Management of Murgugan Mills Ltd. Vs.
Industrial Tribunal Madras & ANR  INSC 263 (11 November 1964)
11/11/1964 WANCHOO, K.N.
GAJENDRAGADKAR, P.B. (CJ) HIDAYATULLAH, M.
CITATION: 1965 AIR 1496 1965 SCR (2) 148
R 1975 SC 661 (13,14,18,19) E 1976 SC2062
(27,28) RF 1980 SC1896 (68)
Industrial Disputes Act (14 of 1947), s.
33(2)(b), proviso- it applicable to s. 33 (2) (a) -Jurisdiction of Tribunal to
entertain application under S. 33-A.
During the pendency of an industrial dispute
between the appellant and its workmen, the services of the respondent, who was
an employee, were terminated without giving any reasons. He filed a petition
before the Industrial Tribunal, under s. 33-A of the Industrial Disputes Act, 1947,
complaining that the approval of the Tribunal for terminating his services as
required by the proviso to s.
33(2)(b) was not obtained. The appellant
justified the termination by contending that cl. 17(a) of the Standing Orders
enabled the management to terminate the services of an employee by fourteen
days' notice, that though the respondent was deliberately going slow in his
work the termination was not for misconduct, and that therefore s. 33 (2) (b)
and its proviso did not apply. The Tribunal held, that as the termination was
under cl. 17(a) of the Standing Orders, s. 33(2) (a) applied. The Tribunal however
held that the proviso applied to s. 33(2)(a)also, and that, since the approval
of the Tribunal was not obtained, the application under s. 33-A was
maintainable. The Tribunal then considered the evidence adduced on merits, held
that the allegation that the respondent had been deliberately going slow was
not made out, and ordered the reinstatement of the respondent. The appellant
filed a writ petition in the High Court, which held, that the proviso applies
only to cl. (b) and not to cl. (a), that action was taken against the
respondent by way of punishment and therefore was covered by cl. (b) to which
the proviso applies, and that therefore the Tribunal had jurisdiction to
entertain the application and pass order on merits. In appeal to the Supreme
Court, it was contended that since the Tribunal took the view that the case was
covered by s. 33 (2) (a), it had no jurisdiction to entertain the application
because, the proviso is not applicable to that sub-section.
HELD : Even though the Tribunal was in error
in holding that the proviso applied to s. 33(2) (a), there was no reason to.
interfere with its order. The contention of
the respondent was that there was a contravention of cl. (b) and its proviso
and that contention gave jurisdiction to the Tribunal in the absence of a
domestic enquiry to consider the evidence and find that the respondent was not
guilty of dereliction of duty, and to order reinstatement. [153 A-C] The form
used for terminating the services is not conclusive and the Tribunal has
jurisdiction to enquire into. the reasons which lead to the termination. [152
B] Chartered Bank v. Chartered Bank Employees Union, 3 S.C.R. 441 and
Management of U. B. Dutt & Co. v. Workmen of U. B. Dutt & Co. 
Supp. 2 S.C.R. 822, followed
CIVIL, APPELLATE JURISDICTION.--Civil Appeal
No. 1036 of 1963.
149 Appeal by special leave from the judgment
and order dated November 8, 1960 of the Madras High Court in Writ Appeal No. 146
A.V. Viswanatha- Sastri and R. Ganapathy
Iyer, for the appellant.
M.S. K. Sastri and M. S. Narasimhan, for
respondent No. 2 The Judgment of the Court was delivered by Wanchoo, J. This is
an appeal by special leave against the judgment of the Madras High Court. The
appellant is a textile mill. Rangarathinam Pillai respondent was employed as an
accountant in the mill for over 13 years by he appellant. On September 11,
1958, the appellant served a notice on the respondent under cl. 17 (a) of the
Standing Orders terminating his services on and from September 24, 1958. No reasons
were given in the order terminating the service. The respondent protested
against his dismissal and said that he had a blameless record and had not done
anything meriting the termination of his services. He added that no showcause
notice had been served upon him, no explanation was asked for and no enquiry
whatsoever had been held before the order was issued. He further alleged that
he had been victimised for his trade union activities as he was a member of the
Executive of the Coimbatore District Textile Mill Staff Union. When his protest
had no effect, he made an application under S. 33-A of the Industrial Disputes Act,
No. 14 of 1947, (hereinafter referred to as the Act), as an industrial dispute
was pending at the time, between the appellant and its workmen. The main
contention of the respondent was that the order terminating his services had
been passed without obtaining the approval of the industrial tribunal and this
was against the provision contained in S. 3 3 (2) (b) of the Act, which lays
down that during the pendency of any proceeding in respect of an industrial
dispute the employer may in accordance with the standing orders applicable to a
workman concerned in such dispute, discharge or punish him whether by dismissal
or otherwise for any misconduct unconnected with the dispute, provided that no
such discharge or dismissal may be made unless the workman has been paid wages
for one month and an application has been made by the employer to the authority
for approval of the action taken by the employer.
The contention of the appellant before the
tribunal was that the services of the respondent had been terminated under cl.
17 150 (a)of the Standing Orders. It enables
the management to terminate the services of a worker by 14 days' notice. It was
further contended that the termination was not for any misconduct and was not
meted out as punishment and therefore S. 33 (2) (b) did not apply and it was
not necessary to obtain the approval of the tribunal. It was also stated that
the reason for the termination of service was that the respondent had been
deliberately going slow in his work for some months prior to the date on which
his services were terminated. This was because he had asked for increase in pay
sometime back and that had been refused. It was further stated that the
balance-sheet for the year 1957 had not been prepared till August 1958 and
therefore when the appellant found that the respondent was deliberately going
slow his services were terminated as provided in the Standing Orders.
The tribunal took the view that as the
termination of service had taken place under cl. 17 (a) of the Standing Orders,
this was not a case covered by s. 33 (2) (b) of the Act, which provides for
discharge or punishment by way of dismissal or otherwise for any misconduct
unconnected with the dispute. The tribunal however held that the case was
covered by s. 33 (2) (a). It further held that the proviso to S. 33 (2) not
only applies to a case covered by cl. (b) but also to cl. (a). Therefore, as
the proviso was not complied with, the tribunal held that the termination of
service of the respondent was in contravention of the section and the
application under S. 33-A of the Act was maintainable. However, as evidence had
been adduced on both sides on the merits of termination of service, the
tribunal went into the matter. It took the view that even under the Standing
Orders, the appellant could terminate respondent's services only for proper
reason or the particular standing order provides that reasons should be
recorded and communicated to the workman if he so desired. The tribunal went
into the question whether the appellant had proper reasons for terminating the
services of the respondent. It came to the conclusion that the reason given by
the appellant to the effect that the respondent had been deliberately going
slow because his requests for rise in pay had been refused was not made out. As
to the non- preparation of the balance-sheet for the year 1957 up to August
1958, the tribunal seems to have accepted the explanation of the respondent
that the delay was due to the appellant's desire not to publish the
balance-sheet till fresh shares issued by it had been taken up by the public
for if the loss incurred for the year 1957 were known to the public before the
fresh shares were subscribed, the public response might be poor. The tribunal
finally 151 held that the delay in the finalisation of the accounts for the
year 1957 could not be said to be due to solvenliness or dereliction of duty on
the part of the respondent. The tribunal therefore allowed the application
under S. 33-A and ordered the reinstatement of the respondent with back wages.
The appellant then filed a writ petition
before the High Court, which came before a learned Single Judge. The learned
Single Judge did not decide the question whether the proviso to s. 33 (2)
applied only to cl. (b) and not to cl.
(a). He held that as the action against the
respondent was taken by way of punishment for negligence etc., the case was
clearly covered by cl. (b) of s. 3 3 (2) to which the proviso undoubtedly
applied. He therefore held that the industrial tribunal had jurisdiction to entertain
the application under s. 33-A in the circumstances. Finally he held that as the
tribunal had held on the merits that the charge against the respondent of
dereliction of duty was not made out, the writ petition must fail. The
appellant then went in appeal to the Division Bench, which upheld the order of
the learned Single Judge. Then there was an application for leave to appeal to
this Court, which was rejected. The appellant then applied for and obtained
special leave from this Court and that is how the matter has come up before us.
The right of the employer to terminate the
services of his workman under a standing order, like cl. 17(a) in the present
case, which amounts to a claim "to hire and fire" an employee as the
employer pleases and thus completely negatives security of service which has
been secured to industrial employees through industrial adjudication, came up
for consideration before the Labour Appellate Tribunal in Buchkingham &
Carnatic Co. Ltd. v. Workers of the Company(1). The matter then came up before
this Court also in Chartered Bank v. Chartered Bank Employees Union(2) and the
Management of U. B. Dutt & Co. v. Workmen of U. B. Dutt & Co.(3)
wherein the view taken by the Labour Appellate Tri- bunal was approved and it
was held that even in a case like the present the requirement of bona fides was
essential and if the termination of service was a colourable exercise of the
power or as a result of victimisation or unfair labour practice the industrial
tribunal would have the jurisdiction to intervene and set aside such
termination. The form of the order in such a case is not conclusive and the
tribunal can no behind the order to find the reasons which led to the order and
then consider for itself whether the (1) (1952) L.A.C. 490. (2) 3 S.C.R.
(3) (1962) Supp. 2 S.C.R. 822, 152
termination was a colourable exercise of the power or was a result of
victimisation or unfair labour practice. If it came to the conclusion that the
termination was a colourable exercise of the power or was a result of
victimisation or unfair labour practice it would have the jurisdiction to
intervene and set aside such termination.
The form therefore used in the present case
for terminating respondent's services under cl. 17 (a) is not conclusive and
the tribunal was justified in enquiring into the reasons which led to such
termination; even the Standing Orders provide that an employee can ask for
reasons in such a case.
Those reasons were given before the tribunal
by the appellant viz the respondent's services were terminated because he
deliberately adopted go-slow and was negligent in the discharge of his duty.
His services were therefore terminated for dereliction of duty and go-slow in
This clearly amounted to punishment for
misconduct and therefore to pass an order under cl. 17 (a) of the Standing
Orders in such circumstances was clearly a colourable exercise of the power to
terminate the services of a workman under the provision of the Standing Orders.
In those circumstances the tribunal would be justified in going behind the
order and deciding for itself whether the termination of the respondent's
services could be sustained.
In the present case, evidence was led before
the tribunal in support of the appellant's case that the respondent was guilty
of dereliction of duty and go-slow in his work. The tribunal has found that
this has not been proved. In these circumstances the case was clearly covered
by cl. (b) of S.
33 (2) of the Act as the services of the
respondent were dispensed with during the Pendency of a dispute by meeting out
the punishment of discharge to him for misconduct. As this was done without
complying with the proviso, the termination of the service was rightly set
It is however urged on behalf of the
appellant that the tribunal found that the case under S. 33 (2) (b) had not
been made out. It also found that the case which had been made out was one
under S. 33 (2) (a). It then went on to hold that the proviso applied to S. 33
(2) (a). The appellant contends that the view of the tribunal that the proviso
applied to S. 33 (2) (a) is incorrect and therefore the tribunal was not right
in entertaining the application under S. 33-A and ordering reinstatement of the
It is clear from a bare perusal of S. 33 (2)
that the proviso thereto only applies to cl. (b) and not to cl. (a) and the
tribunal therefore was in error when it held that it also applied to cl. (a).
But that in our opinion makes no difference in the present case as pointed 153
out by the High Court. The contention of the respondent was that there had been
a contravention of S. 33 (2) (b). It was that contention which gave
jurisdiction to the tribunal and which the appellant had to meet and it did
meet it by producing evidence. That evidence was considered by the tribunal and
it found that the appellant's contention that the respondent was guilty of
dereliction of duty and go-slow had not been made out. In these circumstances
even though the tribunal was in error in holding that the proviso to S.
33 (2) applied to cl. (a) thereof also, there
in no reason for us to interfere with the order passed by the tribunal.
As the High Court has rightly pointed out,
the case is clearly covered by s. 33 (2) (b) to which the proviso undoubtedly
applies. As the proviso was not complied with the application under S. 33-A
could be entertained by the tribunal and the tribunal did entertain it and went
into the merits of the charge and came to the conclusion that the charge had
not been proved. In these circumstances the order passed by the tribunal, and
upheld by the High Court, is substantially correct, in spite of the error of
law committed by the tribunal. The appeal therefore fails and is hereby
dismissed with costs.