Cooper Engineering Limited Vs. Shri P.
P. Mundhe  INSC 170 (20 August 1975)
CITATION: 1975 AIR 1900 1976 SCR (1) 361 1975
SCC (2) 661
CITATOR INFO :
R 1978 SC1380 (8) RF 1979 SC1652 (6,13,24,27,28,34)
R 1984 SC 289 (2)
Industrial Dispute-Domestic enquiry-Violative
of principles of natural justice-If labour court should give opportunity to
adduce evidence afresh-Failure to do so-If vitiates the award.
On the question, whether when a domestic
inquiry held by an employer was found by the labour court as violative of the
principles of natural justice there Was any duty cast upon that court to give
an opportunity to the employer to adduce evidence afresh before it and whether
failure to do so would vitiate its
HELD: When a case of dismissal or discharge
of an employee is referred for industrial adjudication the labour court should
first decide as a preliminary issue whether the domestic enquiry has violated
the principles of natural justice. When there was no domestic enquiry or
defective enquiry is admitted by the employer, there will be no difficulty. But
when the matter is in controversy between the parties that question must be
decided as a preliminary issue.On that decision being pronounced it will be for
the management to decide wether it will adduce any evidence before the labour
court. If it chooses not to adduce any evidence, it will not be thereafter
permissible in any proceeding to raise the issue. Three will be no
justification for any party to stall the final adjudication of the dispute by
the labour court by questioning it, decision with regard to the preliminary
issue when the matter, if worthy, can be agitated even after the final award.
It will be legitimate for the High Court to refuse to intervene at this stage.
[368C-E] Workmen of Motipur Sugar Factory (private) Limited v. Motipur Sugar
Factory  3 S.C.R. 588; Management of Northern Railway Cooperative Society
Ltd. v. industrial Tribunal Rajasthan, Jaipur and Anr.  2 S.C.R. 476;
Management of Ritz Theatre (P) Ltd. v. Its
workmen  3 S.S.R. 461/469-470; State Bank of India v. R. K. Jain &
 1 S.C.R. 755/766, 777; Delhi Cloth
& General Mills Co. v. Ludh Budh Singh  3 S.C.R. 29/54-56 and Workmen
of Messrs Firestone Tyre & Rubber Company of lndia (P) Ltd.
v. Management & Others,  3 S.C.R.
587/606-607, referred to.
CIVlL APPELLATE JURISDICTION: Civil Appeal
No. 1716 of 1969.
Appeal by special leave from the award dated the
31st March, 1969 of the Labour Court, Kolhapur, Maharashtra in Reference (IDA)
No. f 1968.
B. Sen and I. N. Shroff, for the appellant.
R. K. Garg, S. C. Agarwal and V. J. Francis,
for the respondent.
The Judgment of the Court was delivered by
GOSWAMI, J. The important question which has been pinpointed hl this appeal by
special leave is whether when a domestic inquiry held by an employer is found
by the labour court as violative of the principles of natural justice there is
any duty cast upon that court to give an opportunity to the employer to adduce
evidence afresh before it and whether to do so would vitiate its award.
362 In the present case the workman concerned
was charged under the standing orders of the company for soliciting or
collecting from the employees contributions for some purpose (allegedly
purchase of microphone and loud-speaker arrangements) within the factory
premises. The workman denied the charge of soliciting or collecting
contribution within the factory premises (for purchase of microphone and
loudspeaker) but added that for this purpose I collect the said contribution
outside the gate of the Company and this being so, such erroneous information
supplied to you by someone should not be considered acceptable".
After holding the domestic inquiry in which
some witnesses were examined by the employer and cross-examined by the workman
and questioning the workman at the outset as well as at the end of the inquiry,
the Enquiry Officer Submitted very brief report to the Works Manager (hereinafter
the Manager) holding that the charges were established. He did not give any
detailed reasons for preferring the evidence of the six witnesses examined on
behalf of the employer in the inquiry to the version of the workman. The
Manager after perusal of the report of the Enquiry officer passed the order of
dismissal without adverting to the evidence in the inquiry. This was
particularly necessary since the Enquiry Officer had not given his reasons for
his finding. Another incident occurred during the inquiry before the
Manager.The workman after answering the first question of the Manager. when
another question was put, abruptly left the inquiry without paying any heed to
the orders of the Manager and to persuasion of other officer resent asking him to
wait. The dismissal order was passed the same afternoon.
In this appeal we will proceed on the
assumption that the domestic inquiry was rightly found by the labour court to
be defective. The labour court is aware of the legal position that it was competent
in this case to take evidence of the parties and come to its own conclusion on
the merits of the case and to decide whether the order of dismissal was
justified or not to enable it to consider about the relief, if any, to be
awarded to the workman. The labour court, however, observed in its award that-
in the instant case no evidence regarding merits is led by the opponent before
this Court....It is open to the Labour Court to hold an enquiry itself. But the
opponent has chosen not to lead any evidence regarding the merits of the
alleged misconduct. The natural result of vitiating the enquiry would therefore
be to set aside the order of dismissal and to direct the reinstatement in
service of the dismissed employee with all back wages".
The question posed at the commencement of our
judgment is thus highlighted by the aforesaid observations of the labour court
and we are required to consider whether after the labour court comes to a
decision about the inquiry being defective it has any duty to announce its
decision in that behalf to enable the employer an opportunity to adduce
evidence before it to justify the order on the charge levelled against a
363 There is, however.. no doubt that when
the employer chooses to do so the workman will have his opportunity to rebut
such evidence. There is also no doubt, whatsoever, that if the employer
declines to avail of such an opportunity, it will be open to the labour court
to make an appropriate award and the employer will thereafter be able to make
no grievance on that score.
In dealing with a case of dismissal of an
industrial employee, this Court has time and again adverted to various
principles and it is not necessary to recount all those decisions. It will be
sufficient to concentrate our attention only on a few of the decisions so far
as material for our purpose and which are also rightly referred to at the bar.
The first case arising out of an award that
has a material Bearing on the question is that of Workmen of Motipur Sugar
Factory (Private) Limited v. Motipur Sugar Factory(1) which is a decision of
four learned Judges. Inter alia, the question that arose in that appeal was as
to whether, since the management held no inquiry as required by the standing
orders, it could not justify the discharge before the Tribunal. In Motipur
Sugar Factory's case (supra), the Court observed at page 597 of the report as
follows :- "If it is held that in cases where the employer dismisses his
employee without holding an enquiry, the dismissal must he set aside by the
industrial tribunal only on that ground, it would inevitably mean that the
employer will immediately proceed to hold the enquiry and pass an order
dismissing the employee once again.
In that case, another industrial dispute
would arise and the employer would be entitled to rely. upon the enquiry which
he had held in the meantime. This course would mean delay and on the second
occasion it will entitle the employer to claim the benefit of the domestic
enquiry given. On the other hand, if in such cases the employer is given an
opportunity to justify the impugned dismissal on the merits of his case being
considered by the tribunal for itself and that clearly would be to the benefit
of the employee. That is why this Court has consistently held that if the domestic
enquiry is irregular, invalid or improper, the tribunal may give an opportunity
to the employer to prove his case and in doing so the tribunal tries the merits
itself. This view is consistent with the approach which industrial adjudication
generally adopts with a view to do justice between the parties without relying
too much on technical considerations and with the object of avoiding delay in
the disposal of industrial disputes".
The consequence that can ensue from a
contrary view, as noticed by the, Court in Motipur Sugar Factory's case
(supra), will appear from what took place in the Management of Northern
Railway. Cooperative Society Ltd. v. Industrial Tribunal, Rajasthan, Jaipur and
Anr.(2) where pursuant to the award after reinstating the employee the
management (1)  3 S.C.R. 588. (2)  2 S.C.R. 476.
364 drew a fresh proceeding and passed a
fresh order of removal and the A said order was again the subject matter of
another reference to the industrial tribunal.
The pertinent question that arises for
consideration is whether it is the duty of the tribunal to make known its
decision to the parties on this jurisdictional aspect of the case so that the
employer can avail of the opportunity to justify the dismissal based on the
In Management of Ritz Theatre (P) Ltd. v. Its
workmen (1), this Court was required to deal with rather ingenious argument. It
was contended in that case by the workmen, in support of the tribunal's
decision, that since the management at the very commencement of the trial
before the Tribunal adduced evidence with regard to the merits of the case it
should be held that it had given up its claim to the propriety or validity of
the domestic enquiry. While repelling this argument this court made some
"In enquiries of this kind, the first
question which the Tribunal has to consider is whether a proper enquiry has
been held or not. Logically, it is only where the Tribunal is satisfied that a
proper enquiry has not been held or that the enquiry having been held properly
the finding recorded at such an enquiry are perverse, that the Tribunal derives
jurisdiction to deal with the merits of the dispute.. Ir the view taken by
Tribunal was held to be correct, it would lead to this anamoly that the employer
would be precluded from justifying the dismissal of his employee by leading
additional evidence unless he takes the risk of inviting the Tribunal to deal
with the merits for itself, because as soon as he asks for permission to lead
additional evidence, it would follow that he gives up his stand based on the
holding of the domestic enquiry. Otherwise, it may have to be held that in all
such cases no evidence should be led on the merits unless the issue about the
enquiry is tried as a preliminary issue. If the finding on that preliminary
issue is in favour of the employer, then, no additional evidence need be cited
by the employer; if the finding on the said issue is against him, permission
will have to be given to the employer to cite additional evidence". -
Although this Court in Ritz Theatre's case (supra) observed that such a
procedure may be "elaborate and somewhat cumbersome" it was not held
to be illegal nor had if been rejected out of hand In State Bank of India v. R.
K. Jain & ors.(2), this Court had to deal with a similar question. The
contention on behalf of the management in that case was that- "Even
assuming that the domestic inquiry conducted by the Bank was in any manner
vitiated, the Industrial Tribunal (1)  3 S.C.R.461, 469-470. (2)  I
365 erred in law in not giving an opportunity
to the management to adduce evidence before it to establish the validity of the
order of discharge".
In dealing with the above contention this
Court observed as follows:- "If the management defend its action solely on
the basis that the domestic inquiry held by it is proper and valid and if
Tribunal holds against the management on that point, the management will
fail.... It is essentially a matter for the management to decide about the
stand that it proposes to take before the Tribunal.
It may be emphasised, that it is the right of
the management to sustain its order by adducing also .
independent evidence before the Tribunal. It
is a right given to the management and it is for the management to avail itself
of the said opportunity".
On the facts of that case this Court held
that the management, having made it clear to the Tribunal that it was resting
its case solely on the domestic enquiry, had no right to make a grievance that
it should have been given an opportunity to adduce evidence on facts before the
Tribunal in justification of its order.
This Court further observed in that case that
"no such opportunity was asked for by the appellant nor even availed
of". This Court in that case took into account management's consistent
stand throughout before Tribunal as also that it made no grievance on the score
of non-availability of opportunity to adduce evidence even in the special leave
petition. The claim of the Bank in that case was rejected on the peculiar facts
found by this Court.
Referring to the State Bank's case (supra) in
Delhi Cloth & General Mills Co. v. Ludh Budh Singh(l), this Court observed
that- "the grievance of the management before this Court that the Tribunal
should have given such an opportunity Suo moto was not accepted in the
circumstances of that case".
There was a further observation in the Delhi
Cloth & General Mills' case (supra) to the following effect:
"It may be pointed out that the Delhi
and Madhya Pradesh High Courts had held that it is the duty of the Tribunal to
decide, in the first instance, the propriety of the domestic enquiry held by
the management and if it records, a finding against the management, it should
suo moto provide an opportunity to the management to adduce additional evidence
though the management had made no such request. This view was held to be
erroneous by this Court, in State Bank of India v. R. K. Jain &
(1)  3 S. C. R. 29,54-56 10-839Sup.
CI/75 366 We may now refer to the propositions (4), (5) and (6) in the A Delhi
Cloth and General Mills' case (supra):
(4) "When a domestic enquiry has been
held by the management and the management relies on the same, it is open to the
latter to request the Tribunal to try the validity of r the domestic enquiry as
a preliminary issue and also ask for an opportunity to adduce evidence before
the Tribunal, if the finding on the preliminary issue is against the
management. However elaborate and cumbersome the procedure may be, under such
circumstances, it is open to the Tribunal to deal, in the first instance, as a
preliminary issue the validity of the s domestic enquiry. If its finding on the
preliminary issue is in favour of the management, then no additional evidence need
be cited by the management But, if the finding on the preliminary issue is
against the management, the Tribunal will have to give the employer an
opportunity to cite additional evidence and also give a similar opportunity to
the employee to lead evidence contra, as the request to adduce evidence had
been made by the management to the Tribunal during the course of the
proceedings and before the trial has come to an end ...." (5) "The
management has got a right to attempt to sustain its order by adducing independent
evidence before the Tribunal. But the management should avail itself of the .
said opportunity by making a suitable request to the Tribunal before the
proceedings are closed. If no such opportunity has been availed of, or asked
for by the management, before the proceedings are closed, the employer can make
no grievance that the Tribunal did not provide such an opportunity. The
Tribunal will have before it only the enquiry proceedings and it has to decide
whether the proceedings have been held properly and the findings recorded
therein are also proper".
(6) "If the employer relies only on the
domestic enquiry and does not simultaneously lead additional evidence or ask
for an opportunity during pendency of the proceedings to adduce such evidence, the
duty of the Tribunal is only to consider the validity of the domestic enquiry
as well as the finding recorded therein and decide the matter. If the Tribunal
decodes that the domestic enquiry has not been held properly, it is not its
function to invite suo moto the employer to adduce evidence before it to
justify the action taken by it".
In the Delhi Cloth and General Mills' case
(supra) dealing with the case of the management's application to adduce
evidence after close of arguments, although on the same day after the Court
reserved judgment, this Court observed as follows:- "The appellant did not
ask for an opportunity to adduce evidence when the proceeding were pending nor
did it avail itself of the right given to it in law to adduce evidence before he
Tribunal during the pendency of the proceedings".
367 In Workmen of Messrs Firestone Tyre &
Rubber Company of India (P) Ltd. v. Management & Others, (1) this Court
stated the law laid down by this Court as on December 15, 1971. For our purpose
we will extract from that decision only propositions 4, 6, 7 and 8:
(4) "Even if no enquiry has been held by
an employer or if the enquiry held by him is found to be defective, the,
Tribunal in order to satisfy itself about the legality and validity of the
order, has to give an opportunity to the employer and employee to adduce
evidence before it. It is open to the employer to adduce evidence for the first
time justifying his action".
(6) "The Tribunal gets jurisdiction to
consider the evidence placed before it for the first time in justification of
the action taken only, if no enquiry has been held or after the enquiry
conducted by an employer is found to be defective".
(7) "It has never been recognised that
the Tribunal should straightway, without anything more, direct reinstatement of
a dismissed or discharged employee, once it is found that no domestic enquiry
has been held or the said enquiry is found to be defective". .
(8) "An employer, who wants to avail
himself of the opportunity of adducing evidence for the first time before the
Tribunal to justify his action, should ask for it at the appropriate stage. If
such an opportunity is asked for, the Tribunal has no power to refuse. The
giving of an opportunity to an employer to adduce evidence for the first time
before the Tribunal is in the interest of both the management and the employee
and to enable the Tribunal itself to be satisfied about the alleged
We are particularly concerned with
proposition ( 8 ) .
What is the appropriate stage was specifically
adverted to in the Delhi Cloth & General Mills' case (supra) which we are
now required to seriously consider whether this conclusion is correct and
ensures justice to all concerned in an industrial adjudicating.
Propositions (4), (6) and (7) set out above
are well- recognised. It is, however, fair and in accordance with the
principles of natural justice for the labour court to withhold its decision on
a jurisdictional point at the appropriate stage and visit a party with evil
consequences of a default on its part in not asking the court to give an
opportunity to adduce additional evidence at the commencement of the
proceedings or at any rate, in advance of the pronouncement of the order in
that behalf ? In our considered opinion it will be most unnatural and
unpractical to expect a party to take a definite stand when a decision of a
jurisdictional fact has first to be reached by the labour court prior embarking
upon an enquiry to decide the dispute on its merits. The reference involves
determination of the larger issue of discharge or (1)  3 S. C. R. 587,
368 dismissal and not merely whether a
correct procedure had been followed by the management before passing the order
of dismissal. Besides, even if the order of dismissal is set aside on the
ground of defect of enquiry. a second enquiry after reinstatement is not ruled
out nor in all probability a second reference. Where will this lead to ? This
is neither going to achieve the paramount object of the Act namely industrial
peace, since the award in that case will not lead to a settlement of the
dispute. The dispute, being eclipsed, pro tempore, as a result of such an
be revived and industrial peace will again be
Again another object of expeditious disposal
of an industrial dispute (sec section 15) will be clearly defeated resulting in
duplication of proceedings. This position has to be avoided in the interest of
labour as well as of the employer and in furtherance of the ultimate aim of the
Act to foster industrial peace.
We are, therefore, clearly of opinion that
when a case of dismissal or discharge of an employee is referred for industrial
adjudication the labour court should first decide as a preliminary issue
whether the domestic enquiry has violated the principles of natural justice.
When there is no domestic enquiry or defective enquiry is admitted by the
employer, there will be no difficulty. But when the matter is in controversy
between the parties that question must be decided as a preliminary issue. On
that decision being pronounced it will be for the management to decide whether
it will adduce any evidence before the labour court. If it chooses not to
adduce any evidence, it will not be thereafter permissible in any proceeding to
raise the issue.. We should also make it clear that there will be no
justification for any party to stall the final adjudication of the dispute by
the labour court by questioning its decision with regard to the preliminary
issue when the matter, if worthy, can be agitated even after the final award.
It will be also legitimate for the High Court to refuse to intervene at this
stage. We are making these observations in our anxiety that there is no undue
delay in industrial adjudication.
In the present case, however, besides the long
delay that has already taken place, since the law laid down by this Court was
not very clear at the time of the award in casting a duty upon the labour court
to decide the preliminary issue and also in view of the submission of the
appellant that it is prepared to pay the entire salary of the workman upto-date
it will meet the interest of justice if the order of reinstatement is converted
to one of compensation in terms of his entire salary from the date of dismissal
to the date of this decision except for what has already been paid to him
instead of remitting the. matter to the labour court for disposal in the light
of this judgment by setting aside the award.
In the result the appeal is dismissed with
the above modification of the relief There will be, however, no order as to
P.B.R. Appeal dismissed.