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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • For the Appellant: M.M Ismail for B.T. Seshadri, Advocates.
  • For the Respondent: R1, B.R. Dolia of Ayer & Dolia, Advocates.
Judges
  • Kailasam, J.
Acts
  • section 10(1)(c) of the Industrial Disputes Act
  • section 38(1)(b) and S. 38(2)(b)
  • section 33(2)(b)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • For the Appellant: M.M Ismail for B.T. Seshadri, Advocates.
  • For the Respondent: R1, B.R. Dolia of Ayer & Dolia, Advocates.
Judges
  • Kailasam, J.
Acts
  • section 10(1)(c) of the Industrial Disputes Act
  • section 38(1)(b) and S. 38(2)(b)
  • section 33(2)(b)
See more information ...
Smart Summary

Summary of Opinion: Writ Petitions Challenging Labour Court Proceedings and Retrenchment

Factual and Procedural Background

These two connected writ petitions arise from an industrial dispute (I.D. 63 of 1963) referred to the Labour Court under section 10(1)(c) of the Industrial Disputes Act by the Government on 12-12-1963. A compromise between the parties was reached on 8-10-1964 and an award embodying that compromise was passed the same day. Under the compromise the management agreed to reinstate Shanmugham effective 25-9-1964 with three months' back wages, and to reinstate the first respondent effective 19-10-1964 with three months' back wages. The first respondent was reinstated on 19-10-1964 and paid three months' wages.

Two days later, on 21-10-1964, the management issued notices of retrenchment to 19 persons, including the first respondent, and paid retrenchment compensation. The management stated the Supervisor post had to be abolished due to shortage of work. The award was published in the Fort St. George Gazette on 11-11-1964. On 9-12-1964 the first respondent filed a complaint in the Labour Court under Section 38-A of the Act. The petitioner challenged the maintainability of that complaint; the Labour Court on 6-6-1965 held the petition maintainable. The petitioner filed W.P. 2583 of 1965 for certiorari to quash the Labour Court's order and W.P. 316 of 1966 for prohibition restraining the Labour Court from proceeding further with the complaint.

Legal Issues Presented

  1. Whether the retrenchment of the first respondent on 21-10-1964 occurred "during the pendency of any proceedings before a Labour Court" such that Section 33 (and Section 33-A) of the Industrial Disputes Act applied.
  2. Whether Sections 38(1)(b) and 38(2)(b) (and related provisions) apply only where dismissal or discharge is a punishment for misconduct, or whether a retrenchment effected for inadequate reasons, victimisation or unfair labour practice falls within those provisions (and thus attracts the protection of Section 33).

Arguments of the Parties

Petitioner's Arguments (management; Mr. Ismail, counsel)

  • The petition of the first respondent is not maintainable because the retrenchment was not during the pendency of proceedings before the Labour Court; therefore Section 33 and Section 33-A are not attracted. The award had been passed on 8-10-1964 and implemented on 19-10-1964, so nothing remained pending on 21-10-1964 when retrenchment notices were issued.
  • Sections 38(1)(b) and 38(2)(b) apply only when a person is discharged or punished (by dismissal or otherwise) for misconduct. Retrenchment, even if improperly motivated, is not a "punishment for misconduct" and thus the statutory prohibition against dismissal as punishment for misconduct (Section 33(2)(b)) does not apply.

The opinion does not record a detailed set of counter-arguments advanced by the first respondent in the text provided; the court's summary and analysis primarily addresses the petitioner's contentions.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Syamala Studios Madras v. Kannu Devar (1966) 79 Mad LW 329 Held that when dismissal is deliberate and without any reasons, Section 33 (and Section 33-A) may apply; dismissal without reason can attract statutory protections. The court cited this decision to support the proposition that dismissal (or discharge) that is deliberate and without reasons falls within the scope of Section 33/33-A and to reject a narrow reading that excludes such dismissals.
Murugan Mills Ltd. v. Industrial Tribunal Madras, AIR 1965 SC 1496 (1966-1 Lab LJ 422) Demonstrates that where termination was found to be for dereliction/go-slow (i.e., misconduct), Section 38 and related provisions apply; factual finding of misconduct justified treating termination as punishment for misconduct. The court noted the Supreme Court's factual finding of misconduct in that case, and explained that the authority turned on that finding — the present case differs because the petitioner contended there was no misconduct; the court rejected the petitioner's attempt to distinguish the principle that scrutiny applies to the bona fides of terminations.
Buckingham and Carnatic Mills Ltd. v. Their Workers (1951-2 Lab LJ 314) Part of authorities concerning an employer's right to terminate and the requirement of bona fides; addresses limits on termination where there is colourable exercise, victimisation or unfair labour practice. Referred to by the court (via the Supreme Court's consideration) to support the view that bona fides is essential and that tribunals may intervene where termination is a colourable exercise or victimisation.
Chartered Bank, Bombay v. Chartered Bank Employees' Union & Another, AIR 1960 SC 919 (1960-2 Lab LJ 222) One of the Supreme Court authorities addressing employer powers to terminate and need for bona fide exercise of such power. Cited as part of the chain of authority relied upon by the Supreme Court and adopted by the court to show that improper grounds for termination (victimisation/unfair practice) can render termination subject to tribunal interference.
U.B. Dutt and Co. v. Workmen of U.B. Dutt and Co., AIR 1963 SC 411 (1962-1 Lab LJ 374) Affirmed that requirement of bona fides is essential; termination that is colourable or amounts to victimisation/unfair labour practice can be set aside by an Industrial Tribunal. The court relied on this authority (as approved by the Supreme Court) to hold that even where discharge is not for misconduct, if it results from victimisation or unfair labour practice it is subject to tribunal jurisdiction and may be set aside.

Court's Reasoning and Analysis

The court's analysis proceeded in two main strands corresponding to the petitioner's contentions: (A) whether the retrenchment occurred during the pendency of proceedings before the Labour Court (so as to invoke Section 33), and (B) whether the statutory protections apply only when dismissal is a punishment for misconduct.

A. Pendency and the notional date of conclusion under Sections 20 and 17-A

  • The court accepted the chronology: reference to the Labour Court (12-12-1963), compromise and award (8-10-1964), reinstatement implemented (19-10-1964), notice of retrenchment (21-10-1964), and publication of the award in the Gazette (11-11-1964).
  • The critical statutory provision is Section 20(3), which deems proceedings before a Labour Court to have concluded on the date the award becomes enforceable under Section 17-A. Section 17-A makes an award enforceable on expiry of 30 days from the date of its publication under Section 17 (i.e., publication in the Gazette).
  • Applying these provisions, the court treated the date of conclusion as the notional date when the award becomes enforceable (30 days after publication). Here, publication occurred on 11-11-1964, so under Section 17-A the award became enforceable on 11-12-1964. Because the retrenchment took place on 21-10-1964 — before 11-12-1964 — it occurred during the pendency of the proceedings and thus Section 33 applied.
  • The court rejected the petitioner's argument that implementation of the award (reinstatement on 19-10-1964) ended the proceedings. The court emphasised that the statutory conclusion date is a notional legal date provided by Section 20(3) and determined by Section 17-A; whether the award's terms happened to be implemented earlier does not alter the notional conclusion date. The court noted Section 17A(4) distinguishes the date an award comes into operation from the date it becomes enforceable.

B. Scope of 'misconduct' and application of Sections 33 / 38

  • The petitioner argued Sections 38(1)(b) and 38(2)(b) apply only where discharge or dismissal is punishment for misconduct; hence, retrenchment would not attract those provisions. The court declined a narrow interpretation.
  • The court explained the purpose of Section 33 is to maintain the status quo and prevent deterioration of relations between management and workers during the pendency of industrial disputes. A narrow reading that excludes dismissals effected without reasons would allow management to circumvent the protection by victimising workmen or resorting to unfair labour practice.
  • Consequently, the court adopted a wide construction of “misconduct” to include dismissals or discharges effected for inadequate or unsustainable reasons, and to cover cases amounting to victimisation or unfair labour practice. The court concluded that discharge effected in such circumstances falls within the ambit of the statutory protection and that Section 33 (and Section 33-A) can apply.
  • The court reinforced this interpretation by reference to prior decisions (including Syamala Studios and the Supreme Court authorities) which emphasise the requirement of bona fides in termination and the power of industrial tribunals to intervene where termination is a colourable exercise of power.

Holding and Implications

Holding: The two writ petitions are dismissed. The court held that the retrenchment of the first respondent on 21-10-1964 occurred during the pendency of proceedings before the Labour Court (as the proceedings are deemed to conclude only when the award becomes enforceable under Section 17-A), and that the statutory protections of Section 33 (and related provisions) apply. The court also held that the term "misconduct" must be given a wide meaning so as to include dismissals for inadequate reasons or acts of victimisation or unfair labour practice.

Implications and immediate effects:

  • The writ petitions (W.P. 2583 of 1965 and W.P. 316 of 1966) are dismissed with costs. The court awarded counsel's fee of Rs. 100 in one writ petition.
  • The Labour Court is to proceed with the petition pending before it according to law (i.e., the Labour Court may continue to adjudicate the complaint under Section 38-A).
  • No wider new precedent beyond the court's reasoning is expressly announced; the decision applies the statutory scheme (Sections 20, 17, 17-A, 33, 33-A, 38) and relies on previously cited authorities to support its interpretation that bona fides and protection against victimisation are essential.

This summary is prepared exclusively from the provided opinion and does not add or infer facts beyond the text of that opinion.

Show full summary ...

    Sri Rama Machinery Corporation (P) Ltd., Madras v. N.R Murthy And Another

    1. These two writ petitions are connected and may be dealt with together A dispute, I.D 63 of 1963, concerning the discharge of the first respondent herein and one Shanmugham was referred to the Labour Court under section 10(1)(c) of the Industrial Disputes Act by the Government on 12-12-1963. A compromise was entered into between the parties on 8-10-1964 by which the management agreed to reinstate Shanmugham from 25-9-1964 and to pay him three months' back wages. The management also agreed to reinstate the first respondent from 19-10-1964 and to pay him back wages for three months. An award on the terms of the compromise was passed on 8-10-1964. On 19-10-1964 the first respondent was reinstated and three months wages were paid to him, as agreed to in the compromise. Two days later, on 21-10-1964, the management gave notice to 19 persons, including the first respondent, intimating them that they were to be retrenched. Retrenchment compensation was paid and the management stated that the first respondent was retrenched as, the post of Supervisor had to be abolished due to shortage of work. The Award which was passed in terms of the compromise was published in the for St. George Gazette on 11-11-1964. On 9-12-1964, the first respondent preferred a complaint in the Labour court under S. 38-A of the Act. The petitioner questioned the maintainability of that complaint. On 6-6-1965 the Labour court held that the petition was maintainable. Against the said order. W.P 2583 of 1965 is filed for the issue of a writ of certiorari quashing the order of the Labour court holding that the petition is maintainable and W.P 316 of 1966 is filed for the issue of a writ of prohibition restraining the Labour court from proceeding further with the complaint of the first respondent.

    2. Mr. Ismail, learned counsel for the petitioner management, submitted that the petition of the first respondent is not maintainable on two grounds. Firstly, he submitted that the retrenchment was not during the pendency of any proceedings before a Labour court and as such neither Section 33 nor section 33-A is attracted. Secondly, he submitted that the retrenchment of the first respondent would not fall under S. 33(1)(b) or S. 38(2)(b), as the first respondent was not discharged or punished by dismissal or otherwise for any misconduct.

    3. It may be noted that the compromise was entered into on 8-10-1964 and the Award was passed on the same date. The Award was published in the Fort St. George Gazette on 11-11-1964. The first respondent was reinstated on 19-10-1964. The notice of retrenchment was given on 21-10-1964 Now, the contention of the petitioner is that as the award was passed on 8-10-1964, and its terms were implemented on 19-10-1964 that there was nothing pending on 21-10-1964 when the notice of retrenchment was given. Section 33 provides that during the pendency of any proceedings before a Labour court in respect of an industrial dispute, no employer shall alter the conditions of service or discharge or dismiss any workman for any misconduct. Section 20 of the Act specifies when the proceedings commence and conclude. Sub-sec. (3) of S. 20 provides that proceedings before a Labour court shall be deemed to have commenced on the date of the reference of the dispute for adjudication and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under S. 17-A.

    4. We are not in this case concerned with the date of commencement of the proceedings, the proceedings according to the section, shall be deemed to have concluded on the date on which the award becomes enforceable under S. 17-A. Section 17-A provides that an award shall become enforceable on the expiry of 30 days from the date of its publication under Section 17. Section 17 relates to the publication of the Award by the appropriate Government, that is, the date of publication thereof in the Gazette. If the date of conclusion of the proceedings is taken to be the date on which the Award became enforceable under S. 17-A, which is 30 days from the date of publication in the Gazette, the date on which the proceeding shall be deemed to have been concluded, in this case, would be 11-12-1964, and as the retrenchment of the first respondent was before that date, it will be during the pendency of the industrial dispute attracting S. 33.

    5. Mr. Ismail, learned counsel for the petitioner, submitted that the date given in section 17-A would only be applicable to cases where the Award was not complied with and becomes enforceable after the date of publication in the Gazette and not to cases where the Award had already been implemented. This contention cannot be accepted for the date of the conclusion of the proceedings is not a factual date but is only a notional date, which is provided for in section 20(3) and for purposes of determining whether the proceedings has been concluded or not, the date that has to be taken into account is the date on which the Award becomes enforceable. Whether the terms of the award have been implemented or not, this date would be the date of expiry of 30 days after its publication under section 17. It may be noted that section 17A(4) maintains a distinction between the date when the Award comes into operation and the date when the Award becomes enforceable. This contention of the petitioner is therefore rejected.

    6. The second contention of the learned counsel is that section 38(1)(b) and S. 38(2)(b) are applicable only when a person it discharged or punished, whether by dismissal or otherwise, for any misconduct. Learned counsel would emphasise the words “punished for misconduct by dismissal” and submit that when a person had been retrenched, even though for no proper reasons, the section will not be attracted, as it will not amount to dis charge or dismissal as punishment for misconduct. This contention cannot be upheld, for section 33 is enacted for the purpose of maintaining the status quo and preventing the Relationship between the management and the workers getting worse during pendency of the industrial dispute. If the contention of the learned counsel for the petitioner is to be accepted, while section 33(2)(b) prohibited the discharge or dismissal as punishment for misconduct, the management would be at liberty to discharge or dismiss a worker without assigning any reasons, by way of victimization or unfair labour practice. The word ‘misconduct’ should be given a wide meaning to Include discharge or dismissal by the management for inadequate or unsustainable reasons.

    7. In Syamala Studios Madras v. Kannu Devar (1966) 79 Mad LW 329, I came to the conclusion that when the dismissal is deliberate and without any reasons, it cannot be said that the employer did not take action under section 33 of the Act. Section 33-A was held to be applicable to such cases. Mr. Ismail learned counsel for the petitioner, submitted that the above decision required reconsideration as the observations of the Supreme Court in Murugan Mills Ltd. v. Industrial Tribunal Madras 1966-1 Lab LJ 422 : (AIR 1965 SC 1496) on which that decision is based, are not applicable to cases arising under Section 33 of the Act. Mr. Ismail drew my attention to the finding of the Supreme Court in 1965-1 Lab LJ 422, 425 : (AIR 1965 SC 1496 at p. 1499) where the Supreme Court found as a matter of fact that the employee's services were terminated for dereliction of duty and go-slow in his work, which clearly amounted to punishment for misconduct. On that finding. It was submitted that section 38 of the Act is applicable, while in the present case the discharge or dismissal is not for an\ misconduct. This contention cannot be accepted, for before the Supreme Court it was contended that the termination was not for any misconduct and was not meted out as a punishment and therefore S. 33(2)(b) did not apply and it was not necessary to obtain the approval of the Tribunal This contention was noi accepted.

    8. In dealing with the right of an employer to terminate the services of his workman, the Supreme Court referred to the decisions in Buckingham and Carnatic Mills Ltd. v. Their Workers, 1951-2 Lab LJ 314 (Chartered Bank, Bombay v. Chartered Bank Employees' Union & Another 1960-2 Lab LJ 222 : (AIR 1960 SC 919) and U.B Dutt and Co. v. Workmen of U.B Dutt and Co., 1962-1 Lab LJ 374 : (AIR 1963 SC 411) and observed that in 1962-1 Lab LJ 374 : (AIR 1963 SC 411) the view taken by the Labour Appellate Tribunal was approved and it was held that even in a case like the present, the requirement of bona fides was essential and if the termination of service was a colourable exercise of the power or as a result of victimisation or unfair labour practice, the Industrial Tribunal would have the jurisdiction to Intervene and set aside such termination. This observation is applicable to a case like the present, where the discharge was not for any misconduct but a discharge or dismissal pending an industrial dispute as a result of victimisation or unfair labour practice. Further, in my view, the word “misconduct” should be construed as to include any ground for dismissal or discharge, which is improper, amounting to victimisation or unfair labour practice. The second contention of the learned counsel has also to be rejected. The two writ petitions are dismissed with costs. Counsel's fee of Rs. 100. In one writ petition. The Labour court will proceed with the petition pending before it according to law.

    GK/NRK/G.G.M

    9. Petitions dismissed.

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    Comments

    Sri Rama Machinery Corporation (P) Ltd., Madras v. N.R Murthy And Another
    (Jul 18, 1966)