Supertex (India) Corporation And ... vs Radheshyam K. Pandey And Anr.
2001 Latest Caselaw 514 Bom

JUDGMENT

D.Y. Chandrachud, J.

1. In the two petitions which are being disposed of by this common judgment, an Order of the Industrial Court dated 30th July 1997 on a complaint of unfair labour practices under Items 1(a), 1(b) and 9 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 is called into question. The Industrial Court has directed the employer to allow the complainant before it to report for duty but has confined the grant of back wages only between the period of 24th October, 1994 and 10th November, 1994. The employer challenges the Order of the Industrial Court in so far as it grants reinstatement to the workman while the workman is aggrieved by the denial of the back wages for the period after 10th November, 1994 until reinstatement. For the sake of convenience, the parties to the present proceedings may be referred to as the employer and the workman.

2. The employer before the Court is a proprietary firm registered under the provisions of the Bombay Shops and Establishments Act, 1948. The employer was engaged at the material time in the business of trading in textile products. The workman before the Court was appointed as a driver in the services of the employer on probation for a period of six months on 1st December, 1986. The appointment of the workman was subject to the service Rules and Regulations which inter alia provided for termination upon one month's notice or pay in lieu thereof. The period of probation of the workman was extended on 21st May, 1987 until 3rd November, 1987. The letter of extension sets out that the management was inclined to terminate the service of the workman since the quality of his driving was not satisfactory, but at the request of the workman a further extension of the probationary period by six months was being granted so as to enable him to show an improvement in his driving skills. The period of probation was, thereafter extended once again on 30th November, 1987. While extending the period of probation, the employer once again noted that the workman had continued to drive the company's car in a rash and negligent manner causing damage to the car belonging to the company and endangering the lives of passengers. However, it was stated that on the assurance of the workman that he would not give cause for dissatisfaction to the Management, the period of probation was being extended. Ultimately, the workman was confirmed in the service of the employer on 1st January, 1988. Between 20th April, 1987 and 26th February, 1993, several Memos were issued by the employer to the workman recording that the manner in which the car belonging to the company was being driven was unsatisfactory and that a positive improvement ought to be shown by the workman. In one of the letters dated 29th August, 1988, there was a reference to the fact that as a result of the unsatisfactory driving of the vehicle of the company by the workman, the company was being put to the cost of repairs since the vehicle had been involved in accidents. In a letter dated 16th November, 1988, the employer recorded that the car belonging to the company was involved in a collision with another car as a result of which the company had to incur costs and expenses towards repairs. The company issued a warning to the driver workman in the present case to exercise due care and caution in driving the vehicle stating that the management could not retain the services of a driver who was rash and negligent. A further memo dated 21st April, 1989 recorded that again on 10th April, 1989 while driving the Ambassador Car (Registration No. 7500) belonging to the company, the workman had been involved in an accident with a lorry at the junction of Morarji Mill No. 2. Thereafter a letter dated 31st August, 1989 was addressed to the workman recording another accident which had taken place on 26th July, 1989. On 10th October, 1990 there was a communication recording the fact that the vehicle which was being driven by the workman had dashed against a 'Maruti Vehicle'. Again on 30th May, 1991 there was another memo recording that on 30th April, 1991 the car driven by the workman had met with an accident while proceeding from Vikhroli towards the office of the company on the Highway. On 30th November, 1991 it was stated that the workman had been involved in an accident which took place on the Western Express Highway on 19th September, 1991 near the Jogeshwari Crossing.

3. Apart from the Memos which were issued by the company to the workman various letters were addressed on behalf of the workman to the company admitting to the fact inter alia that on diverse occasions the vehicle of the company which was being driven by him was involved in incidents on the road. These communications by the workman included communications dated 12th June, 1988, 1st September, 1983, and 30th April, 1994. It is common ground between the learned Counsel that the Memos which were addressed by the company to the workman as well as the letters/statements of the workman were duly produced before the Industrial Court in the proceedings below.

4. On 22nd October, 1994, an incident took place to which a reference would be made shortly hereinafter and on 27th October, 1994 a letter came to be addressed by the employer to the workman stating that his "style and manner of driving has been such that the persons sitting in the car feel unsafe and experience the fear of meeting with an accident at any moment". A reference was then made to the fact that several warnings had been issued to the workman despite which there was no improvement in his performance. The letter by the employer adverted to the fact that on 22nd October, 1994 when the car of the company was being driven by the workman it had collided with a public Transport bus belonging to the BEST. The company stated that despite several opportunities there had been no improvement in the performance of the workman, as a result of which a decision had been reached to discharge the respondent from service. The employer purported to enclose a cheque in the amount of Rs. 34,874/- dated 7th November, 1994 towards the payment of retrenchment compensation, one month's pay in lieu of the notice and the amount of gratuity. In the evidence before the Industrial Court in these proceedings it has come on record that the service of the aforesaid letter was refused by the workman. Thereupon, a further letter dated 12th November, 1994 was addressed by the employer to the workman, in which after a narration of circumstances similar to those in the earlier letter, it was stated that the Management was discharging the workman from service. It was stated therein that a copy of the letter was now being sought to be served on the workman personally since he had attended office on the date of the letter. Together with the aforesaid letter dated 12th November, 1994 the company stated that it was offering a payment of Rs. 34,784.80 in cash, towards retrenchment compensation, pay in lieu of notice and gratuity. The workman declined to accept the aforesaid letter and the payment which was offered by the company upon which the employer instructed its bankers to transfer the amount of Rs. 34,784/- to the salary account of the workman.

5. A complaint was filed by the workman before the Industrial Court initially under Items 1-a and 1-b of Schedule IV of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971. Under the provisions of section 5(d) read with section 7 of the Act, a complaint under Item 1 of Schedule IV is to lie only before the Labour Court and would not be maintainable before the Industrial Court. The complaint came to be amended so as to incorporate a challenge to the action of the employer on the ground that there was an unfair labour practice under Item 9 of Schedule IV. The evidence was adduced before the Industrial Court. By its order dated 30th July, 1997, the Industrial Court noted that the employer had filed as many as 49 documents from which it appeared that several Memos and warnings had been issued to the complainant workman. The Industrial Court came to the conclusion that "from the said documents, it appears number of Memos and warnings (were) issued to the complainant and from the company's evidence it is also established that complainant's driving was not satisfactory". The Industrial Court then held that after the workman had refused to accept the letter dated 22nd October, 1994, the amount of Rs. 34,784/- was deposited by the employer in the bank account of the complainant and that the employer had in the circumstances "tried to forcibly discharge the complainant". The Industrial Court was of the view that if an employee commits a misconduct then it was necessary for the employer to hold an enquiry. In the present case no enquiry had been held and the case itself would not be covered under "the theory of loss of confidence". Since the employer had not held an enquiry, the Industrial Court came to the conclusion that there was a breach of Item 9 of Schedule IV and the commission of an unfair labour practice by the employer. In the operative part of its order, however, the Industrial Court issued a declaration to the effect that the employer had committed an unfair labour practice not merely under Item 9 of Schedule IV but also under Items 1-a and 1-b of the said Schedule. In the circumstances, the employer was directed to allow the complainant workman to report for duty and it was held that the complainant would be entitled to wages from 24th October, 1994 to 10th November, 1994.

6. In assailing the order of the Industrial Court the learned Counsel appearing on behalf of the employer has submitted that :

(i) The Industrial Court had no jurisdiction to entertain the complaint under Items 1-a and 1-b of Schedule IV of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971;

(ii) An issue was framed expressly in the present case only on whether the employer had committed an unfair labour practise under Item 9 of Schedule IV;

(iii) A finding was arrived at in the body of the Order to the effect that there was a breach of Item 9, yet, in its conclusion the Industrial Court had purported to hold that there was also a breach of Items 1-a and 1-b of the Schedule.

(iv) Apart from the issue of jurisdiction, the learned Counsel submitted that this was a case where the Industrial Court on the basis of the evidence which was adduced before it had come to the conclusion that the employer had duly established that the driving by the complainant-workman of the company's vehicle was not satisfactory. The learned Counsel submitted that there was no finding or even a pleading of mala fides or victimization. In the circumstances, it was urged that this was a case where the employer in the exercise of the power conferred upon him under the service rules and regulations had bona fide terminated the service of the workman.

(v) Once the Industrial Court had come to the conclusion that the employer had established that the work of the complainant workman was not satisfactory then clearly no case for reinstatement was made out and the finding that there was a breach of Item 9 of Schedule IV was without any foundation. The learned Counsel has relied upon the judgments of the Supreme Court in Air-India Corporation, Bombay v. V.A. Rebellow and another, 1972(I) L.L.J. 501 and Pfizer Limited v. Mazdoor Congress and others, 1996(II) L.L.J. 891.

7. On the other hand, the learned Counsel appearing on behalf of the workman submitted that in the present case the workman was dismissed from service on account of an allegation of misconduct and since no enquiry has been held the impugned order of the Industrial Court was correct and proper. The learned Counsel submitted that the order of discharge is really an order of dismissal and that in the absence of an enquiry being held in regard to the allegations of misconduct, the order for reinstatement is sustainable. The learned Counsel further submitted that there is no reason for the Labour Court to deprive the workman of back wages and consequently prayed for relief in terms of which a petition has been instituted by the workman.

8. The complaint which was filed by the workman before the Industrial Court was originally instituted under Items 1-a and 1-b of Schedule IV of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971, Item 1-a is entitled "to discharge or dismiss employees by way of victimisation". In Item 1-b the unfair labour practice consists of the discharge or dismissal of an employee not in good faith but in colourable exercise of the employer's right. Section 5(d) of the Act provides that it shall be the duty of the Court to decide complaints relating to unfair labour practices except in respect of an unfair labour practice falling in Item 1 of Schedule IV. Under section 7 it is the Labour Court which is vested with the jurisdiction to decide a complaint relating to unfair labour practices described in Item 1 of Schedule IV. Therefore, there can be no doubt about the position that the Industrial Court was clearly not competent to deal with the complaint as it was originally instituted. After the complaint was amended so as to incorporate a challenge under Item 9 of Schedule IV, issues were framed by the Industrial Court which were as follows :

"(1) Does the complainant prove that by enforcing the discharge simplicitor order issued and not allowed to resume on duty?

(2) Whether the respondent has committed unfair labour practice under Item 9 of Schedule IV?"

The first issue is, with respect incomprehensible. The second issue which was raised was under Item 9 of Schedule IV. The Industrial Court, in the body of its judgment has initially dealt with the issues with reference to Item 9. However, in the operative part of the order the Court has found that the employer was guilty of unfair labour practices besides Item 9, under Items 1-a and 1-b as well. That part of the order of the Industrial Court is clearly without jurisdiction because the Industrial Court had no jurisdiction to investigate into a complaint under Item 1 of Schedule IV.

9. Before the Industrial Court, evidence was adduced both on behalf of the complainant workman as well as on behalf of the employer. In paragraph 16 of its order the Industrial Court noted that during the course of cross-examination the workman had admitted his signature on all the Memos which had been issued to him by the employer. The workman had also admitted the letter of apology which had been written by him. All the documents which were sought to be relied upon by the Management (Exhibits C-15 to 51) were admitted by the workman. On the basis of these documents and the evidence which was adduced, the Industrial Court came to the conclusion that from the memos and warnings which had been issued by the employer to the workman in the present case it was established that the driving of the vehicle of the company by the workman was not satisfactory. Though there was some discussion in the order of the Industrial Court about the question as to whether the workman could comprehend the Memos which were addressed to him in English, it is an admitted position that in his several letters addressed to the company the workman had accepted that he was at fault on several occasions while driving the vehicle belonging to the company. The circumstances of the present case, therefore, would clearly establish that the termination of the services of the workmen was not an act of victimisation but was resorted to bona fide by the employer, for a reason bearing upon the inability of the workman to perform safety and effectively the duty which was assigned to him, namely, the duty of the driving the vehicle belonging to the company. The Industrial Court has, in fact, found that the services of the workman were not satisfactory. It must be noted that neither in the pleadings nor for that matter in the body of the order of the Industrial Court is there any reference to the workman having been victimised or of the action of the employer being mala fide. The present case is, therefore, one where even if no enquiry had been held prior to the termination from service of the workman, the employer has on the evidence which was produced before the Industrial Court justified the action of termination. A clause in the contract of employment providing for discharge simpliciter cannot be utilised by the employer for the purpose of what is often described as a "naked hire and fire policy". Courts have viewed such clauses and recourse to them with disfavour. On the facts of this case, I am satisfied that such was not the conduct of the employer. On the basis of the evidence and for that matter, the finding which was recorded by the Industrial Court, it cannot but be held that the termination of the service was a bona fide act on the part of the employer and was not an attempt to victimise the workman.

10. The learned Counsel for the employer has placed reliance on a judgment of the Supreme Court in Air India Corporation v. V.A. Rebellow, 1972(I) L.L.J. 501. A Bench of three learned Judges of the Supreme Court referred in the course of the judgment to an earlier decision of the Court in The Workmen of Sudder Office, Cinnamara v. The Management, 1971(II) L.L.J. 620 wherein it was held that it is well settled that if a termination of service is in colourable exercise of the power vested in the management or as a result of victimisation or unfair labour practice, the Industrial Tribunal would have jurisdiction to intervene and set aside such a termination. In order to find out whether the order of termination is one of termination simpliciter, the Tribunal has ample jurisdiction to go into all the circumstances which led to the termination. In the Air India case the Supreme Court held thus :

"Once bona fide loss of confidence is affirmed the impugned order must be considered to be immune from challenge. The opinion formed by the employer about the suitability of his employee for the job assigned to him even though erroneous, if bona fide, is in our opinion final and not subject to review by the industrial adjudication. Such opinion may legitimately induce the employer to terminate the employee's service; but such termination can on no rational grounds be considered to be for misconduct and must, therefore, be held to be permissible and immune from challenge."

11. In Pfizer Limited v. Mazdoor Congress and others, 1996(II) L.L.J. 891 an employee of a company was apprehended while he was attempting to take away certain property belonging to the employer. The employee was handed over to the police and during the course of the investigation stated that besides himself two other workmen employed in the watch and ward department were involved in a conspiracy to commit theft. The said two workmen were arrested by the police. The employer wrote to the two workmen informing them that while the employer did not wish to sit in judgment on whether they were in fact involved in any criminal action, the company had lost confidence in their suitability as members of its watch and ward staff. A complaint which was filed under section 28 of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 and under Items 1-a to 1-f of Schedule IV of the Act, was dismissed by the Labour Court. The Industrial Court in revision remanded the matter back to the Labour Court to consider whether the allegation of the workmen that they had been falsely implicated in the criminal case was correct. Pursuant to the Order of the remand the Labour Court received evidence which was led by the parties. The Labour Court dismissed the complaint and the Industrial Court in revision affirmed the Order of the dismissal. There upon the workmen move this Court under Article 227 of the Constitution of India and the petition which was filed by the workmen was allowed by this Court. This Court was of the view that a case of unfair labour practice had been made out since the employer had acted with undue haste. In appeal, the Supreme Court reversed the view which was taken by this Court and confirmed the order of the Labour and Industrial Court dismissing the complaint. Mr. Justice B.N. Kirpal, delivering a judgment of two learned Judges noted in paragraph 21 of the judgment that "it is not in dispute that on account of loss of confidence and because of the absence of the two employees from work without leave their services came to be discharged under the standing orders applicable to the company". This being so, it was held that "even if the High Court could have gone into the question as to whether there was any undue haste on the part of the management, the conclusion which was arrived at by the High Court was without any evidence or basis".

12. Reference in this connection may also be made to the judgment of the Supreme Court in Kamal Kishore Lakshman v. The Management of M/s. Pan American World Airways Inc. & others, 1987(I) L.L.R. 26. The Supreme Court there held as follows :

"10. ........ The legal position firmly established is that if there has been no appropriate domestic enquiry or no enquiry at all before disciplinary action is taken, it is open to the employer to ask for such opportunity in the course of adjudication. In the facts of the present case, the order of separation grounded upon loss of confidence has been justified before the Labour Court and the Labour Court has come to that conclusion upon assessment of the evidence.

11. Several decisions were relied upon by appellant's learned Counsel in support of his contention that the conclusion in Chandu Lal's case that loss of confidence amounted to stigma was wrong. We have not been shown a single case other than Chandu Lal's where this aspect has been directly considered. Whether termination is grounded upon stigma or not would vary from case to case depending upon whether it involves a Government servant or a woman. But the procedural safeguards appear to be different when termination is sought to be founded upon stigma. If disciplinary inquiry has not preceded the prejudicial Order in the case of a Government servant the action would be bad while in the case of a workman the order could be justified even in the course of adjudication before the appropriate Tribunal under the Industrial Disputes Act even though no inquiry had been undertaken earlier."

13. In the present case, apart from the fact that the Industrial Court had no jurisdiction to entertain the complaint with reference to the provisions of Item 1 of Schedule IV, evidence was duly adduced on behalf of the employer and upon a consideration of evidence the Court came to the conclusion that a number of warnings and Memos were issued to the workman and that from the evidence of the company "it is established that the complainant's driving was not satisfactory". Even though no enquiry was held, the employer had thus on the basis of the evidence produced before the Industrial Court justified the termination of service. There is no allegation of mala fides or of victimisation. In the circumstances, I am of the view that the Industrial Court was not justified in directing that the workman be reinstated in the service of the employer. Given the nature of the evidence against the workman in the present case, it would be impossible to compel or direct the employer to take the workman in the service of the employer. In the circumstances, the order of the Industrial Court is not sustainable and is liable to be quashed and set aside. Even within the restrictive para meters of and the wise limitations placed on the exercise of the jurisdiction under Article 226, I am of the view that interference by the Court is necessary. The order of the Tribunal is legally perverse and suffers from a clear error apparent on the fact of the record.

14. Before concluding, it would be necessary to record that during the course of the hearing an attempt was made to resolve the dispute between the parties on the suggestion of the Court. The last drawn salary of the workman was Rs. 3,000/- per month and it is stated that the workman had worked with the employer for about six years. The learned Counsel appearing on behalf of the employer has informed the Court on instructions that in deference to the suggestion, the employer was willing to pay an amount of Rs. 70,000/- to the workman to put an end to the dispute, though the employer is willing to establish in the course of submissions that the action is justified and sustainable. Mr. N.M. Ganguli appearing on behalf of the workman had sought an adjournment which was granted since the learned Counsel desired some time to explain the position to the workman. Mr. Ganguli has thereafter, however, informed the Court that the workman is not willing to accept the aforesaid amount and that he would be willing to settle the dispute only if an amount of between Rs. 5 to 6 lakhs is paid to him as compensation. The learned Counsel for the employer has stated that it is not possible to pay the aforesaid amount to the workman, having regard to all the facts and circumstances. The matter has in view thereof been heard on merits, and is being disposed of by the present order.

15. In the circumstances, Writ Petition 1589 of 1977 is allowed and is made absolute in terms of prayer Clause (a). Writ Petition No. 2395 of 1998 is dismissed. In the circumstances of the case, there shall, be no Order as to costs.