Delhi High Court
Madan Lal Arora. vs Manag./Director All India Institute Of ... on 31 August, 1999
Equivalent citations: 1999VIAD(DELHI)38, 81(1999)DLT596, ILR1999DELHI403, (2000)ILLJ158DEL
Author: A.K. Sikri
Bench: A.K. Sikri
ORDER A.K. Sikri, J.
1. Since these are two cross petitions filed by the parties writ petitions against same award dated 16th September, 1996 passed by the Labour Court in ID No. 244/95, the same were heard together and are disposed of by common judgment.
2. Shri Madan Lal Arora (workman) is the petitioner in CW, 163/97. All India Institute of Medical Sciences (hereinafter referred to as, 'Management' for short) is the petitioner in CW. 1850/97. For the sake of convenience I shall take up the facts as per CW. 163/97.
3. Workman was employed as peon with the Management on 10th January, 1962. He was confirmed by order dated 11th June, 1974 w.e.f. 7th February, 1968. His services were terminated on 3rd June,1976. Workman raised industrial dispute against this termination and vide order dated 4th August, 1979 appropriate government referred the industrial dispute for adjudication by Labour Court with the following terms of reference:-
"Whether termination of services of the workman, Shri Madan Lal Arora is illegal and/or unjustified and if so to what relief he is entitled?"
4. After the reference of the dispute the workman submitted his statement of claim in which he alleged that his services were terminated without assigning any reason or holding any enquiry and therefore the same was illegal. The Management filed written statement in which jurisdiction of the Labour Court to adjudicate the dispute was questioned on various grounds including the ground that Management is not an "industry" within the meaning of Section 2(j) of the Industrial Disputes Act (hereinafter referred to as, the Act, for short). It was also stated that workman had filed civil suit against the Management under Specific Relief Act seeking declaration that his termination was illegal and void. The said suit was registered as Suit No. 7 of 1997 and was dismissed on 25th September, 1998. Once having chosen the forum for seeking relief, the workman was estopped from raising any dispute before another forum. It was further stated that services of the petitioner were terminated in accordance with clause (iii) (b) of his appointment letter dated 29th December, 1961 and he was paid three months pay and allowances in lieu of three months notice period. The Management also made the following additional plea in the written statement:-
Additional plea Shri Madan Lal was specially detailed on overtime and was entrusted with the duty of inserting roll numbers in the envelopes to be sent to the candidates appearing in the MBBS examination. In certain cases he did not insert the roll numbers and instead wrote personal letters to parents of some of the candidates advising them to see him at his residence with an ulterior motive of causing wrongful gain to himself. The matter was enquired into. In the enquiry the above allegation was established. The previous record of the petitioner was also unsatisfactory. The management still was magnanimous towards him and instead of dismissing him, it took a lenient view by discharging him from service as per conditions of employment by paying him 3 months notice pay.
5. Workman filed his replication and refuted the allegations made by the Management in the written statement. Thereafter evidence was laid by both the parties and arguments were heard. Persuant thereto, Labour Court passed the impugned award dated 16th. September, 1996 inter alia holding that termination of the service of the workman was illegal as provisions of section 25-F of the Act were not complied with. However, the Labour Court refused to grant the relief of reinstatement or back wages and instead awarded two years full back wages to the workman as compensation.
6. The workman has filed the writ petition challenging the award on the ground that he should have been given the relief of reinstatement with full back wages together with consequential benefits of increments, promotion, bonus, etc.
7. On the other hand, in the writ petition filed by the Management , the award is challenged on various grounds including the ground that State Government is not "appropriate Government" and therefore award was without jurisdiction, the workman having availed the remedy of filing the civil suit, he could not have invoked the jurisdiction under the Act. the workman had raised dispute after more than two years and therefore Labour Court should not have taken cognizance of the same. It is also alleged that provisions of Section 25-F of the Act were not applicable in the case of termination of service and in any case under the facts and circumstances of this case. Labour Court should not have directed the Management to pay two years wages after rejecting the claim of workman for reinstatement. However, it may be pointed out that at the time of argument on Management's petition, Shri Mukul Gputa, learned counsel for Management pressed only one argument, namely, Management was not "industry" within the meaning of Section 2(j) of the Act.
CW. 1850 of 1997
8. Let me deal with the petition of Management first. As mentioned above during the argument the only ground raised was Management was not "industry" within the meaning of Section 2 of the Act. However, perusal of the writ petitiion shows that this point is not even mentioned in the writ petition on the basis of which the impugned award is challenged. No doubt before the Labour Court, Management had taken the plea that it was not an "industry". Issue was also framed on this point being issue No. 2, the Labour Court. The Labour Court after following the judgment of the Supreme Court in the case of Bangalore Water Supply cited as 1978 LIC 467 held that management comes within the defination of " industry" as per Section 2 of the Act. Although the writ petition filed by the Management against the award is challenged on various grounds but the findings of the Labour Court on issue No. 2 are not assailed. Even otherwise, during arguments, it could not be pointed out by the Management as to how it would not come in the definition of "industry" as defined under Section 2(j) of the Act. The counsel for the Management referred to the following judgements of the Supreme Court without dilating as to how the same are applicable in the present case in the absence of relevant material/evidence adduced by the management:-
1. 1995 (4) Supp. SCC 672:- Union of India Vs. Jai Narain Singh.
2. :- Physical Research Laboratory Vs. G. Sharma.
3. :- Executive Engineer Vs.Somasetty and others.
9. In view of my aforesaid discussion particularly when this point is not even taken up in the writ petition filed by the Management (Civil Writ Petition 1850 of 1997) and there are no pleadings and material to come to any definite conclusion as to whether Management is "industry" or not, I am not inclined to accept the submission of the Management. Without expressing my final view on this question, I leave the question open and it would be for the Management to agitate the same in appropriate proceedings by producing the relevant material on the basis of which Management contends that it is not an "industry" and the aforesaid judgments are applicable in its case. Since no other point was urged by the Management in support of its petition, Civil Writ Petition No. 1850 of 1997 is hereby dismissed.
Civil Writ Petition 163 of 1997
10. I shall now deal with to Civil Writ 163 of 1997 filed by the workman as noticed above, the Labour Court in the impugned award has held that the termination of the workman is void ab definition. These findings are returned while deciding issue No.7. While discussing this issue Labour Court has taken into consideration the additional plea regarding sending personal letters to the parents of some candidates instead of roll numbers in the envelopes meant for such candidates taken by the Management in the written statement reproduced above. In order to substantiate this plea the Management even produced evidence before the Labour Court. The Labour Court analysed the evidence produced before it and found that some sort of fact finding enquiry was conducted by the Management at the spot and on the basis of such preliminary enquiry the service of the workman could not be terminated. Not only this removal of the workman from the services was not by way of punishment after holding preliminary enquiry. Insofar as preliminary enquiry is concerned even in the said preliminary enquiry workman was not given any opportunity to cross-examine the witnesses examined on behalf of the Management. In view of this, the Labour Court held that termination of the workman amounted. to retrenchment under Section 2(oo) of the Act and as the Management had not complied with the mandatory. provision of Section 25-F of the Act the termination was void ab initio. Relevant portion of the award of the Labour Court, dealing with this issue is reproduced below with appropriate appreciation of the matter:-
Issue No. 7The contention of the management is that in the year 1976 in the month of May when roll number were being dispatched to the candidates for appearing in examination for admission in the Institute, the workman Madan Lal Arora working as Peon with the Institute, was put on overtime duty along-with some other Class-IV employees of the Academic Section for inserting roll numbers in the envelopes to be sent to the prospective candidates. The workman as also other Class-IV employees used to take the envelopes to the despatch section which was at same distance. It is alleged that in certain envelopes instead of roll numbers typed unsigned slips were found inserted to the effect that candidature of particular candidates has been cancelled by the Institutes and such candidate was advised to contact Sh. Madan Lal Arora the workman and also the address given for contacting the workman madan Lal Arora was the residential address of the workman. Further it is alleged that parents of some of the candidates came to the Institute with the typed unsigned Letters containing the advice to contact Sh. Madan Lal Arora in the Institute. The case was reported to Shri B.S. Dhingra. Mr. B.S. Dhingra testified as MW-2 on behalf of the management has stated that on 17.5.76 one Mr. Kashyap have brought one letter copy of which is Ex. MW.2/1 which was typed and unsigned containing the directions to the candidates to contact the workman Shri Madan Lal Arora. It is further testified by him that on 18.5.76 as one Mr. Mehta come to him alongwith Mr. Salwan who was working as Superintendent in the Academic Section of the Institute and has also testified as MW5 on behalf of the management. It is further testified by Shri B.S. Dhingra that he was told by Mr. Salwan that he had recovered letter containing the same language as Ex. MW2/1 from the pocket of Mr. Madan Lal Arora in the presence of Mr. Mehta. It is further testified by Shri B.S. Dhingra that he alongwith Mr. Salwan, Mr. Mehta, Mr. A.P. Khanna and Mr. Madan Lal Arora had gone to Dy. Director Administration by whom the enqury was ordered to be held on the same date. The enquiry was conducted by Sh. B.S. Nayyar who has testified as MW 4 on behalf of the management. From the testimony of Mw.-4 it appears it was some sort of fact finding enquiry done by the management at the spot as it is testified by MW-4 that after receiving direction by Dy. Director he went to the academic Section and asked the workman Madan Lal Arora to open the locker. Certain stationary items like letters, envelopes were found from the locker of workman which he was not supposed to keep. The allegations against the workman were to the effect that unsigned typed letters containing language as in Ex. MW.2/1 were inserted by the workman Madan Lal Arora with the envelopes in which rol numbers to be sent to the prospective candidates. Even as per the case of the management it was some sort of preliminary enquiry. Though the witness MW-4 has claimed that workman was given opportunity to cross-examine the witnesses examined on behalf of the management but nothing has been placed on record on behalf of the management to the effect that infact any opportunity was given to the workman to cross-examine the management witnesses. It is also not proved on behalf of the management that workman was given any opportunity to adduce any evidence in his defense. In any case, the management has not formed the report of MW-4 Shri B.S. Nayyar to be the basis for taking action against the workman as no punishment was awarded to the workman on the basis of the report but he was discharged from services after giving three months notice as per the service condition applicable to the workman. Thus, removal of the workman from services was not by way of punishment after holding any enquiry as a disciplinary measure by the management. Nor it was a case of service of the workman coming an end by efflux of time by virtue of any argument between the parties. The case of the workman clearly falls within the definition of retrenchment under section 2 of the Industrial Disputes Act. Evidence adduced on behalf of the Management in the Court itself is not sufficient to prove the allegations against the workman as none of the witnesses by whom alleged letters were received or who infact contacted the workman after receipt of the said letters have been examined by the management. Nor any steps taken to summon them to depose as witness on behalf of the management. Admittedly the management has not complied with the mandatory provisions of Section 25-F of the Industrial Disputes Act as no notice, notice pay or service compensation have been paid to the workman by the management before dispensing with the services of the workman. it is the case of the management that he was offered three months of salary when he was discharged from services as per service condition but evidence brought record shows that a draft for the said amount was sent after a long time since dispensing with services of the workman. In this way, termination of services of the workman by the management is void ab initio.
11. A perusal of the aforesaid finding of the Labour Court would show that Labour Court has treated the enquiry conducted by the Management as preliminary enquiry in which no opportunity was given to the workman to cross-examine the witnesses. Even workman was not given opportunity to adduce any evidence in his defense. Moreover, this report of preliminary enquiry was not made basis for taking action against the workman as no punishment was awarded to the workman on the basis of the report but he was discharged from service after giving three months notice as per the service conditions applicable to the workman. Labour Court further holds that no regular departmental enquiry as a disciplinary measure was held therefore such a termination amounted to retrenchment which was illegal as the provisions of Section 25-F of the Act were not complied with.
12. In the instant case, perusal of the termination order shows that the services are not terminated by way of punishment but in terms of clause (iii) (b) of the appointment letter dated 29th December, 1961 as per which the services of the workman could be terminated by giving three months notice. Memo dated 3rd June, 1976 terminating the services of the workman is reproduced below:
"In accordance with clause No. iii(b) of appointment letter No. F.5-1/61- Estt. I dated the 29th December, 1961, I may give notice to Shri M.L. Arora, Peon that his services shall stand terminated forthwith. Shri M.L. Arora, Peon shall be paid a sum equivalent to the amount of pay and allowances for a period of three months, in lieu of three months notice calculated at the same rate on which he was drawing them immediately before the date on which these orders are served or tendered to him.
Shri M.L. Arora, Peon is advised to return the EHS/Identity Card issued to him, if any."
13. Thus the service was terminated on the basis of condition stipulated in the contract. Therefore, Labour Court was right in holding that the preliminary report (or for that matter allegation containing therein) was not the basis for taking action against the workman as no punishment was awarded to the workman on the basis of the report but there was discharge from service after giving three months notice as per the service condition applicable to the workman. Moreover, admittedly workman was a confirmed employee who worked from 10th January, 1962 till 3rd June, 1976 i.e. the date of his termination which is itself, more than 14 years period. His services could not be terminated by such kind of letter invoking contractual condition or giving three months notice. Such type of clause of termination of three months notice and this kind of termination is held to be bad in law in number of cases including the case of DTC Vs. DTC Mazdoor Congress and M/s. Uptron India Ltd. Vs. Shammi Bhan cited in 1996 LLr 385.
14. Faced with this situation, Mr. Mukul Gupta counsel appearing for the management submitted that in any case evidence was produced before the Labour Court and Labour Court wrongly concluded that on the basis of the said evidence charge against the petitioner was not substantiated. Learned counsel referred to the statement of various management-witnesses on the basis of which he tried to establish that allegations against the workman are proved. On the other hand, the workman who appeared in person, tried to contend that allegations against the workman are not substantiated and in support of his submission he referred to various portions of the witnesses produced by the Management.
15. It is well established that even is no departmental enquiry is held into the charges on the basis of which the workman was dismissed from service. Management can prove these charges before the Labour Court and Labour Court can give its findings as to whether the charges are proved or not and if the charges are proved punishment can still be sustained.
16. However, on the basis of evidence produced before the Labour Court, Labour Court has held that charges are not proved beyond reasonable doubt. Sitting in writ court and exercising the jurisdiction under Article 226 of the Constitution of India it is not the function of this court to analyse this evidence and come to the conclusion one way or the other as to whether allegations against the workman are proved before the Labour Court or not.
17. This fact may also be not lost sight of that we are dealing with the writ petition filed by the workman in which he has claimed reinstatement with full back wages on the ground that termination is held to be illegal by the Labour Court. In so far as finding of the Labour Court that the termination is illegal, Management also filed writ petition no 1850 of 1997 and in the said writ petition Management has not assailed this finding of the Labour Court on these grounds. If Management was aggrieved by the findings of the labour Court on issue No. 7, in the writ petition filed by it against the award it could have taken specific plea in its writ petition. However the award is not challenged on this ground.
18. In view of the aforesaid I uphold the findings of the Labour Court that the termination of the petitioner's services was illegal and bad in law.
19. Once the Labour Court held that the termination of the workman was illegal it denied the workman reinstatement and back wages. The Labour Court has given its reasons for taking this course in pars 13 of the award which is reproduced below..
13.The management has taken the stand that management has lost confidence in the workmen and as such it is not in the interest either of the workman or the Institute to order reinstatement of the workman to his job. Contention of the management is also that workman is gainfully employed and is working as a clerk with some advocate at Tis Hazari Courts. The workman in his cross-examination has denied that he is working as a clerk with any advocate. The workman is also opposing to the contention of the management regarding loss of confidence on the ground that same is beyond the terms and conditions and it is not open for the management to raise such objections to the reinstatement of workman. MW. 7 Shri Anil Kumar Ahlmed of Labour Court. IV. Tis Hazari has testified that an application under Sec. 33C registered as LCA No. 267/86 was filed by the workman against M/s. Jain Dharam Sabha charitable Trust and as per the contention in the said application the workman Madan Lal Arora was employed with m/s Jain Dharam Sabha Charitable Trust from 1.6.84 upto 20.10.95 drawing wages @ Rs. 300/- p.m. It is testified by mw. 7 that on. 11.12.1992 Madan Lal Arora s/o K.C. Arora made a statement regarding settlement of the dispute. Thus contention of the workman that he had been unemployed all along is not only incorrect but a dishonesty. In his cross-examination MW.7 the workman has tried to show that said Madan Lal Arora in LCA No. 267/86 Labour Court IV might be some other Madan Lal Arora, but the witness has testified that on the date statement was made by said Madan Lal Arora he was working in the seat of Reader of the Court as Reader was on leave. The witness has identified the workman personally of having made a statement regarding settlement on 11.12.92 in Labour Court no. IV. Thus the contention of the workman that he has remained unemployed is wrong and also that the workman is trying to act dishonestly while stating that he was not the person by whom the LCA No. 267/86 in Labour Court No. IV was moved. Accordingly, I am of the opinion that workman has been employed for a considerable time for the period has been out of the employment of the management. In any case, the circumstances in which the workman was discharged from services by the management gives evidence of the contention of the management that management has lost confidence in the workman. Even though the allegations might not have been proved beyond doubt by the management in Court against the workman, the testimony of several witnesses examined on behalf of the workman on 18.5.76 regarding receiving envelopes containing typed unsigned letters with directions to the candidates for meeting him for provisional roll numbers makes the workman is suspicious person having doubtful integrity. The management is justified in his contention that it shall not be in the interest of the Institute if workman is reinstated to his job. Keeping in view all the circumstances in which services of the workman were terminated by the Management and also the fact that despite being gainfully employed and having filed an application under Section 33C in the Labour Court No. IV. the workman has taken the plea that he has remained unemployed for all the period he is out of the job of the Management. I am of the opinion that reinstatement of the workman to his job is not justified. It shall be sufficient in the interest of justice if workman is paid two years full back wages by the management without any reinstatement to his job. The reference is answered accordingly and award made.
20. Reading of the aforesaid para of the award would show that the Labour Court was influenced by the following factors in awarding compensation and denying the workman reinstatement and back wages:-
A. Management had lost confidence in the workman and it was not in the interest of the Management to reinstate the workman.
B. Workman was gainfully employed as he worked in Jain Dharam Sabha Charitable Trust from 1st June, 1984 to 20th October, 1985 drawing @ Rs. 300/- per month.
C. It was an act of dishonesty on the part of the workman to deny this fact on oath.
D. He has been working as clerk with some advocate at Tis Hazari Courts and therefore gainfully employed for consider able time.
21. The workman tried to assail the aforesaid observations/findings of the Labour Court. It was contended that on the one hand the Labour Court held that evidence adduced on behalf of the Management was not sufficient to prove allegation against workman and on the other hand relying upon the same evidence the Labour Court has held that Management had lost confidence in the workman and it was submitted by the workman that these are self-contradictory findings. He further argued that all the allegation against him are cooked up and he was victimised and harassed as he did not two the lines of his superiors who wanted him to be a party to their illegal activities. He has also argued that he worked with Jain Dharam Sabha Charitable Trust for a few months only thereafter he did not work anywhere and even Jain Dharam Sabha did not pay the part time charges to him because of which he was constrained to invoke legal action before the Labour Court for recovery of the amount for the work done by him. On the basis of these contention he submitted that the award of the Labour Court denying him reinstatement should be set aside and he should be reinstated in service with full back wages.
22. Once termination is held to be illegal, no doubt normal rule is to grant reinstatement with back wages. However, the Labour Court in appropriate cases can give compensation in lieu of reinstatement having regard to the facts and circumstances of each case. The question of granting relief is in the discretion of the Labour Court. What is to be seen is as to whether the discretion exercised by the Labour Court in the present case is properly exercised.
23. The perusal of the record shows that admittedly there was some allegation against the petitioner/workman because of which preliminary enquiry was held against him. No doubt workman was not given any chance to cross-examine the witnesses or to produce his evidence in the fact finding enquiry. Fact remains the Management produced witnesses even before the Labour Court to substantiate their allegations. From the evidence produced, Labour Court has held that although the allegations are not proved beyond doubt by the Management but several witnesses examined on behalf of the Management have recorded conduct of the workman on 18th May,1976 regarding receiving envelopes containing typed new letters with directions to the candidates for meeting him for provisional roll numbers makes the workman a suspicious person having doubtful intergrity. Learned counsel for the Management had even tried to argue that from the evidence produced charges against the workman is established and the finding of the Labour Court that it was not established beyond doubt are perverse. Be as it may, from the testimony of the various witnesses it can be said that atleast there was bona fide suspicion in the mind of the Management about the integrity of the workman. Once that be so and the Labour Court is convinced about this fact, denying relief of reinstatement to the workman on this ground was proper in the facts and circumstances of this case and it cannot be said that labour court has exercised its discretion arbitrarily or on extraneous considerations. It may further be added that loss of confidence has been treated as good ground to deny the relief of reinstatement in number of cases.
1. Workman of Assam Match Co. Ltd. Vs. Presiding Officer, Labour Court reported in (1973) II LLJ 279.
2. Assam Oil Co. Ltd. Vs. Its Workmen reported in (1960) I LLJ 587.
3. Hukumchand Jute Mills Ltd. Vs. Labour Appellate Tribunal reported in (1959) I LLJ 595 (599).
4. Sadhan Sahakari Samiti Basantpur Ltd. Vs. Presiding Officer, Labour Court reported in (1993) IT LLJ 468 (470-171).
24. In Ruby General Insurance Company Vs. P.P. Chopra cited in (1971) LLJ 63, the hon'ble Supreme Court accepted the plea of loss of confidence for the first time raised before it and denied the relief of reinstatement to a Stenographer who was in a position of confidence and trust and he was taking down the dictation and typed out all kinds of letters and even secret letters and particularly when he bad, in fact, surreptitiously retained with him a copy of some communication. It was held that in such circumstances employer could legitimately entertain the feeling that, if reinstated, he would again retain with him copies of documents of confidential nature whenever he felt that such retention would be of use or advantageous to him. In the present case also the allegation that workman misused his position by inserting a note in the envelope and removing roll numbers, is of a serious nature and the Management is justified in nurturing a suspicion against such an employee.
In the case of Francis Klien and Company Limited Vs. Their Workman cited in (1971) 2 LLJ 615, Supreme Court held that direction of reinstatement of the workman who held the post of Durban and to allow him other suitable job, to be unjustified for the reason that employer has lost confidence in him on account of his refusal to cooperate when a colleague of his asked him for assistance to apprehend a thief.
25. From the facts mentioned above it can be inferred that the action of the Management was not mala fide. This may be the additional ground on which the award of the Tribunal giving compensation in lieu of reinstatement can be sustained. Further more it is also to be borne in mind that services of the petitioner-workman were terminated in the year 1976 and more than 23 years have expired since then. The Labour Court had exercised a discretion in awarding compensation in lieu of reinstatement by the impugned award. Upsetting this discretion at this stage and putting back the petitioner in service after 23 years of his termination may not be proper even on this ground. For these reason also it would not be appropriate to interfere with the discretion exercised by the Labour Court in not granting reinstatement with full back wages.
26. It is also to be borne in mind that petitioner has admittedly worked for some period with Jain Dharam Sabha Charitable Trust. Workman had sup-pressed this fact and in his evidence he alleged that he was unemployed all along. Not only this he in his cross examination tried to show that Madan Lal Arora in L.C.A. 267 of 1986 may be some other Madan Lal Arora, which was not believed by the Labour Court. In the written argument filed by the workman in this court he has admitted that he had filed the said L.C.A. No. 267 of 1986. The Labour Court has rightly stated that this is an act of dishonesty on the part of the workman when he stated that he was unemployed or he was not the person who filed L.C.A. No. 267 of 1986. This may also be a valid ground to deny reinstatement. It may also be mentioned here that workman has been working as clerk with Mr. J.S. Salwan, advocate. Tis Hazari Court who appeared before the Labour Court and testified to this effect.
27. However, while maintaining the award of the Labour Court denying the petitioner relief of reinstatement, it may be mentioned that the compensation awarded by the labour Court i.e. two years wages, in lieu of rein-statement appears to be somewhat inadequate. The services of the petitioner were terminated in the year 1976 and he fought against his termination for 20 years when the award of the Labour Court was pronounced on 16th September, 1996. Accordingly, ends of justice will be wholly met if the workman is given sum equivalent to five years wages as compensation instead of two years wages as awarded by the Labour Court. This compensation be paid by respondent-AIIMS to the petitioner within a period of six weeks. A perusal of the record shows that the petitioner was getting a monthly salary of Rs. 325/- at the time of his termination. Obviously, this is much less than the minimum wage fixed by the Delhi Government today. Therefore, it would be appropriate if 5 years back wages are calculated at the rate of minimum basic pay that is payable to a Peon employed on regular basis by the AIIMS. The award of the Labour Court stands modified to this extent. With the aforesaid modification, the writ petiton is otherwise dismissed.
28. There shall be no order as to costs.