Full Judgment Text
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PETITIONER:
AIR INDIA CORPORATION, BOMBAY
Vs.
RESPONDENT:
V. A. REBELLOW & ANR.
DATE OF JUDGMENT24/02/1972
BENCH:
DUA, I.D.
BENCH:
DUA, I.D.
VAIDYIALINGAM, C.A.
MITTER, G.K.
CITATION:
1972 AIR 1343 1972 SCR (3) 606
1972 SCC (1) 814
CITATOR INFO :
RF 1973 SC2650 (14)
D 1975 SC 661 (13,17)
RF 1976 SC2062 (30)
D 1991 SC 101 (17,154,170,226,278)
ACT:
Industrial Disputes Act (14 of 1947), ss. 33(1) (b), 33(2)
(b) and 33A--Termination of services of employee--Not for
misconduct--Approval of Tribunal not obtained--legality.
HEADNOTE:
The respondent had bean employed by the appellant as an
Assistant Station Superintendent. An order was passed
terminating his services with immediate effect With payment
of one month’s salary in lieu of notice. He filed a
complaint under s. 33A of the Industrial Disputes Act, 1947
before the Labour Court before which, in industrial dispute
was pending alleging that the termination of his service was
illegal for the reason inter alia that the approval of’ the
Labour Court for such termination was not obtained. The
appellant contended that the respondent was not a workman
and that he was not concerned in the industrial dispute
pending in the Labour Court. Pursuant to the directions of
the Labour Court, the appellant filed n. written statement
in which it was pleaded that without prejudice to the
contention that this case should be decided ’an the
aforesaid preliminary points raised by the appellant the
order of termination of the respondents’ services was valid
’because his services were terminated under Regulation 48 of
the Air India Employees’ Service Regulations framed with
previous approval of the Central Government, and under that
regulation the services of a permanent employee may be
terminated without assigning any reason. it was added that
without prejudice to the plea that the appellant was not
bound to disclose any reason for terminating the services of
the respondent, the latter’s services we’re terminated be-
cause of the appellant’s total loss of confidence in the
respondent on account of grave suspicions regarding his
private conduct and behaviour with the Air Hostesses of the
appellant-Corporation.
The Labour Court held one the preliminary question that the
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respondent was a workman concerned in the industrial dispute
pending before it and that his discharge was in breach of s.
33 of the Act.
On the question Whether the action taken by the appellant,
was hit by s. 33 of the Act,
HELD: (1) Section 33 (1) (b) bans the discharge or
punishment,whether by dismissal or otherwise, of a workman
for misconduct nected with a pending dispute without the
express permission in writing of the authority dealing with
the pending proceeding. Section 33(2)(b) places a similar
ban in regard to matters not connected with the pending
dispute; but the employer is free to discharge or dismiss a
workman by paying wages for one month provided he applies to
the authority dealing with the pending proceeding for
approval of the action taken. Whether the action is taken
under. 33 (1) (b) or s. 33 (2) (b), the ban is imposed only
in regard to election taken for misconduct whether connected
or unconnected with the dispute. Unlike under s. 33(3)
which gives a blanket protection to ’protected workmen’, an
employer is free to take action against other workmen if it
is not based off any misconduct on their part,
[617B-D, C-G]
607
(2) In the present case, on the face of it, the language of
the order does not show that the respondent’s services were
terminated because of any misconduct. Prima facie,
therefore, the impugned order was not an order discharging
or punishing the respondent for any misconduct. [618A-B]
(3) Action under Reg. 48 can be validly, taken by an
employer at his sweet-will without assigning any reason, and
he is not bound to disclose why he does not want to continue
in service a particular employee. [620D-E]
(4) It is however open to the respondent to urge that
reliance on, Reg. 48 was not bona fide and that it was a
colourable exercise of the right conferred by the
Regulation, because, the form of the order is not decisive
and attending circumstances are open to consideration though
the motive for the order, if not malafide is not open to
question. [619H; 620B-C]
workmen of sudder office cinnamara v Management [1971] II
L.L.J. 620. Chartered Bank, Bombay v. Chartered Bank
Employees’ Union, [1960] II L.L.J. 222 and Tata Oil Mills
Co. Ltd. v. WorKmen [1964] 11 L. L. J. 113, referred to.
(5) But the reason of the employer for the terminating the
services of’ his employee need not be his misconduct but
may, inter-cilia, be want of full satisfaction with the
employee’s overall suitability in the job assigned to the
employee. Such want of satisfaction does not imply
misconduct of the employee. [620E-F]
(6) The loss of confidence in the present case cannot be
considered to be malafide. Assuming that the reason stated
in the appellant’s written statement could be taken into
account, the bona fides of the appellant in making the
impugned order could not be challenged. The respondent had
to deal with Air hostesses in the performance of his duties
and if the appellant was not fully satisfied beyond
suspicion about his general conduct and behaviour while
dealing with them it could not be said that the loss of
confidence was not bona fide. Once bona fide loss of
confidence is affirmed the impugned order must be considered
to be immune from challenge. The opinion formed by the
employer about the suitability of his employee for the job
assigned to him, even though erroneous, if bona fide is
final and not subject to review by industrial adjudication.
Such an opinion may legitimately induce the employer to
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terminate the employee’s services, but, such termination
can, on no rational grounds, be considered to be for
misconduct, and must therefore be held to be permissible and
immune from challenge. [620F-H; 621A-B]
Management of U.B. dutt & co. v. Workmen of U. B. Dutt & Co.
[1962] Supp. 2 S.C.R. 822, distinguished.
[The question whether the reason stated in the appellant’s
written statement filed without prejudice and pursuant to
the direction of the Labour Court could be taker into
account, left open.] [621E-F]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1339 of 1967.
Appeal by special leave from the Award dated April 28, 1967’
of the Central Government Labour Court, Bombay in
Application No. LCB-39 of 1965.
608
S. D. Vimdalal, S. K. Wadia, D. N. Mishra and O. C. Mathur-,
for the appellant.
K. P. V. Menon, S. R. Iyer and M. S. Narasimhan, for respon-
dent No. 1.
The Judgment of the Court was delivered by
Dua, J. This. is an appeal by special leave and the
appellant, the Air-India Corporation, Bombay assails Part I
of the Award ’with corrigendum, dated April 28, 1967, given
by the Central Government Labour Court, Bombay, on the
complaint dated October 16, 1965 made by Shri V. A.
Rebellow, respondent no. 1 in this Court (hereinafter
referred to as the complainant) under s. 33-A of the
Industrial Disputes Act, 1947_hereinafter called the Act).
The complaint was originally filed by the complainant before
the National Industrial Tribunal, Delhi, (Mr. Justice G. D.
Khosla, retired Chief Justice of the Punjab High Court) in
the Industrial Dispute Reference No. 1 of 1964 but was later
transferred to the Central Government Labour Court and
numbered as application no. LCB 39 of 1965.
The impugned award merely dealt with the preliminary
points .raised by the appellant that the complainant was not
a workman concerned in the aforesaid industrial dispute and
that there was no breach of s. 33 of the Act with the result
that the complaint under s. 33-A of the Act was incompetent.
The Labour Court held the complainant to be,, a workman
concerned in the aforesaid industrial dispute pending before
the National Industrial Tribunal on the date of his
dismissal and that the dismissal was not a discharge
simpliciter but in breach of the provisions of s. 33. On
this finding his complaint was held to be maintainable. The
two questions canvassed in the present appeal are (1)
whether the complainant was a workman and was as such
concerned in the aforesaid dispute (Industrial Dispute
Reference No. 1 of 1964) and (2) whether the termination of
his service was a dismissal as alleged by him or was a mere
termination of service not amounting to dismissal. Broad
facts necessary for understanding the controversy may now be
stated:
The order which was challenged as amounting to the com-
plainant’s dismissal reads
CONFIDENTIAL
Dated June
19, 1965
(Thru : The Commercial Manager, Cargo)
Dear sir,
It has been decided to terminate your
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services, which we hereby do with immediate
effect. You will be paid ,one month’s salary
in lieu of notice.
609
2. Please arrange to return, as early as
possible, all items
of Corporation’s property in your possession
to enable us to settle your accounts.
3. Your accounts will be settled after
checking your commitments.
Yours faithfully,
AIR INDIA
Sd/- S. K. KOOKA
Commercial Director"
On July, 16, 1965 the complainant acknowledged the above
letter terminating his services with immediate effect and
requested for reinstatement because according to him there
was nothing to warrant such summary termination of his
services. This is what he wrote :
". . . In this connection I have to state that
I have served the Corporation for a period of
over nine years and to the date of terminating
my services, there is nothing on record which
warrants that my services should be terminated
summarily. Hence it is requested that I be
reinstated and thereafter if the Management is
of the opinion that I have done something
against the interest and the fair name of the
Corporation, I be charged accordingly, given
an opportunity to explain my conduct and after
everything else if I am found guilty, action
taken against me as the management deems fit.
With the experience I have with the
management’s policy towards, its employees, I
am confident that I will never ’be deprived of
the opportunity I have asked for and more so
in the light of the faithful service I have
rendered.........."
The following reply was sent to the complainant on September
8.1965
2. 1 have to inform you that your services were terminated
on payment of 30 days’ salary in lieu of notice, in
accordance with Rule 48 of the Air-India Employees’Service
Regulations."
610
Regulation 48 of the Air-India Employees’ Service
Regulations which was described as Rule 48 in the letter of
September 8, 1965 leads as under
CHAPTER VIII
Cessation of service
48. Termination : The service of an employee
may be terminated without assigning any
reason, as under :
(a) of a permanent employee by giving him 30
days’ notice in writing or pay in lieu of
notice;
(b) of an employee on probation by giving him
7 days’ notice in writing or any in lieu of
notice;
(c) of a temporary employee by giving him 24
hours’ notice in writing or pay in lieu of
notice.
Explanation : For the purposes of this
Regulation, the word "pay"’ shall include all
emoluments which would be admissible if he
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were on privilege leave."
In the complaint under s. 33-A of the Act it was alleged by
the complainant that the order dated June 19, 1965 smacked
of vindictiveness or unfair labour practice and that his
alleged termination was a cloak for punishing him. No facts
were, however, stated in support of this averment.
According to the averments in this complaint, Regulation 48
postulates the existence of some reason for the termination
of service and since the Corporation had not disclosed any
reason for the termination of the complainant’s service it
was requested that the Corporation be directed to disclose
the reason, if any, for the termination of his service. The
real grievance of the complainant, it appears, was founded
on the construction of Regulation 48 as is clear from the
following averments in para 7 of the complaint:
"The complainant submits that on a reasonable
construction of the said Rule, the Opposite
Party is bound to disclose the reason
if any
for the said termination in the present
proceedings. The complainant submits that any
other construction would be unreasonable and
make the said rule itself unreasonable,
illegal, void as also in contravention of
Articles 14, 16, 19 and 311 of the Consti-
tution of India and is therefore void and
inoperative."
In regard to the question of the complainant being a workman
concerned in a pending industrial dispute it was averred
that the
611
complainant had been employed by the Opposite Party as an
Assistant Station Superintendent (Crew Scheduling) in the
grade of Rs. 300-25-500-50-650 and was confirmed in that
post with effect from 1st December, 1963. In para 8 of the
complaint it was pleaded that :
"the proceedings in reference no. NIT No. 1
of 1964 were and are pending before this
Hon’ble Tribunal and the Complainant is a
workman concerned in the said dispute. The
Complainant says that under the circumstances
aforsaid the Opposite Party ought to have made
an application for approval before this
Hon’ble Tribunal under Section 3 3 (2) of the
Industrial Disputes Act, 1 947 but the
Opposite Party has made no such application
nor has the Opposite Party intimated that it
proposed to make such an application for
approval while terminating the services of the
Complainant. The Complainant says. that the
Opposite Party has not obtained the approval
of this Hon’ble Tribunal in writing of the
action taken by it against the Complainant."
On these averments reinstatement was claimed by the
complainant with full back wages and allowances from the
date of the alleged termination of his services.
It appears that pursuant to directions from the Labour Court
the appellant filed a further written statement dated June
30, 1966 and it was submitted :
"Without prejudice to the contention of the
Opposite Party that this case should be
decided on the preliminary points above as
raised by the Opposite Party, as the
Complainant has repeatedly made a grievance
that a written statement on merits has not
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even been filed and as this Honourable
Tribunal also indicated at the preliminary
hearing that a written statement on merits
should in any event be kept ready and that no
further time would be given to the opposite
Party for preparing and filing the same-, the
Opposite Party herewith begs to submit this
further written Statement."
With these; preliminary submissions it was stated as follows
in paragraph 7 :
"With reference to, paragraphs 6 and 7 of the
Complaint, Regulation 48 of the Air-India
Employees’ Service Regulations provides inter
alia, that the services of a permanent
employee may be terminated, without assigning
any reason, by giving him thirty days’ notice
in writing or pay in lieu of notice. The
construction
612
sought to be put upon the said Regulation by
the Complainant is not correct. The opposite
Party denies that Regulation 48 is
unreasonable, illegal or void or in con-
travention of Articles 14, 16, 19 and 311 of
the Constitution of India. The said
Regulations have been framed with the previous
approval of the Central Government under
section 45 (2)(b) of the Air Corporation Act,
1953. The Opposite Party submits that it was
and is not bound to give or disclose any
reason for terminating the service of the
Complainant. Any contrary view would, it is
submitted, render the said Regulation No. 48
completely nugatory. However, without
prejudice to this, the Opposite Party says
that the Complainant’s service was terminated
because of the total loss of confidence on
account of grave, suspicions regarding his
private conduct and behaviour with Air
Hostesses of the Corporation. The reports and
statements from the Air Hostesses concerned
cannot be disclosed as they involve the
reputation and future of young and unmarried
girls. Having regard to this, the Opposite
Party could not continue the Complainant in
its service and it was constrained to
terminate his service in accordance with
Regulation 48."
The complainant’s averment that he was a workman concerned
in the proceedings in the industrial dispute was denied by
the appellant in the first written statement dated March 15,
1966 in para I which reads :
"(a) The Complainant was at no relevant time a
’workman’ within the meaning of that term as
defined in Section 2(s) of the said Act. At
the time of the termination of his service,
the Complainant was an Assistant Station.
Superintendent and was employed in an adminis-
trative,/Supervisory capacity, drawing a total
salary amounting to Rs. 690 per month.
Moreover, it may also be pointed out that in
its Staff Notice No. 130 dated 31st March,
1956, the Opposite Party has given a classi-
fication of its personnel, wherein the
category of Assistant Station Superintendents
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has been classified as an "Officer" category
(vide Entry no. 1/28). A copy of the said
Staff Notice is hereto annexed and marked Ex.
No. 1. Further, the said category of A
ssistant
Superintendents has not been included among
the categories of workman in the’ dispute in
Ref. No. NIT/1 of 1964 pending before the,
National Industrial Tribunal composed of Shri
G. D. Khosla. Besides, the Class of officers
designated as Assistant Station
Superintendents has always been, and is,
represented by the Air-India Officers
613
Association which is not an association
representing any workmen’ and which is not a
party to the dispute in the above mentioned
reference. Further, the said class of
Officers has not at any time presented itself
before the National Industrial Tribunal nor
has, it been represented at the hearing of the
said dispute by any of the Unions representing
parties nos. 2 to 7 to the said dispute.
(b) Even assuming, without admitting, that the
Complainant is held to be a workman (which is
denied) sub-sections ‘1 and 2 of section 33,
and consequently section 33A, have, and can
have, no application having regard to the
circumstances of the present case. The sub-
ject matter of the Complaint is not a matter
connected with the dispute in the Reference
before the National Industrial Tribunal nor is
the Complainant concerned in the said dispute.
Further subsection (1) (b) and subsection 2(b)
of section 33 have application only in the
case of dismissal or discharge for misconduct
in the circumstances set out therein, and not
to a case of termination of service
simpliciter. In the present case, the
Opposite Party has bona fide terminated the
service of the Complainant under the
provisions of Regulation 48 of Air India
Employees’ Service Regulations which are
applicable to the Complainant. There has,
therefore, been no breach of the provisions of
sub-section (1)(b) or sub-section 2(b) of
section 33 and unless there is such a breach
there can be no invocation of Section 33A.
On the contrary, the Opposite ’Party repeats
that the said sub-sections are inapplicable."
The complainant and the appellant both filed lists of the
complainant’s duties in proof of their respective
contentions, Ex. E-1 being the appellant’s list and Ex. W-
13, the complainant’s.
The Labour Court held in the impugned award that the com-
plainant as Assistant Station Superintendent was a Junior
Officer and as such, as determined in the Khosla Tribunal
Award, was a workman concerned in the industrial dispute
before that Tribunal and that his discharge was not
discharge simpliciter but in breach of s. 33 of the Act. On
this view the complaint was directed to be considered on the
merits.
In this Court Shri Vimadlal argued that keeping in view the
complainant’s duties it is not possible to hold that he is a
workman. According to the submission the complainant was an
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officer whose duties were primarily supervisory and,
therefore, he could not be described as a workman. The
complainant, it was further argued, was at least not a
workman concerned in the industrial 11-L1031S sup. CI/72
614
dispute pending before the Khosla Tribunal. In any event,
the action taken by the appellant, not being for misconduct
on the part of the appellant but under Regulation 48 was not
hit by S. 33 of the Act.
We should like first to deal with the applicability of ss.
33 and 33A of the Act on the assumption that the complainant
was a workman and also as such interested in a pending
industrial dispute. These sections read :
"33. Conditions of service etc., to remain
unchanged under certain circumstances during
pendency of proceedings:
(1) During the pendency of any conciliation
proceeding before a concilation officer or a
Board or of any proceeding before an
arbitrator or a Labour Court or Tribunal or
National Tribunal in respect of an industrial
dispute, no employer shall,-
(a) in regard to any matter connected with the
dispute, alter, to the prejudice of the
workmen concerned in such dispute, the
conditions of service applicable to them
immediately before the commencement of such
proceeding; or
(b) for any misconduct connected with the
dispute, discharge or punish, whether by
dismissal or otherwise, any workmen concerned
in such dispute, save with the express
permission in writing of the authority before
which the proceeding is pending.
(2) During the pendency of any such proceeding
in respect of an industrial dispute, the
employer may, in accordance with the standing
orders applicable to a workman concerned in
such dispute, or, where there are no such
standing orders, in accordance with the terms
of the contract, whether express or implied,
between him and the workman,-
(a) alter, in regard to any matter not
connected with the dispute, the conditions of
service applicable to that workman immediately
before the commencement of such proceeding; or
(b) for any misconduct not connected with the
dispute, discharge or punish, whether by
dismissal or otherwise, that workman
Provided that no such workman shall be
discharged or dismissed, unless he has ’been
paid wages for owner
615
month and an application has been made by the
employer to the authority before which the
proceeding is pending for approval of the
action taken by the employer.
(3) Notwithstanding anything contained in sub
section (2)no employer shall, during the
pendency of any such proceeding in respect of
an industrial dispute,take any action against
any protected workman concerned in such
dispute-
(a) by altering, to the prejudice of such
protected workman, the conditions of service
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applicable to him immediately before the
commencement of such proceedings; or
(b) by discharging or punishing, whether by
dismissal or otherwise, such protected
workman,
save with the express permission in writing of
the authority before which the proceeding is
pending.
Explanation.-For the purposes of this sub-
section, a ’protected workman’, in relation to
an establishment, means a workman who, being
an officer of a registered trade union
connected with the establishment, is recog-
nised as such in accordance with rules made in
this behalf.
(4) In every establishment, the number of
workmen to be recognised as protected Workmen
for the purposes of sub-section (3) shall be
one per cent. of the total number of workmen
employed therein subject to a minimum number
of five protected workmen and a maximum number
of one hundred protected workmen and for the
aforesaid purpose, the appropriate Government
may make rules providing for the distribution
of such protected workmen among various trade
unions, if any, connected with the
establishment and the manner in which the
workmen may be chosen and recognised as
protected workmen.
(5) Where an employer makes an application to
a conciliation officer, Board, an arbitrator,
a Labour Court, Tribunal or National Tribunal
under the proviso to sub-section (2) for
approval of the action taken by him, the
authority concerned shall, without delay, hear
such application and pass, as expeditiously as
possible such order in relation thereto as it
deemed fit.
616
33A Special provision for adjudication as to whether
conditions of service, etc., changed during pendency or
proceedings :
Where an employer contravenes the provisions
of section 33 during the pendency of
proceedings before a Labour Court, Tribunal or
National Tribunal, any employee aggrieved by
such contravention, may make a complaint in
writing, in the prescribed manner to such
Labour Court, Tribunal or National Tribunal
and on receipt of such complaint that Labour
Court, Tribunal or National Tribunal shall
adjudicate upon the complaint as if it were, a
dispute referred to or pending before it, in
accordance with the provisions of this Act and
shall submit its award to the appropriate
Government and the provisions of this Act
shall apply accordingly."
The basic object of these two sections broadly speaking
appears to be to protect the workmen concerned in the
disputes which form the subject matter of pending
conciliation proceedings or proceedings by way of reference
under s. 10 of the Act, against victimisation by the
employer on account of raising or continuing such pending
disputes and to ensure that those pending proceedings are
brought to expeditious termination in a peaceful atmosphere,
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undisturbed by any subsequent cause tending to further
exacerbate the already strained relations between the
employer and the workmen. To achieve this objective a ban,
subject to certain conditions, has been imposed by s. 33 on
the ordinary right of the employer to alter the terms of his
employees’ services to their prejudice or to terminate their
services under the general law governing contract of
employment and s. 33A provides for relief against
contravention of s. 33, by way of adjudication of the
complaints by aggrieved workmen considering them to be
disputes referred or pending in accordance with the provi-
sions of the Act. This ban, however, is designed to
restrict interference with the general rights and
liabilities of the parties under the ordinary law within the
limits truly necessary for accomplishing the above object.
The employer is accordingly left free to deal with the
employees when the action concerned is not punitive or mala
fide or does not amount to victimisation or unfair labour
practice. The anxiety of the legislature to effectively
achieve the object of duly protecting the workmen against
victimisation or unfair labour practices consistently with
the preservation of the employer’s bona fide right to
maintain discipline and efficiency in the industry for
securing the maximum production in a peaceful harmonious
atmosphere is obvious from the overall scheme of these
sections. Turning, first to s. 33, sub-s.
617
(1)of this, section deals with the case of a workman
concerned n a pending dispute who has been prejudicially
affected by an action in regard to a matter connected with
such pending dispute and sub-s. (2) similarly deals with
workmen concerned in regard to matters unconnected with such
pending disputes. Sub-section (1) bans alteration to the
prejudice of the workman concerned in he conditions of
service applicable to him immediately before the
commencement of the proceedings and discharge or punishment
whether by dismissal or otherwise of the workman concerned
for misconduct connected with the dispute without the
express Permission in writing of the authority dealing with
the pending proceeding. Sub-section (2) places a similar
ban in regard to matters not connected with the pending
dispute but the employer is free to discharge or dismiss the
workman by paying wages for one month provided he applies to
the authority dealing with the pending proceeding for
approval of the action taken. In the case before use we are
concerned only with the ban imposed against orders of
discharge or punishment as contemplated by cl. (b) of the
two sub-sections. There are no allegations of alteration of
the complainant’s terms of service. It is not necessary for
us to decide whether the present case is governed by sub-s.
(1) or sub-s. (2) because the relevant clause in both the
sub-sections is couched in similar language and we do not
find any difference in the essential scope and purpose of
these two subsections as far as the controversy before us is
concerned. It is noteworthy that the ban is imposed only in
regard to action taken for misconduct whether connected or
unconnected with the dispute. The employer is, therefore,
free to take action against his. workmen if it is not based
on any misconduct on their part. In this connection
reference by way of contrast may be made to sub-s. (3) of s.
33 which imposes an unqualified ban on the employer in
regard to action by discharging or punishing the workman
whether by dismissal or otherwise. In this subsection we do
not find any restriction such as is contained in cl. (b) of
sub-ss. (1) and (2). Sub-section (3) protects "protected
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workman" and the reason is obvious for the blanket
protection of such a workman. The legislature in his case
appears to be anxious for the interest of healthy growth and
development of trade union movement to ensure for him
complete protection against every kind or order of discharge
or punishment because of his special position as an officer
of a registered trade union recognised as such in accordance
with the rules made in that behalf. This explains the
restricted protection in sub-ss. (1) and (2).
It is in the background of the purpose and scope of s. 3 3
(1 and (2) that we have to consider whether the action taken
against the complainant is hit by either of these two sub-
sections. We have seen the form and the language of the
impugned order. On
618
its face the language does not show that the complainant’s
services were terminated because of any misconduct. Prima
facie, therefore, the impugned order is not an order
discharging or punishing the complainant for any misconduct.
But then the complainant’s learned counsel Shri Menon argued
that the face or the form of the order is not conclusive and
that the Court is entitled to and indeed should go behind
the form and by looking at the real substance of the matter
try to find the real cause and then come to its conclusion
whether or not the order is a mere camouflage for an order
of dismissal for misconduct.
The true legal position has been stated by this Court more
than once and is by now beyond controversy. In one of the
most recent decisions in The Workmen of Sudder Office,
Cinnamara v The Management(1) this Court approvingly
referred to two of its earlier decisions actually
reproducing a passage from one of them.
This is what was said in Sudder Office case :
"It is needless to point out that it has been
held by this Court in The Chartered Bank,
Bombay v. The Chartered Bank Employees’ Union
( 2 ) that if the termination of service is a
colourable exercise of the power vested in the
management or as a result of victimisation or
unfair labour practice, the Industrial
Tribunal would have jurisdiction to intervene
and set aside such a termination. In order to
find out whether the order of termination is
one of the termination simpliciter under the
provisions of contract or of standing orders,
the Tribunal has ample jurisdiction to go into
all the circumstances which led to the
termination simpliciter-. The form of the
order of termination, is not conclusive of the
true nature of the order, for it is possible
that the form may be merely a camouflage for
an order of dismissal for misconduct. It is,
therefore, open to the Tribunal to go behind
the form of the order and look at the
substance. If the Tribunal comes to the
conclusion that though in form the order
amounts to termination simpliciter but in
reality cloaks a dismissal for misconduct, it
will be open to it to set aside the order as a
colourable exercise of power by the
management.
Principles to the same effect have also been reiterated in
the later decision of this Court in Tata Oil Mill Co. Ltd.
v. WorKmen & anr. (3) where the Court observed as follows :
"The true legal position about the Industrial
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Court’s justification and authority in dealing
with
(1) [1971]-Il L.L.J. 620. (2) [1960]-Il L.L.J. 222.
(3) [1964]-II L.L.J. 113.
619
cases of this kind is no longer in doubt. It
is true that in several cases, contract of
employment or provisions in standing orders
authorise an industrial employer to terminate
the service of his employees after giving
notice for one month or paying salary for one
month in lieu of notice, and normally, an
employer may, in a proper case, be-
entitled
to exercise the said power. But where an
order of discharge passed by an employer gives
rise to an industrial dispute, the form of the
order by which the employee’s services are
terminated would not be decisive; industrial
adjudication would be entitled to examine the
substance of the matter and decide whether the
termination is in face discharge simpliciter
or it amounts to dismissal which has put on
the cloak of discharge simpliciter. If the
Industrial Court is satisfied that the order
of discharge is punitive, that it is mala
fide, or that it amounts to victimisation or
unfair labour practice, it is competent to
the. Industrial Court to set aside the order
and, in a proper case, direct the
reinstatement of the employee."
Shri Menon on behalf of the complainant, however, contended
that ignoring the form and language of the impugned order
and looking at the real substance of the matter it is clear
as disclosed by the appellant in the further written
statement that the complainant’s services were terminated
because of a suspicion about his private conduct and
behaviour with Air Hostesses whose names were considered not
proper to be disclosed. This, said the counsel, makes out
an allegation of misconduct which induced the appellant to
terminate the complainant’s services and the case,
therefore, clearly falls within the mischief of s. 33. The
impugned order, he added, is a colourable exercise of the
power under Regulation 48, the real object of the appellant
being essentially to punish the complainant for misconduct.
No doubt, the position of the industrial workman is
different from that of a Government servant because an
industrial employer cannot "hire and fire" his Workmen on
the basis of an unfettered right under the contract of
employment, that right now being subject to industrial
adjudication : and there is also on the other hand no
provision of the Constitution like Arts. 3 1 0 and 3 1 1
requiring consideration in the case of industrial workmen.
We are here only concerned with the question whether the
impugned action of termination of the complainant’s services
is for misconduct as contemplated by s. 3 3 (II) (b) or s. 3
3 (2) (b). While considering this question it is open to
the complainant to urge that reliance on Regulation 48 is
not bona fide, it being a colourable exercise of the right
conferred by that regulation. He has in fact raised
620
this argument and it is this aspect which concerns us in
this case. Let us now scrutinies the present record for
examining the position from this aspect.’
Now, the true position, as it appears to be clear from the
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record of this case, is that the complainant’s services were
terminated under Regulation 48 by paying his salary for 30
days in lieu of notice. The order does not suggest any
misconduct on the part of the complainant and indeed it is
not possible to hold this order to be based on any
conceivable misconduct. The form of this order is no doubt
not decisive and attending circumstances are open for
consideration, though motive for the order, if not mala
fide, is not open to question. The further written
statement which the appellant was directed to file and which
was filed without prejudice discloses the fact that the
appellant had lost confidence in the complainant and this
loss of confidence was due to a grave suspicion regarding
the complainant’s private conduct and behaviour with Air-
Hostesses employed by the appellant,
Regulation 48 which has been set out earlier as its plain
language shows does not lay down or contemplate any defined
essential pre-requisite for invoking its operation. Action
under this Regulation can be validly taken by the employer
at his sweet will without assigning any reason. He is not
bound to disclose why he- does not want to continue in
service the employee concerned. It may be conceded that an
employer must always have some reason for terminating the
services of his employee. Such reasons apart from
misconduct may, inter, alia, be want of full satisfaction
with his overall suitability in the job assigned to the
employee concerned. The fact that the employer is not fully
satisfied with the overall result of the performance of his
duties by his employee does not necessarily imply misconduct
on his part. The only thing that remains to be seen is if
in this case the impugned order is mala fide. The record
merely discloses, that the appellant had suspicion about the
complainant’s suitability for the job in which he was
employed and this led to loss of confidence in him with the
result that his services were terminated under Regulation
48. In our view, loss of confidence in such circumstances
cannot be considered to be mala fide. We are unable to
conceive of any rational challenge to the bona fides of the
employer in making the impugned order in the above back-
ground. The complainant, it may be remembered had to deal
with Air-Hostesses in the performance of his duties and if
the appellant was not fully satisfied beyond suspicion about
his general conduct and behaviour while dealing with them it
cannot be said that loss of confidence was not bona fide.
Once bona fide loss of confidence in affirmed the impugned
order must be considered to be immune from challenge. The
opinion formed by
621
the employer about the suitability of his employee, for the
job assigned to him even though erroneous, if bona fide, is
in our opinion final and not subject to review by the
industrial adjudication. Such opinion may legitimately
induce the employer to terminate the employee’s services;
but such termination can on no rational grounds be
considered to be for misconduct and must, therefore be held
to be permissible and immune from challenge.
The decision in the case of Management of U. B. Dutt & Co.
v. Workmen of U. B. Dutt & Co.(1) relied upon by the com-
plainant’s learned counsel is of no assistance to him.
There one employed by the management as a cross cutter in
the saw mill was asked to show cause why his services should
not be terminated on account of grave indiscipline and
misconduct and he denied the allegations of fact. He was
thereafter informed about a departmental enquiry to be held
against him and was suspended pending enquiry. Purporting
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to act under r. 18 (a) of the Standing Orders, the appellant
terminated the services of S without holding any
departmental enquiry. On reference of the dispute to the
Industrial Tribunal this action was held not to be bona fide
but a colourable exercise of the power conferred under r. 13
(a) of the Standing Order and since no attempt was made
before it to defend such action by proving the alleged
misconduct, it passed an order for reinstatement of S. Ouite
clearly the facts there are not parallel to the facts
before us. The facts there are materially different.
We have proceeded on the assumption that the reason stated
in the further written statement filed without prejudice
pursuant to the direction of the Labour Court could be taken
into account. We, however, must not be understood to
express any opinion on its propriety either way.
In our opinion the Central Government Labour Court, Bombay,
was, for the reasons foregoing, not right in holding that
the complainant was guilty of misconduct and that his
services were terminated for that reason. We, therefore,
allow this appeal and setting aside the order of the Central
Government Labour Court, Bombay, dismiss the complainant’s
petition under s. 33-A of the Act. In the peculiar
circumstances of the case there would be no order as to
costs.
V.P.S. Appeal allowed.
(1) [1962] Supp. 2 S.C.R. 822.
622