Allahabad High Court
Amity International School Sector 1, ... vs Presiding Officer Labour ... on 17 May, 2024
Author: Dinesh Pathak
Bench: Dinesh Pathak
HIGH COURT OF JUDICATURE AT ALLAHABAD
Neutral Citation No. - 2024:AHC:89604
A.F.R.
Court No. - 6
Case :- WRIT - C No. - 16608 of 2024
Petitioner :- Amity International School Sector 1, Vasundhara Yojana
Respondent :- Presiding Officer Labour Court(Second) And Another
Counsel for Petitioner :- Rahul Chaudhary
Hon'ble Dinesh Pathak,J.
1. Heard learned counsel for the petitioner, learned Standing Counsel for respondent no.1 and Shri Shekhar Srivastava, Advocate who has assisted the Court without filing his memo of appearance on behalf of respondent no.2.
2. In view of the peculiar facts and circumstances of the present case and the order proposed to be passed hereunder, this Court proceeds to decide the instant writ petition finally, without calling for respective affidavits of the parties concerned, with the consent of learned counsel for the parties present in the Court.
3. The petitioner has invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India assailing the order dated 18.11.2023 passed by the Presiding Officer, Labour Court, Ghaziabad whereby application dated 08.08.2023 (Paper No.13-D) moved on behalf of the petitioner to decide the issue no.1 as a preliminary issue has been rejected.
4. Facts culled out from the record are that the workman (respondent no.2) has been terminated from service after departmental enquiry vide order dated 20.05.2020 w.e.f. 01.06.2020. Having been aggrieved, respondent no.2 has moved claim petition under the U.P. Industrial Disputes Act, 1947 (in brevity 'Act, 1947'). On the said application, question has been referred for adjudication with respect to termination of respondent no.2 since 01.06.2020. During pendency of adjudication case, labour court, vide order dated 27.01.2023, has framed two issues, first, qua adhering to the principles of natural justice while conducting the domestic enquiry and, second, legality and validity of terminating the services of workman with effect from 01.06.2020. At later stage, the petitioner has moved an application dated 08.08.2023 (Paper No.13-D) to decide the issue no.1 as a preliminary issue. The labour court has rejected the said application, vide order dated 18.11.2023, which is under consideration before this Court.
5. It is submitted by learned counsel for the petitioner that the labour court has illegally rejected the said application (Paper No.13-D) without properly considering the gravity of issue no.1. The question relating to violation of principles of natural justice while conducting the domestic enquiry is a paramount consideration for deciding the adjudication case under the Act, 1947, therefore, same is liable to be decided as a preliminary issue. In support of his submission, learned counsel for the petitioner has cited the following cases :-
(i) Shankar Chakravarti vs. Britannia Biscuit Co. Ltd & Another reported in 1979 AIR 1652 (Full Bench decision).
(ii) M.L.Singla vs. Punjab National Bank reported in 2018 (18) SCC 21.
(iii) Kurukshetra University vs. Prithvi Singh reported in AIR 2018 S.C. 973.
(iv) Shamli Distillery And Chemical Works Shamli vs. State of U.P. And 2 Others decided by Coordinate Bench of this Court on 13.11.2019 in Writ-C No.31147 of 2019.
6. Per contra, Shri Shekhar Srivastava, Advocate vehemently opposed the submissions advanced by counsel for the petitioner and contended that issue no.1 regarding violation of principles of natural justice in domestic enquiry cannot be considered as preliminary issue inasmuch as it is a question of fact and requires evidence to decide the same. It is further contended that intention of the establishment is only to protract the litigation. Both the issues, as framed by the labour court, vide order dated 27.01.2023, requires common evidence to be adduced by the parties, therefore, once the evidence are adduced by the parties, there is no justification to decide one issue as a preliminary issue inasmuch as both the issues can be decided simultaneously. In support of his case he has cited the following cases :-
(i) Judgment of the Apex Court in the case of Gregory Patrao & Others vs. Mangalore Refinery and Petrochemicals Limited & Others reported in (2022) 10 SCC 461.
(ii) Full Bench judgment of this Court in the case of M/s. Swarup Vegetable Product Industries Ltd. vs. Labour Court II, Meerut reported in 1998 (1) AWC 491.
(iii) Division Bench of this Court in the case of H.R. Sugar Factory vs. State of U.P. reported in 1997 (76) FLR 355.
7. Having considered the rival submissions advanced by learned counsel for the parties and perusal of record, it is manifested that question for consideration in the instant matter lies in a narrow compass as to whether issue relating to the violation of principles of natural justice, while conducting domestic enquiry, can be tried/examined as a preliminary issue.
8. The Labour Court has rejected the application dated 08.08.2023 moved in this regard citing the Full Bench judgment of the Hon'ble Supreme Court in the case of D.P. Maheshwari vs. Delhi Administration & Others reported in AIR 1984 SC 153. In the said judgment, the Hon'ble Supreme Court has raised concern qua protraction of litigation before the Labour Court/Labour Tribunal which may led to misery and jeopardize industrial peace. Consequent thereto, ultimately workman is the sufferer. It is apposite to mention that equal Bench strength (Hon'ble Three Judges Bench) of the Hon'ble Supreme Court in the matter of Cooper Engineering Ltd. vs. Shri P.P. Mundhe reported in (1975) 2 SCC 661 and Shankar Chakravarti (Supra) has emphasized that violation of principles of natural justice, during the domestic enquiry, should be decided first as a preliminary issue. In the subsequent judgments passed by the Hon'ble Supreme Court, the case of Shankar Chakravarti (Supra) has been followed as a law of the land. Case of D.P. Maheshwari (Supra) has been decided subsequent to the cases of Cooper Engineering Ltd. (Supra) and Shankar Chakravarti (Supra). However, while deciding the case of D.P. Maheshwari (Supra), the Hon'ble Supreme Court has observed that with the change of time, the policy to decide the preliminary issue first should be reversed. For ready reference observation made by the Hon'ble Supreme Court is quoted herein below :-
"There was a time when it was thought prudent and wise policy to decide preliminary issues first. But the time appears to have arrived for a reversal of that policy. We think it is better that tribunals, particularly those entrusted with the task of adjudicating labour disputes Where delay may lead to misery and jeopardise industrial peace, should decide all issues in dispute at the same time without trying some of them as preliminary issues. Nor should High Courts in the exercise of their jurisdiction under Article 226 of the Constitution stop proceedings before a Tribunal so that a preliminary issue may be decided by them. Neither the jurisdiction of the High Court under Article 226 of the Constitution nor the jurisdiction of this Court under Article 136 may be allowed to be exploited by those who can well afford to wait to the detriment of those who can ill afford to wait by dragging the latter from Court to Court for adjudication of peripheral issues, avoiding decision on issues more vital to them. Article 226 and Article 136 are not meant to be used to break the resistance of workmen in this fashion. Tribunals and Courts who are requested to decide preliminary questions must therefore ask them selves whether such threshold part-adjudication is really necessary and whether it will not lead to other woeful consequences. After all tribunals like Industrial Tribunals are constituted to decide expeditiously special kinds of disputes and their jurisdiction to so decide is not to be stifled by all manner of preliminary objections journeyings up and down. It is also worth while remembering that the nature of the jurisdiction under Article 226 is supervisory and not appellate while that under Article 136 is primarily supervisory but the Court may exercise all necessary appellate powers to do substantial justice. In the exercise of such jurisdiction neither the High Court nor this Court is required to be too astute to interfere with the exercise of jurisdiction by special tribunals at interlocutory stages and on preliminary issues."
9. It is pertinent to mention that in the case of D.P. Maheshwari (supra), no independent consideration has been made by the Hon'ble Supreme Court to the ratio decided in the previous cases i.e. Cooper Engineering Ltd. (Supra) and Shankar Chakravarti (Supra). Besides this Full Bench of this Court has occasioned to consider and decide the question in this respect in the case of M/s. Swarup Vegetables (Supra). Before the Full Bench, two questions were referred which are quoted herein below :-
"1. Whether the Labour Court/Industrial Tribunal have any statutory or legal obligation to decide any issue as preliminary issue while adjudicating an industrial dispute in accordance with procedure provided under Rules framed under U.P. Industrial Disputes Act ?
2. Whether the High Court can in exercise of its jurisdiction under Article 226 of the Constitution mandate a Court or Tribunal to follow a procedure contrary to statutory Rules ?"
10. Question no.1 is relevant for the purposes of deciding the instant writ petition. While answering the question no.1, the Full Bench of this Court has considered the relevant judgment of the Hon'ble Supreme Court including the case of Shankar Chakravarti (Supra) and D.P. Maheshwari (Supra) and concluded in paragraph 16 of the judgment that all the issues should be decided simultaneously. For ready reference paragraph no.16 of the judgment passed by the Full Bench of this Court in the case of Swarup Vegetables (Supra) is quoted herein below :-
"16. From the conspectus of views expressed by the Supreme Court in the aforementioned decisions, the position that emerges is that once a reference has been made to an Industrial Tribunal, then all the issues which arise, whether jurisdictional or merit, must be decided together. The process of adjudication by the Industrial Tribunal or Labour Court must be completed as expeditiously as possible. It is not obligatory on the Industrial Tribunal or Labour Court to frame a preliminary issue. Law does not enjoin the Tribunal to decide if the enquiry was fair and proper initially and then to grant an opportunity to the management if the finding went against it, to adduce evidence on the delinquency of the workmen and the punishment imposed. On the other hand the law casts a duty on the Industrial Tribunal/Labour Court to decide not only whether the domestic enquiry was fair and proper but also whether the punishment imposed by the employer was justified in the facts and circumstances of the case. The Industrial Tribunal/Labour Court should consider the entire case in the light of the evidence adduced before it. The Industrial Tribunal/Labour Court should particularly bear in mind the provisions of Section 11A of the Central Act and Section 6(2-A) of the U.P. Act' and remember that the main purpose of creating a forum for industrial adjudication is to avoid delay in disposal of proceedings. Viewed in this angle, we hold the Division Bench of this Court in the case of D.C.M. Shriram Industries Ltd. (1996 (72) Fac LR 713) was not right in holding that the management can lead evidence to establish the charges against the workman only after decision on the issue whether domestic enquiry was fair and proper and, therefore, such issue should be taken as a preliminary issue. It is, accordingly, overruled. The decision of the single Judge in M/s. Star Paper Mills Ltd. (1987 Lab IC 1854) (supra) is also overruled. The decision of the single Judge in the case of M/s. Vikram Cotton Mills (1989 (59) Fac LR 386) (supra) has our approval."
11. However, the ratio decided by the Hon'ble Supreme Court in the case of Shankar Chakravarti (Supra) was subsequently affirmed by the Constitution Bench (Hon'ble Five Judges Bench) of the Hon'ble Supreme Court in the case of Karnataka State Road Transport Corpn. vs. Lakshmidevamma (Smt.) and Another reported in (2001) 5 SCC 433. The relevant paragraph no.41 of the said judgment upholding the correctness of law laid down in the case of Shankar Chakravarti is quoted herein below :-
"In view of the above, I am of the opinion that Shambhu Nath Goyal case does not lay down correct law. The law has been correctly laid in Shankar Chakravarti case and Rajendra Jha case. The correct procedure is as stated in Shankar Chakravarti case subject to further safeguards for workman as already indicated above."
12. Importance of deciding the issue relating to violation of principles of natural justice during domestic enquiry as a preliminary issue has succinctly been decided and upheld by the Hon'ble Supreme Court in both the cases i.e. Cooper Engineering Ltd. and Shankar Chakravarti (Supras). In all the subsequent judgments, the Hon'ble Supreme Court has followed the judgment of Shankar Chakravarti (Supra) and upheld that the preliminary issue qua violation of principles of natural justice during the domestic enquiry has to be decided first. In the matter of M.L.Singla (Supra) the Hon'ble Supreme Court has held that it would obligatory upon the labour court to first frame the preliminary issue on the question of legality and validity of the domestic enquiry and confined its discussion only for examining the legality and proprietory of the enquiry proceeding. For ready reference paragraph nos. 20 to 32 and 46 of the said judgment are quoted herein below :-
"20. The first error was that it failed to decide the validity and legality of the domestic enquiry. Since the dismissal order was based on the domestic enquiry, it was obligatory upon the Labour Court to first decide the question as a preliminary issue as to whether the domestic enquiry was legal and proper.
21. Depending upon the answer to this question, the Labour Court should have proceeded further to decide the next question.
22. If the answer to the question on the preliminary issue was that the domestic enquiry is legal and proper, the next question to be considered by the Labour Court was whether the punishment of dismissal from the service is commensurate with the gravity of the charges or is disproportionate requiring interference in its quantum by the Labour Court.
23. If the answer to this question was that it is disproportionate, the Labour Court was entitled to interfere in the quantum of punishment by assigning reasons and substitute the punishment in place of the one imposed by respondent No.1-Bank. This the Labour Court could do by taking recourse to the powers under Section 11A of the ID Act.
24. While deciding this question, it was not necessary for the Labour Court to examine as to whether the charges are made out or not. In other words, the enquiry for deciding the question should have been confined to the factors such as-what is the nature of the charge(s), its gravity, whether it is major or minor as per rules, the findings of the Enquiry Officer on the charges, the employee's overall service record and the punishment imposed etc.
25. If the Labour Court had come to a conclusion that the domestic enquiry is illegal because it was conducted in violation of the principles of natural justice thereby causing prejudice to the rights of the employee, respondent No.1-Bank was under legal obligation to prove the misconduct (charges) alleged against the appellant (employee) before the Labour Court provided he had sought such opportunity to prove the charges on merits.
26. The Labour Court was then under legal obligation to give such opportunity and then decide the question as to whether respondent No.1-Bank was able to prove the charges against the appellant on merits or not.
27. If the charges against the appellant were held proved, the next question to be examined was in relation to the proportionality of the punishment given to the appellant.
28. If the charges against the appellant were held not proved, the appellant was entitled to claim reinstatement with back wages either full or partial depending upon the case made out by the parties on the issue of back wages.
29. The second error was that the Labour Court called upon the parties to lead evidence on all the issues including the charge of misconduct in the first instance itself.
30. The third error committed by the Labour Court was that it proceeded to examine the findings of the Enquiry Officer on the charges like an Appellate Court, appreciated the evidence adduced before the Enquiry Officer and the one adduced before it and then came to a conclusion that the findings of the Enquiry Officer are perverse. This the Labour Court could not do.
31. Assuming that the Labour Court had the jurisdiction to direct the parties in the first instance itself to adduce evidence on merits in support of the charges yet, in our opinion, it was obligatory upon the Labour Court to first frame the preliminary issue on the question of legality and validity of the domestic enquiry and confined its discussion only for examining the legality and propriety of the enquiry proceedings.
32. Depending upon the finding on the preliminary issue on the legality of the enquiry proceedings, the Labour Court should have proceeded to decide the next questions. The Labour Court while deciding the preliminary issue could only rely upon the evidence, which was relevant for deciding the issue of legality of enquiry proceedings but not beyond it.
46. In our view, the reasoning, which we have given while dealing with the first three errors committed by the Labour Court in Paras 20 to 33, are based on the law laid down in aforementioned cases, which are approved in Shankar Chakravarti's case (supra)."
13. In the case of Kurukshetra University (Supra), the Hon'ble Supreme Court has discussed this issue in detail in light of the ratio decided in the case of Shankar Chakravarti (Supra) and came to conclusion that preliminary issue with regard to legality of the domestic enquiry should be decided first. Relevant paragraph nos. 14 to 24 of the said judgment is quoted herein below :-
"14. The question as to what are the powers of the Labour Court and how it should proceed to decide the legality and correctness of the termination order of a workman under the Labour Laws in reference proceedings and what are the rights of the employer while defending the termination order in the Labour Court remains no more res integra and is settled by series of decisions of this Court beginning from AIR 1958 SC 130 (Indian Iron & Steel Co. Ltd. & Anr. Vs. Their Worken) till AIR 1979 SC 1653 (Shankar Chakravarti vs. Britannia Biscuit Co. Ltd. & Anr.) and also thereafter in several decisions as mentioned below.
15. In between this period, this Court in several leading cases examined the aforesaid questions. However, in Shankar's case (supra), this Court took note of entire case law laid down by this Court in all previous cases and reiterated the legal position in detail.
16. The legal position, in our view, is succinctly explained by this Court (two-Judge Bench) in the case of Delhi Cloth & General Mills Co. vs. Ludh Budh Singh, 1972(3) SCR 29-1972(Lab IC) 573 in Propositions 4, 5 and 6 in the following words:
"(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 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 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. When the preliminary issue is decided against the management and the latter leads evidence before the Tribunal, the position, under such circumstances, will be, that the management is deprived of the benefit of having the finding of the domestic Tribunal being accepted as prima facie proof of the alleged misconduct. On the other hand, the management will have to prove, by adducing proper evidence, that the workman is guilty of misconduct and that the action taken by it is proper. It will not be just and fair either to the management or to the workman that the Tribunal should refuse to take evidence and thereby ask the management to make a further application, after holding a proper enquiry, and deprive the workman of the benefit of the Tribunal itself being satisfied, on evidence adduced before it, that he was or was not guilty of the alleged misconduct.
(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 the 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 decides that the domestic enquiry has not been held properly, it is not its function to invite suo motu the employer to adduce evidence before it to justify the action taken by it."
17. The aforesaid principle of law was quoted with approval in Shankar's case (supra) by a Bench of three Judges in Para 23 observing, "..... After an exhaustive review of the decisions bearing on the question and affirming the ratio in R.K. Jain's case (1972 Lab IC 13) this Court extracted the emerging principles from the review of decisions. Propositions 4, 5 and 6 would be relevant for the present discussion."
18. The aforementioned decisions were extensively discussed by the Constitution Bench in the case of Karnataka State Road Transport Corpn. vs. Lakshmidevamma(Smt.) & Anr., 2001 (5) SCC 433 wherein the law laid down in the aforementioned two cases was approved.
19. When we examine the facts of this case in the light of the aforementioned principles of law, we find that the termination of the respondent was by way of punishment because it was based on the adverse findings recorded against the respondent in the domestic enquiry.
20. So the question, which the Labour Court was expected to decide in the first instance as a "preliminary issue", was whether the domestic enquiry held by the appellant (employer) was legal and proper. In other words, the question to be decided by the Labour Court was whether the domestic enquiry held by the appellant was conducted following the principles of natural justice or not.
21. If the domestic enquiry was held legal and proper then the next question which arose for consideration was whether the punishment imposed on the respondent(delinquent employee) was proportionate to the gravity of the charge leveled against him or it called for any interference to award any lesser punishment by exercising the powers under Section 11-A of the ID Act.
22. If the domestic inquiry was held illegal and improper then the next question, which arose for consideration, was whether to allow the appellant (employer) to prove the misconduct/charge before the Labour Court on merits by adducing independent evidence against the respondent (employee). The appellant was entitled to do so after praying for an opportunity to allow them to lead evidence and pleading the misconduct in the written statement. (see- also Para 33 at page 1665/66 of Shankar's case (supra)).
23. Once the appellant(employer) was able to prove the misconduct/charge before the Labour Court, then it was for the Labour Court to decide as to whether the termination should be upheld or interfered by exercising the powers under Section 11-A of the ID Act by awarding lesser punishment provided a case to that effect on facts is made out by the respondent(employee).
24. We are constrained to observe that first, the Labour Court committed an error in not framing a "preliminary issue" for deciding the the legality of domestic enquiry and second, having found fault in the domestic inquiry committed another error when it did not allow the appellant to lead independent evidence to prove the misconduct/charge on merits and straightaway proceeded to hold that it was a case of illegal retrenchment and hence the respondents' termination is bad in law."
14. Having considered the law laid down by the Hon'ble Supreme Court in the cases, as discussed above, and precisely the observations made by the Constitutional Bench of Hon'ble Supreme in the case of Karnataka State Road Transport Corporation (Supra), this Court has no doubt in mind that the issue qua violation of principles of natural justice and fair play during the domestic enquiry should be decided first as a preliminary issue. There is no need to discuss the merits of the case or other points inasmuch as matter referred to the labour court is still sub judice, therefore, any observation made by this Court would effect the merits of the case. As such, instant writ petition succeeds and is allowed. Order impugned dated 18.11.2023 passed by the Presiding Officer, Labour Court is hereby quashed. Application dated 08.08.2023 (Paper No.13-D) filed on behalf of the petitioner is allowed and the labour court is directed to decide the issue no.1 as a preliminary issue. It is expected that unnecessary adjournment/delay shall be avoided by the parties concerned and the labour court shall make endeavour to decide the adjudication case, as early as possible.
Order Date :- 17.5.2024
VR
