Madras High Court
Engine Valves Ltd. vs Labour Court, Madras And Another on 27 November, 1990
Equivalent citations: (1991)ILLJ372MAD
Author: A.S. Anand
Bench: A.S. Anand
JUDGMENT Raju, J.
1. The above appeal has been filed against the order of the learned single judge dated 16th June, 1987, made in Writ Petition No. 2407 of 1981, dismissing Writ Petition No. 2407 of 1981 filed by the appellant challenging the award of the Labour Court, dated 17th December, 1980 in I.D. No. 358 of 1977.
2. The appellant company has a factory near Madras, where it manufactures valves for internal combustion engines. The second respondent had been in the employment of the appellant for over 16 years and for about ten years, he was working as Setter Operator in the Head Disc. Department. The second respondent was allotted with the work of Crack Detection from 19th May, 1975 and he attended the work between 19th and 23rd May, 1975. After the weekly holidays on 26th May, 1975, it is claimed by the appellant that when the Foreman Mr. Kasi Viswanathan has allotted the detection work to the second respondent, he refused to do the said work and instead he walked straight to the Packing Section. Thereafter the Senior Foreman is said to have taken the second respondent to the Production Manager's room, where he was advised to obey the lawful orders given by his Foreman and represent thereafter his grievance, if any, to the concerned authorities. It is further claimed that the second respondent refused to heed to the said advice and told them that he would not care even if any action was taken against him and he persisted in his refusal to carry out the orders of the Foreman. The second respondent appears to have refused to heed to the advice of even the Personnel Officer and he insisted that he should be allotted to some other work. It is claimed that when the Personnel Officer advised him to go back to his section and resume work in the Crack Detection Department and make any representation in writing regarding his grievance. Thereafter the second respondent, who was claimed to be in an agitated mood and not prepared to discuss with the Personnel Officer, went straight to the Cloak Room, changed his dress, took his cycle from the cycle stand and left the factory without the permission of any of his superiors without even going the Gate Office to record therein his reasons for refusal.
3. Consequently, a charge memo dated 26th May, 1975 came to be issued attributing serious acts of misconduct viz, wilful insubordination or disobedience of lawful orders of superiors, refusal to work and failure to observe work instructions by leaving the factory without even filling the Gate Pass and obtaining the sanction, thus contravening clauses 16(a), 16(c) and 16(w) of the certified standing orders of the Company. Next followed the charge memo dated 2nd June, 1975 in which the second respondent was alleged to have acted in an insolent and rude manner towards the Personnel Officer on 26th May, 1975 and refused to accept the service of notice of charge memo dated 26th May, 1975 thus constituting violation of clause 16(g) and 16(aa) of the certified standing orders. Therefore, the charge memos dated 26th May, 1975 and 2nd June, 1975 appear to have been sent to the second respondent by registered post to which he gave an explanation on 10th June, 1975. The third charge-memo dated 17th June, 1975 was issued against the second respondent on the allegation of wilful slowing down of normal work constituting misconduct within the meaning of clause 16(f) of the Company's certified standing orders.
4. A domestic enquiry appears to have been conducted and on the basis of the findings contained in the enquiry report, an order dated 5th August, 1975, appears to have been passed, dismissing the second respondent from service with immediate effect. Having regard to the pendency of I.D. No. 95 of 1974 on the file of the Labour Court, the necessary approval was also obtained on 21st January, 1976. Thereupon, the second respondent raised an industrial dispute, challenging his non-employment and though initially the Government declined to refer, later, on reconsideration, in G.O. Ms. No. 2671 (Labour and Employment), dated 12th December, 1977 the matter was referred to the Labour Court for adjudication regarding the non-employment and for the obtaining of the benefits to which the second respondent will be entitled to. Before the Labour court, the appellant contested the claim of the second respondent and tried to justify its order of dismissal. When the matter was taken up for enquiry by the Labour Court, the management appears to have agreed to justify non-employment on the basis of the domestic enquiry proceedings and parties further appear to have agreed that they will not let in any evidence on merits of misconduct but will lead evidence on disputed documents relating to the past record of service. The Labour Court by its award dated 17th December, 1980 held the domestic enquiry against the second respondent to be a fair and proper one, the charge memos dated 26th May, 1975 and 2nd June, 1975 have been established and that so far as the charge contained in the memo dated 17th June, 1975 relating to wilful slowing down of normal work, the Labour Court held 'that though WW1's production for the period 5th June, 1975 to 13th June, 1975 was not normal production but low, it cannot be said that he was wilfully slowing down for the reasons stated earlier. For the above reasons it cannot be said that the charge governed by Ex. M-23 has been proved.' Thereupon, the Labour Court held that the failure to give a second show cause notice disclosing the past record of service taken into account without opportunity to the second respondent to submit his explanation with reference to the proposed punishment rendered the dismissal liable to be set aside and the punishment also required to be modified in the following terms :
'As the charges covered by Exs. M6 and M7 have been established, I feel that WW1 - should be deprived of wages and benefits for three years and reinstated with continuity of service with half back wages and proportionate benefits for the rest of the period until the date of the award and full wages and benefits thereafter'.
Consequently, he second respondent was directed to be reinstated subject to the above.
5. Before the learned single Judge, the appellant contended (a) that the conclusions of the Labour Court regarding the Charge covered by Ex. M-23 dated 17th June, 1975 are vitiated; (b) that the Labour Court was wrong in holding that a second show cause notice and an opportunity should have been given, the failure of which vitiated the order of dismissal and that there was no justification for the Labour Court to interfere with the punishment imposed. The learned single Judge agreed with the appellant that clause 15(c) of the sanding orders do not imply the necessity to issue a second show cause notice and that Section 12(g) of the Act cannot be invoked when there was specific standing orders, governing the appellant management. But at the same time, the learned single Judge declined to interfere with the findings of the Labour Court in respect of its conclusion that the charge covered by the memo, Ex. M-23 dated 17th June, 1975 has not been established and that the award did not call for any interference even on the modification of the quantum of punishment imposed. The learned single Judge also agreed with the Labour Court that in the absence of reference to the materials relating to the past conduct in the order of dismissal, it cannot be conclusively taken that the punishing authority has looked into the past record of service before passing the order of dismissal.
6. Mr. M. R. Narayanaswami, learned senior counsel appearing for the appellant, made the following submissions before us :
1) The learned single Judge as well as the Labour Court were wrong in holding that since the past conduct had not been taken into account, that vitiated the punishment imposed :
According to the learned counsel, the reference to the past conduct is for unilateral satisfaction of the employer and confers no right on an employee and even if non-considerations is established the same cannot vitiate the order.
2) The order of dismissal in question specifically refers to the past record, though does not discuss the details of the same and consequently on the facts of the case there was no justification to come to a conclusion that there was no consideration of the past conduct :
3) When there are more than one charge held proved against the delinquent employee, even if the findings on any one or some of them are sustained, by the competent Authority subsequently the punishment will stand on the proved charges alone.
The learned counsel further submitted that on the facts and circumstances of the case it could be seen from the order that the gravity of the charges held proved and the decision to impose the maximum punishment on the basis of any and every one of those charges held proved was adverted to and that there was no reason for altering the punishment imposed on the appellant;
4) The powers under Section 11(A) of the Industrial Disputes Act have to be exercised judicially and judiciously keeping in view the necessary and vital pre-requisites and norms laid down and the order of the Labour Court in this regard is open to judicial scrutiny.
The learned counsel further submitted that on the facts of the case the order of the Labour Court does not indicate that it was really conscious of the requirement under Section 11(A) of the Act and there was absolutely no proper reasoning for the exercise of its discretion in a particular way in the matter of quantum of punishment. It is also the contention of the learned counsel that the learned single Judge took a too narrow view of the powers of the Court under Article 226 of the Constitution of India in declining to interfere in the matter.
7. Mr. S. Senthilnathan, learned counsel appearing for the respondents, submitted as follows :
1) When past record is relied upon, due opportunity should be given to the worker and the absence of such an opportunity before relying upon the past conduct by itself vitiated the order of the appellant.
The learned counsel placed reliance on the Division Bench of this Court in Mgt. of M. F. L. v. P. O., I Addl. Labour Court, Etc., (1990-I-LLJ-298) in support of his contention.
2) Since the management passed the impugned orders on the ground that all the charges have been-held proved it could not be postulated as what would have weighed in the mind of the management if only some charges have been held proved by them and consequently according to the learned counsel, the interference by the Labour Court with the quantum of punishment was justified.
3) The Labour Court was very much alive to and fully aware of the relevant principles and the quantum of the punishment by the Labour Court, which was upheld by the learned single Judge, does not call for any interference in this appeal.
8. With reference to the contention Nos. 1 and 2, the learned counsel for the appellant relied upon a decision of this Court in Mahalakshmi Textile Mills v. Labour Court, Madurai (1963-II-LLJ-58) and the decision of the Supreme Court reported in A. C. C. Ltd., v. T. C. Shrivastava (1984-I-LLJ-105) wherein, while considering a Standing Order almost similar to the one under our consideration and the necessity or otherwise of a second opportunity before inflicting punishment, the Apex Court held thus : (pp. 109-110) :
"It is thus clear that neither under the ordinary law of the land nor under industrial law a second opportunity to show cause against the proposed punishment is necessary. This, of course, does not mean that a Standing Order may not provide for it, but unless the Standing Order provides for it, either expressly or by necessary implication, no inquiry which is otherwise fair and valid will be vitiated by non-affording of such second opportunity. The question is whether para 3 of the Standing Order No. 17 provides for such second opportunity being given to the delinquent ? The relevant words are 'all dismissal orders shall be passed by the manager ... after giving the accused an opportunity to offer any explanation.' The underlined words are wholly inappropriate to convey the idea of a second hearing or opportunity on the question of punishment but appropriate in the context of seeking an explanation in regard to the alleged misconduct charged against him. An 'explanation' is to be called from the 'accused' which suggests that the same is to be called for prior to the recording of a finding that the delinquent is guilty of misconduct; it is the alleged misconduct that is to be explained by him and not the proposed punishment. On a plain reading of the relevant words no second opportunity of showing cause against the proposed punishment is contemplated either expressly or by necessary implication. In other words, it is clear to us that the opportunity spoken of by para 3 of S.O. 17 is the opportunity to be given to the delinquent to meet the charges framed against him. In this connection it will be pertinent to mention that the concerned S.O. was framed and came into force on 1st March 1946 and was duly certified on 16th October 1952 under the Industrial Employment (Standing Orders) Act, 1946 i.e, prior to the enunciation of the law by Courts regarding the observance of the principles of natural justice such an issuance of a charge-sheet, holding of an inquiry, opportunity to lead evidence, etc., and it is well known that after the enunciation of these principles model standing orders have been framed to provide for the detailed steps required to be undertaken during a domestic inquiry. Since the instant Standing Order was certified prior to the formulation of the above principles it merely contains a bald provision for 'giving the accused an opportunity to offer any explanation'.
In other words, different stages in domestic inquiry were never in the contemplation of the framers of the S.O. That being the position it would be difficult to attribute any intention to the framers thereof to provide for a second opportunity being given to the delinquent of showing cause against the proposed punishment. The letter part of para 3 merely casts an unilateral obligation on the concerned authority or the officer to give due consideration to the gravity of the misconduct and the previous record of the delinquent in awarding the maximum punishment"
9. The decision of this Court in Solar Works case (1968-I-LLJ-765) is that a learned single Judge wherein an earlier Division Bench Judgment as well as a Judgment of another learned single Judge was considered and while distinguishing the Judgment of the Division Bench held as follows (p. 770) :
"But, in the present case, prima facie the misconduct, viz., participation in an illegal strike, is a very serious one and there is no question of a milder punishment being inflicted if the management had given weight to the Standing Order relating to past conduct. The misconduct per se was sufficient to justify the dismissal because of its serious nature. Therefore, there is no scope at all for entertaining any apprehension that the management failed to give due weight to the provision of Standing Order 16(a) regarding past good conduct of the workers in fixing the quantum of punishment or that if it had done so, a different result would have followed. For the aforesaid reasons, I am of opinion that this is a case to which the observations in Mahalakshmi Textile Mills v. Labour Court, Madurai (vide Supra) will not apply."
The judgment of Srinivasan, J. in Writ Petition No. 166 of 1963, which the learned single Judge preferred to follow laid the proposition thus (P. 769-770) :
"Where a worker is guilty of a serious offence inviting dismissal, very little will turn upon the previous record of the worker. The fact that a person had a previous good record can hardly weigh with the management when it finds that the worker by inciting an illegal strike was paralysing the working of the industry. If, in such an instance, the management proceeded to dismiss the person, I am unable to see how the failure to take into account the previous record vitiates the final order. What the Standing Order merely says is that the management shall take into account the gravity of the misconduct, the previous record, if any, of the workman, and any other extenuating or aggravating circumstances. There may be cases where the gravity of the offence, standing by itself, would justify the dismissal, and no amount of previous good conduct might off-set the gravity of the misconduct. It would depend upon the facts of each case whether the order of dismissal is liable to be interfered with for such a reason as this."
10. On the basis of the above judgments, the learned counsel submitted that reference to past conduct is for the unilateral satisfaction of the employer and this confers no right on an employee and if the employee is found to guilty of charges which are sufficiently grave justifying dismissal, no amount of previous good conduct might off-set the gravity of the misconduct in question and consequently mere non-consideration, even if established, cannot vitiate the order of dismissal in the present case. It was also the contention of the learned counsel that in the present case there had been sufficient consideration of the past conduct also. In traversing the said submission, the learned counsel for the respondents referred to the decision of Madras Fertilisers case (supra) and contended that the failure to issue the second show cause notice vitiated the final order of punishment, particularly inasmuch as it resulted in deprivation of an effective opportunity to show cause against the imposition of the maximum punishment. After giving our thoughtful consideration to the submissions of the learned counsel on either side, we are unable to sustain the plea that either the Standing Order No. 15(c), which is applicable to the present case, mandates the issue of such a second show cause notice or that the failure to issue such a show cause notice vitiates the final order of punishment.
11. Standing Order No. 15(c) applicable to the present case is as follows :
'15(c). No order of dismissal shall be made unless the workman concerned is informed in writing of the alleged misconduct and is given an opportunity to explain the circumstances alleged against him.
In awarding the punishment under this Standing Order, the Manager shall take into account the gravity of the misconduct, the previous record, if any, of the workman and any other extenuating or aggravating circumstances that may exist. A copy of the order made by the Manager shall be supplied to the workman concerned. Having regard to the ratio of the Supreme Court as well as the decisions of this Court referred to by the learned counsel for the appellant, we find no difficulty in arriving at the conclusion that the Standing Order in question does not contemplate the issue of a second show cause notice and that too in a situation and with reference to the passing of an Order under our consideration. To this extent, we are of the view that the learned single Judge was right in his conclusion that neither the provisions of the Standing Order contemplates the issue of a second show cause notice nor Section 12-A of the Industrial Disputes Act can be invoked in this regard. The decision of a Division Bench of this Court in Madras Fertilisers case (supra) will have no application to the present case. That was a case where the learned Judges were of the view, on facts as found referred to in the report, that the past record of service of the employee has itself weighed with the Management on the question of imposition of extreme penalty, and formed along with other charges basis thereof unlike the case before us. From the order dated 5th August, 1975 in the present case, we are of the view that the past record of service was referred to only with a view to find out whether there was any mitigating or extenuating circumstances. Having regard to the peculiar feature of the Order in question in the case before us and the ratio of the Supreme Court, we are of the view that the Standing Order in question is in the nature of an enabling provision casting an unilateral obligation on the concerned authority to take into account the previous record with no further duty or a corresponding right in favour of the employee to either insist upon the issue of a second show cause notice and an opportunity or consideration by a detailed discussion of the materials contained in such previous record. The factual reference in the Order to the consideration having been made of the previous record, in our view constitutes sufficient compliance with the requirements of the Standing Order in question and the grievance made about the non-consideration of past record of service before the Labour Court as well as the learned single Judge and which found their acceptance is wholly unjustified and unwarranted. The nature of the consideration that is required could be indicative of the manner in which it requires to be considered. In the light of the ratio of the Apex Court that it is meant to be for the unilateral consideration of the Authority, we are obliged to conclude that the manner of consideration of the past record adopted in the case on hand constitutes sufficient consideration as well as compliance with the Standing Order in question and the order of punishment could not be said to have been vitiated on this account. In our view, the Labour Court committed a grave error in coming to the conclusion that the absence of specific reference to Exs. M-33 to M-43 vitiated the Order. We are not persuaded to agree on this aspect with the learned single Judge that the absence of specific reference to those exhibits is indicative of the fact that the punishing authority failed to look into the past record of service before passing of the final orders. At the same time, we are unable to agree with the submission of the learned counsel for the appellant that there is any conflict between the decision of the Division Bench of this Court in Madras Fertilisers Case (supra) and that of the Supreme Court in A.C.C. Ltd. Case (supra) since, as referred to earlier, the Division Bench of this Court was concerned with a case of an imposition of extreme penalty taking into account the past conduct or record, of service as an act by itself warranting punishment.
12. With reference to the third submission of the learned counsel for the appellant there could be no difficulty in agreeing with the proposition generally, that where there are more than one charge held proved resulting in an order of punishment, the fact that any one of those charges has been subsequently held not proved by the competent authority or Court does not undermine the validity or efficacy of the order of punishment and the same can be allowed to stand on the proved charges if they are by themselves sufficiently grave, warranting imposition of such maximum penalty. If any authority is required for the said proposition, the decision of the Apex Court in Pyare Lal Sharma v. Managing Director, J & K Industries Ltd., (1990-I-LLJ-32) can be usefully referred to, wherein it has been held as follows (P. 37) :
"The learned Single Judge allowed the writ petition on the fourth point though the same did not find favour with the Division Bench. Grounds (c) and (d) in regulation 16.14, exclusively and individually, are sufficient to terminate the services of an employee. Once it is established to the satisfaction of the authority that an employee remains on unauthorised absence from duty, the only action which can be taken is the termination of his services. Similar is the case when an employee takes part in active politics. The finding in the termination order regarding taking part inactive politics cannot be sustained because no notice in this respect was given to Sharma but the order of termination can be supported on the ground of remaining on unauthorised absence from duty. This Court in State of Orissa v. Vidyabhushan Mohaptra and Railway Board v. Niranjan Singh (1969-II-LLJ-743) has held that if the order can be supported on one ground for which the punishment can lawfully be imposed it is not for the Courts to consider whether that ground alone would have weighed with the authority punishing the public servant. Thus there is no force in this argument."
The said principle was applied to a case relating to industrial adjudication in the decision of the Apex Court reported in Burn & Co. Ltd v. Workmen (1970-II-LLJ-56), wherein the decision in State of Orissa v. Bidyabhushan (supra) has been specifically referred to and applied. Consequently, we are unable to agree with the submission of the learned counsel for the respondents that when the order of punishment has been made on proof of more than one charge, the order stands vitiated even when any one of such charges held originally proved has been found to be not proved by the competent authority subsequently.
13. With reference to the next submission of the learned counsel for the appellant on the scope of Section 11(A) of the Industrial Disputes Act as well as the mode and the manner of exercise of those powers in respect of a particular case the decisions reported in Workmen of Firestone Tyre & Rubber Co. v. The Management (1973-I-LLJ-278); C. M. C. Hospital Employees' Union & Anr v. C. M. C. Vellore Assn. & Ors (1988-I-LLJ-263); Sri Gopalakrishna Mills Private Ltd., v. Labour Court (1980-I-LLJ-425); Management of Binny Ltd., v. Addl Labour Court, Madras (1979-II-LLJ-280) and Burn & Co. Ltd., v. Workmen (supra) have been relied upon.
14. In Firestone Tyre & Rubber Company case (supra), the Apex Court summarised the principles emerging from the earlier decisions on the subject regarding the scope of interference by the Tribunal prior to the introduction of Section 11(A) of the Act in the following terms (1973-II-LLJ-278 at 293-294) :
"From those decisions, the following principles broadly emerge :
(1) The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but if a dispute is referred to a Tribunal the latter has power to see if action of the employer is justified;
(2) Before imposing the punishment, an employer is expected to conduct a proper enquiry in accordance with the provisions of the Standing Orders, if applicable, and principles of natural justice. The enquiry should not be an empty formality.
(3) When a proper enquiry has been held by an employer, and the finding of misconduct is plausible conclusion following from the evidence, adduced at the said enquiry, the Tribunal has no jurisdiction to sit in judgment over the decision of the employer as an appellate body. The interference with the decision of the employer will be justified only when the findings arrived at in the enquiry are perverse or the management is guilty of victimisation, unfair labour practice or mala fide.
(4) Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, has to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action, and it is open to the employee to adduce evidence contra.
(5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry.
(6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only if no enquiry has been held or after the enquiry conducted by an employer is found to be defective.
(7) It has never been recognised that the Tribunal should straightway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.
(8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power to refuse. The giving of an opportunity to an employer to adduce evidence for the first time before the Tribunal is in the interest of both the management and the employee and to enable the Tribunal itself to be satisfied about the alleged misconduct.
(9) Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed before a Tribunal for the first time, punishment imposed cannot be interfered with by the Tribunal except in cases where the punishment is so harsh as to suggest victimisation.
(10) In a particular case, after setting aside the order of dismissal. Whether a workman should be reinstated or paid compensation is, as held by this Court in The Management of Panitole Tea Estate v. The Workmen, within the judicial decision of a Labour court or Tribunal."
15. The change of law brought about with the introduction of Section 11(A) of the Industrial Disputes Act as on 15th December 1971 was also considered in the said judgment. To invoke Section 11(A), I was unnecessary that an act of the type mentioned therein should be proved for adjudication and that in he case of such adjudication, the Tribunal should be satisfied that the order of discharge or dismissal was justified. On coming to such a conclusion, the Tribunal has to set aside the order and direct reinstatement or give any other relief to the workman including imposition of a lesser punishment having due regard to the circumstances of the case. The proviso casts a duty on the Tribunal only to consider the materials on record and prohibits it from taking any fresh evidence.
The extent of departure made by the Legislature in introducing Section 11(A) of the Act was also indicated therein. In this context, the observations of the Court are as hereunder (pp 298-299) :
"For the first time, power has been given to a Tribunal to satisfy itself whether misconduct is proved. This is particularly so, as already pointed out by us, regarding even findings arrived at by an employer in an enquiry properly held. The Tribunal has also been given power, also for the first time, to interfere with the punishment imposed by an employer When such wide powers have been now conferred on Tribunals, the Legislature obviously felt that some restrictions have to be imposed regarding what matters could be taken into account. Such restrictions are found in the proviso. The proviso emphasises that the Tribunal has to satisfy itself one way or other regarding misconduct, the punishment and the relief to be granted to workmen only on the basis of the 'materials on record' before it. What those materials comprise of have been mentioned earlier. The Tribunal for the purposes referred to above, cannot call for further or fresh evidence, as an appellate authority may normally do under a particular statue, when considering the correctness or otherwise of an order passed by a subordinate body. The 'matter' in the proviso refers to the order of discharge or dismissal that is being considered by the Tribunal".
The Court further held that where a proper enquiry has been conducted by an employer and a correct finding was arrived at regarding the misconduct, the Tribunal even though it has no power to differ from the conclusions arrived at the Management, will have to give very cogent reasons for not accepting the view of the employer.
16. A Division Bench of this Court in Binny's case held that Section 11(A) of the Act enables it to interference only if the Labour Court comes to the conclusion for proper and sufficient reasons that the dismissal or order of discharge is not justified. In Sri Gopalakrishna Mills case, another Division Bench of this Court had an occasion to consider the relevant principles which should weigh with the Court exercising power under Section 11(A) of the Act and it was held therein that the discretion under Section 11(A) of the Act has to be exercised judicially and in accordance with the well recognised principles including the nature of charges and the Court is also obliged to examine the circumstances of each case to see whether the reinstatement of the discharged or dismissed employee is not inexpedient or improper and refuse to order reinstatement where such a course in the circumstance of a case is not either desirable or expedient.
17. In the decision reported in C. M. C. Hospital Employees' Union & Anr v. C. M. C. Vellore Assn. & Ors the Apex Court considered the scope of powers under Section 11(A), thus (1988-I-LLJ-263 at 273-274) :
"It is only when a reference is made by the Government, the Industrial Tribunal or the Labour Court gets jurisdiction to decide a case. It cannot, therefore, be said that each and every dispute raised by a workman would automatically end up in a reference to he Industrial Tribunal or the Labour Court Secondly, the circumstances in which the Industrial Tribunal or the Labour Court may set aside the decision arrived at by the management in the course of a domestic enquiry held by the management into an act of misconduct of a workman are evolved by a series of judicial decisions. In Indian Iron & Steel Co., Ltd., and Another v. their Workmen (1958-I-LLJ-260), this Court has observed at p. 270 that the powers of an Industrial Tribunal to interfere in cases of dismissal of a workman by he management are not unlimited and the Tribunal does not act of a Court of appeal and substitute is own judgment for that of the management. It will interfere (a) where there is want of good faith; (b) when here is victimisation or unfair Labour practice; (c) when the management has been guilty of the basic error or violation of the principles of natural justice; and (d) when on the materials before the Court the finding is completely baseless or perverse. It cannot, therefore, be said that the Industrial Tribunal or the Labour Court will function arbitrarily and interfere with every decision of the management as regards dismissal or discharge of a workman arrived a in a disciplinary enquiry. The power exercisable by the Industrial Tribunal or the Labour Court cannot therefore, be equated with the power of 'veto' conferred on the Vice-Chancellor under clause (b) of either of the two sub-sections of Section 51-A of the Gujarat University Act, 1949. As we have already said earlier, the decision of the Industrial Tribunal or the Labour Court is open to judicial review by the High Court and by this Court on appeal. Section 11(A) which has been introduced since then into the Act which confers the powers on the Industrial Tribunal or the Labour Court to substitute a lesser punishment in lieu of the order of discharge or dismissal passed by the management again cannot be considered as conferring an arbitrary power on the Industrial Tribunal or the Labour Court. The power under Section 11(A) of the Act only when it is exercised judicially and the Industrial Tribunal or the Labour Court is expected to interfere with the decision of a management under Section 11(A) of the Act only when it is satisfied that the punishment imposed by the management is highly disproportionate to the degree of guilt of the workman concerned. The Industrial Tribunal or the Labour Court has to give reasons for its decision. The decision of the Industrial Tribunal or of the Labour Court is again, as already said, subject to judicial review by the High Court and this Court"
Thus, it could be seen that while laying down the norms and the manner of exercise of powers under Section 11(A) of the Act, the Supreme Court also declared that such exercise of power is subject to judicial review by the High Court and the Apex Court.
18. The decision of this Court in Madras Fertilisers case relied upon by the learned counsel for the respondents only lays down that where the Labour court has not made a proper exercise of the discretion vested in it under Section 11(A) of the Act, this court in the exercise of its powers under Article 226 of the Constitution of India can certainly do what the Labour Court failed to do. Having regard to the principles referred to above, we are of the view that the power and discretion conferred under Section 11(A) of the Act have to be exercised judicially and judiciously and that there should be sufficient indication in the order itself of the fact that the Court exercising powers under Section 11(A) of the Act was aware of and alive to the norms and requirements of Section 11(A) of the Act. The Court exercising powers under Section 11(A) of the Act after finding the misconduct to have been proved is first obliged to advert itself to the question of necessity or desirability to interfere with the punishment imposed by the management and, if the management could not justify the punishment imposed thereafter it must consider the question as to the relief that is to be granted to the employee. In so considering the relief to be granted, the Court has an obligation to consider whether the punishment imposed is disproportionate or shockingly severe to the charges held proved and if so whether a reinstatement has to be ordered or whether any other lesser punishment has to be imposed. A specific finding must be recorded whether it was expedient and proper to reinstate the employee or whether award of compensation in lieu of reinstatement will meet the requirements and ends of justice of the case concerned. Absence of reasons to invoke the power and interfere under provisions of Section 11(A) in a particular case would render the very exercise of powers arbitrary and perverse and the order consequently would stand vitiated.
19. On being taken through the relevant portions of the Award we do not find either consideration of any of the relevant criteria referred to by us supra, or even any discussion of the merits of the case on those relevant aspects. Having regard to the absence of even the bare minimum reasoning on the said vital and relevant aspects, we are constrained to hold that the manner of exercise of powers in the present case could hardly be said to be either in conformity with the principles and criteria laid down for the purpose or can be considered to be judiciously and judicially exercised. The Award of the Labour Court merely indicated that the interference in this case with the quantum of punishment was more on the absence of a second opportunity, its conclusion that the charge contained in the memo dated 17th June 1975 was not proved and that there was no reference in the final order of punishment to Exs. M-33 to M-43 which are the previous record of service. Thus not only there was lack of judicious and objective consideration but the perfunctory as well as the preverse manner in which the powers under Section 11(A) of the Act came to be exercised in this case necessitates our interference and the learned single Judge, in our view, ought to have set aside the order of the Labour Court and directed the Labour Court to consider the matter afresh on the question of punishment. On our part we are unable to agree with the learned single Judge that on the whole the award of the Court below does not call for any interference. We are of the view that the learned single Judge did not specifically advert to and much less discuss all the relevant considerations indicated by us as well as the serious lapses on the part of the labour Court on such vital and relevant considerations which otherwise ought to have been made by that court and consequently we are not persuaded to accept the reasoning of the learned single Judge for declining to interfere in the matter. The Award of the Labour Court makes one to think that the Labour Court was totally oblivious to its duties and responsibilities and its exercise of powers under Section 11(A) of the Act did not proceed on objective consideration. As its expected of that Authority.
20. Since there was lack of consensus among the parties regarding the further course to be adopted and the Labour Court also failed to property and effectively consider all relevant aspects in their proper perspective, we consider it necessary to relegate the matter back to the Labour Court for fresh consideration and disposal on the limited question of punishment with reference to Section 11(A) of the Act
21. Consequently, we set aside the order of the learned single Judge and that of the Labour Court in so far as it related to the question of punishment and direct that the matter to be remitted to the Labour Court to consider the matter afresh in the light of the directions contained herein and the requirements of law governing the exercise of powers under Section 11(A) of the Act and pass appropriate orders, in accordance with law. The Writ Appeal is allowed to the extent indicated above. But, there will be no order as to costs.