Palghar Taluka Industrial ... vs Sadanand Dadu Bhoir
2023 Latest Caselaw 10027 Bom

2023:BHC-AS:28645

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                         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                CIVIL APPELLATE JURISDICTION

                                      WRIT PETITION NO.3768 OF 2023

             Palghar Taluka Industrial Federation and Others           ...Petitioners
                  vs.
             Sadanand Dadu Bhoir                                       ...Respondent

             Mr. A.K. Jalisatgi a/w. Mr. Triveninath Yadav and Mr. Narendra
             Dube, for the Petitioners.
             Mr. S.D. Paithane, for the Respondent.

                                          CORAM :        N. J. JAMADAR, J.
                                      RESERVED ON :      JULY 10, 2023
                                      PRONOUNCED ON :    SEPTEMBER 29, 2023


             JUDGMENT :

1. Rule. Rule made returnable forthwith. With the consent of the

learned counsel for the parties, heard finally at the stage of

admission.

2. This petition under Article 226 and 227 of the Constitution of

India calls in question the legality, propriety and correctness of the

judgment and order, passed by the learned Member, Industrial

Court, Thane in Revision Application (ULP) No. 39 of 2021 dated

29th August, 2022 whereby the learned Member, Industrial Court

was persuaded to partly allow the Revision Application and remit

the matter back to the Labour Court to decide the issue of back

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wages after giving an opportunity to the parties to lead evidence.

3. Shorn of unnecessary details, the background facts leading to

this petition can be stated as under:-

3.1 Petitioner No. 1 M/s. Palghar Taluka Industrial

Federation is a federation of industrial manufactures, traders

and establishments situated in Palghar and adjoining areas.

Petitioner Nos. 2 and 3 are the office bearers of petitioner No.

1 federation. It had a skeleton staff to man its office.

Respondent was employed as a "Peon". In the year 2013

another lady was in the employment of petitioner No. 1. The

said lady employee gave a complaint in writing that

respondent abused and sexually harassed her. On 21 st

November, 2013 the respondent abused her in a filthy and

indecent language. She was humiliated.

3.2 On the basis of said complaint, the petitioner No. 1

constituted an Inquiry Committee. Respondent was

summoned before the Inquiry Committee on 10 th December,

2023. The respondent appeared before the Inquiry

Committee. However, respondent refused to cooperate with

the Inquiry Committee and dared the petitioners to take

whatever action they chose. As the Inquiry Committee found

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the allegations against the respondent to be of serious nature

and unworthy of being tolerated, it decided to terminate the

services of the respondent with immediate effect. On 16 th

December, 2023 an order of termination followed. The

respondent was offered salary for the month of November,

2013 and also compensation @ 15 days salary and notice of

one month. Respondent refused to accept the same. Upon

termination of the services, the respondent filed a complaint

of unfair labour practices under Item 1(a), (b),(c), (d) and (f)

of Schedule IV of the Maharashtra Recognition of Trade.

Unions and Prevention of Unfair Labour Practices Act, 1971

(the Act, 1971) being Complaint (ULP) No. 37 of 2014 before

the Industrial Court.

3.3 The petitioners resisted the complaint.

Respondent examined himself. The petitioners adduced the

evidence of the Secretary of petitioner No. 1 and the lady who

had made allegations against the respondent.

3.4 After appraisal of the pleadings, evidence and

material on record, the learned Judge, Labour Court was

persuaded to declare that the petitioners engaged in unfair

labour practices under Item 1(a) (b) and (f) of Schedule IV of

the Act, 1971 and directed the petitioners to reinstate the

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respondent in service with continuity of service with full back

wages with effect from 16th December, 2013.

3.5 The learned Judge, Labour Court was of the view that

the petitioners had neither issued chargesheet to the

respondent nor held an inquiry against the respondent and,

therefore, the termination of the services of the respondent

without holding inquiry was illegal. Even if the termination

was construed to be by way of retrenchment, there was non-

compliance of the provisions contained in section 25F of the

Act, 1971. It was held that neither the complaint by the lady

employee contained specific abuses hurled by the respondent

nor the evidence of the said lady was sufficient to establish

the allegations of sexual harassment against the respondent.

4. Being aggrieved the petitioners carried the matter in revision

before the Industrial Court.

5. By the impugned judgment and order, the learned Member

partly allowed the revision upholding the finding of the Labour

Court that the retrenchment of the respondent was in breach of the

statutory mandate contained in section 25F of the Act, 1947 and

the allegations of sexual harassment were not established and

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resultantly the termination of the services of the respondent was

not legal and proper. The learned Member, Industrial Court was,

however, of the view that the trial Court erred in awarding full back

wages without properly appreciating the evidence on record. The

parties had not led adequate evidence on the point of entitlement of

back wages. The learned Member, therefore, considered it

appropriate to remit the matter back to the Labour Court to decide

the issue of back wages afresh after providing an effective

opportunity to adduce evidence on the said point.

6. Being further aggrieved by the determination by the

Industrial Court that the termination was not legal and proper, the

petitioners/employers have invoked the writ jurisdiction.

7. I have heard Mr. A.K. Jalisatgi, learned counsel for the

petitioners and Mr. Paithane, learned counsel for the respondent at

some length. The learned counsel for the parties took the Court

through the pleadings, evidence, documents and material on record

including the impugned orders.

8. Mr. Jalisatgi, learned counsel for the petitioners, took pains to

assail the orders passed by the Court below. First and foremost,

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according to Mr. jalisatgi, both the Courts committed a manifest

error in law in ignoring the settled legal position that employer was

entitled to justify the order of termination of services of an

employee even where no disciplinary inquiry was held. This aspect

was completely lost sight of by the Labour Court in setting aside the

termination on the ground that the employer had not issued charge

sheet and conducted disciplinary proceedings against the employee.

Secondly, the Courts below have proceeded on an incorrect premise

that the termination of the service of the employee on the grave

charges of the sexual harassment of co-employee was by way of

retrenchment. Where the services of an employee are terminated as

and by way of a disciplinary measure, the termination does not fall

within the ambit of 'retrenchment' and the Courts below again

committed an error in construing the termination in question as

one by way of retrenchment. This incorrect perspective vitiated the

orders passed by the Courts below. Thirdly, Mr. Jalisatgi would urge

the Courts below have taken a very hypertechnical view of the

matter. The lady co-employee appeared before the Labour Court and

put oath behind the statement of harassment attributed to the

respondent. The Courts, thus, could not have discarded her

evidence on the ground that she did not state the precise words

with sexual overtones uttered by the respondent. It was urged that

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the evidence of the lady co-employee was sufficient to prove the

misconduct of the respondent and furnished a full proof justification

for the termination of the services of the respondent.

9. Mr. Paithane, learned counsel for respondent, countered the

submissions on behalf of the petitioners/employers. An endeavour

was made by Mr. Paithane to support the impugned orders by

forcefully canvassing submissions that the allegations against the

respondent were as vague as possible. Even in the written

complaint, the lady co-employee did not disclose the time and place

of alleged harassment nor the specific utterances were disclosed. In

the face of such extremely unsatisfactory allegations and evidence

of the lady co-employee, the Courts below committed no error in not

placing implicit reliance on her version. Mr. Paithane would submit

that the termination being stigmatic, it was incumbent upon the

employer to hold a proper disciplinary proceeding. Instead a farce

of disciplinary proceeding was made and the services of the

respondent were terminated in an extremely high handed manner.

The Labour Court was, therefore, justified in holding that the

petitioners/employers indulged in unfair labour practices under

Item 1(a), (b) and (f) of the Act, 1971.

Vishal Parekar                                                                  ...7





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10. To start with few undisputed facts. The fact that there were

skeleton employees in the office of the petitioners is not much in

dispute. The employer-employee relationship between the

petitioners and respondent and the fact that the lady co-employee

was also employed with the petitioners at the relevant point of time

are, by and large, admitted. Indisputably, the petitioners professed

to terminate the services of the respondent on the basis of the

written complaint and the allegations of harassment made by the

lady co-employee. The petitioners offered to pay compensation and

admittedly the respondent did not accept the same. Indisputably,

the services of the respondent were terminated under letter dated

16th December, 2013. The parties are at issue as to whether the

services were in fact terminated under the said letter dated 16 th

December, 2013 and whether the said termination was preceded by

the inquiry allegedly evidenced by the minutes of the Inquiry

Committee meeting dated 10th December, 2013.

11. In the light of the aforesaid facts, the primary question that

wrenches to the fore is the nature of the termination. The

applicability of the statutory mandate contained in section 25F of

the Industrial Disputes Act, 1947 hinges upon the nature of the

termination. To this end, it may be appropriate to extract the

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purported termination order dated 16th December, 2013, in extenso.

It read as under:-

Sub: Termination of your service.

This is to inform you that, we have received a complaint against you for your arrogant misbehavior and sexual abuse from our staff member.

An inquiry committee was set up and you were called on and present on 10th December, 2013 at PTIF office to justify and clarify the allegations leveled against you. But you refused to cooperate with the committee saying them that you can go ahead with any action you want to take. Since the allegations leveled against you are of very serious nature and cannot be tolerated. Therefore, the committee has decided to terminate your service with immediate effect. You are requested to settle your account within seven days with prior appointment of the secretary or the same will be sent to you as per our calculations.

You are warned not to visit PTIF office without our permission.

12. Evidently, the petitioners professed to terminate the services

of the respondent in the backdrop of the allegations of arrogant

misbehavior and the sexual harassment of the co-employee. The

termination letter adverts to the constitution of Inquiry Committee,

opportunity given to the respondent to explain the allegations and

the alleged non-cooperation of the respondent in the said inquiry

proceedings.

13. In the backdrop of the aforesaid nature of the termination, it

is to be seen whether it falls within the ambit of retrenchment

within the meaning of section 2(oo) of the Act, 1947. Section 2(oo)

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reads as under:-

Sec.2(oo) :- "Retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include -

(a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf.

(bb) termination of the service of the workman as as result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or

(c) termination of the service of a workman on the ground of continued ill-health.

14. On a plain reading, "Retrenchment" means termination by the

employer of the service of a workman for any reason whatsoever

except in two contingencies. One, termination as a result of

punishment inflicted by way of disciplinary action. Two, the

termination on account of the eventualities envisaged by sub-

clauses (a), (b), (bb) and (c) of clause (oo). If the termination is

either by way of disciplinary action or falls within any of the

excluded categories, it would not fall within the ambit of,

"retrenchment".

15. Section 25F of the Act, 1947 stipulates the conditions which

are required to be followed before the workman in any industry who

has been in continuous service for not less than one year under an

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employer is retrenched. Section 25(F) appears under the Chapter

VA of the Act which makes a fasciculous of provisions in respect of

Lay-off and Retrenchment. For applicability of the provisions

contained in section 25F of the Act, 1947, the termination must first

fall within the ambit of, "Retrenchment" as defined under section

2(oo) of the Act, 1947. If it is a case of termination of the service of

an employee as a disciplinary measure, section 25F of the Act has

no application at all.

16. The Labour Court as well as the Industrial Court seem to have

approached the controversy from an incorrect perspective. The

issues of justifiability of the termination order as a disciplinary

measure and retrenchment without following the mandate of

section 25F of the Act, 1947 were unjustifiably intertwined by the

Courts below. Since the termination order refers to the alleged

misconduct on the part of the respondent, the Courts below ought to

have tested the legality and propriety of the termination from the

point of view of its justifiability as a disciplinary measure only.

Importing the issue of non-compliance of the conditions stipulated

in section 25F vitiated the inquiry as it was not the case of the

employer at any point of time that termination was by way of

retrenchment. The termination was simpliciter for the alleged

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misconduct which took action of termination out of the purview of

"retrenchment".

17. Secondly, I find substance in the submission of Mr. Jalisatgi

that the Labour Court and Industrial Court did not properly

appreciate the foundational principle of the labour jurisprudence

that even if the termination is not preceded by a disciplinary

inquiry, the employer has the right to justify the termination by

adducing evidence before the Labour Court. The learned Judge,

Labour Court proceeded to quash and set aside the termination on

the ground that it was not preceded by a lawful inquiry. Where the

employer exercises the right to adduce evidence in justification of

termination, ordinarily, it is not open to the Industrial Adjudicator

to non-suit the employer on the ground that the inquiry was

defective. In such a case the Industrial Adjudicator would be within

his rights in holding that the employer could not justify the

termination. However, the termination can not be set aside solely on

the ground of no inquiry or defective inquiry where the employer

chooses to lead evidence before the Labour Court.

18. The legal position is well settled by a catena of decisions. In

the case of Punjab National Bank Ltd. vs. All India Punjab National

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Bank Employees' Federation and Anr.1, the Supreme Court

enunciated the law as under:-

38] But it follows that if no enquiry has in fact been held by the employer, the issue about the merits of the impugned order of dismissal is at large before the tribunal and, on the evidence adduced before it, the tribunal has to decide for itself whether the misconduct alleged is proved, and if yes, what would be proper order to make. ... . . ....

19. In Delhi Cloth and General Mills Co. vs. Ludh Budh Singh 2 the

legal position was reiterated in the following words:-

60] ........ "If no domestic enquiry had been held by the management or if the management makes it clear that it does not rely upon any domestic enquiry that may have been held by it, it is entitled straightaway adduce evidence before the Tribunal and justifying its action The Tribunal is bound to consider that evidence so adduced before it, on merits, and give a decision thereon. In such a case, it is not necessary for the Tribunal to consider the validity of the domestic enquiry as the employer himself does not rely on it.".....

20. The pronouncement of the Supreme Court in the case of The

Workmen of M/s. Firestone Tyre and Rubber Co. of India Pvt. Ltd.

vs. The Management and Ors.3 culls out the principles which govern

the situation where the employer proposes to lead evidence in

justification of the termination order. The proposition 4 and 5 bear

upon the controversy at hand. They read as under:-

27] ......

(4) Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in

1 AIR 1960 SC 160.

2 AIR 1972 SC 1831.

3 AIR 1973 SC 1227.

Vishal Parekar                                                                                ...13





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order to satisfy itself about the legality and validity of the order, has to give opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action, and it is open to the employee to adduce evidence contra.

(5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the, merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry.

(emphasis supplied)

21. In the case of The Workmen of M/s. Firestone (supra) the

Supreme Court also adverted to the possibility of the employer not

having held any disciplinary inquiry at all and enunciated the law

as under:-

33] If there has been no enquiry held by the employer or if the enquiry is held to be defective, it is open to the employer even now to adduce evidence for the first time before the Tribunal justifying the order of discharge or dismissal. We are not inclined to accept the contention on behalf of the workmen that the right of the employer to adduce evidence before the Tribunal for the first time recognised by this Court in its various decisions, has been taken away. There is no indication in the section that the said right has been abrogated. If the intention of the legislature was to do away with such a right, which has been recognised over a long period of years, as will be noticed by the decisions referred to earlier, the section would have been differently worded. Admittedly there are no express words to that effect; and there is no indication that the section has impliedly changed the law in that respect. Therefore, the position is that even now the.

employer is entitled to adduce evidence for the first three before the Tribunal even if he had held no, enquiry or the enquiry held by him is found to be defective. Of course, an opportunity will have to be given to the workman to lead evidence contra. The stage at which the employer has to ask for such an opportunity,

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has been pointed out by this Court in Delhi and General Mills Co. Ltd. 1972-1 Lab LJ 180= (AIR 1972 SC 1031). No doubt, this procedure may be time consuming, elaborate and cumbersome. As pointed out by this Court in the decision just referred to above, it is open to the Tribunal to deal with the validity of the domestic enquiry, if one has been held as a preliminary issue. If its finding on the subject is in favour of the management, then there will be no occasion for additional evidence being cited by the management. But if the finding on this issue is against the management, the Tribunal will have to give the employer an opportunity to cite additional evidence justifying his action. This right in the, management to sustain its order by adducing independent evidence, before the Tribunal, if no enquiry has been held or if the enquiry is held to be defective, has bean given judicial recognition over a long period of years.

(emphasis supplied)

22. Lastly a useful reference can be made to a Division Bench

judgment in the case of Vajidali T. Kadri vs. M/s. D.D. Shah & Co.4 on

which reliance was placed by Mr. Jalisatgi. In the case of Vajidali

(supra), after adverting to the pronouncement of the Supreme

Court including the aforesaid judgments, it was postulated in no

uncertain terms that even in a case where no inquiry was held prior

to dismissal of the employee, the employer's right to justify the

action by leading necessary evidence in support of such action for

the first time before the Labour Court remains unaffected.

23. This being the position in law, the Labour Court committed an

error in setting aside the termination on the ground that it was not

preceded by the charge-sheet and formal disciplinary inquiry when

4 2007(6) Mh.L.J. 650.

Vishal Parekar                                                                                ...15





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the employer chose to adduce evidence in justification of the

termination order. The learned Member, Industrial Court had also

fallen in error in not correcting the aforesaid mistake, which could

have been legitimately corrected in exercise of revisional

jurisdiction.

24. It is true that the Labour as well as the Industrial Court have

found that the evidence of the lady co-employee was not specific on

the point of sexual harassment, she was allegedly subjected to. Both

the Courts have in terms recorded that the lady co-employee did not

specifically state the words uttered by the respondent and,

therefore, the allegations of misconduct cannot be said to have been

proved.

25. Mr. Paithane, learned counsel for the respondent, would urge

that the aforesaid approach of the Courts below can not be faulted

at. It was urged that the termination of the respondent was wholly

arbitrary and illegal. On the basis of vague and unsubstantiated

allegations the services of the respondent could not have been

abruptly terminated. To lend support to this submission, Mr.

Paithane placed reliance on the decision of the Supreme Court in

the case of Marwari Balika Vidyalaya vs. Asha Srivastava & Ors5.

5   [2019] 2 S.C.R. 722

Vishal Parekar                                                                          ...16





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26. I have perused the judgment in the case of Marwari Balika

(supra). It does not govern the controversy at hand.

27. The veracity of allegations, in a case of the present nature, is a

matter of careful evaluation of evidence. The Court/Tribunal is

required to summon all its forensic skills to separate the truth from

falsehood.

28. I find substance in the submission of Mr. Jalisatgi that the

evidence of a lady co-employee could not have been thrown over-

board for the only reason that she did not state the specific words

with sexual overtones allegedly uttered by the respondent. Absence

of corroboration is also a matter which ought to have been

considered in the backdrop of the attendant facts and

circumstances. As noted above, there were only two employees at

the time of the occurrence. The lady co-employee first gave a

complaint in writing. The petitioners took cognizance of the

complaint and constituted an Inquiry Panel. The question as to who

would speak first in such a situation ought to have been addressed

by the Courts below. Was the evidence of lady co-employee tainted

with inconsistencies or infirmities which would have rendered it

unsafe to place reliance on her testimony was the question the

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learned Judge, Labour Court, was required to pose unto himself. It

does not appear that the Courts below have appreciated the

evidence in a correct perspective and chose to jettison away the

testimony of the lady co-employee on the ground that she did not

specifically state the words allegedly uttered by the respondent,

which constituted sexual harassment.

29. The upshot of the aforesaid consideration is that the

impugned judgment as well as the judgment of the Labour Court

declaring that the petitioners indulged in unfair practices and

setting aside the termination of the respondent deserve to be

quashed and set aside. The complaint is required to be restored to

the file of the Labour Court for afresh decision on the aspects of the

inquiry against the respondent being fair and proper and, if not,

whether the petitioners/employers succeeded in proving the

misconduct of the respondent before the Court and, resultantly,

were justified in terminating the services of the respondent, and, if

not, to what relief the respondent would be entitled to, including the

aspect of back wages. Hence, the petition deserves to be partly

allowed.

Thus, the following order.

Vishal Parekar                                                                 ...18





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                                    ORDER

1] The petition stands partly allowed.

2] The impugned judgment and order passed by the

Industrial Court in Revision Application (ULP) No. 39 of

2021 as well as the judgment and order passed by the Labour

Court in Complaint (ULP) No. 37 of 2014 are quashed and set

aside.

3] The Complaint (ULP) No. 37 of 2014 is restored to the file

of the Labour Court at Thane.

4] The learned Judge, Labour Court at Thane is requested to

decide the complaint afresh after providing an opportunity to

the parties to adduce evidence, including on the aspect of

back wages, keeping in view the aforesaid observations as

regards the right of the employer to justify the termination

before the Court de hors no or defective inquiry.

5] The Labour Court is at liberty to recast the issues if found

necessary.

6] By way of abundant caution, it is clarified that the

observations of this Court on the merits of the allegations are

confined to determine the legality and propriety of the

impugned orders and they may not be construed as an

expression of opinion on the merits of those allegations and

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the Labour Court shall decide the same without being

influenced by those observations.

7] Rule made absolute to the aforesaid extent.

8] In the circumstance, there shall be no order as to costs.

                                         (N. J. JAMADAR, J.)




Vishal Parekar                                                                 ...20