Narayana Pai, J.:— The petitioner Spencer and Company Limited, took disciplinary proceedings against the second respondent their employee at the relevant period and dismissed him as a result of the enquiry by their proceedings dated 30th of November 1959. The second respondent thereupon presented an appeal under sub-section (2) of Section 41 of the Mysore Shops and Establishments Act, (Act No. II) 1948 to the first respondent. The Headquarters Assistant to the Commissioner of Labour in Mysore, who is the prescribed appellate authority under that section.
The first respondent by his order dated 12th September, 1960 allowed the appeal and made a direction apparently in the light of sub-section (3) of Section 41 for payment to the second respondent by the petitioner of an amount equal to the total of one month's wages in lieu of notice and six months' wages as compensation.
The writ petition is directed against the said order of the first respondent.
In the course of the hearing, apart from certain other errors said to have been committed by the first respondent, it came to our notice that before making his order the first respondent had actually recorded evidence and has purported to rest his conclusion on that evidence. The question whether the appellate authority functioning under sub-section (2) of Section 41 of the Mysore Shops and Establishments Act has the power or jurisdiction to record further evidence in the appeal, in the manner the first respondent in this case has done, appears to be of considerable importance especially in view of what is stated before us, viz., that it has almost been the uniform practice of such authorities to do so. We requested both the learned counsel to address us on the question of jurisdiction.
Having heard them on that point we are of the opinion that the position in law is as follows:—
For the purpose of deciding the said question the relevant portions of Section 41 are sub-sections (1) and (2) thereof which read as follows:—
41. “(1) No employer shall dispense with the services of a person employed continuously for a period of not less than six months, except for a reasonable cause and without giving such person at least one month's notice or wages in lieu of such notice, provided, however, that such notice shall not be necessary where the services of such person are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose.
It will be seen that the first sub-section refers to the modes in which an employee may be thrown out of employment, viz., termination of services for a reasonable cause on being given at least one month's notice or wages in lieu of such notice and dismissal on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose. Likewise sub-section (2) enumerates different grounds which could be alleged or taken in support of an appeal against the employer's action under sub-section (2) depending upon the nature of the action taken. In the case of an appeal against the termination on notice with reasonable cause the ground which the employee could rise in appeal is that there was no reasonable cause for so dispensing with his services. In an appeal against dismissal for misconduct the ground which could properly be raised is that he the appellant had not been guilty of misconduct as held by the employer.
This clear specification or delimitation of the grounds on which alone an appeal by an employee could be supported is in our opinion an indication also of the nature and extent of the jurisdiction of the appellate authority.
In the case of an appeal against the termination of services under the first part of sub-section (1) of Section 41 the point for investigation in appeal is whether there did exist reasonable grounds for such termination. In the case of an appeal against dismissal under second part of sub-section (1), the point for investigation would be whether the employer's finding that the appellant was guilty of misconduct is supported by satisfactory evidence recorded at an enquiry held by the employer for the purpose as indicated in the first sub-section.
It may be, as Mr. Nazerath the learned counsel for the second respondent suggests, in the case of an appeal against the termination of services under the of first part of sub-section (1) of Section 41, the existence or otherwise of reasonable cause for termination being itself a question of fact to be investigated for the first time by the appellate authority, the statute may be read as impliedly conferring upon the appellate authority the power to record evidence so as to enable him to exercise the principal power of adjudication conferred upon him by the statute. But, we are clearly of the opinion that no such power to record additional evidence can by implication be said to have been conferred on the appellate authority. As already pointed out what he has to investigate is whether the finding of the employer that the employee is guilty of misconduct is or is not supported by evidence recorded at an inquiry held by the employer. If the evidence recorded at such an enquiry held by the employer is sufficient to support his finding that the employee is guilty, we do not think that the employee can ask the appellate authority to take further evidence or that the appellate authority could test the correctness of the employer's finding on any evidence other than that recorded at the enquiry held by the employer. Equally so if the evidence recorded by the employer at an enquiry held by him is in the opinion of the appellate authority insufficient to support his finding, the employer cannot ask the appellate authority to permit him to adduce further evidence in support of his finding. It is thus clear that the power to record further evidence is not only impossible to infer from the section but the implication of such power is itself destructive of the very object of the Section.
We, therefore, hold that the appellate authority hearing an appeal under sub-section (2) of Section 41 against an order of dismissal made by an employer on a charge of misconduct which he, seeks to support by evidence recorded at an enquiry held by him, has no jurisdiction to record further evidence in appeal.
This opinion is sufficient to set aside the order of the appellate authority and to direct him to hear and dispose of the appeal afresh. But, before doing so we think it is necessary to make two observations about his order. In the first place he appears to have mis-understood the exact nature of the appeal before him by apparently confining to the first part of sub-section (1) of Section 41. The appeal itself being one against the order of dismissal on a charge of misconduct, the question before the appellate authority was not whether any reasonable cause existed for the termination but whether the finding of guilt was supported by satisfactory evidence recorded at the enquiry held by the employer. Secondly he appears to have proceeded on the footing that he has power or jurisdiction to go into the question whether the dismissal was proper punishment for the mis-conduct if the should come to the conclusion that the finding as to misconduct was correct. It is necessary to point out that the employer's power of dismissal is exclusively one which flows from the contract of services and that the statute merely seeks to control the exercise of that power and not confer upon the statutory authorities the authority to exercise that power. The statutory authority can set aside the exercise of that power by the employer if the conditions set out in the statute on the fulfilment of which alone the employer can exercise that power did not exist or had not been duly fulfilled by the employer. If the opinion of the employer as to his employee's guilt or misconduct is supported by satisfactory evidence recorded at an enquiry held by him, we do not think that the appellate authority can go further and advise the employer to impose a lighter punishment.
The result is that the impugned order of the first respondent is set aside and he is directed to hear the appeal afresh and to dispose of the same in accordance with law and in the light of the observations contained in this order. No order as to costs.