Management of Panitole Tea Estate Vs.
The Workmen [1971] INSC 55 (18 February 1971)
DUA, I.D.
DUA, I.D.
SHELAT, J.M.
CITATION: 1971 AIR 2171 1971 SCR (3) 774 1971
SCC (1) 742
ACT:
Industrial Dispute-Dismissal of workmen-Order
of reinstatement by Labour Court-Reinstatement of compensationCircumstances
justifying reinstatement-Constitution of India-, Art. 136-Interference by
Supreme Court.
HEADNOTE:
In the course of a domestic enquiry on a
charge of pilferage against B a' part time clerk who was incharge of a godown
of the appellant a chit was produced suggesting collusion with him of H another
workman, The appellant instituted a domestic enquiry against the workman and he
was dismissed.
On a reference of the Industrial Dispute the Labour Court held that the contents of the chit were too vague and were procured only to
harass the workman for no fault of his, that the domestic enquiry was violative
of the principle of natural justice, and its findings perverse and without any
evidence to support them. Consequently it ordered the reinstatement of the
workman' The management appealed to his Court contending that instead of
reinstatement the workman should be paid compensation. It also raised the plea
that it had lost confidence in the workman.
HELD : The present case is not one in which
this Court would be justified in interfering, on appeal under Art. 136 of the
Constitution, with the order of the tribunal. The question whether on setting
aside the wrongful dismissal of a workman he should be reinstated or directed
to be paid compensation is a matter within the Judicial discretion of the
Labour Court or the Tribunal, dealing with the industrial dispute, the general
rule in the absence of any special circumstances being of reinstatement. In
exercising this discretion, fair play towards the employee on the one hand and
interest of the employer, including considerations of discipline in the
establishment, on the other, require to be duly safeguarded.
This is necessary in the interest both of
security of tenure of the employee and of smooth and harmonious working ' of
the establishment. Legitimate interests of both of them have to be kept in view
if the order is expected to promote the desired objective of industrial peace
and maximum possible production. The past record of the employee, the nature of
the alleged conduction which the order of the employer is set aside, the nature
of the duties performed by the employee concerned and the nature of the
industrial establishment are some of the broad relevant factors which require
to be taken into consideration. These factors are merely illustrative. Each
case has to be decided on its own facts and no hard and fast rule can said down
to cover generally all conceivable contingencies. Proper balance has to be
maintained between the conflicting claims of the employer and the employee
without jeopardising the larger interests of industrial peace and progress.
[780 D] There was no evidence to conclude that the management lost confidence
in the workman. If the workman is entitled as a general rule to be reinstated
after his wrongful dismissal is set aside and on the facts it is not possible
to find cogent material on which the establishment can genuinely be considered
to have lost confidence in the integrity of the workman, he 775 is entitled to
be reinstated. The suggestion that having regard to the nature of the
proceedings against the workman the management has lost confidence was
acceptable. [782 F] If' the workman's dismissal was wrongful then merely
because proceedings for adjudication of the industrial dispute have taken a
long time (10 years) was by itself no reason for not directing his
reinstatement if it was otherwise justified being in accordance with the normal
rule. [782 G]
CIVIL APPELLATE JURISDICTION Civil Appeal No.
1137 of 1970.
Appeal by special leave from the award dated
October 30, 1969 of the Labour Court of Assam and Dibrugarh in Reference, No.
20 of 1964.
M. C. Chagla and R. Gopalakrishnan, for the
appellant.
K. P. Gupta, for the respondents.
The Judgment of the Court was delivered by
Dun, J. In this appeal special leave was limited to the question whether relief
by way of payment of compensation should' not be substituted for the relief by
way of reinstatement granted by the Labour Court to the workman, H.
P. Bhagavati, Store, Clerk.
The Panitole Tea Estate belongs to the Jokai
(Assam) Tea Co., Ltd., Panitole. Depot Line was one of the Out Gardens under
this Tea Estate and it had a separate godown. One B. K. Borgohain, a part-time
clerk was in charge of this godown. Ammonia sulphate fertiliser was stored in
this godown, 970 bags having been received there between December 12, 1960 and
January 5, 1961. Pursuant to receipt of an anonymous letter that there was
pilferage of these bags the stock was checked and 89 bags were found missing.
In the course of the domestic enquiry against Borgohain a chit (Ex.
12) was produced by him which suggested H. P.
Bhagavati's collusion with Borgohain in this affair. Bhagavati was accordingly
also charge sheeted and after domestic enquiry he was dismissed with effect
from March 23, 1961. This order of dismissal of Bhagavati gave rise to an
industrial dispute which was duly referred to the Labour Court of Assam at
Dibrugarh. The Labour Court by its award dated October 30, 1969 held that the
contents of Ex. 12 were too vague to connect Bhagavati with the offence
charged. According to the Labour Court the management had procured this exhibit
only to harass Bhagavati for no fault of his. The domestic enquiry was also
found to be violative of the principle of natural' 77 6 justice and it
conclusions perverse, there being no evidence to support them. Bhagavati was
accordingly held entitled to reinstatement with all the back wages and
benefits. The present appeal is directed against this order and, as observed
earlier, the only question we have to decide is whether Bhagavati should be
reinstated or he should be paid compensation instead of reinstatement. The
dismissal of Borgohain, it may be pointed out, was not challenged by him and
that order became final. In this appeal we are not concerned with his
dismissal.
On appeal in this Court Shri Chagla has
submitted that the management has lost confidence in Bhagavati and it would be
unjust and improper to force his reinstatement as a store clerk ,on the
management after a lapse of ten years. The learned counsel offered to pay to
the workman any reasonable compensation as may be ordered by this Court.
Reliance in support of this submission against the order of reinstatement was
placed on two recent decision of this Court Ruby General Insurance Co. Ltd. v.
Chiopra(1) and Hindustan Steel Ltd. v. A. K. Roy (2). In the first case special
leave granted by this Court was also limited only to the question whether the
relief granted to the workman concerned should have been reinstatement or
compensation.
On a consideration of the facts and
circumstances of that case this Court had set aside the order of reinstatement
and directed the company to pay compensation to the workman concerned. ,Our
attention has been drawn to some of the observations made in that case. This
Court said there :
"In the present case we are of the view
that reinstatement directed by the tribunal was inexpedient. The respondent had
served the company in all for a period of twelve months.
It was not as if he had been induced to give
up any employment he was engaged in for joining the service of the
appellant-company.
The company's establishment in Delhi was
comparatively a small establishment. There can be no doubt that the position of
a stenographer in such an establishment would be one of confidence and trust as
he would be taking down dictation and typing out all kinds of matters including
sometimes confidential and even secret matters. For example, a report of the
working of this branch to the company's headquarters by the branch manager, or
a report as regards the working of other rival insurance companies in Delhi
area, or a report regarding promotion and even demotion of some of the members
of the staff of the branch office, and such other matters would be of a highly
confidential (1) [1970] 1 L.L.J. 63.
(2) [1970] 1 L.L.J.228.
nature. If the branch manager were, for cm
reason or the other to lose confidence and trust in stenographer working under
him, it would obviously be unpossible for him to give dictation on such matters
to such a stenographer. On the assumption that the respondent was made to take
dictation and type out letters in connexion with other concerns in which the
appellant company was interested and the respondent was not paid any extra
remuneration for such work, the respondent was, on his 'admission retaining
with him surreptitiously copies of those communications. As the tribunal has
remarked, the respondent did so in order to preserve evidence, that he was made
to take down letters relating to concerns other t han the appellant-company.
Whether in terms of his employment as a stenographer the regional manager could
take such work or not is a matter in which we need not go, but he did
admittedly retain with him copies of as many as 32 such communications which he
exhibited as Exs. W. 10 to W. 42. These copies were clearly the property of the
company which the respondent in no event could retain in his possession without
the consent of his employers. If the regional manager were to entertain a
feeling that, if reinstated, the respondent would in future also retain with
him copies of documents of a confidential nature whenever the respondent felt
that such retention would be of use or advantage to him, such a feeling on the
part of the regional manager that he can no longer trust the respondent with
any confidential matter cannot be regarded as altogether unjustified. The
regional manager might well feel that if the respondent was capable of
collecting evidence against the company, he might in future collect perhaps
evidence of a more dangerous, and harmful nature. Obviously, if he cannot
repose confidence in the respondent, if reinstated, he cannot make any use of
his services, as a stenographer. In the circumstances, we think that the
tribunal ought not to have directed his reinstatement despite its conclusion
that the termination of his services was wrongly made, but ought to have
awarded suitable compensation instead." in the second case this Court
observed The question, however, still is whether the tribunal was, in the
circumstances of the case, justified in directing reinstatement.
It is true that some of the decisions of this
Court have laid down that where the discharge or dismissal of a workman is not
legal or 778 justified, the relief which would ordinarily follow would be
reinstatement. The Tribunal, however, has the discretion to award compensation
instead of reinstatement if the circumstances of a particular case are unusual
or exceptional so as to make reinstatement inexpedient or improper. The
Tribunal has, therefore, to exercise its discretion judicially and in
accordance with well recognised principles in that regard and has to examine
carefully the circumstances of each case and decide whether such a case is one
of those exceptions to the general rule. If the Tribunal were to exercise its
discretion in disregard of such circumstances or the principles laid down by
this Court it would be a case either of no exercise of discretion or of one not
legally exercised In either case the High Court in exercise of its writ
jurisdiction can interfere and cannot be content by simply saying that since
the Tribunal has exercised its discretion it will not examine the circumstances
of the case to ascertain whether or not such exercise was properly and in
accordance with the well settled principles made. If the High Court were to do
so, it would be a refusal on its part to exercise jurisdiction.", And
again:
"The Tribunal no doubt felt that it was
not established whether the investigation and the report following it were
properly done and made, that the company ought to have disclosed it to the
workman and given him an opportunity to vindicate himself and that the nondisclosure
of the report made the termination illegal and unjustified. That may or may not
be right. But what was relevant, at the stage when the Tribunal came to decide
what relief the workman was entitled to, was the question whether the
management genuinely apprehended as a result of the report that, it would be
risky to retain the workman in the company service They may have gone wrong in
the manner of terminating the workman's service as held by the Tribunal. But,
if the management truly believed that it was not possible to retain the workman
in the company's service on grounds of security and consequently could not
place confidence in him any longer, the present case, would be one of those
exceptional cases where the general rule as to reinstatement could not properly
be applied.
This of course does not mean that in every
case where the employer says that he has lost confidence in the workman, and,
therefore, has terminated his service that reinstatement cannot be granted and
the 779 Tribunal has to award compensation. On the other hand, if on an
examination of all the circumstances of the case, the Tribunal comes to the
conclusion that the apprehensions of the employer were genuine and the employer
truly felt that it was hazardous or prejudicial to the interests of the
industry to retain the workman in his service on grounds of security, the case
would be properly one where compensation would meet the ends of. justice.
On a consideration of all the circumstances,
the present case, in our' view, was, one such 'case., The Tribunal exercised
its discretion mechanically without weighing the circumstances of the case.
That was no exercise of discretion at all. There is ample authority, to the
effect that if a statutory tribunal exercises its discretion on the basis of
irrelevant considerations or without regard to relevant considerations,
certiorari may properly issue to quash its order. (See S. A. de Smith, Judicial
Review of Administrative Action (2nd ed) pp. 324-325. One such relevant
consideration, the disregard of which would render its order amenable to
interference, would be the well-settled principles laid down in decisions
binding on the Tribunal to whom the discretion is entrusted. The refusal by the
High Court to interfere was equally mechanical and amounted to refusal to
exercise its jurisdiction. Its order, therefore, becomes liable to
interference." Shri Chagla has argued that in the present case there was
exercise of judicial discretion by the Labour, Court and impugned order was
made mechanically without considering the relevant circumstances and applying
its mind to the question as to which of the two reliefs was more appropriate.
On behalf of the respondents it is submitted
that Bhagavati, the workman concerned in this case, is innocent and the
management was found by the Labour Court on evidence to have resorted to unfair
labour practice. The chit, Ex. 12, was also held not to be in the handwriting
of Bhagavati. It is further emphasised that criminal proceedings 'Were also
started against Bhagavati but he was discharged in the criminal case for want of
evidence implicating him. The respondent's learned counsel has, in support of
his submission,, drawn our attention to The Punjab National Bank Ltd. v. Its
Workmen(1), M. L. Bose & Co. (P) Ltd. v. Its Employees(1) and Workmen of
United Bleachers (P) Ltd., v.
United Bleachers (P) Ltd . (3), (a decision
High Court).
In the Punjab (1)[1960] 1 S.C.R 806. (2)
[1961] 11 L.L.J. 107 (S.C.) (3)[1968] 1 L.L.J 529 780 National Bank case(1) it
was observed that the propriety of reinstatement in a case of wrongful or illegal
dismissal-is' normally a question of fact and where the industrial tribunal on
a proper consideration of the relevant factors refuses to pass such an order
the Supreme Court would be reluctant in the absence of any general or
substantial question of law to interfere under Art. 136 of the Constitution.
According to the counsel where reinstatement has been ordered by the court or
tribunal in an industrial dispute arising out of dismissal of a workman this
Court should, in 'the absence of special circumstances, decline to interfere
with that order on special leave appeal. Support from the case of M. L. Bose
& Co. (P) Ltd. (2) is sought for the contention that reinstatement is the
normal rule when dismissal is held to be wrongful and it is immaterial that the
employer has since employed other workmen. The case of United Bleachers(,)
follows the observations of this Court in the case of Punjab National Bank Ltd.
(1), M. L. Bose & Co. (P) Ltd. (2) and Swadesamitran Ltd. v. Their
Workmen(4).
In our opinion the present case is not one in
which we would be justified in interfering on appeal under Art. 136 of the
Constitution with the, order of the Tribunal. The question whether on setting
aside the wrongful dismissal of a workman he should be reinstated or directed
to. be paid compensation is a matter within the Judicial discretion of the
Labour Court or the Tribunal, dealing with the industrial dispute, the general
rule in the absence of any special circumstances being of reinstatement. In
exercising this discretion, fairplay towards the employee on the one hand and
interest of the employer, including considerations of discipline in the
establishment, on the other, require to be duly safeguarded. This is necessary
in the interest both of security of tenure of the employee and of smooth and
harmonious working of the establishment. Legitimate interests of both of them
have to be kept in view it the order is expected to promote the desired
objective of industrial peace and maximum possible production. The past record of
the employee, the nature of the alleged conduct for which action was taken
against him, the grounds on which the order of the employer is set aside, the
nature of the duties performed by the employee concerned and the nature of the
industrial establishment are some of the broad relevant factors which require
to be taken into consideration. The factors just stated are merely illustrative
and it 'is not possible to exhaustively enumerate them. Each case has to be
decided on its own facts and no hard and fast rule can be laid down to cover
generally all conceivable contingencies.
Proper balance has to be maintained between
the conflicting claims of the employer and the employee (1) [1960] 1 S.C.R.806.
(3) [1968] 1 L.L.J. 529.
(2) [1961] 2 L.L.J.107 (S.C.). (4) [1960] 1
L.L.J.504.
78 1 without jeopardising the larger
interests of industrial peace and progress. In Hindustan Steel Ltd.'s case(1)
this Court substituted the order of reinstatement by an order of payment of
compensation on the ground that the police report and the security officer's
recommendation to the Company showed that it was not desirable for reasons of
security to reinstate the employee., In that case it was observed :
"As exceptions to the general rule of
reinstatement, there have been cases where reinstatement has not been
considered as either desirable or expedient. These were the cases where there
had been strained relations between the employer and the employee, where the
post held by the aggrieved employee had been one of trust and confidence or
where, though dismissal or discharge was unsustainable owing to some infirmity
in the impugned order, the employee was, found to have been guilty of an
activity subversive of or prejudicial to the interests of the industry. These
cases are to be found in Assam Oil Co. Ltd. v. Workmen(1); Workmen of Charottar
Gramodhar Sahakari Mandali Ltd. v.Charottar Gramodhar Sahakari Mandali Ltd.(3);
Doomur Dulung Tea Estate v. Workmen(4)) and
Ruby General Insurance Co. Ltd. v. P. P. Chopra(5). These are however,
illustrative case,% where an exception was made to the general rule. No hard
and fast rule as to which circumstances would in a given case constitute an
exception to the general rule can possibly be laid down as the Tribunal in each
case keeping the objectives of industrial adjudication in mind, must in a
spirit of fairness and justice confront the question whether the circumstances
of the case require that an exception should be made and compensation would
meet the ends of justice." The general rule of reinstatement in the
absence of special circumstances was also recognised in the case of Workmen of
Assam Match Co. Ltd. v. The Presiding Officer, Labour Court A & anr. (6)
and has again been affirmed recently in M/s.
Tulsidas Paul v. The Second Labour Court,
W.B. & ors. (7).
In Messrs Tulsidas Paul(7) it has been
emphasised that no hard and fast rule as 'to which circumstances would
establish an exception to the general rule could be laid down and the Tribunal
must In each case decide the question in a spirit of fairness and justice in
keeping with the objectives of industrial adjudication.
(1) [1970] I.L.L.J. 288. (2) (1969) 3 S.C.R.
457.
(3) C.A. 382/66 d/14.-8-1967. (4) C.A.
5161-1966 d/26-101967 (5) [1970] I.L.L.J.63. (6) C.As. 1070-1071/1963 d/27-10-64.
(7) C.A. 1607/1966 d/3-2-1971.
78 2 In the present case Shri Chagla has laid
main stress on the submission that the management has lost confidence in
Bhagavati's integrity and it would be wholly improper to force his
rein.statement on the management. The store of which this workman was in
charge, according to the learned counsel, contains ,goods worth lakhs of rupees
and in the absence of the requisite confidence in his integrity the order of
reinstatement is likely to harm the cause of industrial peace in the appellant
concern. The appellant has expressed willingness to pay any reasonable, amount
by way of compensation. We have in support of the plea of want of confidence
been taken through the correspondence between the management and Bhagavati.
From that correspondence we are unable to conclude that the management lost
confidence in Bhagavati because of the lapses mentioned therein. It appears
that it was only when the management suspected Bhagavati's collusion with
Borgohain that the management felt that his integrity was questionable. That
chit having been found not to be in Bhagavati's handwriting and Bhagavati's
dismissal having been held to be wrongful we are unable to sustain the plea of
want of confidence raised by Shri Chagla. It is significant that no such plea
was sought to be substantiated before the Labour Court. It is undoubtedly true
that the store of the Tea Estate would contain goods of substantial value and a
person really suspected of being untrustworthy may not justifiably be forced on
the unwilling employer, but that aspect requires determination on facts which
should have been properly placed before the Labour Court and a finding secured
after appropriate trial. The suggestion that having regard to the nature, of
the proceedings against Bhagavati, the management has lost confidence is
unacceptable. A similar argument was repelled in the case of Assam, Match
Co.(1). If the workman is entitled as a general rule to be reinstated after his
wrongful dismissal is set aside and on the facts it is not possible to find
cogent material on which the establishment can genuinely be considered to have
lost confidence in the integrity of the workman he is entitled to be
reinstated.
The next. argument that Bhagavati should not
be forced on the management after a lapse of ten years is equally unacceptable
because if his dismissal was wrongful then merely because proceedings for
adjudication of the industrial dispute have taken a long time is by itself no
reason for not directing his reinstatement if it is otherwise justified being
in accordance with normal rule. A similar contention was also repelled in the
case of Assam Match Co.(,) In Swadesamitrans case(1) also this Court observed
that in the ,case of wrongful dismissal, discharge or retrenchment a claim for
reinstatement cannot be defeated merely because time has elapsed or that the
employer has engaged fresh hands. We are, therefore, unable on the existing
record to sustain the appellants sub(1) C.As. 1070-1071/1963d/27-10-64.
(2) [1960] I.L.L.J. 504 783 mission that the
order of reinstatement made by the Labour Court suffers from any legal
infirmity justifying its substitution by an order of payment of compensation to
the workman. A suggestion has been thrown by Shri Chagla that in all probability
the employee must have secured employment elsewhere as he could not have
remained idle all these years an payment of compensation in place of
reinstatement would, therefore, cause him no prejudice. On behalf, of the
employee it is denied that he had been employed anywhere else during this
period. In our opinion, this matter being controversial should have been raised
before the Labour Court and we are not in a position to express any opinion on
it in the present proceedings.
The appeal accordingly fails and is
dismissed. In the circumstances of the case there will be no order as to costs
in this Court.
Y.P. Appeal dismissed.
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