Full Judgment Text
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PETITIONER:
MANAGEMENT OF MURGUGAN MILLS LTD.
Vs.
RESPONDENT:
INDUSTRIAL TRIBUNAL MADRAS AND ANOTMR
DATE OF JUDGMENT:
11/11/1964
BENCH:
WANCHOO, K.N.
BENCH:
WANCHOO, K.N.
GAJENDRAGADKAR, P.B. (CJ)
HIDAYATULLAH, M.
CITATION:
1965 AIR 1496 1965 SCR (2) 148
CITATOR INFO :
R 1975 SC 661 (13,14,18,19)
E 1976 SC2062 (27,28)
RF 1980 SC1896 (68)
ACT:
Industrial Disputes Act (14 of 1947), s. 33(2)(b), proviso-
it applicable to s. 33 (2) (a) -Jurisdiction of Tribunal to
entertain application under S. 33-A.
HEADNOTE:
During the pendency of an industrial dispute between the
appellant and its workmen, the services of the respondent,
who was an employee, were terminated without giving any
reasons. He filed a petition before the Industrial
Tribunal, under s. 33-A of the Industrial Disputes Act,
1947, complaining that the approval of the Tribunal for
terminating his services as required by the proviso to s.
33(2)(b) was not obtained. The appellant justified the
termination by contending that cl. 17(a) of the Standing
Orders enabled the management to terminate the services of
an employee by fourteen days’ notice, that though the
respondent was deliberately going slow in his work the
termination was not for misconduct, and that therefore s. 33
(2) (b) and its proviso did not apply. The Tribunal held,
that as the termination was under cl. 17(a) of the Standing
Orders, s. 33(2) (a) applied. The Tribunal however held that
the proviso applied to s. 33(2)(a)also, and that, since the
approval of the Tribunal was not obtained, theapplication
under s. 33-A was maintainable. The Tribunal then
considered the evidence adduced on merits, held that the
allegation that the respondent had been deliberately going
slow was not made out, and ordered the reinstatement of the
respondent. The appellant filed a writ petition in the High
Court, which held, that the proviso applies only to cl. (b)
and not to cl. (a), that action was taken against the
respondent by way of punishment and therefore was covered by
cl. (b) to which the proviso applies, and that therefore the
Tribunal had jurisdiction to entertain the application and
pass order on merits. In appeal to the Supreme Court, it
was contended that since the Tribunal took the view that the
case was covered by s. 33 (2) (a), it had no jurisdiction to
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entertain the application because, the proviso is not
applicable to that sub-section.
HELD : Even though the Tribunal was in error in holding that
the proviso applied to s. 33(2) (a), there was no reason to.
interfere with its order. The contention of the respondent
was that there was a contravention of cl. (b) and its
proviso and that contention gave jurisdiction to the
Tribunal in the absence of a domestic enquiry to consider
the evidence and find that the respondent was not guilty of
dereliction of duty, and to order reinstatement. [153 A-C]
The form used for terminating the services is not conclusive
and the Tribunal has jurisdiction to enquire into. the
reasons which lead to the termination. [152 B]
Chartered Bank v. Chartered Bank Employees Union, [1960]3
S.C.R. 441 and Management of U. B. Dutt & Co. v. Workmen of
U. B. Dutt & Co. [1962] Supp. 2 S.C.R. 822, followed
JUDGMENT:
CIVIL, APPELLATE JURISDICTION.--Civil Appeal No. 1036 of
1963.
149
Appeal by special leave from the judgment and order dated
November 8, 1960 of the Madras High Court in Writ Appeal No.
146 of 1960.
A.V. Viswanatha- Sastri and R. Ganapathy Iyer, for the
appellant.
M.S. K. Sastri and M. S. Narasimhan, for respondent No. 2
The Judgment of the Court was delivered by
Wanchoo, J. This is an appeal by special leave against the
judgment of the Madras High Court. The appellant is a
textile mill. Rangarathinam Pillai respondent was employed
as an accountant in the mill for over 13 years by he
appellant. On September 11, 1958, the appellant served a
notice on the respondent under cl. 17 (a) of the Standing
Orders terminating his services on and from September 24,
1958. No reasons were given in the order terminating the
service. The respondent protested against his dismissal and
said that he had a blameless record and had not done
anything meriting the termination of his services. He added
that no showcause notice had been served upon him, no
explanation was asked for and no enquiry whatsoever had been
held before the order was issued. He further alleged that
he had been victimised for his trade union activities as he
was a member of the Executive of the Coimbatore District
Textile Mill Staff Union. When his protest had no effect,
he made an application under S. 33-A of the Industrial
Disputes Act, No. 14 of 1947, (hereinafter referred to as
the Act), as an industrial dispute was pending at the time,
between the appellant and its workmen. The main contention
of the respondent was that the order terminating his
services had been passed without obtaining the approval of
the industrial tribunal and this was against the provision
contained in S. 3 3 (2) (b) of the Act, which lays down that
during the pendency of any proceeding in respect of an
industrial dispute the employer may in accordance with the
standing orders applicable to a workman concerned in such
dispute, discharge or punish him whether by dismissal or
otherwise for any misconduct unconnected with the dispute,
provided that no such discharge or dismissal may be made
unless the workman has been paid wages for one month and an
application has been made by the employer to the authority
for approval of the action taken by the employer.
The contention of the appellant before the tribunal was that
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the services of the respondent had been terminated under cl.
17
150
(a)of the Standing Orders. It enables the management to
terminate the services of a worker by 14 days’ notice. It
was further contended that the termination was not for any
misconduct and was not meted out as punishment and therefore
S. 33 (2) (b) did not apply and it was not necessary to
obtain the approval of the tribunal. It was also stated
that the reason for the termination of service was that the
respondent had been deliberately going slow in his work for
some months prior to the date on which his services were
terminated. This was because he had asked for increase in
pay sometime back and that had been refused. It was further
stated that the balance-sheet for the year 1957 had not been
prepared till August 1958 and therefore when the appellant
found that the respondent was deliberately going slow his
services were terminated as provided in the Standing Orders.
The tribunal took the view that as the termination of
service had taken place under cl. 17 (a) of the Standing
Orders, this was not a case covered by s. 33 (2) (b) of the
Act, which provides for discharge or punishment by way of
dismissal or otherwise for any misconduct unconnected with
the dispute. The tribunal however held that the case was
covered by s. 33 (2) (a). It further held that the proviso
to S. 33 (2) not only applies to a case covered by cl. (b)
but also to cl. (a). Therefore, as the proviso was not
complied with, the tribunal held that the termination of
service of the respondent was in contravention of the
section and the application under S. 33-A of the Act was
maintainable. However, as evidence had been adduced on both
sides on the merits of termination of service, the tribunal
went into the matter. It took the view that even under the
Standing Orders, the appellant could terminate respondent’s
services only for proper reason or the particular standing
order provides that reasons should be recorded and
communicated to the workman if he so desired. The tribunal
went into the question whether the appellant had proper
reasons for terminating the services of the respondent. It
came to the conclusion that the reason given by the
appellant to the effect that the respondent had been
deliberately going slow because his requests for rise in pay
had been refused was not made out. As to the non-
preparation of the balance-sheet for the year 1957 up to
August 1958, the tribunal seems to have accepted the
explanation of the respondent that the delay was due to the
appellant’s desire not to publish the balance-sheet till
fresh shares issued by it had been taken up by the public
for if the loss incurred for the year 1957 were known to the
public before the fresh shares were subscribed, the public
response might be poor. The tribunal finally
151
held that the delay in the finalisation of the accounts for
the year 1957 could not be said to be due to solvenliness or
dereliction of duty on the part of the respondent. The
tribunal therefore allowed the application under S. 33-A and
ordered the reinstatement of the respondent with back wages.
The appellant then filed a writ petition before the High
Court, which came before a learned Single Judge. The
learned Single Judge did not decide the question whether the
proviso to s. 33 (2) applied only to cl. (b) and not to cl.
(a). He held that as the action against the respondent was
taken by way of punishment for negligence etc., the case was
clearly covered by cl. (b) of s. 3 3 (2) to which the
proviso undoubtedly applied. He therefore held that the
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industrial tribunal had jurisdiction to entertain the
application under s. 33-A in the circumstances. Finally he
held that as the tribunal had held on the merits that the
charge against the respondent of dereliction of duty was not
made out, the writ petition must fail. The appellant then
went in appeal to the Division Bench, which upheld the order
of the learned Single Judge. Then there was an application
for leave to appeal to this Court, which was rejected. The
appellant then applied for and obtained special leave from
this Court and that is how the matter has come up before us.
The right of the employer to terminate the services of his
workman under a standing order, like cl. 17(a) in the
present case, which amounts to a claim "to hire and fire" an
employee as the employer pleases and thus completely
negatives security of service which has been secured to
industrial employees through industrial adjudication, came
up for consideration before the Labour Appellate Tribunal in
Buchkingham & Carnatic Co. Ltd. v. Workers of the
Company(1). The matter then came up before this Court also
in Chartered Bank v. Chartered Bank Employees Union(2) and
the Management of U. B. Dutt & Co. v. Workmen of U. B. Dutt
& Co.(3) wherein the view taken by the Labour Appellate Tri-
bunal was approved and it was held that even in a case like
the present the requirement of bona fides was essential and
if the termination of service was a colourable exercise of
the power or as a result of victimisation or unfair labour
practice the industrial tribunal would have the jurisdiction
to intervene and set aside such termination. The form of
the order in such a case is not conclusive and the tribunal
can no behind the order to find the reasons which led to the
order and then consider for itself whether the
(1) (1952) L.A.C. 490. (2) [1960]3 S.C.R. 441.
(3) (1962) Supp. 2 S.C.R. 822,
152
termination was a colourable exercise of the power or was a
result of victimisation or unfair labour practice. If it
came to the conclusion that the termination was a colourable
exercise of the power or was a result of victimisation or
unfair labour practice it would have the jurisdiction to
intervene and set aside such termination.
The form therefore used in the present case for terminating
respondent’s services under cl. 17 (a) is not conclusive and
the tribunal was justified in enquiring into the reasons
which led to such termination; even the Standing Orders
provide that an employee can ask for reasons in such a case.
Those reasons were given before the tribunal by the
appellant viz the respondent’s services were terminated
because he deliberately adopted go-slow and was negligent in
the discharge of his duty. His services were therefore
terminated for dereliction of duty and go-slow in his work.
This clearly amounted to punishment for misconduct and
therefore to pass an order under cl. 17 (a) of the Standing
Orders in such circumstances was clearly a colourable
exercise of the power to terminate the services of a workman
under the provision of the Standing Orders. In those
circumstances the tribunal would be justified in going
behind the order and deciding for itself whether the
termination of the respondent’s services could be sustained.
In the present case, evidence was led before the tribunal in
support of the appellant’s case that the respondent was
guilty of dereliction of duty and go-slow in his work. The
tribunal has found that this has not been proved. In these
circumstances the case was clearly covered by cl. (b) of S.
33 (2) of the Act as the services of the respondent were
dispensed with during the Pendency of a dispute by meeting
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out the punishment of discharge to him for misconduct. As
this was done without complying with the proviso, the
termination of the service was rightly set aside.
It is however urged on behalf of the appellant that the
tribunal found that the case under S. 33 (2) (b) had not
been made out. It also found that the case which had been
made out was one under S. 33 (2) (a). It then went on
to hold that the proviso applied to S. 33 (2) (a). The
appellant contends that the view of the tribunal that the
proviso applied to S. 33 (2) (a) is incorrect and therefore
the tribunal was not right in entertaining the application
under S. 33-A and ordering reinstatement of the respondent.
It is clear from a bare perusal of S. 33 (2) that the
proviso thereto only applies to cl. (b) and not to cl. (a)
and the tribunal therefore was in error when it held that it
also applied to cl. (a). But that in our opinion makes no
difference in the present case as pointed
153
out by the High Court. The contention of the respondent was
that there had been a contravention of S. 33 (2) (b). It
was that contention which gave jurisdiction to the tribunal
and which the appellant had to meet and it did meet it by
producing evidence. That evidence was considered by the
tribunal and it found that the appellant’s contention that
the respondent was guilty of dereliction of duty and go-slow
had not been made out. In these circumstances even though
the tribunal was in error in holding that the proviso to S.
33 (2) applied to cl. (a) thereof also, there in no reason
for us to interfere with the order passed by the tribunal.
As the High Court has rightly pointed out, the case is
clearly covered by s. 33 (2) (b) to which the proviso
undoubtedly applies. As the proviso was not complied with
the application under S. 33-A could be entertained by the
tribunal and the tribunal did entertain it and went into the
merits of the charge and came to the conclusion that the
charge had not been proved. In these circumstances the
order passed by the tribunal, and upheld by the High Court,
is substantially correct, in spite of the error of law
committed by the tribunal. The appeal therefore fails and
is hereby dismissed with costs.
Appeal dismissed.
3Sup./65 - 11
154