Full Judgment Text
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PETITIONER:
STATE BANK OF INDIA
Vs.
RESPONDENT:
R. K. JAIN & ORS.
DATE OF JUDGMENT17/09/1971
BENCH:
VAIDYIALINGAM, C.A.
BENCH:
VAIDYIALINGAM, C.A.
REDDY, P. JAGANMOHAN
CITATION:
1972 AIR 136 1972 SCR (1) 755
1972 SCC (4) 304
CITATOR INFO :
RF 1972 SC1031 (43,45,52,58)
RF 1973 SC1227 (24)
RF 1975 SC1900 (12,16)
R 1978 SC1380 (8)
R 1979 SC1652 (20,23,28)
RF 1984 SC 289 (15)
RF 1991 SC1070 (6)
ACT:
Industrial Law Domestic enquiry Defence witnesses not summon
ea-If violative of principles of natural justice-Sastri
Award, para. 521(10)(c)-Scope of-Enquiry before Industrial
Tribunal-Right of management to justify dismissal even if
domestic enquiry vitiated--Scope of.
HEADNOTE:
The first respondent was a Money Tester in the appellant
bank and was deputed to supervise the remittance of
unissuable notes from the branch of the appellant to the
Notes Cancellation and Verification Section of the branch of
the Reserve Bank of India for destruction. On the
allegation that, in order to-avoid liability, he
deliberately tore off the label containing his initials, on
a packet of notes in which there was a shortage, the
appellant ordered an inquiry. At the inquiry, the respon-
dent examined two defence witnesses who were cashiers of the
appellant from different branches. Some officers of Reserve
Bank of India who gave evidence for the appellant refused to
be cross examined and did not answer any question put to
them in cross-examination. Notwithstanding the
irregularity, the inquiry proceeded and the inquiry officer
submitted his report finding the respondent guilty. The
appellant however, ordered a de novo inquiry by another
officer. During that inquiry, in which the first respondent
took part under protest, he requested the inquiry officer to
summon his two defence witnesses who were examined at the
earlier enquiry and three others all employees of the
appellant. The inquiry officer rejected the request
regarding the three new witnesses on the ground that their
evidence would not be relevant, and as regards the other
two, he informed the respondent that he should arrange for
producing them at the inquiry at his own expense, The
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respondent pleaded that he already incurred a considerable
expense in that regard, that the second inquiry was being
held due to no fault of his, and therefore, he regretted his
inability to have the witnesses summoned at his expense He
also requested that in case the two witnesses were not
summoned on his behalf their evidence in the earlier enquiry
may be treated as evidence in the second inquiry. But his
plea was not accepted and the proceedings were conducted
without those witnesses being examined on behalf of the res-
pondent. The enquiry officer submitted his report finding
the respondent guilty. The respondent was asked to show
cause why the proposed punishment of discharge from service
without notice in terms of para. 521(10)(c) of the Sastri
Award should not be imposed. After considering his reply
the appellant discharged him from service.
The Central Government referred the dispute as to whether
the appellant was justified in discharging the respondent
from its service, to the Industrial Tribunal.
The Industrial Tribunal held that the respondent was not
afforded a reasonable opportunity to produce evidence in his
defence during the second inquiry and that the management
was not justified in terminating his services on the basis
of the report of the inquiry officer.
In appeal to this Court, it was contended that (1) the
Tribunal had no jurisdiction to set aside the order of the
management discharging the
756
workman from service when there was no finding that the
appellant acted mala fide or with a view to victimise the
employee; (2) even if it was held that the evidence was not
sufficient to justify the order of discharge nevertheless,
under the last part of the para. 521 (10) (c) of the Sastri
Award the appellant had jurisdiction to pass the order of
discharge; and (3) even assuming that the domestic inquiry
conducted by the appellant was in any manner vitiated, the
Tribunal erred in law in not giving an opportunity to the
management to adduce evidence before the Tribunal to
establish the validity of the order of discharge.
Dismissing the appeal,
HELD : (1) The order terminating the services of a workman
can be set aside when there has been a violation of the
principles of natural justice. Though normally it may be
the duty of a workman to have his witnesses produced before
the inquiry officer, in the particular circumstances of this
case the position was different. The workmen had incurred
heavy expenses in the previous inquiry, which inquiry was
abandoned by the management not because of any fault of the
workman but because of the unreasonable attitude adopted by
the employees of the Reserve Bank who gave evidence. For
their conduct the workman should not be punished by making
him incur expenses over again, especially when the second
inquiry was conducted by the management of its own volition
and in spite of the protests made by the workman. The
request made by the workman was a reasonable and modest one.
The Tribunal was, therefore, justified in holding that the
workman was not afforded a reasonable opportunity to place
his evidence before the inquiry officer, that there has been
a violation of principles of natural justice in the conduct
of the domestic inquiry and consequently, the order’ of
discharge could not be sustained. [769 A-B; 771 G-; 773 C-G;
774 A-B]
Tata Oil Mills Company Ltd. v. Their Workmen, [1966] 2
L.L.J. 602 and Ananda Bazar Patrika (P) Ltd. v. Its Workmen,
[1964].3 S.C.R. 601, followed.
(2)Under para. 521(10)(c) of the Sastri Award even if the
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evidence on record is sufficient to hold a workman guilty of
the charges framed against him the bank had ample power and
jurisdiction to discharge him from its service if it does
not consider it expedient to retain the employee. But in
the present case, the management never sought to place any
reliance on that part of sub-cl. (c). The finding of the
inquiry officer was that on the evidence adduced the workman
was guilty of the charges levelled against him and that the
charges had been proved beyond all doubt. The show cause
notice proceeded on the same basis and the final order of
discharge was also to the same effect. Therefore, the
appellant never proceeded on the basis that the service of
the respondent was being dispensed with on the ground that
the management did not think it expedient to retain the
workman in its service notwithstanding the fact that the
evidence had been found to be insufficient to sustain the
charges levelled against him. [774 D-H]
(3)When an order of punishment by way of dismissal or
termination of services is effected by the management the
issue that is referred by the Industrial Tribunal is whether
the management was justified in discharging and terminating
the services of the workman concerned and whether the
workman was entitled to any relief. Under those
circumstances it is the right of the workman to plead all
infirmities in the domestic inquiry if one has been held,
and also to attack the order on all grounds available to him
in law and on facts. Similarly the management has also a
right to defend the action taken by it on the ground that a
proper domestic inquiry had been held by it on the basis of
757
which the impugned order had been passed. It is also open
to the management to justify on facts that the order passed
by it was proper. If the management &fends its action
solely on the basis that the domestic inquiry held by it is
proper and valid and if the Tribunal holds against the
management on that point, the management will fail. It is
open to the Tribunal to accept the evidence adduced by the
management to justify its action and hold in its favour even
if its finding is against the management regarding the
validity of the domestic inquiry. It is however essentially
a matter for the management to decide about the stand that
it proposes to take before the Tribunal. The inquiry that
is conducted by the Tribunal is ’a composite inquiry, and
there is no justification for the view that the inquiry
before the Tribunal has to be conducted in two parts first,
an investigation into the validity of the domestic inquiry
and if the decision is against the management on the point,
then to conduct a further inquiry regarding the evidence
that may be adduced by the parties about the validity of the
action taken by the management. [776F-H; 777A-D; 778 C-D]
In the present case, the to justify the legality of the
domestic inquiry held was passed. It never to produce any
evidence before the Tribunal apart from the inquiry
proceedings. No opportunity for justifying its action was
asked for by the management nor availed of. [.778 H; 779 A-
B]
M/s.Hindustan Steel Ltd. v. Their Workers, (1970) Labour &
Industrial Cases, 102, approved.
Madhya Pradesh State Road Transport Corporation v.
Industrial Court, Madhya Pradesh, (1970) Labour & Industrial
Cases 510 and Premnath Motors Workshop Private Ltd. v.
Industrial Tribunal, Delhi, (1971) I.F & L.R. 370,
overruled.
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JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 992 of 1967.
Appeal by special leave from the Award dated April 7, 1967
of the Industrial Tribunal, Chandigarh in Reference No. 4C
of 1966.
Jagadish Swarup, Solicitor-General, H. L. Anand, Ashok
Grover and K. B. Mehta, for the appellant
M.K. Ramamurthi, R. A. Gupta and K. B. Rohatgi, for
respondent No. 1.
The Judgment of the Court was delivered by
Vaidialingam, J. This appeal, by special leave, by the State
Bank of India, is against the award dated April 7, 1967 of
the Industrial Tribunal, Chandigarh, setting aside the order
of the appellant, discharging the services of the first
respondent and directing his reinstatement with full back
wages.
The first respondent joined the service of the appellant on
June 13, 1955 as a Money Tester and was working in that
capacity at the Ambala City Branch in July, 1960. On July
26, 1960, he was deputed to supervise the remittance of
unissuable
758
notes of Rs. 87,48,000/- from the Ambala City Branch to the
Note Cancellation and Verification Sections of the Reserve
Bank of India, Ludhiana for destruction. According to the
appellant the procedure adopted for such purpose was : the
currency notes intended to be carried for destruction to the
concerned section of the Reserve Bank of India, are
examined, counted and then tied in bundles with a label or
slip attached to each packet containing the particulars
including the initials of the examining officer’ Each packet
is then recounted by the Money Tester and the latter puts
his initial on the label or slip in token of his having done
the recounting, the idea being, that if any shortage is
discovered subsequently, the person whose initials are found
on the label or slip can be made liable to account for the
deficiency, and be asked to make good the same.
Accordingly, when the money was taken by the first
respondent on July 26, 1.960 and delivered to the Note
Cancellation and Verification Section of the Reserve Bank of
India, Ludhiana, officials therein noted a shortage of Rs.
100/- in the packet containing Rs. 10/denomination notes.
Such a deficiency was noted in the packet to which was
tacked the label bearing the initials of R, K. Jain. The
shortage was pointed out to R. K. Jain by the officials of
the Reserve Bank of India, and the packet was handed back to
the former to enable him to satisfy himself regarding the
shortage. R. K. Jain, under the guise of trying to unstitch
the packet, tore off the label bearing his initials in spite
of the protest made by the officials of the Reserve Bank of
India. The torn label was picked up and as it contained the
initials of R. K. Jain, the officials of the Reserve Bank of
India kept the torn pieces intact. Later on., a verbal
inquiry was made by the Superintendent of the Reserve Bank
of India and R. K. Jain admitted the shortage by his letter
dated July 29, 1960. In that letter, addressed to the
Reserve Bank of India. R.’ K. Jain stated that while count-
ing the packet containing the Rs. 10/- notes in which a
shortage of Rs. 100/- was found, the slip was torn by him
inadvertently and that he repasted the slip, after having
confirmed the mutilation as desired by the officials of the
Reserve Bank of India. Ambala City Branch of the appellant,
addressed a letter dated August 13 , 1960 to R. K. Jain
regarding the reports made by the Currency Officer, Reserve
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Bank of India and the Superintendent Incharge of the Reserve
Bank of India, Ludhiana, regarding the shortage of Rs.
100/-. In that letter, after referring to the counting of
the packet by the first respondent and his tearing the label
and recasting it, it is stated that the first respondent is
responsible for the shortage as he has put his signature in
the label in token of having recounted the packet and found
it to be correct. It was further stated that the first
respondent tore off the label because it contained his
initials and this was done to
759
avoid any liability or responsibility. These acts were
stated to amount to gross misconduct and R. K. Jain was
called upon to submit his explanation to the Head Office of
the appellant. On August 16, 1960, the first respondent
stated that the packet containing soiled notes was handled
by several persons and counted more than once both in the
Branch at Ambala as well as in the concerned section of the
Reserve Bank of India, Ludhiana. After referring to the
fact that the packet was given to him for recounting, as the
officers asked him to hurry up the matter and to return the
packet soon, and as there was a shortage of Rs. 100/-, he
got confused and while handling the packet the covering slip
tore off accidentally. This fact was explained to the
officer of the Reserve Bank of India. He further stated
that he did not destroy the label deliberately to avoid any
liability. The first respondent has further stated that on
the morning of July 26, 1960, ten notes of rupee one
denomination were found short in a packet which was verified
and found correct by the staff of the Reserve Bank of India.
But later on the Superintendent of the Reserve Bank of India
detected the shortage and this deficiency was made up by the
staff of the Reserve Bank. The concerned staff of the
Reserve Bank, who had made up the deficiency, was not well
disposed towards him as he declined to accede to their
request to reimburse, them in the sum of Rs. 10/- which they
had to make good due to their negligence. Therefore, the
staff of the Reserve Bank in the concerned section has made
a false allegation that the slip was deliberately torn off
by the first respondent. R. K. Jain has further stated that
he had put in nearly five years service and had a clean
record and that the allegations made against him were false
and frivolous.
Not satisfied with the explanation given by R. K. Jain, the
appellant placed him under suspension with effect from
September 6, 1960 pending an inquiry, which had been ordered
against his conduct. By letter dated October 10, 1960, R.
K. Jain was required to show cause why disciplinary action
should not be taken against him on the following charges :
"(1) That during the course of examination of
Ambala City Branch remittance of non-issuable
notes sent to the Note Cancellation and
Verification Section of the Reserve Bank of
India. Ludhiana,’ on 26th July, 1960, under
your supervision, 10 pieces of Rs. 10/- notes
were found short in one packet; the packet in
question was recounted by you at the Branch.
(ii) That when you were given the aforesaid
packet for satisfying yourself regarding the
shortage,
760
you tried to unstitch it and in the process
tore off the label stitched on the packet
despite instructions not to do so. On the
label being examined by the Superintendent-in-
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Charge of the Reserve Bank’s Note Cancellation
Section it was revealed that the label bore
your signature in token of your having counted
the packet in question. It is, therefore,
obvious that you tried to destroy the label in
order to absolve yourself of the
responsibility for the shortage in question."
He was further directed to submit his explanation within 10
days of the receipt of the charge sheet.
It will be seen from the above that the charges against R.
K. Jain were twofold: (i) There was a shortage of 10 pieces
of notes of Rs. 10/- denomination in the packet which
contained the label bearing his initial; and (ii) That he
tried to destroy the label in order to absolve himself from
the liability for the shortage.
R.K. Jain sent his explanation to the charges by his
letter dated October 18, 1960. While admitting that he was
deputed on July 26, 1960 to remit unissuable noted in the
concerned section of the Reserve Bank of India, Ludhiana,
and the shortage being found and the packet being given to
him for recounting, R. K. Jain has stated That as the packet
had been handled by different persons in the offices of the
two banks, the stitching had become loose. Therefore, when
the packet was being recounted by him, the slip tore off
accidentally. As the staff of the Reserve Bank desired him
to confirm the mutilation ,of the slip, he signed a letter
which had been drafted by them on being assured that it was
a routine procedure to be adopted. He denied that he
deliberately tore off the slip bearing his initial to avoid
responsibility for the shortage of currency notes. In turn
he alleged that the staff of the Reserve Bank of India at
Ludhiana, in the Note Cancellation and Verification Section
was prejudiced against him as he had declined to accede to
their request to pay them a sum of Rs. 10/- which they had
to make good in respect of another packet. He denied the
charges as baseless and as he had signed the letter of July
29, 1960, as drafted by the staff of the Reserve Bank of
India, Ludhiana, he requested that the, proceedings may be
dropped.
It is seen that there was a Departmental Inquiry conducted
by one B. P. Tiwari, an officer of the Appellant Branch at
Ambala. The inquiry commenced on December 23, 1960 and the
Inquiry Officer submitted his report on February 2, 1961
761
holding R. K. Jain guilty of the charges levelled against
him. it is not necessary for us to advert to the findings in
this report as a fresh inquiry was conducted later. It is
only necessary to note that during the inquiry proceedings
conducted by B. P. Tiwari, the :first respondent had
examined Pooran Singh and Sanjhi Ram, who were Cashiers at
the Jullundur and Amritsar Branches respectively, of the
appellant Bank, as his defence witnesses. They had given
evidence complaining about the behaviour of the staff of
the Reserve Bank of India in the Note Cancellation Section
particulars towards potdars of the State Bank of India. It
is also seen that some officers of the Reserve Bank of India
at Ludhiana in the Note Cancellation Section had given
evidence for the appellant. Those officers surprisingly
refused to be cross-examined by the first respondent during
that inquiry. This resulted in the Deputy General Secretary
of the State Bank of India’s Staff Association sending a
letter on December 24, 1960 to B. P. Tiwari pointing out
that in the inquiry that was being conducted by him, the
employees of the Reserve Bank of India, at whose, instance
the charges had been framed against R. K. Jain, did not
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permit the delinquent to put them any question in cross-
,examination. In fact, it is averred that those officers of
the Reserve Bank of India flatly refused to answer any
questions that were put by R. K. Jain and his representative
and also declined to answer any questions put to them in
cross-examination. It was alleged that the statements given
by those officers of the Reserve Bank of India were one
sided and R. K. Jain and his representative had to sit as
spectators during the inquiry. The inquiry was quite
contrary to the Procedure to be adopted in disciplinary
action taken in respect of Bank employees. Notwithstanding
this grievance made on behalf of the first respondent that
the inquiry was opposed to all principles of natural justice
and was not a proper inqairy, .nothing seems to have been
done, by the appellant, as will be seen from the fact that
the inquiry proceeded and the report, finding R. K. Jain
guilty, was sent by B. P. Tiwari, so late as February 2,
1961.
It is stated by the appellant that when the report of B. P.
Tiwari was considered, the grievance made on behalf of R. K.
Jain in the letter dated December 24, 1960 was taken into
account and it was decided that the inquiry conducted by D.
P. Tiwari, was not a proper one and hence a de novo inquiry
was directed to be done by another Officer B. D. Sharma. It
may be mentioned that there is no order of the appellant on
record, in and by which they directed a de novo inquiry by
B. D. Sharma.
It appears that the new Inquiry Officer B. D. Sharma sent a
communication dated May 27, 1961 to R. K. Jain that he will
762
be conducting another inquiry against him on the charges
originally framed and that the inquiry is fixed for June 14,
1961. On receipt of this communication the Deputy General
Secretary of the State Bank of India Staff Association sent
a reply on June 10, 1961 to D. D. Sharma stating that the
Association was astonished about the proposal to have a
second inquiry. The letter proceeds to state that B. P.
Tiwari conducted an inquiry about six months back and that
though a report appears to have been sent by him to the Head
Office, no copy of such a report had been furnished to R. K.
Jain. The Association has been making several inquiries
from the Head Office regarding the matter, but the only
reply that was received by it was that the matter was
receiving the attention of the Head Office. The Staff
Association further protested very strongly against the
Bank’s action in holding a fresh inquiry and that it was
unjustified and amounted to an unfair labour ’practice. The
Association further charged the management that they were
somehow or the other intent on finding R. K. Jain guilty of
some charge or other and to punish him. On these grounds
the Association made a request to cancel the second inquiry
proposed to be held. A copy of this communication was also
sent to the Secretary and Treasurer of the appellant Bank at
New Delhi requesting him to look into the matter and stop
the fresh inquiry proposed to be conducted by B. D. Sharma
on June 14, 1961. But the Inquiry Officer, by his letter
dated June 13, 1961 informed R. K. Jain that the inquiry
will be held on June 14, 1961 as already intimated. Again
on June 14, 1961 the Deputy General Secretary of the Staff
Association sent a communication to the Inquiry Officer that
the Head Office has not informed R. K. Jain that a fresh
inquiry: is proposed to be conducted and that in fact even
the details of the inquiry relating to the one conducted by
B. P. Tiwari have not been furnished to him. The
Association again requested the Inquiry Officer to stop
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holding the inquiry and furnish R. K. Jain with a copy of
the previous inquiry proceedings.
We will have to refer to certain further correspondence that
passed between the Inquiry Officer and the Staff Association
on behalf of R. K. Jain. It is enough to state that R. K.
Jain, when he found that the inquiry was being proceeded
with consented to take part under protest. He made a
request to the Inquiry Officer to summon five witnesses who
are employees of the appellant Bank. The Inquiry Officer
rejected the request of R. K. Jain regarding three of those
witnesses on the ground that their evidence will not be
useful for the inquiry. Regarding the two others, the
Inquiry Officer informed R. K. Jain that the latter should
arrange for producing those witnesses at the inquiry at his
expenses. R. K. Jain pleaded that those witnesses were
763
that he has already incurred considerable expense in that
regard. The second inquiry was being held due to no fault
of his and therefore he regretted his inability to have them
summoned at his expense. But this plea was not accepted by
the lnquiry Officer and the proceedings were conducted
without those witnesses being examined on behalf of R. K.
Jain.
The inquiry proceedings were conducted by B. D. Sharma
between June 14, 1961 and July 12, 1962. B. D. Sharma sent-
his report to the Head Office on August 23, 1962. In the
said report the Inquiry Officer found that R. K. Jain was
responsible for the shortage of the currency notes and that
he deliberately tore off the slip bearing his initials in
the packet where the deficiency was noted and this was done
with the intention of destroying evidence of his having
recounted the packet. Thefindings are by and large based
upon the evidence of the officers of the Reserve Bank of
India, who in the previous inquiry had’ refused to be cross-
examined. On receipt of the report, the Superintendent of
the Ambala City Branch of the appellant by his letter dated
March 4, 1963 intimated R. K. Jain that theInquiry Officer
B. D. Sharma has found him guilty of the charges framed
against him. It was further stated that the appellant has
come to the decision that R. K. Jain should be discharged
from service of the Bank without notice in terms of
paragraph 521 (10) (c) of the Sastry Award read with
paragraph 18.28 of the Desai Award. R. K. Jain was desired
to show cause within a week why the proposed punishment
should not be imposed. He was also informed that he, would
be given a hearing before final orders are passed, if he so
desired. ,
The first respondent sent a reply on March 28, 1963
pleadinginnocence. In the said reply he alleged that the
first inquiry by B. P. Tiwari was conducted contrary to all
principles of natural justice. The second inquiry by B. D.
Sharma was also conducted in voilation of the principles of
natural justice and that he was not Oven a reasonable
opportunity to defend himself. He made a grievance that his
request to have certain witnesses summoned for being cross-
examined on his behalf was arbitrarily rejected by the
Inquiry Officer. He further alleged tbat his representative
was not permitted to put the necessary questions to the
officers of the Reserve Bank, who gave evidence before the
Inquiry Officer. In particular hp, referred to the fact
that his request to summon two witnesses Pooran Singh and
Sanjhi Ram, who were in the employ of the appellant was
arbitrarily rejected by the Inquiry Officer. Apart from
pleading all these facts, he alleged that the findings
recorded by the Inquiry Officer were opposed to the evidence
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onrecord. The sum and substance of the grievance of R. K.
Jain,
364
was that the inquiry conducted by B. D. Sharma was contrary
to all principles of natural justice; and that he was not
given a fair opportunity for placing his defence before the
Inquiry Officer and the whole proceedings were not conducted
in a judicial manner.
The Superintendent of the appellant branch at Ambala, by his
,order dated October 1, 1963 discharged R. K. Jain from the
service of the Bank without notice, on the ground that his
explanation contained in his letter dated March 28, 1963 was
unsatisfactory and cannot be accepted. The first respondent
filed an appeal on November 8, 1963 before the Deputy
Secretary and Treasurer of the appellant Bank at New Delhi.
The Appellate Authority, ’however, rejected the appeal on
January 18, 1964.
We have given elaborately the circumstances leading to the
order of discharge passed by the appellant Bank in order to
appreciate the background which led to a reference being
made by the Central Government ’to the industrial Tribunal
for adjudication. The Central Government by its order dated
September 19, 1966 referred for adjudication to the
Industrial Tribunal, Chandigarh the following dispute :
"Whether the management of the State Bank of
India was justified in discharging from
service Shri R. K. Jain, Money Tester at
Ambala City Branch, with effect from 1st
October, 1963 if not, to what relief is the
employee entitled ?"
In the written statement filed by the workman, after setting
out the, various facts mentioned earlier, it was averred
that the Reserve Bank employees who appeared before B. P.
Tiwari declined to be cross-examined by the workman and that
the second inquiry by B. D. Sharma was conducted in spite of
protests made by the workman. it was pleaded that the
workman never wanted the second inquiry. He further alleged
that the inquiry conducted by B. D. Sharma was in voilation
of the principles of natural justice inasmuch as he was
denied an opportunity of having certain witnesses summoned,
who were in the employ of the appellant, to give evidence.
The workman also criticised the manner in which the inquiry
proceedings were conducted by B. D. Sharma. The findings
recorded by B. D. Sharma were also attacked as being opposed
to the evidence on record. In particular, the workman made
a grievance that he was denied the opportunity to summon
Pooran Singh, Cashier at Jullundur Branch and Sanjhi Ram,
Cashier at Amritsar Branch of the appellant Bank, who had
appeared as his witnesses in the inquiry conducted by B. P.
Tiwari. He had incurred a lot of expense in that regard and
the first inquiry was scraped for no fault of his and the
second inquiry was ordered
765
by the management of their own accord. All these matters
have caused considerable prejudice in placing his defence
before Inquiry Officer.
The appellant Bank, in its written statement admitted that
during the inquiry conducted by B. P. Tiwari the employees
of the Reserve Bank at Ludhiana, who gave evidence did not
allow themselves to be cross-examined by the representative
of R. K. Jain and, therefore, the said inquiry was not
proper. It was because of the fact that the workman did not
have a fair and proper inquiry conducted against him, the
second inquiry was directed to be conducted by B. D. Sharma.
The Bank further averred that full opportunity was given to
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the workman to place his defence and facilities were
provided for arranging to get any witnesses that he wanted
to produce before the Inquiry Officer. The Bank supported
the findings recorded by the Inquiry Officer. The Bank
further averred that the Agents at the Jullundur and
Amritsar Branches, were permitted to release Pooran Singh
and Sanjhi Ram, if they were willing to give evidence at
Ambala at their expense on behalf of R. K. Jain. The Bank
finally pleaded that the action taken against R. K. Jain was
perfectly justified and it was in accordance with the
procedure indicated in the Sastry Award.
The Industrial Tribunal, by its award dated April 7, 1967,
held that R. K. Jain was not afforded a reasonable
opportunity to produce evidence in his defence during the
inquiry conducted by B. D. Sharma and that the management
was not justified in terminating his services, on the basis
of the report of the Inquiry Officer. The Tribunal has
referred to the evidence given by the Inquiry Officer R.W.
1, as well as the Agent of the appellant Bank R.W. 2, who
passed the order of discharge. It referred to the admission
made by the Inquiry Officer regarding the request made by R.
K. Jain to have the two Cashiers Pooran Singh and Sanjhi Ram
examined on his behalf and that request was not acceded to
on the ground that it was for the workman concerned to
produce them for examination, if he so desired. According
to the Tribunal the workman had been put to a considerable
expense in examining those witnesses in the previous inquiry
held by B. P. Tiwari, which had to be abandoned due to no
fault of the workman. The Tribunal further found that the
workman did not want the second inquiry. Under those
circumstances, when a fresh inquiry was being conducted by
the, management, it is the view of the Tribunal that it was
quite unreasonable on their part to expect a poor workman to
be put to unnecessary and additional expense for no fault of
his. The Tribunal also held that the inquiry was closed in
spite of repeated requests made by the workman for summoning
the witnesses and that even the statement of R. K. Jain was
not recorded after the evidence on the side of the
management was closed. For
766
all these reasons, the Tribunal held that the inquiry
proceedings were vitiated by violation of the principles of
natural justice and, therefore the inquiry was not valid.
The learned Solicitor-General on behalf of the appellant
ha,,-, urged three contentions : (1) The Tribunal had no
jurisdiction to set aside the order of the, management
discharging the workman from service when there is no
finding that the appellant had acted mala fide or with a
view to victimise the employee; (2) Even if it is held that
the evidence is not sufficient to justify the order
of .,discharge, nevertheless under the last part of
paragraph 52 1, cl. (10), sub-clause (c) of the Sastry
Award, the appellant has ’full jurisdiction to pass the
order of discharge; and (3) Even assuming that the domestic
inquiry conducted by the Bank was in any manner vitiated,
the Industrial Tribunal erred in law in not giving an
opportunity to the management to adduce evidence before it
to establish the validity of the order of discharge.
Mr. M. K. Ramamurthi, learned counsel for the first respon-
dent, strenuously contested the position taken on behalf of
the appellant. The counsel urged that the finding of the
Tribunal that the second inquiry was not conducted at the
instance of the workman is correct. Though, normally it is
the duty of the party, who wants to have witnesses examined,
to produce them before the Inquiry Officer, yet in the
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particular circumstances of this case and in view of what
happened in the inquiry conducted by B. P. Tiwari, the
Tribunal is justified in holding that the Inquiry Officer’s
refusal to have the two Cashiers, namely, Pooran Singh and
Sanjhi Ram produced for giving evidence amounts to a denial
of a reasonable opportunity to the workman in placing his
defence before the Tribunal. The counsel further urged that
the last part of Sub-Cl. (c) of Cl. 10 of Paragraph 521 does
not apply and it has not been pleaded by the appellant. The
counsel further pointed out that the appellant, as will be
seen from the written Statement filed before the Tribunal,
was prepared to justify the order of discharge solely on the
basis of domestic inquiry and it never offered to adduce
evidence before the Tribunal dehors the domestic inquiry.
The appellant, not having asked for an opportunity to adduce
evidence before the Tribunal, and not having even raised
such a point in the Special Leave Petition, cannot be
allowed. to urge, for the first time in the appeal that the
Tribunal should ’have given an opportunity to adduce
evidence to justify the order of discharge.
We will now consider the contentions of the learned
Solicitor in the order stated above. Before we do so it is
necessary to refer to the relevant provisions in the Award
of the All India Industrial Tribunal (Bank Disputes), which
is known as the Sastry Award. Chapter XXV deals with the
method of recruitment, conditions of service, termination of
employment, disciplinary action etc. Section
567
1 deals with the method of recruitment; and S. 2 with the
terms and conditions of service. Section 3, in which
Paragraph 521 occurs, deals with the procedure for taking
disciplinary action. Clauses (9) and (10) of Paragraph 521
are as follows :
"521 : A person against whom disciplinary action is proposed
or likely to be taken should, in the first instance, be
informed of the particulars of the charge against him; he
should have a proper opportunity to give his explanation as
to such particulars final orders should be passed after due
consideration of all the relevant facts and circumstances.
With this object in view we give the following directions..-
(9) When it is decided to take any
disciplinary action against an employee such
decision shall be communicated to him within
three days thereof.
(10) The. procedure in such cases shall be as
follows
(a) An employee against whom disciplinary
action is proposed or likely to be taken shall
be given a chargesheet clearly setting forth
the circumstances appearing against him and a
date shall be fixed for enquiry, sufficient
time being given to him and a date shall be
fixed for enquiry, sufficient time being given
to him to enable him to prepare and give his
explanation as also to produce any evidence
that he may wish to tender in his defence. He
shall be permitted to appear before the
officer conducting the enquiry, to cross-
examine any witness on whose evidence the
charge rests and to examine witnesses and pro-
duce other evidence in his defence. He shall
also be permitted to be defended by a
representative of a registered union of bank
employees or, with the bank’s permission, by a
lawyer. He shall also be given a hearing as
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regards the nature of the proposed punishment
in case any charge is established against him.
(b) Pending such inquiry he may be
suspended, but if on the conclusion of the
enquiry it is decided to take no action
against him he shall be deemed to have been on
duty and shall be entitled to the full wages
and allowances and to all other privileges for
the period of suspension; and if some
punishment other than dismissal is inflicted
the
768
whole or a part of the period of suspension,
may, at the discretion of the management, be
treated as on duty with the right to a
corresponding portion of the wages, allowances
etc.
(c) In awarding punishment by way of
disciplinary action the authority concerned
shall take into account the gravity of the
misconduct, the previous record, if any, of
the employee and any other aggravating or
extenuating circumstances that may exist.
Where sufficiently extenuating circumstances
exist the misconduct may be condoned and in
case such misconduct is of "gross" type he may
be merely discharged, with or without notice
or on payment of a month’s pay and allowances,
in lieu of notice. Such discharge may also be
given where the evidence is found to be
insufficient to sustain the charge and where
the bank does not , for some reason or other,
think it expedient to retain the employee in
question any longer in service. Discharge in
such cases shall not be deemed to amount to
disciplinary action."
of the first respondent under sub-cl.(c) of cl. (10)
referred to above. It will also be seen that sub-cl. (a) of
Cl. (10) incorporates, substantially the principles of
natural justice in the conduct of an inquiry and also of
giving a reasonable opportunity to the workman concerned to
defend himself, which includes a right to cross-examine the
witnesses on the side of the management, and also to adduce
evidence in support of his defence.
In support of the first contention, the learned Solicitor
urged that the second inquiry by B. D. Sharma was conducted
at the instance of the workman and that there was not duty
cast on the Inquiry Officer to summon witnesses required by
the workman. The learned Solicitor urged that apart from
the fact that an Inquiry Officer has no power to summon
witnesses, it is well established by the decisions of this
Court that it is the duty of the party, who wants to have
witnesses examined to produce them before the Inquiry
Officer for examination. The reasoning of the Tribunal,
that the principles of natural justice have been violated in
the domestic inquiry by non-summoning by the Inquiry Officer
of Pooran Singh and Sanjhi. Ram, as requested by the
workman, is very strenuously attacked as erroneous in law.
The legal position regarding the circumstances under which
the Tribunal can interfere with the domestic inquiry have
been laid
769
down by this Court. Among the circumstances which will
justify the interference by the Tribunal are : when the
order of discharge is punitive, or mala fide or when it
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amounts to victimization or unfair labour practice. (Vide
Tata Oil Mills Company, Ltd. v. Their Workmen) (1). The
order terminating the, services of the workman can also be
set aside when there has been a violation of the principles
of natural justice, in the conduct of the inquiry which led
to the passing of the order of termination. The extent of
the jurisdiction of a Labour Court or Industrial Tribunal to
interfere with an order of termination passed on the basis
of a domestic inquiry held by the management have also been
reiterated by this Court in Ananda Bazar Patrika (P) Ltd. v.
Its Work-
men 2 ) at page 606 as follows :
"The extent of the jurisdiction which a Labour Court or an
industrial Tribunal can exercise in dealing with such
disputes is well-settled. If the termination of an
industrial employee’s services has been preceded by a Proper
domestic enquiry which has been held in accordance with the
rules of natural justice and the conclusions reached at the
said enquiry are not perverse the Tribunal is not entitled
to consider the propriety or the correctness. of the said
conclusions. If, on the other hand, in terminating the
services of the employee, the management has acted
maliciously or vindictively or has been actuated by a desire
to punish the employee for his trade union activities, the
Tribunal would be entitled to give adequate protection to
the employee by ordering his reinstatement, or directing in
his favour the payment of compensation; but if the enquiry
has been proper and the conduct of the management in
dismissing the employee is not mala fide, then the Tribunal
cannot interfere with the conclusions of the enquiry
officer, or with the orders passed by the management after
accepting the said conclusions."
In the said decision again at page 608 it is observed
"There can ’be no doubt that at the domestic enquiry it is
competent to the enquiry officer to refuse to examine a
witness if he bona fide comes to the conclusion that the
said witness would be irrelevant or immaterial. If the
refusal to examine such a witness, or to allow other
evidence to be led appears to be the result of the desire on
the part of the enquiry officer to deprive the person
charged of an opportunity to establish his innocence, that
course, would be a very serious matter."
(1) [1966] 2 L.L.J. 602.
(2) [1964] 3 S.C.R. 601.
t5-L3SUP Cl/72
770
That an officer holding the domestice, inquiry can take no
valid Or effective steps to compel the attendance of any
witness and that just as the management produces its
witnesses before the officer concerned for giving evidence,
it is the duty of the workman ,to take steps to produce his
witnesses before the Inquiry Officer holding a domestic
inquiry, is also laid down by this Court in Tata Oil Mills
Co. Ltd. v. Its Workman(1).
Having due regard to the principles laid down in the above
decisions, the contention of the learned Solicitor that the
Inquiry Officer B. D. Sharma was justified in refusing to
examine the three officers of the appellant branch as
desired by the workman and that he was also justified in
refusing to summon the two Cashiers. namely, Pooran Singh
and Sanjhi Ram to give evidence, on the ground that it is
the duty of the workman to have them produced ’for giving
evidence, no doubt, may on the face of it, appear to be very
attractive. But when the facts are considered, it will be
clear that no reasonable opportunity has been provided, in
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the domestic inquiry to the workman to place his offence.
As emphasised by this Court in Ananda Bazar Patrika (P) Ltd.
v. Its Workmen (2), the termination of an employee’s service
must be preceded by a proper domestic inquiry held in
accordance with the rules of natural justice. Therefore, it
is evident that if the inquiry is vitiated by violation of
the principles of natural justice or if no reasonable
opportunity was provided to a delinquent to place his
defence, it cannot be characterized as a proper domestic
inquiry held in accordance with the rules of natural
justice. We will be indicating later that the domestic
inquiry held in this case suffers from a very serious
infirmity.
Mr. Ramamurthi referred us to certain letters addressed by
the Staff Association on behalf of R. K. Jain in support of
his contention that the second inquiry was not held at the
instance of the workman. In our opinion, Mr. Ramamurthi is
well founded in his contention and the view of the
Industrial Tribunal in this regard is correct. We will now
refer to the material on record which will support the above
finding of the Industrial Tribunal.
When B. P. Tiwari commenced the first inquiry, the Staff
Association’ addressed a letter on December 24, 1960 that
the employees of the Reserve Bank who-were giving evidence
on behalf of the management refused to be cross-examined by
the workman. That this allegation is justified is borne out
by the admission contained in the written statement of the
appellant filed before the Industrial Tribunal. But
notwithstanding this letter written as early as December 24,
1960, the appellant took no steps whatsoever to redress the
grievance of the workman by stopping the in-
(1) [1966] 21.1.J. 602.
(2) [1964] 3 S.C.R. 601.
771
quiry conducted by B. P. Tiwari. On the other hand, the
management allowed him to continue the inquiry and to send
the report on February 2, 1961 holding the workman guilty’.
Notwithstanding the repeated requests made by the Staff
Association as to what has happened regarding the inquiry
conducted by B. P. Tiwari, the management except saying that
the matter is under consideration did not furnish any
information about their proposal to conduct a second
inquiry. It was only when the communication dated May 27,
1961 was received- from B. D. Sharma regarding the inquiry
to be conducted by him. on the same charges on June 14, 1961
that R. K. Jain knew, for the first time that a fresh
inquiry is proposed to be conducted by the management.
Immediately on June 10, 1961 the Staff Association wrote a
letter of protest to the Inquiry Officer expressing surprise
at the proposed second inquiry and requesting him to stop
the same. Notwithstanding the fact that a copy of this
letter was sent to the Secretary and Treasurer of the
appellant Bank at New Delhi, no further information was
given by the management to the workman concerned. The In-
quiry Officer B. D. Sharma firmly informed the workman that
the inquiry will proceed as scheduled on June 14, 1961. On
June 14, 1961, several letters Passed between the Staff
Association and the Inquiry Officer. After finding that all
attempts to stop the second inquiry have proved futile, the
workman decided to participate in the same under, protest.
The correspondence that took place between the Inquiry Offi-
cer and the Staff Association clearly shows that the workman
never wanted a second inquiry to be conducted against him.
The correspondence also shows that the first inquiry, though
it was conducted to the finish by B. P. Tiwari was abandoned
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by the management due to the unreasonable attitude of the
officers of the Reserve Bank of India, who figured as
witnesses, refusing to be cross-examined by the workman.
The management never informed the workman about their
decision to conduct a second inquiry till B. D. Sharma
himself conveyed that intention to The workman only as late
as May 27, 1961. It is clearly established in the cir-
cumstances that the second inquiry was not conducted,
because the workman wanted it. On the other hand, it is
clear that it was being conducted at the instance of the
management. Therefore, the finding of the Industrial
Tribunal that the second inquiry was not conducted because
the workman wanted it, is correct.
After the second inquiry was commenced by B. D. Sharma, the
Staff Association addressed a letter to the Inquiry Officer
on June 15, 1961. The Inquiry Officer was requested to
arrange to summon five persons for cross-examination by the
workman. Those persons were : (1) Shri B. P. Tewari, (2)
Shri J. S. Bhatnagar, (3) Shri K. C. Mehra, Agent, Ambala
City, (4) Shri
772
Sanjhi Ram, Cashier, Amritsar, and (5) Shri Puran Singh,
Cashier, Jullundur. The first three persons mentioned in
the list were the officers of the Bank and 4 and 5 were also
employees of the appellant, but working in different
branches. There is no controversy that Pooran Singh and
Sanjhi Ram were examined by the workman at his expense in
the previous inquiry conducted by B. P. Tiwari. Those
witnesses had also stated that the staff of the Reserve
Bank, Note Cancellation Section were antagonistic to the
potdars of the State Bank of India. That is a matter of
record. The Inquiry Officer replied on June 15, 1961
stating that the three officers, namely, M/s Tewari,
Bhatnagar and Mehra are all working outside Ambala and that
if it is found necessary the workman will be given an
opportunity to cross-examine them. But regarding Sanjhi Ram
and Pooran Singh, the Inquiry Officer categorically stated
that since those persons had appeared at the instance of the
workman in the previous inquiry, it was for him to arrange
for their presence for giving evidence. On June 15, 1961
again there was a lot of correspondence between the Staff
Association and the Inquiry Officer. The Staff Association
emphasised that Sanjhi Ram and Pooran Singh had been
examined at the instance of the workman in the previous
inquiry and that was abandoned due to no fault of the
workman. It was emphasised that the workman cannot afford
to bear the expenses of bringing those witnesses over again
in the second inquiry. The Inquiry Officer was requested to
contact the management two witnesses, who were employees of
the appellant, The Inquiry Officer firmly replied that it is
for the workman to make arrangements for producing Sanjhi
Ram and Pooran Singh, if their evidence was considered
necessary by him and that the Inquiry Officer cannot take
any steps in that behalf. Notwithstanding the further
request made by the Staff Association on the ground that the
workman’s financial position does not enable him to bear the
necessary expenses in that regard. No doubt, it is seen
that the Agent of the Ambala Bank addressed letters to the
officers at Jullundur and Amritsar Branches to release
Pooran Singh and Sanjhi Ram in case they desired to appear
at the inquiry on behalf of the workman; but it was made
clear in those letters that the two Cashiers must be
specifically told that their presence at the inquiry will be
at the request of R. K. Jain and the Bank will not pay any
expense that may be incurred by them. In these
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circumstances, quite naturally the two witnesses did not
appear before the Inquiry Officer and the workman also could
not afford to bring them all the way to give evidence on his
side. On the other ’hand, the management brought all their
officers as well as the officers of the Reserve Bank for the
purpose of giving evidence on their side and the management
incurred all the expenses in that behalf. During the course
of the correspondence the, workman even made a request
773
that the Reserve Bank officers have already given evidence
in the previous inquiry and that the present inquiry may be
confined only to their cross-examination and the inquiry
continued from that stage. He also made a request that in
case the :two Cashiers Pooran Singh and Sanjhi Ram are not
summoned on his behalf: their evidence given in the inquiry
held by B. P. Tiwari, ,which was already on record, may be
treated as their evidence in the present proceedings. These
requests were also rejected by he Inquiry Officer.
Whether there has been a violation of the principles of
natural justice in the domestic inquiry and whether a
reasonable opportunity of defending himself has been
provided to the workman in the said inquiry has to be
considered in the light of the circumstances referred to
above. Though, normally it may be the duty of the workman
to have his witnesses produced before the Inquiry Officer,
in the particular circumstances of this case the position is
entirely different. The workman has admittedly incurred
heavy expenses in the previous inquiry conducted by B. P.
Tiwari. There is no controversy that he brought the two
Cashiers at considerable expense to give evidence on his
side. That inquiry conducted by B. P. Tiwari was abandoned
by the management not because of any fault of the workman,
but because of the unreasonable attitude adopted by the
employees of the Reserve Bank who gave evidence. For the
conduct of those witnesses, the workman, in our opinion,
should not be punished by making him to incur the expenses
over again specially when the second inquiry was being
conducted by the management of its own volition in spite of
protests made by the workman, and the management was
prepared to bear the expenses of the second inquiry
regarding its officers as well as the officers of the
Reserve Bank of India, Ludhiana. But it was not prepared to
accept, what in our view, was a reasonable and modest
request made by the first respondent to have the two
Cashiers summoned for giving evidence on his side. As to
what evidence they would have given or as to whether the
evidence given by them would have helped the respondent No.
1, are not matters which arise for consideration, because
their evidence was not made available in the second inquiry.
Under those circumstances, in our opinion, the Tribunal was
justified in holding that there has been a violation of the
principles of natural _justice in the conduct of the
domestic inquiry and that the workman was not afforded a
reasonable opportunity to place his defence before the
Inquiry Officer. It may be that the order of the Inquiry
Officer declining to ask the management to produce the three
officers may be justified , because ’the Inquiry Officer
certainly has discretion to consider whether their evidence
will be relevant or not. But the Inquiry Officer, who was
part of the management was not justified in not forwarding
the request of the workman to arrange for the production of
Pooran
774
inquiry suffers from a very serious infirmity and in
consequence the order to discharge based upon the findings
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recorded in such an inquiry cannot be sustained. Such an
order has been rightly set aside by the Industrial Tribunal.
The second contention of the learned Solicitor is that on
the basis of the last part of sub-cl.(c) of Cl. (10) of
Paragraph 521 of the Sastry Award, the order of discharge
can be justified. The last part of the said sub-cl. (c) of
Cl. (10) relied on by the learned Solicitor is as follows :
"Such discharge may also be given where the
evidence is found to be insufficient to
sustain the charge and where the bank does
not, for some reason or other, think it
expedient to retain the employee in question
any longer in service. Discharge in such
cases shall not be ’deemed to amount to
disciplinary action."
That is according to the learned Solicitor even if the
evidence on record is insufficient to hold the workman
guilty of the charges framed against him, the appellant has
ample power and jurisdiction to discharge the workman from
its service, if it considers that it is not expedient to
retain the employee. We are not inclined to accept this
contention of the learned Solicitor, Apart from the fact
that the management never sought to place any reliance on
this part of sub-cl. (c), quoted above, before the Tribunal
or even in the Special Leave Petition before this Court, the
contention is also devoid of substance. The finding of the
Inquiry Officer B. D. Sharma is that, on the evidence
adduced before him the workman is guilty of both the charges
levelled against him and that charges have been proved
beyond all doubt. The show cause notice dated March 4, 1963
sent by the Superintendent of the appellant branch at Ambala
categorically says that in the inquiry conducted by B. D.
Sharma, the workman has been found guilty of the charges and
that on the basis of the said finding, it is proposed to
punish the workman by discharging him from service without
notice. The final order of discharge dated August 1, 1963
is also to the same effect. Therefore, the appellant never
proceeded on the basis that the service of the Respondent
was being dispensed with on the ground that the management
did not think it expedient to retain the workman in its
service, notwithstanding the fact that the evidence has been
found to be insufficient to sustain the charges levelled
against him. Therefore, the second contention of the
learned Solicitor has to be rejected.
The last contention of the learned Solicitor is that the
Tribunal having held that the order of discharge cannot be
sustained because the domestic inquiry has been conducted in
violation of the
775
principles of natural justice, the appellant should have
been given an opportunity by the Tribunal to adduce evidence
to justify the order terminating the service of the workman.
That is, according to the learned Solicitor, the Tribunal
has first to consider whether the domestic inquiry, on the
basis of which the order of termination has been passed, has
been conducted properly and bona fide by the management. If
it comes to the conclusion that the domestic inquiry is
vitiated, it is only then that the stage is set for giving
an opportunity to the management to adduce evidence before
the Tribunal to support the order of termination. In this
connection, the learned Solicitor referred us to the
decisions of the High Courts of Orissa, Madhya Pradesh and
Delhi.
True it is, that it has been held by this Court in Workmen
of Motipur Sugar Factory (Private) Ltd. v. Motipur Sugar
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 21
Factory(1) page 588 at page 596 :
"It is now well-settled by a number of
decisions of this Court that where an employer
has failed to make an enquiry before
dismissing or discharging a workman it is open
to him to, justify the action before the
tribunal by leading all relevant evidence
before it. In such a case the employer would
not have the benefit which he had in cases
where domestic inquiries have been held. The
entire matter would be open before the
tribunal which will have jurisdiction not only
to go into the limited questions open to a
tribunal where domestic inquiry has been
properly held (See Indian Iron & Steel Co. v.
Their Workmen) (2) but also to satisfy itself
on the facts adduced before it by the employer
whether the dismissal or discharge was
justified. We may in this connection refer to
M/s. Sasa Musa Sugar Works (P) Limited. v.
Shobrati Khan(-’), Phulbari Tea Estate V. Its
Workmen(2) and the Punjab National Bank
Limited v.Its Workman(5). These ’three cases
were further considered by this Court in
Bharat Sugar Mills Limited v. Shri Jai
Singh(") and reference was also made to the
decision of the Labour Appeallate Tribunal in
Shri Ram Swarath Sinha v. Belaund Sugar Co.
(7). It was pointed out that the import to the
effect of omission to hold an enquiry was
merely this : that the tribunal would not have
to consider only whether there was a prima
facie case but would decide for itself on the
evidence adduced whether the charges have
really been made out". It s true that three
of these cases, except Phutbari Tea Estate’s
Case(2) were on applications under s. 33
(1) [1964] 7 S.C.R.555. (2) [1965]3S.C.R.
588 (3) [1958] S.C.R.667
(4) [1959]Supp. S.CR.836 (5) [1969] 1
S.C.R.32. (6) [1960] 1 S. R. 06
7) [1962] 3 S.C.R.684
776
of the Industrial Disputes Act, 1947. But in
principle we see no difference whether the
matter comes before the tribunal for approval
under s. 33 or on a reference under s. 10 of
the Industrial Disputes Act, 1947. In either
case if the enquiry is defective or if no
enquiry has been held as required by Standing
Orders, the entire case would be open before
the tribunal and the employer would have to
justify on facts as well that its order of
dismissal or discharge was proper. Phulbari
Tea Estate’s(1) was on a reference under s. 10
and the same principle-was applied there also,
the only difference being that in that case
there was an enquiry though it was defective.
A defective enquiry in our opinion stands on
the same footing as no enquiry and in either
case the tribunal would have jurisdiction
to go into the facts and the employer would
have to satisfy the tribunal that on facts the
order of dismissal or discharge was proper."
From the above extract it is clear that it is open to the
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management to rely upon the domestic inquiry conducted by it
and satisfy the Tribunal that there is no infirmity attached
to the same.
The management has also got a right to justify on facts is
well that its order of dismissal or discharge was proper.
The above principles have also been reiterated in the, later
decisions of this Court. Under those circumstances, we fail
to see why the High Courts should raise a controversy about
the stage when the management has to adduce evidence before
the Triblunal to justify the action taken by it.
It should be remembered that when an order of punishment by
way of dismissal or termination of service is effected by
the management, the issue that is referred is whether the
management was justified in discharging and terminating the
service of the workman concerned and whether the workman is
entitled to any relief. In the present case, the actual
issue that was referred for adjudication to the Industrial
Tribunal has already been quoted in the earlier part of the
judgment There may be cases where an inquiry has been held
preceding the order of termination or there may have been no
inquiry at all. But the dispute that will be referred is
not whether the domestic inquiry has been conducted properly
or not by the management, but the larger question whether
the order of termination, dismissal or the order imposing
punishment on the workman concerned is justified. Under
those circumstances it is the right of the workman to plead
all infirmities in the domestic inquiry, if one has been
held and also to attack the order on all grounds available
to him in law and on facts similarly the management has also
a right to defend the action taken by
(1) [1959] Supp. S.C.R. 836.
777
it on the gorund that a proper domestic inquiry has been
held by it on the basis of which the order impugned has been
passed. It is also open to the management to,justify on
facts that the order passed by it was proper. But the point
to be noted is that tile inquiry that is conducted by the
Tribunal is a composite inquiry regarding the order which is
under challenge. If the management defends its action
solely on the basis that the domestic inquiry held by it is
proper and valid and if the Tribunal holds against the mana-
gement on that point, the management will fail. On the
other hand, if the management relies not only on the
validity of the domestic inquiry, but also adduces evidence
’before the Tribunal justifying its action, it is open to
the Tribunal to accept the evidence adduced by the
management and hold in its favour even if its finding is
against the management regarding the validity of ,-he
domestic inquiry. It is essentially a matter for the
management to decide about the stand ’that it proposes to
take before the Tribunal. It may be emphasised, that it is
the right of the management to sustain its order by
adducing, also independent evidence before the Tribunal. It
is a right given to the management and it is for the
management to avail itself of the said opportunity.
We will now refer to the decisions of the High Courts, which
have been referred by the learned Solicitor. In M/s.
Hindustan Steel Ltd. v. Their Workers through Rourkela
Mazdoor Sabha and others(1) a Division Bench of the Orissa
High Court had to consider a claim made by the management
that if a Labour Court comes to a conclusion that the
domestic inquiry was not fair, it should have given notice
to the management regarding its finding about the defect in
the domestic inquiry and then give an opportunity to the
management to adduce independent evidence before it to
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establish the charge against the workman. This contention
was negatived by the High Court on the ground that there was
no obligation, in law, on the part of the Labour Court to
indicate its mind about the infirmities in the domestic
inquiry at any stage before it gave its finding in the
award.
A contrary view has been taken by the Madhya Pradesh High
Court in The Madhya Pradesh State Road Transport Corporation
v. Industrial Court, Madhya Pradesh (2) . A Division Bench
of the said High Court has held that it is. a healthy
practice, that after coming to the conclusion that the
domestic inquiry was not proper, the Industrial Tribunal or
the Labour Court should give an opportunity to the employer
Lo produce evidence to satisfy the authority that the action
taken by it is justified.
A similar view has also been taken by a learned Single Judge
of the Delhi High Court in Premnath Motors Workshop Private
(1) [1954] I.A.C. 697.
(2) (1970) Labour & Industrial Cases 102.
778
Ltd. v. Industrial Tribunal, Delhi(1). In the said decision
it has been held that it is essential that a Tribunal or a
Labour Court gives at first a finding about the legality of
the domestic inquiry before it decides to consider the
merits of the charges. At that stage the Tribunal must give
the parties an opportunity to adduce such evidence regarding
the charges as the Tribunal might consider relevant.
It is clear from the three decisions of the High Courts,
referred to above, that there is a difference of view
between the Orissa High Court on the one hand and the Madhya
Pradesh and Delhi High Courts on the other. The Madhya
Pradesh and Delhi High Courts appear to proceed on the basis
that the inquiry before the Tribunal has to be conducted in
two parts, namely, first an investigation into the validity
of the domestic inquiry, and if the decision is against the
management on this point, then to conduct a further inquiry
regarding the evidence that may be adduced by the parties
about the validity of the action taken by the management.
As already mentioned by us earlier, there is no
justification for such a view being taken. By and large, we
are in agreement with the views expressed by the Orissa High
Court. But the Orissa High Court has observed that it may
be open to the management to request the Tribunal to decide,
in the first instance, as preliminary issue regarding the
validity of the domestic inquiry that may have been
conducted by it. In our opinion, no hard and fast rule can
be laid down under what circumstance an issue is to be
decided as a preliminary issue. That is a matter for the
Tribunal or the Labour Court concerned to consider, having
due regard to the nature of the pleadings and the points
that arise for consideration.
In the case before us the appellant has no right to make a
grievance that he should have been given an opportunity to
adduce evidence on facts before the Tribunal justifying the
action taken by it against the workman. The written
statement filed by the appellant before the Industrial
Tribunal makes it quite clear that the appellant was
prepared to sustain the validity of the order of discharge
solely on the basis of the domestic inquiry conducted by B.
D. Sharma. The evidence adduced before the, Tribunal was
also of the Inquiry Officer B. D. Sharma and of the officer
who passed the order of termination. Both these witnesses
referred only to the proceedings connected with the domestic
inquiry and gave evidence to the effect that the workman was
given all facilities to participate in the domestic inquiry.
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The management’s stand was that it is prepared to justify
the legality of the order of discharge solely on the basis
of the domestic inquiry held by it as a result of which the
order of discharge was passed. It never offered to produce
(1) [1967] Labour and Industrial Cases 510.
779
any evidence before the Tribunal, apart from the inquiry
proceedings. No doubt, there is a right in the management
to adduce evidence before the Tribunal and justify the
action taken by it. No such opportunity was asked for by
the appellant nor even availed of. If such an opportunity
was, asked for, but refused by the Tribunal, the position
would be entirely different. The appellant further has not
even made a grievanc, in the Special Leave Petition that it
was not given an opportunity by the Tribunal to adduce
independent evidence to justify the action taken by it.
Therefore, it follows that the third contention of the
learned Solicitor-General has also to be rejected..
To conclude, the award of the Industrial Tribunal dated
April. 7, 1967, is confirmed and this appeal is dismissed
with costs of the first respondent.-
V.P.S.
Appeal dismissed.
780