Nicholas Piramal India Ltd. Vs. Harisingh
[Civil Appeal No.4436 of 2010]
V. GOPALA GOWDA, J.
This appeal by special leave is directed against the impugned judgment and order dated 28.4.2009 passed by the High Court of judicature of Madhya Pradesh at Indore, in Writ Petition No. 2309 of 2009, whereby the High Court has affirmed the award dated 27.1.2009 passed by the Industrial Court, Indore in Civil Appeal No. 340/MPIR of 2007 which arises out of the Award dated 29.10.2007 passed by the Labour Court in Case No. 421/MPIR of 2001. For the purpose of considering the rival legal contentions urged on behalf of the parties in this appeal and with a view to find out whether this Court is required to interfere with the impugned judgment and order of the High Court, the necessary facts are briefly stated hereunder: The respondent was employed as a workman at the drug manufacturing unit of the appellant-Nicholas Piramal India Ltd. (for short "the Company"), situated at Pithampur, Madhya Pradesh.
The Company issued two charge sheets dated 26.2.2000 and 13.3.2000 against him, alleging that he has violated and disregarded the orders of his senior officers and intentionally slowed down the work under process and made less production by adopting "go slow work" tactics which is a grave misconduct on the part of the respondent-workman under Clause 12(1)(d) of The M.P. Industrial Employment (Standing Orders) Rules, 1963 (for short "the SSO").
The respondent denied the charges levelled against him by the appellant and submitted his reply to the charge-sheets. Not being satisfied with the same, the domestic enquiry proceedings were initiated by the disciplinary authority against him. In the domestic enquiry proceedings, the Inquiry Officer found the respondent-workman was guilty of the misconduct after holding that the charges levelled against him were proved which finding of fact is recorded by him in the enquiry report. The findings of the Inquiry Officer were accepted by the Disciplinary Authority of the appellant- Company and it served the second show cause notice on the respondent on 31.5.2001 along with the copy of the enquiry report, the same did not refer to any of his past service record.
The respondent-workman submitted his written explanation to the second show cause notice, denying the findings of the Inquiry Officer by giving point wise reply to the findings of the enquiry report. On 30.7.2001 an order of dismissal was passed by the appellant-Company dismissing him from his service, after accepting the findings of the domestic Inquiry Officer in his report and not considering the reply of the respondent-workman to the said show cause notice. Being aggrieved by the order of dismissal passed against the respondent- workman by the appellant-Company, he raised an industrial dispute before the Labour Court by filing application No. 421 of 2001 under Section 31(3) read with Sections 61 and 62 of the Madhya Pradesh Industrial Relations Act, 1960 (for short "the M.P.I.R. Act"), questioning the correctness of the order of dismissal dated 30.7.2001, passed by the Disciplinary Authority of the appellant-Company from his services and prayed to set aside the same and reinstate him in the service to the said post with all the consequential benefits including back wages. The Labour Court, on the basis of the rival legal and factual contentions urged on behalf of the parties, framed the following issues for its determination:-
Whether the domestic enquiry conducted against the applicant is illegal, malafide and liable to be quashed? Whether the applicant is the guilty of misconduct as described in the charge-sheet? Whether the applicant is unemployed after termination of service?
Relief and costs.
The enquiry report was produced before the Labour Court by the appellant- Company and was considered by it and answered the preliminary issue No. 1, regarding the validity of the domestic enquiry in the affirmative in favour of the appellant-Company. The Labour Court, after adverting to the relevant Clause 12(1)(d) & (m) of the SSO and on re-appreciation of the material evidence on record in exercise of its original jurisdiction examined the correctness of the findings recorded by the Inquiry Officer on the charges levelled against the workman which is accepted by the Disciplinary Authority and answered issue No. 2 in the affirmative as well holding that the alleged misconduct of the workman is proved and held that the same does not warrant interference by the Labour Court in exercise of its original jurisdiction and power conferred under Section 107 of M.P.I.R. Act, which is equivalent to Section 11A of the Industrial Disputes Act, 1947 (for short "the I.D. Act") to substitute the punishment of dismissal order passed against the workman as the charges levelled against him have been proved during the enquiry proceedings and the same is held to be valid in law by answering the preliminary issue regarding the validity of the domestic enquiry.
Further, it has held on the merits of the case after re-appreciation of material evidence on record that the penalty of dismissal awarded on the respondent-workman is legal and valid in law which does not call for interference by the Labour Court. The correctness of the same was challenged by the respondent-workman before the Industrial Court which is the Appellate Court, by filing C.A. No.275 of 2006. The Appellate Court by its order dated 22.11.2006 set aside the Award passed by the Labour Court and remanded the case no. 421 of 2001 to it for its re-consideration.
The Labour Court again passed the award dated 15.2.2007 after reconsidering the case as directed by the Appellate Court, in favour of appellant-Company, holding that the order of dismissal passed by the Company does not warrant interference by it. The correctness of the same was again challenged by the respondent-workman before the Industrial Court which again remanded the case to the Labour Court by its order dated 7.8.2007 in C.A. No. 53 of 2007. The Labour Court after re-consideration of the case, has partly allowed the application of the respondent-workman and set aside the order of dismissal dated 30.7.2001 passed against the respondent-workman and the appellant-Company was directed to reinstate the respondent-workman in the service with 50% back wages.
The Labour Court however, denied him the remaining 50% back wages, treating the same as penalty imposed upon him in place of the order of dismissal passed by the disciplinary authority of the appellant-Company. The appellant-Company filed an appeal before the Industrial Court, questioning the correctness of the Award passed by the labour Court by filing C.A. No.340 of 2007 urging certain legal grounds and vide its order dated 27.1.2009, the Industrial Court has held that the evidence produced by the appellant-Company during the domestic enquiry does not show that the workman has made less production intentionally during the relevant period in respect of which the two charge sheets were served upon him. However, the Industrial Court held that withholding of 50% of the back wages from the respondent-workman for the proved misconduct is justified and it found no other reason for its interference with the Award passed by the Labour Court and dismissed the appeal of the appellant-Company.
It has further held that the order of dismissal passed by the appellant-Company is disproportionate to the gravity of the misconduct of the respondent-workman by recording its findings to that effect with reference to the material evidence on record and held that the charges are proved partially by the appellant-Company against the respondent-workman before the Inquiry Officer. The Appellate Court examined the proportionality of the order of dismissal passed against the respondent-workman by the Disciplinary Authority of the appellant-Company, after adverting to the judgments of this Court in the cases of Bharat Heavy Electricals Ltd. v. M. Chandrasekhar Reddy & Ors. and Regional Manager, U.P.S.R.T.C., Etawah & Ors. v. Hoti Lal & Anr. and held that the charges levelled against the respondent-workman only proved that he has not completed the production to the full capacity but the punishment order of dismissal from service awarded against the respondent-workman is disproportionate to the gravity of misconduct committed by the workman.
Further, it has opined that the Disciplinary Authority could have imposed a lesser punishment, such as censure, withholding of increments or any other fine as provided under Clause 12(3)(a)to(c) of the SSO upon the respondent-workman for the proved misconduct. However, the employer has awarded severe punishment of dismissal on the respondent-workman which is much harsher and unjustified in proportion to the proved misconduct as it would deprive the livelihood of the respondent-workman and his family members. Hence, the Labour Court interfered with the same in exercise of its jurisdiction conferred under Section 107 of M.P.I.R. Act and held that the order of dismissal passed against the workman is not proper and the same is liable to be set aside. Accordingly, the same was set aside.
The Award of reinstatement of the workman with 50% back wages was challenged by the appellant-Company by filing the writ petition before the High Court under Article 227 of the Constitution of India, urging various legal grounds.
The High Court, after adverting to the relevant facts and the findings of fact recorded in the Awards passed by both the Labour Court and the Industrial Court, after examining the relevant provisions of the M.P.I.R. Act and the standing orders and keeping in view the order of dismissal passed against the respondent-workman as punishment under the provisions of the SSO, has held that the exercise of power under Section 107 of M.P.I.R. Act by both the Labour Court and the Appellate Court in substituting the lesser punishment in place of the order of dismissal imposed by the Disciplinary Authority is bad in law and it further held that it is not a fit case for it to interfere with the same and held that the Labour Court in exercise of its power under Section 107 of M.P.I.R. Act has got the original jurisdiction and power to interfere with the quantum of punishment imposed upon the workman by the Disciplinary Authority of the appellant-Company and the same is concurred with by the Industrial Court in exercise of its Appellate Jurisdiction after re-appreciation of evidence on record.
Secondly, it has held that the charges levelled against the respondent-workman were partially proved but it did not call for the appellant-Company to impose extreme punishment by passing the order of dismissal against him. Further, looking into the nature of the charges and its gravity, the imposition of punishment of dismissal upon him is disproportionate to that of the charges levelled against the respondent- workman which are partially proved and lastly producing less tablets by the respondent-workman during that particular duration may have been due to several reasons. Therefore, it was held by the Labour Court that the punishment of withholding 50% back wages justifies the proved act of misconduct against the respondent-workman.
It has further held that the same would be proper, particularly, having regard to the fact that no past misconduct of the workman was relied upon by the appellant-Company which is one of the relevant considerations at the time of passing the order of dismissal against him as per Clause 12(3)(vi) of the SSO required to be followed by the appellant-Company. The correctness of the impugned judgment and the order of the High Court has been questioned in this appeal by the appellant-Company on certain grounds raising substantial questions of law. It has been contended by Mr. C.U. Singh, the learned senior counsel on behalf of the appellant-Company that the charges of misconduct of "go slow", for giving less production during the relevant period of time as mentioned in the charge-sheets has been proved in the domestic enquiry against the respondent-workman.
Further, he has urged that the same is a grave misconduct on the part of the respondent-workman which warranted an order of dismissal to be imposed upon him by the appellant-Company in view of his past service record as mentioned in the order of dismissal. Further, it is contended that the order of dismissal was passed after holding domestic enquiry as provided under the SSO and in compliance with the principles of natural justice. The learned senior counsel has further contended that the charge sheets issued against the respondent-workman would show that he has disobeyed the orders of his superiors and wilfully slowed down the performance of work which is a grave misconduct for which the disciplinary proceedings were initiated and the domestic enquiry was conducted against the respondent- workman after giving him an opportunity in accordance with the relevant provisions of the SSO and the second show cause notice was issued to him in this regard.
Thereafter, not being satisfied with his reply to the second show cause notice, the order of dismissal was passed against the workman by the appellant-Company as it is major misconduct under Clause 12(3)(b)(vi) of the SSO and therefore, such a major penalty imposed upon him is legal and valid and the same could not have been interfered with by the Labour Court. He has further placed reliance upon the findings recorded in the report by the Inquiry Officer on the basis of the evidence adduced by both the employer and the defence witnesses, namely, co-employees, DW-1 and DW-3. He has also contended that during the relevant period of time the less production of tablets by the respondent-workman is a clear case of wilful slowing down of work which is a grave misconduct on the part of the workman which warranted an order of dismissal passed against him by the Disciplinary Authority of the appellant-Company.
He has further contended that the finding of the Labour Court that the respondent has not worked to his full capacity in the establishment of the appellant-Company and holding that the order of his dismissal from the service by the appellant-Company is not justified, is an erroneous finding of fact as the same is contrary to the material evidence produced on record, particularly, the evidence adduced before the Inquiry Officer and the evidence of the defence witnesses DW-1 and DW-3 who have spoken about the wilful go slow by the respondent-workman in producing the tablets for the appellant-Company. Therefore, the finding recorded by the Labour Court on the misconduct by the respondent-workman is erroneous in law as the same is contrary to the legal evidence and no reasonable person could have arrived at such a conclusion.
Hence, the Labour Court has erred in law in holding that the charges are partially proved against the respondent- workman even after two remand orders were passed by the Industrial Court in recording the aforesaid finding on the charges in favour of the respondent- workman and the exercise of power by the Labour Court under Section 107 of the M.P.I.R. Act is vitiated in law as the same is contrary to the judgment of this Court in the case of Bharat Sugar Mills Ltd. v. Jai Singh & Ors. wherein this Court has held that the charge of wilful go slow in producing less production on the part of the workman is a grave misconduct which warrants order of dismissal passed against the workman. The learned senior counsel, Mr. C.U. Singh, has further contended that the finding recorded by the Labour Court at para 20 of the Award dated 29.10.2007 passed by it, wherein it is held that the order of dismissal of the respondent-workman from the service is disproportionate with respect to the gravity of the proved misconduct, is once again an erroneous finding and therefore, it is unsustainable in law. The same was erroneously endorsed by both the Industrial Court and the High Court as they have declined to exercise their appellate jurisdiction and therefore, the same requires to be corrected by this Court in exercise of its appellate jurisdiction in this Appeal.
It has been further contended by the learned senior counsel for the appellant-Company that the Labour Court has erred in awarding 50% back wages by passing an award of reinstatement and setting aside the order of dismissal by holding that the order of dismissal is disproportionate, without there being any plea or evidence adduced by the workman in this regard.
On the other hand, Mr. Niraj Sharma, the learned counsel on behalf of the respondent-workman has vehemently sought to justify the findings and reasons recorded by the Labour Court on the contentious issue No. 2 in exercise of its power under Section 107 of the M.P.I.R. Act and has contended that the Labour Court on re-appreciation of evidence on record has held that the imposition of the major penalty of dismissal is disproportionate to the gravity of the misconduct that was partially proved and the same has been rightly interfered with by applying the decision referred to in the judgment passed by the Labour Court, as the same is in accordance with law as laid down by this Court in Raghubir Singh v. General Manager, Haryana Roadways, Hissar and Jitendra Singh Rathor v. Baidyanath Ayurved Bhawan Ltd. & Anr. wherein this Court has held that the denial of back wages to the workman itself is an adequate punishment for the proved misconduct against him.
It has been further contended by him that the statutory duty cast upon the Disciplinary Authority under Clause 12(3)(c) of the SSO requires it to take into consideration the gravity of the misconduct, the previous record of the workman and any other extenuating or aggravating circumstances at the time of passing an order of dismissal. In the present case, the appellant-Company has not notified the workman about any of his past record in the show cause notice as required in law as per the Constitution Bench decision of this Court in the case of State of Mysore v. K. Manche Gowda. Further, there are no extenuating and aggravating circumstances existing against the workman which would lead to the imposition of major or extreme penalty of dismissal by the appellant-Company.
Therefore, there is a violation of statutory duty on the part of the Disciplinary Authority of the appellant-Company. This important aspect of the case has been rightly considered by both the Labour Court and the Industrial Court therefore, the same has rightly not been interfered with by the High Court in exercise of its supervisory jurisdiction. Therefore, he has submitted that the same does not call for interference by this Court. He has further contended that concurrent finding of fact recorded by the fact finding courts need not be interfered with by this Court in exercise of its appellate jurisdiction in view of the fact that the Labour Court and the Industrial Court on re-appreciation of the evidence on record and by placing reliance upon the judgments referred to in the impugned judgment and Award, have held that the dismissal of the respondent-workman from the service in the Company of the appellant for the partially proved misconduct is contrary to the punishment enumerated under Clause 12(3)(b)(i)to(v) of the SSO, which provides punishment of censures, fine, etc. for major misconduct.
The dismissal enumerated under Clause 12(3)(vi) of the aforesaid SSO, should not have been imposed by the Disciplinary Authority of the Company, in the fact situation of the present case and the concurrent view of the fact finding courts which has also been concurred with by the High Court in exercise of its supervisory jurisdiction and it has rightly held that it is legal and valid and does not require the interference of this Court. He has also contended before the Labour Court that the finding recorded by the Inquiry Officer in his enquiry report, which is accepted by the Disciplinary Authority, is erroneous in law as there is no material evidence on record against the respondent-workman by the appellant-Company to prove the charge that he had intentionally adopted "go slow" work for the period mentioned in the charge-sheets.
The Disciplinary Authority has not taken into consideration the past service record and extenuating and mitigating circumstances at the time of passing the order of dismissal, keeping in view the relevant provisions of the SSO Clause 12(3)(a) & (b). Therefore, the courts have repeatedly held that the order of dismissal passed against the respondent-workman is illegal and improper and against the provisions of the SSO and the principles of natural justice. Therefore, it is claimed that the respondent-workman is entitled for reinstatement with consequential benefits after setting aside the order of dismissal passed by the Disciplinary Authority of the appellant-Company against him.
With reference to the aforesaid rival legal contentions urged on behalf of the parties and the evidence on record, we have carefully examined the following points to find out as to whether the impugned judgment and Award warrant interference in this appeal :- Whether the concurrent finding of facts recorded by the High Court in not interfering with the order of the Industrial Court in directing the appellant-Company to reinstate and pay 50% back wages to the respondent- workman is legal and valid? What order? The first point is required to be answered in favour of the respondent- workman for the following reasons:- The Labour Court at the first instance has erroneously failed to exercise its jurisdiction by not re-appreciating the evidence on record after holding that the preliminary issue regarding the domestic enquiry conducted by the appellant-Company is legal and valid.
The said erroneous finding was challenged by the respondent-workman in the Appellate Court after two remand orders were passed by the Industrial Court. Ultimately, the Labour Court has exercised its jurisdiction and on re-appreciation of the facts and the evidence on record and in accordance with the decision of this Court in The Workmen of M/s. Firestone Tyre & Rubber Company of India (P) Ltd. v. The Management and Ors., it has found fault with the findings of the Inquiry Officer which was endorsed by the Disciplinary Authority which has erroneously held that the workman was guilty of the misconduct. The Labour Court after the two remand orders has rightly come to the conclusion on re-appreciation of the evidence on record and held that the charge levelled against the respondent is partially proved and even then the order of dismissal imposed upon him by the Disciplinary Authority, has been done without notifying the respondent-workman about his past service record, as required under Clause 12(3)(b) & (c) of the SSO, which aspect is rightly noticed and answered by the Labour Court at para 20 of its Award dated 29.10.2007.
Thus, the order of dismissal of the workman from the service is disproportionate and severe to the gravity of the misconduct. The same has been laid down by this Court in the case of Raghubir Singh v. Haryana Roadways (supra), wherein this Court has held thus:- "39. The above said "Doctrine of Proportionality" should be applied to the fact situation as we are of the firm view that the order of termination, even if we accept the same is justified, it is disproportionate to the gravity of misconduct. In this regard, it would be appropriate for us to refer to certain paragraphs from the decision of this Court in Om Kumar v. Union of India, wherein it was held as under: (SCC pp. 410-11, paras 66-68)
"66. It is clear from the above discussion that in India where administrative action is challenged under Article 14 as being discriminatory, equals are treated unequally or unequals are treated equally, the question is for the constitutional courts as primary reviewing courts to consider correctness of the level of discrimination applied and whether it is excessive and whether it has a nexus with the objective intended to be achieved by the administrator. Hence the court deals with [pic]the merits of the balancing action of the administrator and is, in essence, applying 'proportionality' and is a primary reviewing authority. 67. But where an administrative action is challenged as 'arbitrary' under Article 14 on the basis of Royappa (as in cases where punishments in disciplinary cases are challenged), the question will be whether the administrative order is 'rational' or 'reasonable' and the test then is the Wednesbury test.
The courts would then be confined only to a secondary role and will only have to see whether the administrator has done well in his primary role, whether he has acted illegally or has omitted relevant factors from consideration or has taken irrelevant factors into consideration or whether his view is one which no reasonable person could have taken. If his action does not satisfy these rules, it is to be treated as arbitrary.
[In G.B. Mahajan v. Jalgaon Municipal Council.] Venkatachaliah, J. (as he then was) pointed out that 'reasonableness' of the administrator under Article 14 in the context of administrative law has to be judged from the standpoint of Wednesbury rules. In Tata Cellular v. Union of India (SCC at pp. 679-80), Indian Express Newspapers Bombay (P) Ltd. v. Union of India, Supreme Court Employees' Welfare Assn. v. Union of India and U.P. Financial Corpn. v. Gem Cap (India) (P) Ltd. while judging whether the administrative action is 'arbitrary' under Article 14 (i.e. otherwise then being discriminatory), this Court has confined itself to a Wednesbury review always.
68. Thus, when administrative action is attacked as discriminatory under Article 14, the principle of primary review is for the courts by applying proportionality. However, where administrative action is questioned as 'arbitrary' under Article 14, the principle of secondary review based on Wednesbury principles applies." 40. Additionally, the proportionality and punishment in service law has been discussed by this Court in Om Kumar case as follows:
"69. The principles explained in the last preceding paragraph in respect of Article 14 are now to be applied here where the question of 'arbitrariness' of the order of punishment is questioned under Article 14.
70. In this context, we shall only refer to these cases. In Ranjit Thakur v. Union of India, this Court referred to 'proportionality' in the [pic]quantum of punishment but the Court observed that the punishment was 'shockingly' disproportionate to the misconduct proved. In B.C. Chaturvedi v. Union of India, this Court stated that the Court will not interfere unless the punishment awarded was one which shocked the conscience of the court. Even then, the court would remit the matter back to the authority and would not normally substitute one punishment for the other. However, in rare situations, the court could award an alternative penalty. It was also so stated in Ganayutham."
" Further, in the case of State of Mysore v. K. Manche Gowda (supra), this Court has held thus:-
"8...........It is suggested that the past record of a government servant, if it is intended to be relied upon for imposing a punishment, should be made specific charge in the first stage of the enquiry itself and, if it is not so done, it cannot be relied upon after the enquiry is closed and the report is submitted to the authority entitled to impose the punishment. An enquiry against a government servant is one continuous process, though for convenience it is done in two stages. The report submitted by the Enquiry Officer is only recommendatory in nature and the final authority which scrutinizes it and imposes punishment is the authority empowered to impose the same. Whether a particular person has a reasonable opportunity or not depends, to some extent, upon the nature of the subject-matter of the enquiry.
But it is not necessary in this case to decide whether such previous record can be made the subject matter of charge at the first stage of the enquiry. But, nothing in law prevents the punishing authority from taking that fact into consideration during the second stage of the enquiry, for essentially it relates more to the domain of punishment rather than to that of guilt. But what is essential is that the government servant shall be given a reasonable opportunity to know that fact and meet the same."
Further, the Labour Court after adverting to the judgments of this Court referred to supra has rightly held that the punishment of dismissal is disproportionate and interfered with the same by imposing the lesser punishment of denial of 50% back wages with reinstatement and the same has been examined and rightly upheld by the Appellate Court and the High Court in exercise of its judicial review power under Article 227 of the Constitution of India.
Having regard to the nature of judicial review power conferred upon the High Court, it has rightly accepted the impugned Award passed by the Labour Court which is affirmed by the Appellate Court by recording valid and cogent reasons in the impugned Award/judgment. The same can neither be termed as erroneous nor error in law. The workman's wilful disobedience of lawful or reasonable order under Clause 12(1)(d) of the SSO and the wilful slowing down of the work performance by him has been held to be partially proved.
Therefore, the Labour Court has imposed a lesser punishment as against the order of dismissal in exercise of its original jurisdiction and power under Section 107 of the M.P.I.R. Act as the Disciplinary Authority has failed to give any valid reasons for not imposing any one of the lesser punishments as provided under Clause 12 (3)(b)(i) to (v) of SSO. Hence, the denial of 50% back wages to the workman by the Labour Court is itself a punishment imposed upon the workman as held by this Court in the case of Jitendra Singh Rathor (supra), upon which reliance has been rightly placed by the learned counsel for the respondent- workman.
The contention urged on behalf of the appellant-Company that the award of back wages in the absence of any plea and evidence by the respondent-workman that he was not gainfully employed cannot be accepted by us in view of the decision in the case of Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (D. Ed.) & Ors. delivered by this Court to which one of us, (Justice V. Gopala Gowda), is a party to the judgment. For the reasons stated supra, we do not find any good reason to interfere with the impugned judgment and Awards of the High Court as well as the Appellate Court and the Labour Court. The appeal is devoid of merit and is accordingly dismissed.
The order dated 28.8.2009 granting stay of the impugned order shall stand vacated. Since, the matter has been pending before various courts for the last 14 years, we direct the appellant-Company to reinstate the workman within 4 weeks from the date of receipt of the copy of this judgment and compute 50% back wages payable to him from the date of his dismissal from the service till the date of passing of the Award, as per the periodical revision of the same and pay full salary from the date of the passing of the Award till the date of reinstatement.
...................................J. [V.GOPALA GOWDA]
...................................J. [C. NAGAPPAN]
April 30, 2015
 (2005) 2 SCC 481
 (2003) 3 SCC 605
 (1962) 3 SCR 684
 (2014) 10 SCC 301
 (1984) 3 SCC 5
 (1964) 4 SCR 540
 AIR (1973) SC 1227
 (2013) 10 SCC 324