M/S. Scooter India Ltd. v. Labour Court And Another

S.N Sahay, J.:— All these three writ petitions arise out of an Award of the Labour Court and proceedings connected therewith and are therefore being disposed of by a common judgment.

2. Jila Jit Pal who is a workman involved in the case was employed as Artisan Grade ‘D’ in Scooters India Ltd. On July 13, 1983, a charge sheet was served by the employer on the workman to the effect that the workman had submitted a false claim for leave travel concession in the year 1982-83. It was alleged that the workman had submitted, a claim that he and his family members had performed journey by rail from Bombay V.T to Lucknow on August 23, 1982 on railway ticket Nos. 03113 to 03116 in Second Class. On inquiry it transpired that no such ticket as aforesaid were sold at Bombay V.T Railway Station. The workman was accordingly charged that he had submitted false claim for leave travel corn cession and had thereby committed misconduct under sub-clauses (16), (31) and (45) of Clause 14.2 of the Standing Orders. The workman was required to submit his explanation within forty-eight hours from the receipt of the charge-sheet. He was warned that if no explanation was submitted within the stipulated period it would be deemed that he had admitted the charge and had nothing to say in respect of the same The workman failed to submit his explanation within forty-eight hours. Thereupon, the employer passed an order, dated July 20/23, 1983 that since no explanation was submitted by the workman he shall be deemed to have admitted the charge and his services were accordingly terminated Kinder sub-clause (4) of Clause 14.2.1 of the Standing Orders. The order terminating services of the workman gave rise to an industrial dispute which__was referred by the State Government by order, dated May 1, 1986 to the Labour Court for adjudication. The question which was referred to the Labour Court was whether the termination of services of the workman was proper/legal and if not to what relief the workman was entitled. The Labour Court issued summons to the parties to the dispute. They appeared and filed written statements, rejoinders and documents and also produced evidence before the Labour Court. On the pleadings of the parties, the Labour Court proceeded to frame a preliminary issue being issue No. 1 as to whether in view of the employer's admission that the charge-sheet was served upon the workman and his further statement that no inquiry was held, what is the effect of this procedure on the legality of the termination of the services of the workman concerned.

3. Learned Presiding Officer of the Labour Court heard the arguments of the parties on the preliminary issue but before he could give any decision he retired from service. The employer moved an application on April 16, 1986 for amendment of the written statement. The amendment which was sought to be made in the written statement by the employer was that the employer's crave permission of the court to justify the termination of the services of the workman with effect from July 23, 1983 by adducing evidence before the Court. The application was disposed of by the Labour Court on September 30, 1986 after hearing the parties. The Labour Court took the view that since no decision had been given on the preliminary issue which was with regard to the validity of the domestic inquiry, the employer had a right to make a request for leading evidence in case the domestic inquiry was found to be defective. It was observed that the fate of the domestic inquiry in the case was still undecided but if the inquiry was declared to be invalid the employer would be within his rights to make a request to the Court for leading evidence after the decision. The Labour Court relied on the case of Delhi Cloth and General Mills Co. v. Rudh Budh Singh,(1) in support of the view taken by it. The Labour Court eventually held that there was no need to allow the amendment application of the employer at that stage.

4. On October 15, 1986 the employer moved another application before the Labour Court praying that it may be allowed to lead evidence to justify the termination of services. This application was opposed on behalf of the workman. But it was allowed by the Labour Court by order, dated October 17, 1986. It was held that the application of the employer for amendment of the written statement was not allowed on September 30, 1986 on the ground that the fate of the inquiry being still undecided the employer would be within his rights to make a request to the Court for leading evidence. The contention of the workman to the contrary was not accepted and the case of Shambhu Nath Goyal v. Bank of Baroda(2) on which reliance was placed on behalf of the workman was distinguished on the ground that the facts of the case were different and there was no inordinate delay on the part of the employer in moving the application for permission to lead evidence.

5. The parties adduced evidence before the Labour Court and on a consideration of evidence on record and the circumstances of the case, the Labour Court gave its Award, dated September 10, 1987. After deciding issue No. 1 referred to above as preliminary issue the Labour Court proceeded to decide issue No. 2 whether otherwise than from the point of view of the above issue the services of the workman were illegally terminated-. Under this issue the Labour Court found that on June 23, 1982 the workman and his family undertook journey from Lucknow to Bombay V.T in-Second Class on Railway Ticket Nos. 44575 to 44578-These are the ticket numbers which were furnished in the leave travel concession claim by the workman and the starting journey was found to be correct. However, the workman and the members of his family did not travel on June 28, 1988 by rail from Bombay V.T to Lucknow and the claim submitted by the workman that this journey was performed on Railway Ticket Nos. 03113 to 03116 was false. It was accordingly held that the charge of furnishing wrong ticket numbers for return journey from Bombay to Lucknow was established and the charge of preferring false leave travel concession claim was proved against the workman. On the basis of these facts the Labour Court came to the conclusion that the workman is guilty of the charge of deliberate abuse of leave travel concession facility, and this was a major misconduct committed by the workman under sub-clauses (31) of Clause 14.2 of the Standing Orders. As a sequal to this conclusion the Labour Court found that the Management was justified in terminating the services of the workman on the said charge. But the Labour Court proceeded further and held that on a consideration of all aspects of the case the punishment awarded was out of a portion of the misconduct proved. Accordingly the Labour Court gave its Award in the following terms:

“For the reasons aforesaid I feel that the punishment of dismissal inflicted on the concerned workman is not commensurate with the misconduct proved. It is extremely excessive and harsh. Therefore, I order conversion of the above punishment into a lesser punishment. The lesser punishment is that the workman will be reinstated but he will not be paid the wages and other terminal benefits from the date of dismissal to the date of publication of this Award. The issue is answered accordingly. Parties are left to bear their own costs.”

6. Aggrieved from the orders and Award of the Labour Court the employer has filed Writ Petition No. 8201 of 1987 for quashing the Award, dated September 10, 1987. The workman has filed Writ Petition No. 218 of 1986 for quashing the order of the Labour Court, dated October 17, 1986 whereby the employer was permitted to lead evidence for justifying the order of termination of services passed against the workman. The Second Writ Petition No. 3303 of 1988, has been filed by the workman for quashing the Award of the Labour Court in so far as it refuses to provide for payment of back wages to the workman.

7. First of all Writ Petition No. 218 of 1987 may be taken up. The main grievance of the workman is that the Labour Court erred in not placing reliance on the case of Shambhu Nath Goyal which was cited before it on behalf of the workman. In Shambhu Nath Goyal's case a reference was made to two earlier decisions of the Supreme Court, namely, Workmkm v. Motipur Sugar Factory(3) and Shankar Chakravarty v. Britanid Biscuit Company Ltd.(4). In the first mentioned case it was observed that it is now well settled that where an employer has failed to make an inquiry before dismissing or discharging a workman it is open to him to justify the action before the Industrial Tribunal by leading all relevant evidence before it. In such a case the employer would not have the benefit which he had in cases where domestic inquiries have been held. The entire matter would be open before the Tribunal which will have the jurisdiction not only to go into the limited questions open to the Tribunal where domestic inquiry has been properly held but also to satisfy itself on the facts adduced before it by the employer whether the dismissal or discharge was justified. In the case, of Shankar Chakraverty, it was held that it is crystal clear that the rights which the employer has in law to adduce additional evidence in a proceeding before the Labour Court or Industrial Tribunal questioning legality of the order terminating services must be availed of by the employer by making a proper request at the time when it files its statement of claim or written statement or makes an application seeking either permission to take certain action or seeking approval of the action taken by it. If such a request is made in the statement of claim or written statement the Labour Court or the Industrial Tribunal must be given such an opportunity. If the request is made before the proceedings are concluded the Labour Court or the Industrial Tribunal should ordinarily grant opportunity to adduce evidence. But if no such request is made at any stage of the proceedings there is no duty in law on the Labour Court or the Industrial Tribunal to give such an opportunity and if there is no such obligatory duty in law, failure to give any such opportunity cannot and would not vitiate the proceedings. After referring to the above observations it was held in para 16 as follows:

“Then if the Management chooses to exercise its right it must make up its mind at the earliest stage and file the application for that purpose without any unreasonable delay. But when the question arises in a reference under. Section 10 of the Act after the workman had been punished pursuant to a finding of guilt recorded against him in the domestic enquiry there is no question of the management filing any application for permission to lead further evidence in support of the charge or charges framed against the workman for the defect in the domestic enquiry is pointed out by the workman in his written claim statement filed in the Labour Court or Industrial Tribunal after the reference had been received and the management has the opportunity to look into that statement before it files its written statement of defence in the enquiry before the Labour Court or Industrial Tribunal and could make the request for the opportunity in the written statement itself. If it does not choose to do so at that stage it cannot be allowed to do it at any later stage of the proceedings by filing any application for the purpose which may result in delay which may lead to wrecking the morale of the workman and compel him to surrender which he may not otherwise do.”

8. With respect to the other two Writ Petition Nos. 8201 of 1987 and 3303 of 1988, it may be stated that the employee and the workman both are dissatisfied with the award given by the Labour Court. The contention of the employer is that once the Labour Court found that the workman is guilty of major misconduct by submitting false claim for leave travel concession and the employer was justified in passing the order of discharge from service against him, it was not open to the Labour Court to interfere with that order and direct reinstatement of the workman. In this connection, the reasons given by the Labour Court for substituting a different punishment have been assailed and it was contended that the said reasons are not valid and proper. On the other hand, it was urged on behalf of the workman that the Labour Court has held that there was no loss of confidence and in similar other cases what was done by the employer was to direct the workman at fault simply to refund the money wrongly taken by him by way of leave travel concession and therefore there was no justification to direct withholding of back wages to the workman on his re-instatement. It was emphasised that the punishment of discharge from service inflicted on the workman was motivated by the fact that he took part in trade union activities to the dislike of the employer. When it was established that the workman) and his family members did go from Lucknow to Bombay, it is so urged, that they must have returned from Bombay to Lucknow and the conduct of the workman in giving wrong ticket numbers pertaining to the return journey was not such as would merit the punishment of discharge from service or withholding back wages.

9. The power of the Labour Court to direct the setting aside of the discharge or dismissal and reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or granting other relief to the workman including the substitution of any lesser punishment for discharge or dismissal, as required by the circumstances of the case is not in dispute. Such power is available to the Labour Court under Section 2-A of the U.P Industrial Disputes Act, 1947 and the corresponding provisions of Section 11-A of the Industrial Disputes Act, 1947. In C.M.C Hospital Employee's Union v. Christian Medical Vellore(5) it has been held that Section 11-A which confers the power on the Industrial Tribunal or the Labour Court to substitute a lesser punishment in lieu of the order of discharge or dismissal passed by the Management cannot be considered as conferring an arbitrary power on the Industrial Tribunal or the Labour Court. The power under Section 11-A has to be exercised judicially and the Industrial Tribunal or the Labour Court is expected to interfere with the decision of the Management under Section 11-A of the Act only then it is satisfied that the punishment imposed by the Management is hightly disproportionate to the degree of guilt of the workman concerned. The, Industrial Tribunal or the Labour Court has to give reasons for its decision and the decision is subject to judicial review by the High Court and the Supreme Court. Again, Jitendra Singh Rathor v. Shri Boidycmath Ayurved Bhawan Limited(6) the law was laid down in the following terms:

“Wide discretion is vested in the Tribunal under this provision and in a given case on the facts established, the Tribunal can vacate the order of dismissal or discharge and give suitable directions. It is a well-settled principle of law that when an order of termination of service is found to be bad and reinstatement is directed, the wronged workman is ordinarily entitled to full back wages unless for any particular reason the whole or a part of it is asked to be held. The Tribunal while directing reinstatement and keeping the delinqurey in view could withhold the payment of a part or whole of the Dack wages. In our opinion, the High Court was right in taking the view that when payment of back wages either in full or part is with held, it amount to a penalty……The High Court is indisputably entitled to scrutinise the orders of the subordinate Tribunals within well acquainted limitation and, therefore, it could in an appropriate case quash the Award of the Tribunal and thereupon remit the matter to it for fresh disposal in accordance with law and directions, if any. The High Court is not entitled to exercise the powers of the Tribunal and substitute an award in place of the one made by the Tribunal as in the case of an appeal where it lies to it.”

10. In the present case, the Labour Court has given three reasons for taking the view that the punishment of discharge is out of proportion of the proved misconduct; first, in the past the management awarded much lesser punishments for misconduct proved, which were grave or enough to merit the dismissal of the workman, secondly, the management should have taken a lenient view as the” advance taken was in the nature of loan transaction and should have demanded the workman to refund the same with interest; and, thirdly, the plea of loss of confidence was also not tenable.

11. The Labour Court has further observed that on 12-6-1985, the workman moved an application that the employer should be directed to produce the records of recovery made from 59 employees as mentioned in the list enclosed to the application on account of leave travel concession claim bills received by them/The employer was directed to state these cases in which the delinquent persons were exonerated or otherwise not proceeded against and recovery was not made. The employer submitted their reply on 29-4-1987. It was found that the leave travel concession claims of workman mentioned at Serial Nos. 21-24-27 and 50 to 59 were not correct and that they were let off either with minor punishment or after refunding the money taken in advance. The Labour Court was of opinion that the workman Jila Jit Pal had been discriminated against. After giving this finding, the Labour Court proceeded to record that the punishment of discharge is extremely harsh and it should be converted in a lesser punishment; and the lesser punishment is that the workman will be re-instated, but he will not be paid the wages and other terminal benefits from the date of dismissal to the date of publication of the award.

12. The Labour Court has given consent reasons for coming to the conclusion that the punishment of discharge inflicted by the employer upon the workman was excessive and harsh and out of proportion. It may be that the workman committed major misconduct under sub-clause (31) of Clause 14.2 of the Standing Orders mis-representing to the management that he and his family members had performed return journey from Bombay V.T to Lucknow on the date and railway ticket numbers alleged to have been held by him. The submission of false claim for leave travel concession on the basis of the above fact may be commission of an act subversive of discipline or of good behaviour which would attract clause 14.2(20) of the Standing Orders or may be regarded as deliberate abuse of a privilege, or concession or facility or benefit provided by the Company (in this case leave travel concession) sufficient to attract clause 14.2(31) of the Standing Orders. It is doubtful if sub-clause (31) is attracted, because the workman did proceed to Bombay and come back to Lucknow and so it cannot be said that the workman committed deliberate abuse of a privilege or concession, unless it is proved that the same was available for railway journey only and for a limited period during which the journey was not performed. However, the fact remains that the workman committed major misconduct whether the act complained of is covered by sub-clause (20) or sub-clause (31) of Clause 14.2 of the Standing Orders. And for that, the workman was liable to any of the punishments mentioned in clause 14.2(31) of the Standing Orders.

13. The punishments indicated in clause 14.2.1 vary from stoppage of annual increments to dismissal without notice or may in lieu thereof and discharge is one of such punishments. It is obvious that the punishment is to be commensurate with the misconduct and the punishment of discharge cannot be arbitrarily awarded in every case. Discharge is in extreme penalty which puts to an end the relationship between the employer and the workman and may appropriately be resorted to when the conduct of the workman is such that this continuance in the industry would be detrimental to the good of the industry. The employer was not justified in awarding the extreme penalty of discharge, even though the workman had committed major misconduct. The reasons given by the Labour Court for coming to the conclusion that the punishment of discharge is out of proportion in the circumstances of this case are valid and proper and the contention of the employer to the contrary cannot be accepted. The Labour Court was within its power to set aside the order of discharge and there is nothing to show that it committed any error or acted unreasonably in doing so.

14. However, the Labour Court has not lived up to its own principles in withholding back wages to the workman. As laid down in the case of Jitendra Singh Rathor (cited above), the normal rule is that when re-instatement is directed the workman is entitled to back wages. The Labour Court has found that the advance taken by the workman was in the nature of loan transaction and he should have been required to refund the same with interest. It has also found that in other similar cases, the workmen were let off with minor punishment or after refunding the money taken in advance and that discrimination has been practised in the case of the Workman, Jila Jit Pal. The Labour Court intended to award lesser punishment to the workman, while setting aside the order of discharge and directing his re-instatement. The withholding of back wages is not one of the punishments specified in the Standing Orders in Clause 14.1.1 in respect of minor misconduct or in Clause 14.2.1 in resepct of major misconduct. No reason whatsoever has been given by the Labour Court for devising and inflicting the withholding of back wages as a lesser punishment. The amount payable by the workman on refunding the advance taken by him for non-performance of the railway journey, as alleged, has not been balanced against the amount of back wages to be withheld as a result of the impugned award. Therefore, the discretion exercised by the Labour Court in awarding the punishment of withholding of back wages is arbitrary and cannot be justified in law. As a result of the above discussion, I find that Writ Petition No. 8201 of 1987 is liable to be dismissed and Writ Petition No. 3303 of 1988 deserves to be allowed. The impugned award in so far as it purports to direct with holding of back wages must be quashed and the matter should be remitted to the Labour Court for determining lesser punishment, if any, to be awarded to the workman on his re-instatement, since this Court cannot determine the nature and quantum of punishment in the light of the legal position settled in the case of Jitendra Singh Rathor (cited above).

15. Writ Petition Nos. 218 of 1987 and No. 8201 of 1987 are hereby dismissed. Writ Petition No. 3303 of 1988 is allowed to this extent that that part of the impugned award, and no more, which directs that the workman will not be paid the wages and other terminal benefits from the date of dismissal to the date of publication of the award, is hereby quashed. The matter is remitted to the Labour Court to determine and award to the workman on his re-instatement, such lesser punishment, if any, in accordance with law and in the light of the observations made above, as may be considered appropriate. This will be done within two months from the date of receipt of a copy of this order after affording an opportunity of being heard to all the parties concerned. Parties shall bear their own costs.