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The Delhi Cloth & Ge... v. Shriram Fertilisers ...
Factual and Procedural Background
This writ petition was filed by an employer challenging the award (Annexure 13) dated 18 September 1982 of the Industrial Tribunal-cum-Labour Court, Kota, under Section 10(1)(c) of the Industrial Disputes Act, 1947. The Tribunal held that the termination of service of the workman, Girraj Prasad, was unjustified, substituted the punishment of dismissal by stoppage of two annual grade increments with cumulative effect, and directed reinstatement with full back-wages.
Girraj Prasad, employed as a maintenance fitter (transferred from the carbide plant to the ammonia plant), was charged by a charge-sheet dated 26 April 1980 with: (a) going to the house of co-worker P.P. Singh on 23 April 1980 and threatening his wife because P.P. Singh had not joined an agitation, and (b) threatening P.P. Singh on 25 April 1980 while on duty in the factory. A corrigendum to the charge-sheet was tendered and the workman allegedly refused to accept it after reading it on 2 May 1980, giving rise to an additional charge of impertinence/insubordination.
The enquiry officer's reports (Annexures 4 and 5) found the 23 April incident not proved, the 25 April incident proved, and recorded that on 2 May the workman returned the corrigendum instead of acknowledging receipt (that charge was treated as proved by the enquiry report). The employer issued a final order of dismissal on 23 March 1981. The union raised a dispute which was referred to the Tribunal.
The Tribunal treated the fairness of the domestic enquiry as a preliminary issue and held the enquiry to be fair (Annexure 9). By its award (Annexure 13) dated 18 September 1982, the Tribunal accepted that the 25 April 1980 charge (threatening within factory premises) was proved but found the punishment of dismissal disproportionate in the circumstances (including a delay of about six months in taking final action and an intervening fresh charter of demands signed on 19 January 1981 by the workmen including Girraj Prasad). The Tribunal substituted stoppage of two grade increments (cumulative) for dismissal and directed reinstatement with full back-wages. The employer challenged this award by the present writ petition.
Legal Issues Presented
- Whether Section 11A of the Industrial Disputes Act, which empowers Labour Courts/Tribunals to reappraise an employer's action in dismissal cases, is violative of Article 14 of the Constitution for lack of sufficient guidelines and for permitting arbitrariness (also noting absence of appeal/revision).
- Whether the Tribunal was justified in interfering with the employer's punishment (dismissing the workman) and in directing reinstatement with full back-wages, or whether reinstatement should be replaced by compensation in lieu thereof.
Arguments of the Parties
Petitioner's Arguments
- Section 11A confers very wide powers on Labour Courts and Tribunals and lacks sufficient guidelines to exclude arbitrariness; consequently it is said to be constitutionally infirm under Article 14.
- The absence of any provision for appeal or revision against decisions of Labour Courts/Tribunals indicates there is no effective check on arbitrary decisions.
- The Tribunal should not have interfered with the punishment of dismissal because (a) the misconduct (threatening a co-worker within factory premises) was found proved and (b) it was therefore inappropriate to order reinstatement; if reinstatement is ordered, full back-wages should not have been given where the employee was not found wholly blameless.
- In the alternative, if reinstatement is not considered appropriate, compensation should be awarded in lieu of reinstatement, calculated having regard to the workman's last drawn salary.
The opinion does not contain a detailed account of the respondent (union or workman) arguments beyond the Tribunal's reasoning reflected in its award.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Workmen of Firestone Tyre & Rubber Co. of India (Pvt.) Ltd. v. Firestone Tyre & Rubber Co. of India (Pvt.) Ltd., 1973 I LLJ 278 | The Supreme Court indicated changes in legal position after insertion of Section 11A: the Tribunal can differ from employer's findings on misconduct and on punishment, but when doing so it must give "very cogent reasons for not accepting the view of the employer." | The court relied on this authority to support the view that Section 11A permits the Tribunal to differ from an employer's findings or punishment provided very cogent reasons are given; this reliance helped the court reject the contention that Section 11A is arbitrary and unsupported by guidelines. |
Court's Reasoning and Analysis
The court proceeded in two stages corresponding to the principal arguments raised by the petitioner.
On challenge to Section 11A and Article 14:
- The court held there is no merit in the contention that Section 11A lacks adequate guidelines or is arbitrary. The object of Section 11A is to provide an independent reappraisal of an employer's action to ensure fairness.
- The court identified textual guides within Section 11A itself: the requirement that the Tribunal be "satisfied that the order of discharge or dismissal was not justified" imposes a substantive threshold (the words "satisfied" and "justified" are legally significant). When that threshold is reached, the Tribunal may grant such relief "as it thinks fit" and "as the circumstances of the case may require."
- These expressions provide an intelligible standard; judicial interpretation of similar expressions has been developed in earlier decisions, and the Section contemplates a reappraisal exercised within identified limits.
- The court referred to the Supreme Court decision in the Firestone case to emphasize that Section 11A permits divergence from the employer's findings but requires "very cogent reasons" for doing so; that requirement itself guards against arbitrariness.
- Absence of an internal statutory appeal or revision mechanism under the Industrial Disputes Act does not render Section 11A arbitrary because judicial review remedies exist: writ petitions under Article 226 to the High Court and appeal to the Supreme Court under Article 136 are available. The present writ petition illustrates that such remedies are available.
- Accordingly, the court rejected the constitutional challenge to Section 11A and the argument that the provision is devoid of safeguards against arbitrariness.
On interference with punishment and grant of back-wages:
- The Tribunal had found proved the charge of threatening a co-worker within the factory premises on 25 April 1980. However, the Tribunal examined surrounding circumstances and concluded dismissal was too harsh and disproportionate.
- The Tribunal's reasons were considered cogent by the court: delay of about six months between enquiry reports and imposition of penalty (final order on 23 March 1981), and the intervening fresh charter of demands (19 January 1981) signed by workmen including the claimant, were relevant mitigating considerations.
- The court analyzed the separate 2 May 1980 incident (refusal to accept the corrigendum after reading it). It concluded that treating this incident as a separate misconduct charge was difficult to appreciate; at best it established knowledge of the corrigendum's contents and did not amount to a distinct act of misconduct warranting separate punishment. The employer's reliance on that incident likely influenced the severity of the dismissal.
- On the issue of back-wages, the court accepted that since some misconduct was found proved (so the workman was not wholly blameless), awarding full back-wages up to reinstatement was not appropriate. The court noted that during suspension the workman had received subsistence allowance (initially 50% of wages, later 75%). Because the suspension was not unjustified, wages owing up to the date of reinstatement should be confined to the subsistence allowance already paid rather than full back-wages.
- Regarding the alternative contention that compensation should be substituted for reinstatement, the court held the material was insufficient to show the workman was of such a character or that his continued presence would be inimical to industrial peace. Therefore, it was not appropriate to deny reinstatement and award compensation in lieu thereof.
Holding and Implications
Core Ruling: The petition is partly allowed.
The court upheld the Tribunal's power under Section 11A to interfere with an employer's decision and accepted the Tribunal's substitution of a lesser punishment (stoppage of two grade increments cumulatively) for dismissal and its direction of reinstatement. However, the court modified the relief concerning back-wages: the workman is entitled only to the subsistence allowance amounts already paid for the period of suspension up to the date of the award, not full back-wages for the entire suspension period.
Consequences for the parties:
- The Tribunal's substantive decision to substitute a lesser punishment and to reinstate the workman is sustained.
- The monetary relief ordered by the Tribunal is reduced: full back-wages are disallowed; only the subsistence allowance actually paid during suspension is to be treated as the wages due up to the date of reinstatement.
- The petition was otherwise dismissed; parties were directed to bear their own costs.
Broader implications: The court reaffirmed that Section 11A provides adequate standards to prevent arbitrariness (noting textual standards and the requirement of "very cogent reasons" as explained by the Supreme Court in the cited precedent). The opinion does not purport to lay down any new, general precedent beyond applying established principles to the facts of the case.
1. This writ petition is by an employer against the award (Annexure 13), dated 18th September, 1982, by which the Industrial Tribunal-cum Labour Court, Kota, has decided the reference made to it under Section 10(1)(c) of the Industrial Disputes Act, 1947, by holding that the termination of service of the workman, Girraj Prasad, by the employer was unjustified and instead of this punishment, the punishment of stoppage of two annual grade increments with cumulative effect has been imposed. By the award, the workman, Girraj Prasad, has consequently been ordered to be reinstated with full back-wages. The employer is aggrieved by the interference made in this manner by the award. Hence, this petition to quash the award.
2. The material facts are a few only. The aforesaid workman, Girraj Prasad, whose cause has been espoused by respondent 1-union, was employed as maintenance fitter in the carbide plant of the petitioner's factory and was later on transferred in the same capacity to the ammonia plant. A charge-sheet, dated 26 April 1980, was served on Girraj Prasad alleging that he went to the house of a co-worker. P.P. Singh, on 23 April 1980, and threatened his wife with dire consequences on account of P. P. Singh not joining other workers in the agitation, and on 25 April 1980, of threatening the said co-worker while on duty in the factory to assault him and his family members for the same reason. A corrigendum to the charge-sheet was given to Girraj Prasad, who after reading it refused to accept the same. Consequently another charge was framed of refusal to accept the corrigendum after reading it on 2nd May, 19 80, which amounted to impertinence or in-subordination. The enquiry officer held that the charge relating to the incident on 23rd April 1980, was not proved, while the charge of threatening the co-worker in factory premises on 25th April 1980 was proved. The enquiry officer's report is Annexu-re 4, dated 26 September 1980. Relating to the incident on 2nd May 1980. which was the subject-matter of another charge, the enquiry report, annexure 5, dated 20 August 1980, held that Girraj Prasad after reading the corrigendum had returned it instead of acknowledging its receipt. This charge was also therefore held to be proved. Curiously enough, the employer made the final order much later on 23 March 1981, imposing the penalty of dismissal from service. Aggrieved by this action of the employer, the union raised a dispute, which was referred for adjudication to the Tribunal.
3. The Tribunal treated as preliminary issue the question whether the domestic enquiry was fair. By its order (Annexure 9), dated 3 July 1982, it held that the domestic enquiry was fair. Thereafter, by its award (Annexure 13), dated 18 September 1982, it has come to the conclusion that the charge relating to the incident on 25 April 1980, of threatening a co-worker, P.P. Singh, within the factory premises was rightly held proved. The Tribunal then proceeded to consider the circumstances of the case including the fact that the decision to terminate his service was taken about six months after getting the enquiry reports and during the intervening period a fresh charter of demands was submitted by the workmen on 19 January 1981, to which this workman, Girraj Prasad, was also a signatory. The Tribunal came to the conclusion that the punishment of termination of service was too harsh and was incommensurate with the charge found proved. Consequently, the punishment of stoppage of two grade increments with cumulative effect was substituted for the punishment of termination from service, directing reinstatement of the worker with full back-wages.
4. Learned counsel for the petitioner has advanced substantially two arguments. The first argument is that Section 11A of the Industrial Disputes Act which confers wide powers on Labour Courts and Tribunals to interfere in such cases, is violative of Article 14 of the Constitution, inasmuch as it does not provide sufficient guidelines to exclude arbitrariness. The absence of any provision for appeal or revision against the Labour Court's decision also indicates that there is no check provided against any arbitrary decision. The other argument is that it was not a fit case for interference by the Tribunal with the punishment imposed by the employer. The argument is that there was no occasion to direct reinstatement of the workman in these circumstances and for payment of back-wages. In the alternative, it was contended that compensation can be awarded in lieu of reinstatement. We shall consider these arguments in the same order.
5. In our opinion, there is no merit in the first contention that there are no guidelines provided in Section 11A to exclude arbitrariness. The object of enacting Section 11A obviously is to provide a remedy of reappraisal of the employer's action by an independent authority in order to ensure fairness of the employer's action. Sufficient guidelines are indicated by the expression "is satisfied that the order of discharge or dismissal was not justified" which enables interference by the Labour Court or Tribunal. The requirement is of satisfaction that the discharge or dismissal was not justified. The words "satisfied" and "justified" used in this expression are well known in legal terminology and have also assumed a known meaning and significance. Thus, there is a clear indication that interference is to be made only on satisfaction that the employer's action is not justified. On such satisfaction being reached, the relief to be given is also indicated in wide terms and in doing so the expressions "as it thinks fit" and "as the circumstances of the case may require" have been used. These expressions also are well known in legal terminology and the expression "as it thinks fit" has also been judicially construed in several decisions. For the purpose of granting relief there is a clear indication that the relief which is considered fit in the circumstances of the case is to be given after the conclusion is reached that the impugned discharge or dismissal was not justified. In our opinion, these are sufficient guidelines for any authority discharging such functions and whenever challenge is made to the decision of the Labour Court or Tribunal, correctness of the decision can be tested on the touch-stone of these guidelines. It is significant that the other argument of learned counsel for the petitioner is based actually on these guidelines itself.
6. We may also refer to the decision of the Supreme Court in Workmen of Firestone Tyre & Rubber Co, of India (Pvt.) Ltd. v. Firestone Tyre & Rubber Co. of India (Pvt.) Ltd. 1973 I LLJ 278. Their Lordships, after enumerating the, principles emerging from the earlier decisions, governing the jurisdiction of the Tribunal when adjudicating the dispute relating to the dismissal or dishcarge prior to insertion of Section 11A, have also indicated changes in the legal position resulting from the insertion of Section 11A. It has been clearly indicated in this decision that even if a proper enquiry is conducted by the employer and a correct finding is reached on the question of misconduct, the Tribunal can now under Section 11A differ from the conclusions reached by the management, but in doing so, it will have to give "very cogent reasons for not accepting the view of the employer". It has been reiterated that, under Section 11A, the Tribunal has been given power to differ both on a finding of misconduct arrived at by the employer as well as on the punishment imposed by him. In our opinion, the requirement of giving very cogent reasons for differing with the findings and conclusions reached by the employer, which is implicit in the guidelines contained in Section 11A as earlier indicated and expressly held by the Supreme Court ensures exclusion of arbitrariness. We may also add that the absence of any provision of appeal against the decision of the Tribunal does not support the argument of arbitrariness in view of the requirement of Section 11A. In a case where the Labour Court or the Tribunal has acted contrary to the mandate in Section 11A, remedy by writ petition under Article 226 of the Constitution to the High Court in addition to a remedy of an appeal to the Supreme Court directly under Article 136 of the Constitution is available. The present petition itself is a proof of the availability of this remedy. Accordingly, the first argument has no merit and is rejected.
7. Learned counsel for the petitioner strenuously urged that in a case like the present where the workman's misconduct of threatening a co-worker within the factory premises was found proved even by the Tribunal, interference with the punishment of dismissal from service was not justified. It was also urged that at any rate payment of full back-wages should not have been directed since the award of full back-wages is not a normal rule where the workman has not been found free from blame. It was also contended with considerable vehemence in the alternative, that even if reinstatement could have been granted, the proper order to make is the award of compensation of an amount sufficient to provide for the workman taking into account his last drawn salary. The question is, whether any part of this contention can be accepted.
8. The charge found proved against the workman is that he had threatened a co-worker within the factory premises on account of his not joining the other workers in their agitation. The Tribunal has given several reasons for considering the punishment of dismissal to be too harsh and incommensurate with the misconduct found proved. It cannot be said that the reasons given by the Tribunal are not cogent. In this connection, learned counsel criticized the treatment by the Tribunal of the incident relating to 2 May 1980, of refusal by the workman to accept the corrigendum to the charge sheet after reading the same. In our opinion, treating this incident as the basis of a separate charge is difficult to appreciate. Assuming that the workman refused to accept the corrigendum to the charge sheet after reading it when it was tendered to him on 2 May 1980, the only effect thereof was to attribute to the workman the knowledge of the contents of that document and no more. In other words, if the workman denied knowledge of the contents of the corrigendum by which a correction was made in the residential address of the co-worker, P.P. Singh, then this fact was material for proof that he had knowledge of the correct address and the charge-sheet, dated 26 April, 1980, was to be treated as amended in this manner. In other words, it was not a separate charge of misconduct, but mere correction of some incorrect particulars given in the original charge-sheet. The Tribunal in rejecting this incident as amounting to proof of an additional charge did not, therefore, commit any error, which requires to be corrected in these proceedings. On the other hand, the employer's conduct of treating the incident of 2 May 1980, also as an act of misconduct in these circumstances indicates that the punishment of dismissal was undoubtedly influenced by this fact also. It may be mentioned that the charge found proved relating to the incident of 2 May 1980, was merely of refusing to acknowledge receipt of corrigendum given to him and no more.
9. Taking into account the charge found proved by the Tribunal and the reasons given by the Tribunal for holding that the punishment of dismissal was too excessive and unduly harsh, it cannot be said that the lesser punishment substituted by the Tribunal is inadequate in the circumstances of the case. We are satisfied that the interference by the Tribunal with the employer's action in exercise of the powers available under Section 11A of the Industrial Disputes Act, 1947, was within the limits prescribed in the provision. It is no doubt true that the workman was not found wholly free from blame inasmuch as a misconduct was found proved against him for which the penalty of stoppage of two grade increments cumulatively has been awarded. In such a situation, award of fullback-wages till the dale of reinstatement does not appear to be justified. We are informed that during the period of suspension, the workman was paid subsistence allowance initially of 50 per cent of the wages and after some time of 75 per cent of the wages. In our opinion, the suspension could not be treated as unjustified and, therefore, the wages upto the date of reinstatement should be confined only to the amount of subsistence allowance paid to the workman, instead of full back-wages. The workman became entitled to reinstatement as a result of the award of the Tribunal. However, by a stay order, dated 1 December, 1982, passed in this petition when it was filed in 198 2, the workman has not been reinstated and he has been paid only 50 per cent of the wages every month. In our opinion, this is not a fit case where an exemption should be made to direct payment of compenstion in lieu of reinstatement. The material present is insufficient to indicate that the workman belongs to that category whose presence as an employee is undesirable and is not conducive to maintenance of industrial peace. We do not think it is a fit case for depriving the workman of normal relief of reinstatement and grant him compensation in lieu thereof.
10. Consequently, the petition is partly allowed only to the extent that the workman will be entitled only to the wages already paid for the period of suspension up to the date of award instead of full back-wages for the entire period. In the circumstances of the case, the parties shall bear their own costs.
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