AMICUS AI
Citation Codes
Neutral Citations
1997 INSC 725
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 10 or 10-A of the Act, Section 33 of the Act
  • Section 33(1)/33(2) of the Industrial Disputes Act, 1947
  • Section 33(1) of the I.D Act
  • Sections 10 and 10-A of the Act
  • Section 10 of the Industrial Disputes Act
  • Section 10 or 10-A of the Industrial Disputes Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Neutral Citations
1997 INSC 725
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 10 or 10-A of the Act, Section 33 of the Act
  • Section 33(1)/33(2) of the Industrial Disputes Act, 1947
  • Section 33(1) of the I.D Act
  • Sections 10 and 10-A of the Act
  • Section 10 of the Industrial Disputes Act
  • Section 10 or 10-A of the Industrial Disputes Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

This is an order of the Supreme Court in which learned counsel for the petitioner relied on prior Supreme Court decisions concerning the effect of evidence led before a Labour Court/Industrial Tribunal and the doctrine of “relation back” in termination matters. The Court distinguishes between (i) cases where a defective domestic inquiry was held and the defect was sought to be cured by leading evidence before the adjudicatory forum, and (ii) cases where no domestic inquiry was held at all, which the Court states is the situation “in the present case.”

The Court records that the controversy arises in the context of industrial adjudication under the Industrial Disputes Act, including references under Section 10 and Section 10-A, and compares these to proceedings under Section 33. Procedurally, the Court grants leave, directs that the appeals be placed for final disposal before a Constitution Bench, dispenses with printing, permits filing of relevant documents, issues notice on the prayer for interim relief, and grants an ad interim stay of a portion of a High Court Division Bench order relating to back wages.

Legal Issues Presented

  1. Whether precedents dealing with curing defects in a defective domestic inquiry and the “relation back” doctrine apply where no domestic inquiry was held prior to termination.
  2. Whether, and to what extent, the ratio of the Constitution Bench decision in P.H. Kalyani v. Air France—rendered in the context of proceedings under Section 33 of the Industrial Disputes Act—should apply to proceedings arising out of references under Section 10 or Section 10-A.
  3. Whether the dispute, in light of later decisions applying Kalyani to matters under Sections 10 and 10-A and the relevance of Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha, should be resolved by a Constitution Bench (including reconsideration of later decisions).

Arguments of the Parties

Petitioner's Arguments

  • The petitioner relied on R. Thiruvirkolam v. Presiding Officer (1997) 1 SCC 9, later followed by Punjab Dairy Development Corpn. Ltd. v. Kala Singh (1997) 6 SCC 159.
  • The petitioner contended, with considerable confidence, that the Constitution Bench decision in P.H. Kalyani v. Air France (AIR 1963 SC 1756) “squarely applies” even where the management terminated an employee’s services without holding any domestic inquiry.
  • The petitioner submitted that observations in Kalyani regarding Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan (AIR 1959 SC 923) should not be treated as limiting the application of Kalyani to cases involving termination orders passed without domestic inquiry.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
R. Thiruvirkolam v. Presiding Officer (1997) 1 SCC 9 Cited (along with later-following authority) in relation to cases where a defective domestic inquiry is cured by leading evidence before the Labour Court/Industrial Tribunal, and the relevance of “relation back” to the original termination order. Distinguished as inapplicable in the present case because the Court states that here no domestic inquiry was held at all.
Punjab Dairy Development Corpn. Ltd. v. Kala Singh (1997) 6 SCC 159 Followed Thiruvirkolam; cited for the same category of cases involving defective inquiry cured through evidence and the “relation back” question. Treated as not applicable for the same reason as Thiruvirkolam (absence of any domestic inquiry in the present case).
P.H Kalyani v. Air France AIR 1963 SC 1756, (1964) 2 SCR 104, (1963) 1 LLJ 679 Cited as a “sheet-anchor” for later cases; discussed on whether its ratio should apply beyond Section 33 proceedings, including to references under Sections 10 and 10-A, and in relation to “relation back” concepts. The Court notes Kalyani was rendered in the context of Section 33(2) approval proceedings, and indicates that applying it to Section 10/10-A references “will require a closer scrutiny.” The Court considers that the matter would be better resolved by a Constitution Bench examining Kalyani and later applications of its ratio.
Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan AIR 1959 SC 923, 1959 Supp (2) SCR 836, (1959) 2 LLJ 388 Discussed as a precedent pertaining to proceedings under Section 33(1) (permission), referenced within the discussion of Kalyani. The Court emphasizes that Sasa Musa pertains to Section 33(1) proceedings and states that the observations in Kalyani connecting to Sasa Musa require closer scrutiny before being applied to Section 10/10-A references, which the Court says “stand on a different footing.”
Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha (1980) 2 SCC 593 Cited as authority on leading evidence before the Industrial Court in proceedings under Section 10-A, and on “relation back” of the ultimate penalty order passed by the arbitrator based on evidence led to justify management action. Invoked to frame the question whether its ratio continues to apply in Section 10/10-A proceedings (and in relation to the broader question of how Kalyani should apply outside Section 33 contexts), supporting the Court’s view that a Constitution Bench should resolve the dispute.

Court's Reasoning and Analysis

The Court first addresses the petitioner’s reliance on R. Thiruvirkolam and Punjab Dairy Development Corpn. It explains that those cases concern situations where the management held a defective inquiry and then attempted to cure the defect by leading evidence before the Labour Court/Industrial Tribunal. In such circumstances, if the adjudicatory forum ultimately agrees with the management on the basis of newly led evidence, the “relation back” question (i.e., relating the result back to the original termination order) becomes important. However, the Court holds that where no domestic inquiry is held at all, those decisions do not apply.

The Court then considers the petitioner’s strong submission that the Constitution Bench decision in P.H. Kalyani v. Air France applies even where the management terminated service without holding any inquiry, and that Kalyani should be read as not excluding such cases notwithstanding its discussion of Sasa Musa. The Court observes that Kalyani was delivered in the context of Section 33(2) approval proceedings, while Sasa Musa pertained to Section 33(1) permission proceedings. It concludes that applying Kalyani (and its observations linked to Sasa Musa) to disputes arising out of a reference under Section 10 or Section 10-A requires “closer scrutiny,” because such references “stand on a different footing.”

The Court identifies as the “moot question” whether the ratio in Kalyani should “almost automatically” apply outside Section 33 proceedings. It notes that Gujarat Steel Tubes is an authority on leading evidence and relation back under Section 10-A proceedings, and acknowledges that later Supreme Court decisions have applied Kalyani to matters under Sections 10 and 10-A. Given this doctrinal interplay and reliance on Kalyani in subsequent cases, the Court expresses the view that the present dispute would be better resolved by a Constitution Bench to consider the scope and ambit of Kalyani and to “relook” later decisions applying it.

Holding and Implications

LEAVE GRANTED.

REFERRED FOR FINAL DISPOSAL BEFORE A CONSTITUTION BENCH. The Court directs that the appeals be placed for final disposal before a Constitution Bench.

INTERIM ORDER: Notice is directed to issue on the prayer for interim relief, and there is an ad interim stay of the order of the Division Bench of the High Court to the extent of 50% of the back wages.

Procedural directions: Printing is dispensed with, and parties are permitted to file all relevant documents.

Implications: The immediate effect is that the High Court Division Bench order is partially stayed regarding back wages (50%), and the appeals will be decided by a Constitution Bench, which is expected to examine the applicability of Kalyani (and related jurisprudence) to Section 10/10-A references. The order itself does not finally decide the substantive industrial dispute and does not, at this stage, set any new precedent beyond directing a Constitution Bench hearing.

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    Vishweshwaraiah Iron & Steel Ltd. v. Abdul Gani And Others

    Order

    1. Learned counsel for the petitioner referred us to a decision of a Bench of two learned Judges of this Court in the case of R. Thiruvirkolam v. Presiding Officer (1997) 1 SCC 9 which has been later followed by a Bench of three learned Judges in the case of Punjab Dairy Development Corpn. Ltd. v. Kala Singh (1997) 6 SCC 159. In our view, these are the cases where the management held defective inquiry and before the Labour Court or the Industrial Tribunal the defect was sought to be removed by leading evidence and ultimately if the Court seized of a reference under Section 10 of the Industrial Disputes Act agreed with the management on the new evidence led before it, the question of relation back of the order of the Labour Court or Industrial Tribunal to the original order of termination would assume importance. But in cases where no domestic inquiry is held at all, as in the present case, in our view the aforesaid decisions would not apply.

    2. Learned counsel is very sanguine when he contends that the decision of the Constitution Bench in the case of P.H Kalyani v. Air France AIR 1963 SC 1756, (1964) 2 SCR 104, (1963) 1 LLJ 679 squarely applies to the facts of the present case also and for that purpose he submits that the observation in the Constitution Bench judgment regarding Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan AIR 1959 SC 923, 1959 Supp (2) SCR 836, (1959) 2 LLJ 388 would not apply in connection with the termination orders passed without domestic inquiry and that ratio of the Constitution Bench judgment in Kalyani case AIR 1963 SC 1756, (1964) 2 SCR 104, (1963) 1 LLJ 679 would squarely apply, where admittedly no enquiry was held by the management before terminating the services of the employee. In our view, these observations in Kalyani case AIR 1963 SC 1756, (1964) 2 SCR 104, (1963) 1 LLJ 679 were rendered in connection with proceeding for approval of the management's action under Section 33(2) of the Industrial Disputes Act, 1947. Even Sasa Musa Sugar Works case AIR 1959 SC 923, 1959 Supp (2) SCR 836, (1959) 2 LLJ 388 also pertains to a proceeding under Section 33(1) of the I.D Act for permission. Therefore, the observations of the Constitution Bench in Kalyani case AIR 1963 SC 1756, (1964) 2 SCR 104, (1963) 1 LLJ 679 in connection with Sasa Musa Sugar Works case AIR 1959 SC 923, 1959 Supp (2) SCR 836, (1959) 2 LLJ 388 which is under Section 33(1) of the Act will require a closer scrutiny insofar as they are to be applied to a proceeding arising out of a reference under Section 10 or 10-A of the Industrial Disputes Act which would stand on a different footing.

    3. The moot question would arise whether the ratio of the Constitution Bench judgment in Kalyani case AIR 1963 SC 1756, (1964) 2 SCR 104, (1963) 1 LLJ 679 would almost automatically apply to such cases apart from the cases arising under Section 33 of the I.D Act. We may, in this connection, mention that the decision of the three-Judge Bench of this Court in Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha (1980) 2 SCC 593 wherein Krishna Iyer, J., spoke for the majority, was an authority on the question of leading evidence before the Industrial Court in proceedings under Section 10-A of the Act and on the question of relation back of ultimate penalty order passed by the arbitrator on the basis of evidence led by the management for justification of its action before such Tribunal. Therefore, the question would arise whether the ratio of this decision would still apply to a case where the proceedings relate to Section 10 or 10-A of the Act apart from Section 33 of the Act. The later decisions of this Court have applied the ratio of the decision in Kalyani case AIR 1963 SC 1756, (1964) 2 SCR 104, (1963) 1 LLJ 679 to matters arising under Sections 10 and 10-A of the Act. In our view, therefore, the dispute in the present proceedings could be better resolved by a Constitution Bench of this Court which can consider the scope and ambit of the decision of the earlier Constitution Bench judgment in Kalyani case AIR 1963 SC 1756, (1964) 2 SCR 104, (1963) 1 LLJ 679 which has been the sheet-anchor of the subsequent cases referred to earlier on which a strong reliance has been placed by learned counsel for the petitioner and which had nothing to do with proceedings under Section 33 of the Act. The later decisions of this Court will also, therefore, require a relook.

    4. Leave granted.

    5. The appeals will now be placed for final disposal before a Constitution Bench of this Court pursuant to the present order.

    6. Printing dispensed with. All the relevant documents are permitted to be filed by the parties concerned.

    7. Notice to issue on the prayer for interim relief. There will be ad interim stay of the order of the Division Bench of the High Court to the extent of 50% of the back wages.

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    Vishweshwaraiah Iron & Steel Ltd. v. Abdul Gani And Others
    (Nov 11, 1997)