskar that, looking at the background, it was a legitmate inference to be drawn from the circumstantial evidence before the Labour Court. This finding, in my view, is based not so much on inferntial reasoning, as it is on conjecture.
11. While assessing the evidence before it regarding the allegation that the reason for termination of the workman's service was his bad performance and unsatisfactory work, the Labour Court failed to bear in mind the reason expressly alleged by the employer in the order of termination of service as the reason for termination of the workman's service. This the Labour Court utterly lost sight of. The Labour Court accepted the evidence of Barodawala and Kapadia as sufficient material to show that the performance and working of the workman was unsatisfactory. Here again, it is difficult to appreciate the line of reasoning adopted by the Labour Court. Kapadia was the Foreman directly under whom the workman was working. One would have expected Kapadia to depose as to the unsatisfactory nature of the workman's work. All that he says is that he had 'an occasion' to observe the work of the workman and that the other workmen in the Fabrication Department used to say that the performance of the workman was not good. It is true that both Barodawala and Kapadia maintained that they had orally informed the workman to improve his performance, and that there was no such improvement shown by the workman. It is in this background that the Labour Court had to come to a conclusion as to whether the workman's job performance was unsatisfactory, as alleged. When an employer terminates the service of a workman without assigning any reason therefor or assigns the reason therefor, which is inconsistent with what he pleads before the Labour Court, the Labour Court ought to be more vigilant in scrutinizing the evidence on record, for it is not inconceivable that the material in support of reasons which were not indicated or inconsistent with the indicated reasons, could have been obtained post facto. If we scrutinize the evidence on record in this perspective, it would be difficult to take the view that the evidence on record justifies the finding that the work and performance of the workman were unsatisfactory, as made out. Obviously, it was an after =thought, and judicial discretion had to be exercised carefully when scrutinizing material produced in support of an after thought. For this reason, I am of the view that the finding as to unsatisfactory nature of the workman's work is perverse, and needs to be interfered with.
12. Assuming, for a moment, that there was un satisfactory work on the part of the workman, that is not the ground on which the workman's service was terminated. If the employer chooses to terminate the service of a workman by an innocuous order, without indicating the reason in the order, then it is difficult to see why such an order would not amount to "retrenchment" within the meaning of Section 2(oo) of the Act. In this case, the workman had pleaded a case of retrenchment contrary to the Act. The Labour Court considered the offer made in the letter terminating the service of the workman as substantial compliance with the requirements of payment of notice pay and compensation under Section 25 of the Act. The offer in the said letter runs as under :-
"You are hereby requested to obtain your clearance certificate from the Company and collect your dues, if any, from the Cashier''.
In my view, this is hardly compliance with the mandatory requirements of the statute. Under Section 25F or 25N, the requirement is that the statutory dues be paid as a condition precedent. It is possible to hold that there is substantial compliance with the obligation arising under the section, if the employer, at least, indicates in the letter of retrenchment the amount to which the workman is entitled and offers it unconditionally. The unconditional offer must be contemporaneous with the retrenchment, if not precedent. The instant letter dated 20th August, 1981 does not show advertence to this aspect of the matter. On this ground also, the Labour Court ought to have held that the order of termination of service was illegal, being contrary to statute. 13. Turning then to the question of exercise of jurisdiction under Section 11-A while granting relief, in my judgment, the Labour Court has misdirected itself on this issue. Having found that the order of termination of service was illegal, for non-compliance with the principles of natural justice, while assessing the evidenee of unsatisfactory performance of work, the Labour Court failed to notice the significant fact that, at no point of time, had the workman been served with any memos. This, though the Labour Court itself referred to this fact as a vital circumstance. In fact, the Labour Court found that it was the practice of the employer to issue written memos in serious cases, and that the employer had taken serious view of the workman's performance. Consequently, the Labour Court was of the view that it was necessary on the part of the employer to issue written memos to the workman about his unsatisfactory performance containing directions to show improvement, before terminating his service on such count. Unfortunately for the workman, having gone thus far, the learned Judge stopped in his track and did not follow the reasoning to its logical conclusion. This, in my view, is the misdirection in law. If, on account of these circumstances, the Labour Court was of the view that the order of termination of the workman's service was illegal and liable to be interfered with, there was no other circumstance sufficient to refuse the relief of reinstatement. The only reason given (vide paragraph 58) was that there was sufficient material with the employer for saying that the performance of the workman was unsatisfactory. In my view, the material was such as could have hardly been considered sufficient by any reasonable person to arrive at a decision of such serious moment (sic) at least from the point of view of the workman. The other reason given (vide paragraph 59) is that it would be difficult for the employer to maintain discipline in the establishment if the workman were reinstated. On the difficulties of enforcing discipline, not a word was said by any of the witnesses examined by the employer, nor was there any other acceptable material placed on the record of the Labour Court. This reason is, therefore, a pure ipse dixit.
14. Turning, finally, to the estimate of the compensation, it appears that the Labour Court thought it fit to grant one month's wages as compensation for each month of service rendered by the workman. The workman had, in all, 26 months' service, and, therefore, an amount of Rs. 31,250/- representing 26 months, wages has been awarded. There is grievance made on behalf of the workman on this score also. It is contended that, once an order of termination of service is set aside, there is no justification for depriving the workman of full back-wages, except, perhaps, on restricted grounds such as that he had actually earned his livelihood by an alternative employment. In the present case, no attempt was made by the employer to place any such material on record. On the other hand, the testimony of the workman before the Labour Court was that he had remained unemployed, and this part of the testimony has gone unchallenged. Though, under the circumstances, the workman would have been entitled to full wages, Mr. Kochar fairly conceded that the workman is badly in need of employment and he would press utmost for being reinstated in service, while not giving up his claim for full back-wages. I find that the emphasis was more on getting the employment back, the implication being that the Court may award whatever appropriate amount of back-wages as was justified in the circumstances.
15. In the peculiar facts and circumstances of the case, I am of the view that it would be necessary, in the interests of justice, to give an additional direction in the Award that the workman be reinstated with continuity of service. This direction shall be in addition to the amount of compensation which has already been awarded, which shall be deemed to have been awarded towards the claim for back-wages.
16. In the result, Writ Petition No. 3229 of 1990 is dismissed, and the Rule discharged. However, there will be no order as to costs.
17. In Writ Petition No. 2697 of 1990, the Rule is partly made absolute to the extent that the direction in the Award shall stand modified by an additional direction to the employer that the workman shall also be, reinstated in service with continuity of service and the compensation of Rs. 31,250/- shall be deemed to be awarded towards back wages for the period of unemployment. There shall be no order as to costs.
18. Certified copy of the judgment expedited.