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Bharat Forge Co. Ltd. v. A.B Zodge And Another
Factual and Procedural Background
The appellant, Bharat Forge Ltd., dismissed a workman (the respondent). During proceedings before the Industrial Tribunal, the company requested permission to adduce evidence to justify the dismissal. The Tribunal refused, and the Bombay High Court affirmed that refusal. The present Supreme Court appeal concerns whether the Tribunal’s denial of permission was legally sustainable.
Legal Issues Presented
- Whether, after insertion of Section 11-A of the Industrial Disputes Act, 1947, an employer is still entitled to lead additional evidence before the Industrial Tribunal when the domestic enquiry is found to be perverse or otherwise vitiated.
Arguments of the Parties
Appellant’s Arguments (Bharat Forge Ltd.)
- The Tribunal wrongly assumed that a finding of perversity in the domestic enquiry precludes the employer from leading evidence; precedent allows such evidence (Ritz Theatre v. Workmen).
- Section 11-A did not abrogate the employer’s right to adduce evidence; the Supreme Court in Workmen v. Firestone Tyre & Rubber Co. clarified that the Tribunal’s powers remain unfettered.
- No express or implied language in Section 11-A removes this right; had Parliament intended otherwise, the provision would have been differently worded.
Respondent’s Arguments (Workman)
- The right recognised in pre-Section 11-A jurisprudence has been curtailed by the proviso to Section 11-A, which states that the Tribunal “shall rely only on the materials on record and shall not take fresh evidence.”
- The Tribunal therefore acted correctly in refusing additional evidence.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Management of Ritz Theatre (P) Ltd. v. Workmen (1963) 3 SCR 461 | Even where findings are perverse, the Tribunal may examine the merits and hear additional evidence from the employer. | Cited to show that denial of evidence solely because the enquiry was “perverse” is incorrect. |
| Workmen v. Firestone Tyre & Rubber Co. of India (P) Ltd. (1973) 1 SCC 813 | Section 11-A does not remove the employer’s long-standing right to adduce evidence before the Tribunal. | Relied upon as the leading authority confirming the continued availability of that right. |
| Shankar Chakravarti v. Britannia Biscuit Co. Ltd. (1979) 3 SCC 371 | Specifically considered the proviso to Section 11-A and upheld the reasoning in Firestone. | Used to rebut the respondent’s reliance on the proviso; court noted the proviso does not bar fresh evidence. |
| Workmen v. Motipur Sugar Factory (P) Ltd. (1965) 2 LLJ 162 | Recognised employer’s right to lead evidence where the domestic enquiry is vitiated. | Referenced to demonstrate consistent jurisprudence supporting the employer’s right. |
| State Bank of India v. R.K. Jain (1972) 4 SCC 304 | Affirmed principles on employer’s evidentiary rights in disciplinary disputes. | Listed among authorities confirming the right. |
| Delhi Cloth & General Mills Co. v. Ludh Budh Singh (1972) 1 SCC 595 | Indicated that before closure of proceedings the employer may seek leave to adduce evidence. | Cited to show that the appellant’s request was timely. |
| Cooper Engineering Ltd. (1975) 2 SCC 661 | Considered the stage at which additional evidence may be permitted. | Clarified—without overruling Delhi Cloth—that framing of a preliminary issue is not mandatory in every case. |
Court’s Reasoning and Analysis
The Supreme Court traced the evolution of the law both before and after Section 11-A:
- Domestic enquiries vitiated by procedural defects or perversity place the disciplinary action on the same footing as cases with no enquiry; in both scenarios, the employer’s right to lead evidence is “well recognised.”
- Firestone Tyre decisively held that Section 11-A did not abrogate this right. The Court found no express or implied language to that effect.
- The respondent’s reliance on the proviso to Section 11-A was rejected. In Shankar Chakravarti the Supreme Court had already examined the proviso and concluded that it does not bar fresh evidence; that reasoning remained controlling.
- Earlier authorities—Ritz Theatre, Motipur Sugar, State Bank of India v. Jain, and Delhi Cloth—were consistent with permitting employers to adduce evidence when requested before closure of proceedings.
- Because the appellant made its request before closure of the Tribunal’s proceedings, denial of that opportunity was legally unsustainable.
Holding and Implications
The Supreme Court allowed the appeal and set aside the High Court’s judgment. The matter is remanded to the Industrial Tribunal with directions:
- Both parties may lead such evidence as they deem fit (employer within two months; workman within one month thereafter).
- The Tribunal must conclude the rehearing within six months from receipt of the order.
- No order as to costs.
Implications: The decision reaffirms that, notwithstanding Section 11-A and its proviso, employers retain the right to adduce additional evidence before the Tribunal when domestic enquiries are found defective. The ruling clarifies the continued vitality of earlier Supreme Court precedents and ensures that procedural bars cannot preclude substantive examination of dismissal disputes.
Order
1. Leave granted.
2. Heard learned counsel for the parties. The short question which arises for consideration of this Court is whether the Industrial Tribunal was justified in refusing the prayer of the appellant company, the employer, to lead evidence in support of the order of dismissal passed against the respondent employee. By the impugned judgment, the Bombay High Court has upheld the decision of the Tribunal in refusing to give permission to the employer to lead evidence before the Tribunal in justification of the order of dismissal.
3. Mr Pai, the learned Senior Counsel appearing for the appellant, has submitted before us that such permission has been refused by the Tribunal by indicating that although the enquiry was properly held, the finding in such enquiry was perverse and in such circumstances, no opportunity to lead evidences should be given. Such a view according to Mr Pai is not justified inasmuch as it has been held in Ritz Theatre (P) Ltd. v. Workmen (1963) 3 SCR 461, AIR 1963 SC 295, (1962) 2 LLJ 498 that even when the finding is perverse (see p. 468) the whole issue is at large before the Tribunal and it would be entitled to deal with the merits of the dispute itself, when it would be open to the employer to adduce additional evidence. Mr Phadnis, learned Senior Counsel appearing for the respondents, contends that that was the position in law before insertion of Section 11-A in the Industrial Disputes Act, 1947, but this section has altered the position.
4. Mr Pai's submission is that this is not so. In support of his contention, he has drawn our attention to the decision of this Court in Workmen v. Firestone Tyre and Rubber Co. of India (P) Ltd. (1973) 1 SCC 813, (1973) 3 SCR 587 In the said decision, the legislative changes brought about on the power of the Tribunal to decide the question of correctness and propriety of the order of termination or dismissal of service of an employee under Section 11-A were taken into consideration. It has been indicated in the said decision that the Tribunal under Section 11-A of the Industrial Disputes Act is clothed with the power to assess the evidences placed before the Tribunal for deciding as to whether the decision made by the employer was justified or not and such power is not fettered in any manner. In the said decision, the earlier decisions of this Court were also considered and ten principles emerging from such decisions have also been culled out. It also appears that the contention sought to be raised on behalf of the workmen that the right of the employer to adduce evidence before the Tribunal, for the first time since recognised by this Court in its various earlier decisions, has been taken away by Section 11-A of the Industrial Disputes Act has not been accepted. It has been indicated in the said decision that there is no indication in Section 11-A that such right has been abrogated. It has also been held that if the intention of the legislature was to do away with such right which has been recognised over a long period of time as noticed in the decisions referred to earlier Section 11-A would have been differently worded. This Court has observed that admittedly there are no express words to that effect and there is no indication that Section 11-A has impliedly changed the law in that respect. Therefore, the position is that even now the employer is entitled to adduce evidences, for the first time, before the Tribunal even if the employer had held no inquiry or the inquiry held by the employer is found to be perverse.
5. Mr Phadnis has, however, submitted before us that it does not appear that in the decision of Firestone Tyre Rubber Co. case (1973) 1 SCC 813, (1973) 3 SCR 587, proviso to Section 11-A has been specifically adverted to and thereafter considered. The proviso expressly bars introduction of any fresh materials because the proviso to Section 11-A indicates that the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take fresh evidence in relation to the matter.
6. Mr Phadnis has submitted that the implication of proviso to Section 11-A therefore requires consideration. Such contention of Mr Phadnis, however, cannot be accepted. Mr Pai has drawn our attention to a later decision of this Court by a Bench of three Judges in Shankar Chakravarti v. Britannia Biscuit Co. Ltd. (1979) 3 SCC 371, (1979) 3 SCR 1165 In the said decision, the question of implication of the proviso to Section 11-A was specifically raised and such question had been gone into. The contention that under the proviso to Section 11-A the Labour Court or the Industrial Tribunal or the National Tribunal in proceeding under Section 11-A shall rely only on the material on record and shall not take any fresh evidence in relation to the matter under consideration was not accepted by this Court by placing reliance on the reasonings indicated in the decision in Firestone Rubber Co. case (1973) 1 SCC 813, (1973) 3 SCR 587.
7. A domestic enquiry may be vitiated either for non-compliance of rules of natural justice or for perversity. Disciplinary action taken on the basis of a vitiated enquiry does not stand on a better footing than a disciplinary action with no enquiry. The right of the employer to adduce evidence in both the situations is well recognised. In this connection, reference may be made to the decisions of this Court in Workmen v. Motipur Sugar Factory (P) Ltd. (1965) 2 LLJ 162, AIR 1965 SC 1803, State Bank of India v. R.K Jain (1972) 4 SCC 304, (1971) 2 LLJ 599, Delhi Cloth and General Mills Co. v. Ludh Budh Singh (1972) 1 SCC 595, (1972) 1 LLJ 180 and Firestone Tyre Co. case (1973) 1 SCC 813, (1973) 3 SCR 587. The stage at which the employer should ask for permission to adduce additional evidence to justify the disciplinary action on merits was indicated by this Court in Delhi Cloth and General Mill case (1972) 1 SCC 595, (1972) 1 LLJ 180. In Shankar Chakravarti case (1979) 3 SCC 371, (1979) 3 SCR 1165, the contention that in every case of disciplinary action coming before the Tribunal, the Tribunal as a matter of law must frame preliminary issue and proceed to see the validity or otherwise of the enquiry and then serve a fresh notice on the employer by calling him to adduce further evidence to sustain the charges, if the employer chooses to do so, by relying on the decision of this Court in the case of Cooper Engineering Ltd. (1975) 2 SCC 661, (1975) 2 LLJ 379, has not been accepted. The view expressed in Delhi Cloth Mill case (1972) 1 SCC 595, (1972) 1 LLJ 180 that before the proceedings are closed, an opportunity to adduce evidence would be given if a suitable request for such opportunity is made by the employer to the Tribunal, has been reiterated in Shankar Chakravarti case (1979) 3 SCC 371, (1979) 3 SCR 1165 after observing that on the question as to the stage as to when leave to adduce further evidence is to be sought for, the decision of this Court in Cooper Engineering Ltd. (1975) 2 SCC 661, (1975) 2 LLJ 379 has not overruled the decision of this Court in Delhi Cloth Mill case (1972) 1 SCC 595, (1972) 1 LLJ 180. There is no dispute in the present case that before the closure of the proceedings before the Tribunal, prayer was made by the employer to lead evidence in support of the impugned order of dismissal. Hence, denial of the opportunity to the employer to lead evidence before the Tribunal in support of the order of dismissal cannot be justified.
8. In that view of the matter, the impugned judgment cannot be sustained and the same is set aside. It will be open to the parties to lead such evidence as they may deem proper before the Industrial Tribunal where the matter is to be reheard. Since the proceeding is pending for long, we direct that the proceeding before the Tribunal should be completed as early as practicable, but not beyond six months from the date of communication of this order. In order to expedite the proceeding before the Tribunal we direct that the appellant Bharat Forge Ltd. may lead such further evidence as the said company may desire within a period of two months from today and the workmen may also lead evidence if they so desire within one month thereafter. The appeal is accordingly disposed of without any order as to costs.
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