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  • S. 28 read with Sch. IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.
  • S. 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.2.
  • S. 28 of the Maharashtra Recognition of Trade Unions and frevention of Unfair Labour Practices Act, 1971,
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citation codes
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  • S. 28 read with Sch. IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.
  • S. 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.2.
  • S. 28 of the Maharashtra Recognition of Trade Unions and frevention of Unfair Labour Practices Act, 1971,
Smart Summary

Judgment Summary — Mookerjee, C.J.

Factual and Procedural Background

One Prabhakar Bhau Patil was a workman employed by the petitioner-company. The company served a chargesheet on him on 20 September 1976 and another set of charges on 4 February 1977. A departmental (domestic) inquiry was held in respect of those charges; the workman participated through a defence representative. On 21 April 1977 a domestic inquiry proceeded ex parte and was concluded. By letter dated 30 April 1977 the company purported to discharge the workman.

The respondent, Mumbai Mazdoor Sabha, acting on behalf of the discharged workman, filed a complaint under S. 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 before the First Labour Court, Bombay. The complaint alleged unfair labour practices including violation of principles of natural justice by reason of the ex parte domestic inquiry and sought setting aside of the dismissal and reinstatement of the workman.

The petitioner-company denied the allegations, contending serious misconduct by the workman and that the inquiry was fair; it sought dismissal of the complaint. After evidence by both sides the First Labour Court, by order dated 4 January 1983, held the domestic inquiry was not fair and proper because it was conducted ex parte on 21 April 1977 and set aside that inquiry, directing parties to lead evidence on merits. The company challenged that Labour Court order by way of the present writ petition.

Legal Issues Presented

  1. Whether, in complaint proceedings under S. 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 read with Schedule IV, the Labour Court has power to adjudicate upon the fairness and propriety of a domestic inquiry conducted by the employer, or whether it is precluded from doing so by reason of the inquiry being a departmental proceeding.
  2. Whether the domestic inquiry conducted on 21 April 1977 and concluded ex parte amounted to a violation of the principles of natural justice and, if so, whether such violation constituted an "unfair labour practice" within the meaning of the Act (in particular Cl. (f) of item (1) of Schedule IV).
  3. Whether the Labour Court transgressed its jurisdiction or arrogated to itself appellate powers in setting aside the domestic inquiry and directing evidence to be led on merits.

Arguments of the Parties

Petitioner-Company's Arguments

  • The Labour Court did not have power under S. 28 (read with Schedule IV) to adjudicate upon the fairness and propriety of the domestic inquiry; it could not function as an appellate court reviewing the findings of a departmental inquiry.
  • There was no violation of principles of natural justice in not granting an adjournment on 21 April 1977, and in any event the procedural irregularity did not amount to an utter disregard of natural justice.
  • The inquiry had been repeatedly adjourned at the instance of the workman (as averred in the company's written statement), and on 21 April 1977 both the workman and his defence representative were absent without cause according to findings relied upon by the company.

Respondent (Mumbai Mazdoor Sabha)'s Contentions

  • The domestic inquiry concluded ex parte on 21 April 1977 was in violation of principles of natural justice and constituted victimisation; therefore it was an unfair labour practice.
  • Accordingly, the Labour Court was entitled to set aside the domestic inquiry and direct that the parties be permitted to lead evidence on the merits.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Maharashtra State Road Transport Corporation v. Niranjan Sridhar Gade [1985-I L.L.N 223] (Jahagirdar, J.) Principles about the scope of an inquiry under S. 28 read with Schedule IV: the Labour Court is not to sit as an appellate court to re‑evaluate findings of a domestic inquiry except where findings are perverse; natural justice is vitiated only if the inquiry officer relied upon materials not put to the delinquent; it was unnecessary to supply copies of preliminary inquiry statements not relied upon or not examined in the domestic inquiry. The Court examined and accepted the general propositions in Jahagirdar, J.'s decision as consistent with its view of S. 28 and Schedule IV. However, the Court distinguished the present facts and held that the First Labour Court in the present case did not exceed its jurisdiction in setting aside the ex parte domestic inquiry.
Amravati District Central Co-operative Bank, Ltd., Amravati v. Shamrao Tanbaji Ladavikar [1982-II L.L.N 182] (Padhye, J.) Where a domestic inquiry is found to be vitiated for non-observance of principles of natural justice, the Labour Court may disallow evidence from that domestic inquiry and permit the employer to establish charges by adducing evidence in Court. The Court held that this decision supports the Labour Court's approach in the present case. The petitioner did not dispute that if the Labour Court finds a domestic inquiry breached natural justice it may call for evidence afresh; accordingly, the present Court did not need to consider that point further and found the Amravati decision adverse to the petitioner's contentions.

Court's Reasoning and Analysis

The Court began by identifying the statutory definitions: "unfair labour practices" under S. 3(16) refers to the practices listed in S. 26 and the Schedules, and Schedule IV lists general unfair labour practices on the part of employers. The Court emphasized that a S. 28 inquiry is confined to the matters set out in Schedule IV; it is not an appeal in the sense of a Court of error that rehears and redecides every aspect of a departmental inquiry.

The Court reviewed the decision in Maharashtra State Road Transport Corporation v. Niranjan Sridhar Gade (Jahagirdar, J.), and agreed with its general statement that a Labour Court should not sit as an appellate court to reappraise or reverse findings of a domestic inquiry unless those findings are perverse or there is a specific vitiating circumstance (for example, reliance on material not put to the delinquent). The Court noted that the Single Judge in that case did not state a proposition contrary to the view the present Court took about the scope of S. 28 and Schedule IV.

The Court then turned to the facts of the present case and to the order of the First Labour Court. It noted the factual circumstances: the adjourned date of hearing was fixed for 21 April 1977; the workman had written on 19 April 1977 requesting accommodation because he was required to work the second shift on the hearing date and suggesting alternatives; the company prepared a reply but admittedly never served it on the workman; the Labour Court found that the undelivered letter would have accommodated the workman but was not communicated, and concluded the workman had a valid reason for not attending; on 21 April 1977 the company's evidence was closed ex parte and the workman had no opportunity to adduce evidence.

The Court accepted that not every breach of natural justice will constitute an unfair labour practice under Schedule IV: the breach must amount to an "utter disregard" or a gross breach causing prejudice or a denial of fair opportunity to defend. Applying that standard to the facts before it, the Court found that the ex parte closing of the company's evidence without affording the workman the right to cross‑examine and the deprivation of the workman's opportunity to adduce evidence amounted to such an utter disregard of the principles of natural justice.

Importantly, the Court observed that the Labour Court did not assume appellate powers; it did not decide the merits of the charges against the workman at this stage. Instead, having found the domestic inquiry vitiated for breach of natural justice, the Labour Court set aside that inquiry and directed that both parties be given an opportunity to adduce evidence on the merits — a course consistent with precedent (as in Amravati) and within the Labour Court's powers under S. 28.

For these reasons the Court concluded that the Labour Court had not erred in law or exceeded its jurisdiction in setting aside the domestic inquiry and directing a fresh opportunity to lead evidence.

Holding and Implications

Holding: The writ petition is dismissed and the rule is discharged. The order of the First Labour Court dated 4 January 1983 setting aside the ex parte domestic inquiry and directing parties to lead evidence on merits is upheld.

Direct consequences for the parties:

  • The First Labour Court's order stands and the parties are to lead evidence on the merits as directed by that Court.
  • There is no order as to costs in the circumstances of the case.
  • The Supreme Court (bench) directed that the order be communicated to the Labour Court expeditiously so that the matter may be disposed of at an early date.

Broader implications:

The opinion reiterates established limits on a Labour Court's role under S. 28 read with Schedule IV: it may adjudicate on whether an employer has committed unfair labour practices (including where a domestic inquiry is vitiated by gross breaches of natural justice) but is not to function as an appellate body re‑appraising untainted findings of a domestic inquiry. The Court did not purport to lay down a new precedent beyond applying these principles to the facts before it.

    Cosmos India Rubber (Private), Ltd. v. Mumbai Mazdoor Sabha And Others

    Mookerjee, C.J:— The learned Single Judge who initially heard this writ petition was of the opinion that it would be more advantageous if the matter be beard by a Bench of two or more Judges. In his order the learned Single Judge has referred to two reported decisions of this Court regarding the scope of an inquiry under S. 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.

    2. One Prabhakar Bhau Patil was the workman of the petitioner-company. On 20 September 1976, the company had served a chargesheet upon him. On 4 February 1977, another set of charges were served upon the said Prabhakar Bhau Patil. The petitioner-company caused a departmental inquiry to be held in respect of the said charges. The workman who was represented by a defence representative had participated in the inquiry. On 21 April 1977, the said domestic inquiry was held ex parte against the workman and was concluded. The petitioner-company by letter, dated 30 April 1977, purported to discharge the workman.

    3. The respondent-Mumbai Mazdoor Sabha on behalf of the said discharged workman had filed a complaint under S. 28 of the Maharashtra Recognition of Trade Unions and frevention of Unfair Labour Practices Act, 1971, before the first Labour Court at Bombay. The Mumbai Mazdoor Sabha, respondent 1, had averred in its complaint, inter alia, that the company was guilty of unfair labour practices in the matter, inter alia, on the ground that the inquiry which was conducted and concluded ex parte on 21 April 1977, was in violation of principles of natural justice and the workman has been discharged by way of victimisation. The Mazdoor Sabha, respondent 1 accordingly prayed for setting aside of dismissal and for reinstatement of the workman.

    4. In its written statement the petitioner-company had denied the said allegation regarding unfair labour practices. The company contended that the workman was guilty of serious misconduct; the inquiry against him was fair and proper and prayed that the complaint be dismissed.

    5. After recording evidence adduced by both parties, the Presiding Officer, First Labour Court, Bombay, by his order, dated 4 January 1983, held that the inquiry against the workman was not fair and proper because to the prejudice of the workman in the domestic inquiry was held ex parte on 21 April 1977. The First Labour Court after setting aside the said inquiry, directed the parties to lead evidence on merits.

    6. The said order, dated 4 January 1983, passed by the First Labour Court, bombay, is a subject-matter of challenge in the present writ petition. Sri Patel, learned counsel for the petitioner-company has strenuously submitted before us that the impugned order of the First Labour Court was contrary to the law laid down by the Hon'ble Justice Sri Jahagirdar in Maharashtra State Road Transport Corporation v. Niranajan Sridhar Gade [1985-I L.L.N 223], regarding the scope of an inquiry under S. 28 read with Sch. IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. According to the learned counsel for the petitioner, in holding an inquiry into the complaint under S. 28 of the said Act, the Labour Court had no power or authority to adjudicate about the fairness and propriety of the domestic inquiry conducted by the petitioner. Secondly, it was submitted that there had been no violation of principles of natural justice by not granting adjournment of the inquiry on 21 April 1977, and in any event the same did not amount to utter disregard of the principles of natural justice. Our attention was also sought to be drawn to the fact that in its written statement filed before the Labour Court the petitioner-company had averred that the said inquiry proceedings had been repeatedly adjourned at the instances of the workman. It has been also pointed out that according to the findings made by the First Labour Court on 21 April 1977, not only the workman was absent but his defence representative without any cause had also absented himself.

    7. The expression “unfair labour practices” according to S. 3(16) of the Act means unfair labour practices as defined in S. 26 of the Act. Section 26 lays down that unless the context requires otherwise, “unfair labour practices” mean any of the practices listed in Schs. II, III and IV. Schedule IV sets out general unfair labour practices on the part of employers. Undoubtedly, in conducting an inquiry in respect of a complaint made under S. 28(1) of the Act against an employer, the Labour Court is required to consider all or any of the practices set out in Sch. IV had in fact been committed by an employer. In other words, the scope of an inquiry under S. 28 against an employer would be confined to matters set out in Sch. IV and such inquiry proceedings would not be in the nature of an appeal in the sense an appeal Court functions as a Court of error providing for a rehearing of the entire matter. We have carefully perused the decision of Justice Sri Jahagirdar in Maharashtra State Road Transport Corporation v. Niranjan Sridhar Gade [1985-I L.L.N 223] (vide supra). The learned Single Judge has not laid down any proposition contrary to the view taken by us about the scope and effect of S. 28 read with Sch. IV of the Act. Before the learned Single Judge, the employer transport corporation had filed a petition under Art. 227 against an order passed by the Presiding Officer, Labour Court, in Nasik, holding that the termination of the service of a driver of the transport corporation amounted to unfair labour practices within the meaning of Cls. (b), (d), (f) and (g) of item (1) of Sch. IV of the Act (1 of 1972). The writ petition before Jahagirdar, J., succeeded. In the facts of the said reported case, the learned Judge held that the Labour Court was not right in finding that by denying copies of the deposition of witnesses examined in the preliminary inquiry the rule of natural justice had been violated. The learned Single Judge held that in the said case except two none of the other persons whose statements were recorded in the preliminary inquiry had been examined in the domestic inquiry. So according to the learned Single Judge it is wholly unnecessary to supply copies of their statements recorded in the preliminary inquiry. The learned Single Judge also noted that the rule of natural justice would have been vitiated only if in the domestic inquiry the inquiry officer had relied upon materials which had not been put to the delinquent workman. In the inquiry impugned in the writ petition disposed by Jahagirdar, J., the Labour Court had purported to review the evidence regarding the charge against the delinquent workman that the conductor of the bus had handed over moneys collected from the passengers to him. In view of this position, the learned Single Judge had observed that It was not open to a Labour Court which was not sitting as a Court of appeal to sit upon the judgment over the findings recorded by the inquiry officer in a domestic inquiry unless those findings were perverse. The Labour Court in the said case had exceeded its jurisdiction in reversing the findings recorded by the domestic inquiry in this regard. In view of this, Jahagirdar, J., had set aside the order of the Labour Court, Nasik, in the complaint case in question.

    8. The learned counsel for the petitioner himself has before us the decision of Padhye, J., in Amravati District Central Co-operative Bank, Ltd., Amravati v. Shamrao Tanbaji Ladavikar [1982-II L.L.N 182]. In our view the decision of Padhye, J., in fact is against the contentions raised on behalf of the petitioner. In the case before Padhye, J., the Labour Court found that the evidence recorded in the domestic inquiry against the workman was vitiated because of non-observance of principles of natural justice. The same could not be taken into account while deciding the complaint. Accordingly, the Labour Court had granted permission to the employer to establish the charges by adducing evidence in Court. The learned Single Judge had upheld the said course adopted by the Labour Court. Before us the learned counsel for the petitioner did not dispute that in the event in a complaint proceedings under S. 28 of the Act the Labour Court finds that the domestic inquiry was in breach of principles of natural justice, it is open to the Labour Court to call upon both the parties to adduce evidence. Since this proposition is not disputed by the petitioner, we are not required to consider this aspect of the matter. In Para. 16 of its impugned order, the Labour Court has observed:

    “However, as the enquiry is being set aside a further chance shall have to be given to the management to prove its case on merits as prayed by the company vide application, dated 26 December 1982.”

    In other words, the petitioner-company itself appeared to have prayed for giving such opportunity to establish the charge before the Court.

    9. We have examined the order of the First Labour Court impugned in the present writ petition. We regret we are unable to give any countenance to the submissions made on behalf of the petitioner that the Labour Court had in any way transgressed its powers under S. 28 of the Act. It is not very much disputed that the adjourned date of hearing was fixed on 21 April 1977. The preceding day was a weekly off of the delinquent workman. On 19 April 1977, he had made a written application stating that on 21 April 1977 (the date fixed for hearing), he was required to work in the second shift. He had prayed that the inquiry may be held during his working hours on 21st or he may be marked present during the second shift for being required to attend the inquiry at 10 A.M Neither the workman had been asked to wait nor he was given any intimation about the course to be adopted about the holding of the inquiry on 21 April 1977. A reply by the company was purported to be prepared but was never served admittedly on the workman. It may be also pointed out that in the said undelivered letter of the company, it was prepared to accommodate the petitioner. But the said letter being not communicated to the work man, according to the Labour Court he had for valid reason did not appear at the inquiry on 21 April 1977. On the said date, not only evidence adduced by the company was closed but also the workman had no opportunity to adduce evidence on his side. In case it is found that the workman had valid reasons for not attending the inquiry on 21 April 19?7, it was in consonance that no separate ground was advanced for non-attendance by the defence representative. Obviously unless the workman himself attended, his defence representative would have no occasion to participate in the inquiry.

    10. The learned counsel for the petitioner is right in his submission that every infraction of the principles of natural justice may not amount to indulging in unfair labour practices within the meaning of Cl. (f) of item (1) Sch IV of the Act. There must be utter disregard of the principles of natural justice. In other words, it must be a gross one causing prejudice or amounting to denial of fair opportunity to defend the charges in the domestic inquiry. In the instant case, having regard to the fact that not only there was ex parte closing of company's evidence without affording the right to cross-examination but also deprivation of the workman to adduce evidence on his side, the Labour Court was entitled to bold that there had been utter disregard of the principles of natural justice in the domestic inquiry impugned in the complaint. In the instant case, the Labour Court did not arrogate to itself the powers of an appeal Court by making appraisal or appreciation about the merits of the charges framed against the workman. The Labour Court had characterised inquiry as not fair and improper upon its determination that the ex parte inquiry on 21 April 1977, amounted to violation of the principles of natural justice. In fact the Labour Court was careful enough by avoiding any finding at this stage whether the charges against the workman were sustainable or not. The same was left to be decided after both the parties avail of the opportunities given to adduce evidence on merits. For the foregoing reasons we reach the conclusion that the Labour Court did not commit any error of jurisdiction and the impugned order does not warrant interference by this Court. We accordingly discharge the rule and dismiss the writ petition. In the circumstances of the case there is no order as to costs.

    11. The order be communicated to the Labour Court expeditiously so that the case may be disposed of at an early date.

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    Cosmos India Rubber (Private), Ltd. v. Mumbai Mazdoor Sabha And Others
    (Jan 20, 1989)