All India Institute Of Medical ... vs O.P. Chauhan And Ors.
2006 Latest Caselaw 2309 Del

JUDGMENT

Shiv Narayan Dhingra, J.

Page 0325

1. By this writ petition, the petitioner has challenged the validity of the award dated 29.7.1998 whereby the Labour Court No. -III, Delhi answered the reference in favor of the respondent No. 1 (hereinafter- the respondent) and directed the reinstatement of the respondent with 50% back wages from October, 1987 till the reinstatement.

2. Briefly the facts are that the respondent was initially appointed as a Lab Attendant in March, 1968 by the petitioner. In October, 1970 the post of Lab Assistant fell vacant and he was temporarily appointed to the post of Lab. Assistant. It was not a promotion but a fresh appointment of the respondent in officiating capacity on the same terms and conditions on which he was appointed as Lab Attendant. The respondent indulged in a theft of Chemicals and equipments from the Laboratory along with his accomplice Pareshwar Prasad and a FIR was registered against him and his accomplice under Sections 379/34/411 at Police Station Vinay Nagar bearing FIR No. 454/77. The incident of theft took place on 27.7.1997. The secuirty guards of petitioner had noticed two bags in the hands of Pareshwar Prasad. The respondent had handed over the articles in bags to his co-accused Pareshwar Prasad and it was noticed by the security guards. The security guards chased Pareshwar Prasad and caught him red handed along with stolen articles. He disclosed receiving stolen articles from the respondent. After this incident the services of the respondent were terminated by the petitioner vide order dated 28.9.1977 invoking Clause 2 (v) of the appointment letter whereunder the services of the respondent could be terminated by giving one months notice or pay in lieu thereof. The respondent was given one month pay in lieu of the notice period and his services were terminated and he was advised to return I.Card etc. The respondent did not challenge this order of 28.9.1977 for 10 years. He was acquitted by the Court of MM vide judgment dated 8.9.1987 and after that he served a notice upon the petitioner dated 22.9.1987 asking the petitioner to reinstate him on the ground that he has been acquitted by the Court of MM. He also asked for continuity of service and full back wages. His application for reinstatement was turned down so he raised an industrial dispute which was referred for adjudication in following terms:

Whether the termination of service of Sh. Om Prakash Chauhan is illegal and or unjustified and if so, to what relief is he entitled and what directions are necessary in this respect?

3. The Labour Court after recording evidence of both the sides came to the conclusion that the petitioner was an industry in view the Bangalore Water Supply and Sewerage Board v. A. Rajappa 1978 (36) FLR 226 case and since the services of the respondent were terminated without payment of retrenchment compensation, his termination was illegal. The plea of the petitioner that the termination of the respondent was simpliciter in accordance with the terms of employment was rejected by the Labour Court holding that Page 0326 the Court could pierce the veil and see the real reason behind the termination. In this case, the real reason behind termination was involvement of respondent in theft case and the management was duty bound to hold an enquiry before terminating the services of respondent. Since no enquiry was held and the respondent had been acquitted by the Criminal Court, the petitioner was bound to reinstate the respondent. The Labour Court directed reinstatement with 50% back wages from October, 1987 till the passing of award.

4. The award of the Labour Court has been challenged by the petitioner on the ground that the petitioner was not an 'industry' and also on the ground that there was no occasion for intervention of the Labour Court since the termination of the respondent was covered under Section 2(oo)(bb). The finding of the Labour Court were perverse and the award was passed ignoring the evidence on record and was contrary to law. The award was without jurisdiction, the reference was itself without jurisdiction and void ab initio.

5. I have heard the counsel for the parties and perused the record. The counsel for petitioner argued that the reference made by the appropriate Government was bad in law for two reasons; one the reference was made after more than ten years of the dismissal of the workman the workman was dismissed in 1977 while the reference was made in 1988 and in view of the latest law laid down by Supreme Court this reference was bad. It is also argued that the judgment of Supreme Court in Safdarjung Hospital has not been overruled and the question of industry has been referred to a larger bench of Judges of the Supreme Court. The petitioner was not an 'industry'. The petitioner was not indulging in any commercial activity but was performing the governmental duty of looking after the health of the people and doing research in the field of medicines and treatment. It is stated that the petitioner institute was primarily an institute of research. The patients are admitted so that the research of the institute gets a helping hand. The petitioner gets huge grants for research. The research budget of petitioner was more than the patient care budget. It is further argued that the trial court erred in not considering the fact that the respondent was involved in a case of theft, he and his accomplices were caught red-handed by the guards of the petitioner. The judgment of the Criminal Court acquitting the respondent does not say that the respondent was falsely implicated but the respondent was acquitted because the Court considered that the proof was not beyond reasonable doubt. The witnesses of the management before the Criminal Court had supported the case and identified the stolen property but this identification was not believed because no specific marks of the AIIMS Hospital was there on Chemicals and because receipts and stock register could not be produced. It is further submitted that such an acquittal does not stand in the way of termination of the services of the respondent the respondent was terminated simpliciter in accordance with the contract of service. It was not a case of retrenchment where retrenchment compensation should have been paid.

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6. The counsel for respondent argued that no evidence to prove misconduct was adduced before the Labour Court. The acquittal of the respondent gives a clean chit to the respondent that he was not involved in the theft. He was terminated because of his involvement in theft. Since he has been acquitted by the Criminal Court, he is entitled for reinstatement with full back wages. The respondent also filed a writ petition bearing WP(C) No. 1348/99 challenging the part of the award by which the respondent had been granted only 50% back wages. He seeks full back wages.

7. It is now settled law that the appropriate Government while referring an industrial dispute must be careful and should not refer those disputes that have become stale or dead. In this case the respondent was dismissed from service on 28.9.1977. He did not send any representation against his dismissal, he did not prefer any appeal against the dismissal, he did not challenge his dismissal before any forum and accepted his dismissal. He was involved in a case of theft and the stolen material was recovered from his accomplice by the guards of the petitioner. A theft case was registered against him. His termination had become settled. He accepted the termination and went to his village where he started doing agricultural work. The dispute of his termination did not survive after 10 years, when he was acquitted by the Criminal Court. There was no reason for the appropriate Government to refer a dead/stale dispute and this reference was without a jurisdiction. In 2006 (3) LLJ 12 Assistant Engineer, CAD, Kota v. Dhan Kumwar, the respondent workman raised an Industrial Dispute after about eight years. The reference of dispute was made to the Labour Court by appropriate Government. The Labour Court awarded reinstatement with 30% back wages which was upheld by the High Court Supreme Court observed that though the law does not prescribe any time limit for the appropriate Government to exercise its powers under Section 10 of the Act, it is not that this power can be exercised at any point of time and to revive matters which had since settled. Power is to be exercised reasonably in a rationale manner and allowed the appeal. In Nedungadi Bank Ltd. v. K.P. Madhavankutty Supreme Court laid down the same law and held the reference of the Industrial Demand by the Government as ex facie bad and incompetent. The appropriate Government should not refer the stale and dead disputes. In Shalimar Works Ltd. v. Workmen Supreme Court held that a delay of four years was fatal and dis-entitled the workman to any relief. In 2006 (3) LLJ 15, UP State Road Transport Corporation v. Babu Ram, Supreme Court again held that a delay of 15 years in raising the dispute was fatal to the case.

8. I consider that in this case the reference was bad in law, the workman had not raised any dispute for 10 years, he had not challenged his involvement in theft before the department for 10 years. The termination of the workmen had become a settled fact. The vacancy of Lab Assistant could not have been Page 0328 kept vacant for long. The department was bound to fill up the vacancy by another person. By referring an industrial dispute after eleven years, the appropriate Government in fact acted contrary to the spirit of Industrial Disputes Act. The Act was enacted to bring Industrial harmony and peace by providing an adjudicating machinery for industrial disputes. It is not meant to disturb industrial peace by racking up stale and dead disputes. I consider that the reference was bad in law and without jurisdiction. The award is liable to be set aside only on this ground.

9. It is true that in this case the management had not held any enquiry and terminated the services of the respondent simpliciter by giving him one months notice pay. The respondent was governed by service conditions as he was a temporary employee of the institute and the following condition was mentioned in his appointment letter

The appointment may be terminated at any time by a month's notice given by either side, viz. the appointee or the appointing authority without assigning any reason. It will be open to the Institute to pay in lieu of notice pay for the period by which the notice falls short of one month. Similarly, if he/she wishes to resign his/her post, he/she may do so by depositing with the Institute pay and allowances in lieu of the notice period by which it falls short of one month and three months in case of permanent employees.

10. I consider that management is not obliged to keep thieves under its employment. There is no doubt that the respondent was acquitted by the Criminal Court but the standards of proof required by a Criminal Court are always different from the standards of conduct which are required to be seen by a management for employing a person. The respondent was working in the laboratory of AIIMS as Lab. Assistant. He was handling all the Chemicals and equipments stored in the laboratory, the Chemicals which are used in the research. Many Chemicals and equipment are quite costly while some may not be costly but very crucial for research. A laboratory is required to be handled by those persons (Lab. Assistants) who are trustworthy and have high integrity and who, protect the property i.e. Chemicals and equipments in the Laboratory from pilferage and wastage. If a Lab Assistant himself is found involved in theft of Chemicals and equipments and caught red handed along with his accomplices by the security guards of the management, the management is well within its right to invoke the relevant clause of service contract and terminate the services of such employee.

11. It would have been worthwhile for the Labour Court to go through the judgment of the Criminal Court to see whether the respondent had been acquitted on the ground that he was falsely implicated or he has been acquitted because of benefit of doubt. A perusal of the judgment of the Criminal Court would show that the Criminal Court observed that since the receipts and stock register of the stolen property, recovered from the accused, were not produced in the Court the property cannot be considered that of the AIIMS. The Criminal Court brushed aside the evidence of the security guards who, had caught the respondent and his accomplices red handed, stating Page 0329 that they were not believable without giving any reason as to why the security guards were not believable. The Criminal Court seemed to be labouring under a conception that poor persons cannot speak truth and only rich and high class are credit-worthy and believable. The Criminal Court without giving any reason disbelieved the testimony of the security guards who had caught the respondent's accomplices red handed with Chemicals and equipments. However, the Labour Court was under an obligation to see at least if, the acquittal was the basis of doubts or it was a clean chit to the respondent stating that he was not involved or it was held that he was falsely implicated.

12. The Labour Court observed that an order of dismissal simpliciter can be considered as a colored order by piercing the veil and looking at the circumstances under which the person was terminated. I consider that where the management shows magnanimity and mercy to a person and does not record the real reasons in the order of his termination so that the person, if wants to work somewhere else and improves himself, he may improve himself, this magnanimity and mercy should not be misconstrued and should not be considered as an illegality. The services of a person can be terminated simpliciter even for those reasons which are not recorded in the order the order would not become illegal. In Rajasthan State Road Transport v. Zakir Hussain Supreme Court observed as under:

The termination order in the instant case would clearly show that the misconduct on the part of the workman-respondent is not the foundation of the order of discharge. For an order to be 'founded' on misconduct, it must be intended to have been passed by way of punishment, that is, it must be intended to chastise or cause pain in body or mind or harm or loss in reputation or money to be concerned worker. Such an intention cannot be spelled out of the present order of discharge. It cannot be regarded as an order of dismissal. Such would be the case when the employer orders discharge in the interests of the Corporation. So, the real criterion which formed the touchstone of a test to determine whether an order of termination of services is an order of discharge simpliciter or amounts to dismissal is the real nature of the order, that is, the intention which it was passed.

13. I, therefore, consider that the observation of the Tribunal that this dismissal was illegal, is bad in law and perverse. As far as the petitioner not being an 'industry' is concerned I would not like to express any opinion in view of the fact that this question is pending before a larger bench of Supreme Court.

14. I consider that the Labour Courts while exercising jurisdiction under Section 10 must be careful and see that they do not put a premium on the persons who sleep and approach the appropriate Government with delay. Similarly, the Labour Court must be careful that the employees of doubtful Page 0330 integrity and the employees who are involved in criminal cases are not thrust upon the management. It is not necessary that in every case the where a person is involved in theft, forgery and where a criminal case is registered, the management has to hold an enquiry and then only terminate the services. The management can always terminate the services in terms of service conditions of an employee, for loss of faith and confidence, where the employee involved is handling sensitive post or a high degree of integrity and honesty is expected from him because of responsibilities.

15. In view of my above discussion, I allow this writ petition. The award dated 29.7.1998, passed by the Labour Court is hereby set aside.