The Punjab National Bank, Ltd. Vs. Its Workmen [1959] INSC 121 (24 September 1959)
GAJENDRAGADKAR, P.B.
SINHA, BHUVNESHWAR P.
SUBBARAO, K.
CITATION: 1960 AIR 160 1960 SCR (1) 806
CITATOR INFO :
F 1960 SC 762 (13) R 1960 SC1262 (4) R 1961 SC 689 (7) R 1961 SC 860 (8) R 1963 SC 601 (6) F 1965 SC 917 (5) R 1965 SC1803 (11) F 1968 SC 231 (14) R 1971 SC2171 (5) R 1971 SC2417 (7,11) R 1972 SC 136 (33) R 1972 SC 277 (10) RF 1972 SC1031 (21,51) E 1973 SC1227 (18,20) F 1978 SC 995 (6,10,12) R 1978 SC1380 (8) RF 1978 SC1428 (18,20) RF 1979 SC1652 (18) RF 1980 SC1896 (148) RF 1981 SC 422 (4) RF 1990 SC1054 (19)
ACT:
Industrial Dispute-Dismissal by employer pending adjudication -Omission to hold proper enquiry or obtain permission of the Tribunal-Such dismissal, if wholly void-Jurisdiction of Tribunal, Scope of-Pen-down strike-Legality_ If disentitles a dismissed employee to reinstatementIndustrial Disputes Act, 1947 (14 of 1947), ss. 2(q), 10, 33, 33A.
HEADNOTE:
The employees of the appellant Bank commenced pen-down strikes, which were followed by a general strike, pending arbitration of an industrial dispute between them. The Government of India intervened and as the result of an agreement that followed the Bank reinstated all the employees except 150, against whom it had positive objections, and the Government referred their cases under s. 10 of the Industrial Disputes Act, 1047, to the Industrial Tribunal for adjudication. The two issues before the Industrial Tribunal were whether the 150 employees had been wrongly dismissed and what wages and allowances would the 807 employees be entitled to on reinstatement. The case of the employees was that the Bank wanted to penalise the active trade union workers by the said dismissals while the Bank maintained that the employees were guilty of participation in illegal strikes intended to paralyse its business and scare away its customers. The Industrial Tribunal did not hear evidence and, by its final award, held that, the strikes being illegal, the Bank was, on that ground alone, justified in dismissing the employees. Even so, it directed the Bank to make certain payments to the employees on compassionate grounds. The Bank as well as the employees appealed. The Labour Appellate Tribunal held that even though the strikes were illegal under s. 23(b) read with s. 24(1) of the Industrial Disputes Act, 1947, the Bank had, by entering into the agreement with the Government of India, waived its right to take penal action against the employees for joining the illegal strikes and that, therefore, an enquiry should be held on additional evidence to decide the disputes on merits. Against this interlocutory order the Bank appealed to this Court and it was held by this Court that while the strikes were no doubt illegal under s. 23(b) of the Act, the orders of dismissal passed by the Bank were no less so under s. 33 of the Act, and it dismissed the appeal. The Appellate Tribunal, thereafter, heard the cases on merits, directed-the reinstatement of 136 of the said employees, but refused to reinstate the rest whom it found guilty of issuing posters and circulars subversive of the credit of the Bank. Both the parties appealed to this Court. Preliminary objections were raised on behalf of the said employees that, (1) in view of the decision of this Court dismissing the Bank's appeal against the said interlocutory order the subsequent inquiry by the Tribunal and the orders of dismissal must be held to be void and, (2) no charges having been admittedly framed nor any proper enquiry held by the Bank against the employees, the orders of dismissal were wholly invalid. It was urged, inter alia, on behalf of the Bank in the appeals that participation in a pen-down strike by itself amounted to misconduct sufficient to disentitle an employee to reinstatement and that the entire body of strikers, being collectively responsible for the publication of the subversive documents in question, the dismissed employees could by no means escape liability.
Held (per curiam), that the preliminary objections must be negatived and the decision of the Appellate Tribunal affirmed with this modification that, in view of its inconsistent findings, the appeal of one of the employees must be allowed.
Per Sinha and Gajendragadkar, JJ.-The purpose the Legislature had in view in enacting s. 33 of the Industrial Disputes Act, 1947, was to maintain the status quo by placing a ban on any action by the employer pending adjudication.
But the jurisdiction conferred on the Industrial Tribunal by S. 33 of the Act was a limited one. Where a proper enquiry had been held and no victimisation or unfair labour practice had been 808 resorted to, the Tribunal in granting permission had only to satisfy itself that there was a Prima facie case against the employee and not to consider the propriety or adequacy of the ,proposed action. But to such permission, when granted, the Tribunal could attach no conditions; it can either grant or refuse it.
The effect of such permission was only to remove the ban imposed by s. 33 of the Act. It could neither validate a dismissal nor prevent it from being challenged in an industrial dispute; but in such a dispute, when raised, the employer could justify its action only on such grounds as were specified in the original charge-sheet and no others.
There was substantial difference between non-compliance with s. 33 of the Act and that with Art. 311(2) of the Constitution. Compliance with s. 33 only avoided the penalty under s. 31(1) of the Act, while compliance with Art. 311(2) of the Constitution made the order of dismissal final.
Atherton West & Co. Ltd. V. Suti Mills Mazdoor Union, [1953] S.C.R. 780, The Automobile Products of India Ltd. v.
Rukmaji Bala, [1955] 1 S.C.R. 1241, Lakshmi Devi Sugar Mills Ltd. v. Pt. Ram Sarup, [1956] S.C.R. 916, Indian lron and Steel Co. Ltd. v. Their Workmen, [1958] S.C.R. 667 and McKenzie & Co. Ltd. v. Its Workmen, [1959] S.C.R. (Suppl.) 222 referred to.
It was not, therefore, correct to contend that noncompliance with s. 33 of the Act could render the orders of dismissal wholly void or take away the jurisdiction of the Tribunal to hold the enquiry. Nor could the failure to hold a proper enquiry have that effect.
Under s. 33A of the Act, as construed by this Court, the jurisdiction of the Tribunal was not limited to an enquiry as to the contravention of s. 33 of the Act. Even if such contravention was proved, the employer could still justify the impugned dismissal on merits and there was no difference in this regard between a reference under s. 10 of the Act and a dispute raised under s. 33A of the Act.
The Automobile Products of India Ltd. v. Rukmaji Bala, [1955] 1 S.C.R. 1241 and Equitable Coal Co.Ltd. v. Algu Singh, A.I.R. 1958 S C. 761, referred to.
Although there can be no doubt that in proper cases the Industrial Tribunal has the power to direct reinstatement in disputes arising out of dismissal of employees, it is not possible to Jay down any hard and fast rule to be applied to such cases. In coming to its decision, the Industrial Tribunal has to reconcile the conflicting claims of the employer and the employee,--the latter's right to protection against wrongful dismissal, and in such a case the normal rule is reinstatement, and the interest and safety of the industry itself. Its approach to such a problem cannot, therefore, be legalistic or doctrinaire or as is permissible 809 in a civil court deciding the validity of dismissals under S. 240 of the Government of India Act, 1935, or Art. 311(2) of the Constitution.
Western India Automobile Association v. Industrial Tribunal, Bombay, [1949] F.C.R. 321 and Buckingham & Carnatic Mills Ltd. v. Their Workmen, (1955) 11 L.L.J. 314, referred to.
If no enquiry is held by the employer before it passes an order of dismissal, the propriety of such dismissal can be adjudged by the Tribunal on evidence and no employer can be allowed to object to it on the ground that it interferes with the exercise of its managerial function.
The Madras Electric Tramways, (1904) Ltd. Madras v. Their Workers, (1951) 11 L.L.J. 204, distinguished and held inapplicable.
The propriety of reinstatement in a case of wrongful or illegal dismissal is normally a question of fact and where the Industrial Tribunal on a proper consideration of the relevant factors refuses to pass such an order this Court would be reluctant, in absence of any general or substantial question of law, to interfere under Art. 136 of the Constitution.
A pen-down strike falls within the definition of a strike contained in S. 2(q) of the Industrial Disputes Art, 1947, and is not Per se illegal. Even if it might involve an element of civil trespass as in the present case, that cannot disentitle an employee to reinstatement. M/s. Burn & Co. Ltd. v. Their Workmen, A.I.R. 1959 S.C. 529, referred to.
It is not safe to extend principles of American decisions to such a strike without a careful scrutiny of the relevant provisions of the American Statute and the facts on which the said decisions are based.
National Labour Relations Board v. Fansteel Metallurgical Corporation, 306 U.S. 238, considered and held inapplicable.
William Truax v. Michael Corrigan, 66 Law. Ed. 311, referred to.
Since in the instant case, the peaceful and non-violent conduct of the strikers, as found by the Appellate Tribunal, could not amount to criminal trespass within, the meaning of s. 441 of the Indian Penal Code , mere participation in the pen-down strike did not disentitle them to reinstatement.
T. H. Bird v. King-emperor, (1934) L.R. XIII Pat. 268, held inapplicable.
The mere fact that the employer had engaged new hands during the strike, was not sufficient to defeat the claim to reinstatement of such employees as were subsequently found to have been wrongfully dismissed.
National Transport and General Co. Ltd. v. The Workmen, C.A. NO. 312 of 1956, decided on January 22, 1957, referred to.
810 But where, as in the instant case, the Appellate Tribunal took a common-sense view of the matter of evidence and held certain office-bearers and leaders of the union liable for subversive acts and refused to extend such liability to the entire body of strikers on theoretical and academic grounds, no principles of natural justice could be said to have been contravened by it.
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 519 to 521 of 1958.
Appeal by special leave from the decision dated January 4,1955, of the Labour Appellate Tribunal of India, Calcutta, in Appeals Nos. Cal. 69152 and Cal. 70/52.
AND Civil Appeal No. 521 of 1958.
Appeal by special leave from the decision dated January 4, 1955, of the Labour Appellate Tribunal of India, Calcutta in Appeal No. Cal 70/52.
Ram Lal Anand and Naunit Lal, for the appellant in C.A. No.
519 of 58.
H. N. Sanyal, Additional Solicitor-General of India, Ram Lal Anand and Naunit Lal, for the appellants in C.A. No. 520/58 and respondents in C.A. NO. 521 of 58.
M. C. Setalvad, Attorney-General for India, C. K. Daphtary, Solicitor-General, M. K. Ramamurthi, Syed Mahummud, B. K. Garg, Miss. A. B. Varma and Janardan Sharma, for respondent No. 1 in C.A. Nos. 519 and 520 of 58 and appellant in C.A. No. 521 of 58.
Hardyal Hardy and M. B. Krishna Pillai, for respondent No. 2 in C.As, Nos. 519 & 520 of 58.
1959. September 24. The judgment of Sinha and Gajendragadkar, JJ., was delivered by Gajendragadkar, J.
Subba Rao, J., delivered a separate judgment.
J.GAJENDRAGADKAR J.-These three appeals arise out of an industrial dispute between the Punjab National Bank, Ltd.
(hereinafter called the Bank) and two sets of its employees represented by the. All-India Punjab National Bank Employees' Federation (hereinafter called the Federation) and the U.P. Bank Employees' Union hereinafter called the Union) respectively.
811 On July 2, 1951, this dispute was referred by the Central Government for adjudication to the industrial tribunal of which Mr. A. N. Sen, a retired Judge of,, the Calcutta High Court, was the sole member. It raised two issues. The first was whether the 150 workmen mentioned in Sch. 11 attached to the reference had been wrongfully dismissed by the Bank, and the second had reference to the claim for reinstatement and payment of wages and allowances from the date of dismissal to the date of reinstatement. The reference thus made has gone through a long and protracted career and the final decision of the dispute would be reached after we dispose of the present appeals. In order to appreciate the points raised for our decision in these appeals it is necessary to indicate briefly at the outset the salient points of controversy between the parties, the findings made by the original tribunal, the conclusions reached by the Labour Appellate Tribunal in its interlocutory and final judgments and the decision of this Court in the appeal which had been brought before it by the Bank against the interlocutory judgment of the Labour Appellate Tribunal.
The 150 employees, whose dismissal has given rise to the present dispute are spread over several branches of the Bank. 52 of them work at its head office in Delhi, 15 in Bombay, 73 in East Punjab and 10 in U.P. 140 workmen in the first three areas are represented by the Federation while the last 10 in U.P. are represented by the Union. All of these employees took part in strike which, according to the Bank, were illegal. The strikes in which the two respective groups of workmen took part were, however, for different reasons.
The strike in which the Federation took part was the result of the suspension by the Bank of its typist Sabharwal employed in the Delhi Branch of the Bank on April 17, 1951.
It appears that Sabharwal, who was the Secretary of the Punjab National Bank Employees' Union, Delhi, had applied for leave for seven days on April 3, 1951, but his application was rejected; even so he absented himself from duty and went to Bombay. As soon as he resumed his duties on 812 April 14, 1951, he was supplied with a written chargesheet for absence without leave which he refused to accept. It was then sent to him by registered post, and on April 17 he was suspended. This suspension was followed by an immediate pen-down strike at the head office of the Delhi Branch subsequent to which the Bank suspended 60 other employees.
This led to a general strike in Delhi and many other branches and it commenced at different dates from April 18 to 20, 1951. On April 21-22, 1951, the Bank issued notices calling upon all striking members of the staff to report for duty by 10 a. m. on April 24, 1951, and it warned them that if they did not comply with the notice it would be taken that they had voluntarily ceased to be its employees and their services would be deemed to have terminated from that date. This was followed by another notice on April 24 which announced that the strikers who had failed to report for duty as aforesaid had ceased to be the employees of the Bank from April 24, 1951. An option was, however, given to the strikers who were still willing to rejoin duty to apply in that behalf and explain their action in staying away. It is common ground that the 140 employees represented by the Federation who had taken part in the strike were dismissed by the Bank for absence due to the strike. That is the genesis of the dispute between the Bank and the Federation in relation to the 140 employees of the Bank.
The strike in which the remaining 10 employees of the Bank from the U.P. branches are concerned commenced on April 23, 1951. This strike was in pursuance of the strike notice served by the Union on the Bank on April 22, 1951. This pen-down strike was a part of the general strike which affected not only the Bank but also the Allahabad Bank and other banks in the U.P. region. The Regional Labour Commissioner of the U.P. Government who intervened suggested that the general strike should be called off and recommended that some of the demands made by the strikers should be referred to the industrial tribunal for adjudication; in accordance with this request, on April 30, 1951, the strike committee decided to call off the strike and 813 Advised workmen to join duty from May Is 1951. This advice, however, did not reach all the branches in time with the result that some of the employees of the Bank offered to resume work on May 3,1951. The other banks in the U.P. region took back their employees who rejoined on May 3, but the Bank refused to take back its employees on the ground that they' had not offered to rejoin on or before the date fixed; and so it proceeded to dismiss them. The dismissal of the said 10 employees is also the subject-matter of the present reference. That is bow the reference is concerned with the dismissal of 150 employees of the Bank in all.
The strikes in question which affected the head office and the large number of branches of the Bank operating in more than one State and a very large number of its employees caused public concern, and so the Prime Minister and the Labour Department of the Central Government thought it necessary to intervene; and a conference was arranged at New Delhi between the officers of the Government and the Bank.
To this conference the representatives of the Federation or the Union were, however, not invited. This conference led to an agreement as a result of which the Bank undertook to reinstate all its employees who had taken part in the strikes except those to whose reinstatement it had " positive objections". This, however, was subject to the reservation that the number of such employees was not to exceed 150 and that their case,-, would be referred by the Central Government for adjudication by a tribunal. This agreement was the result of several meetings between the representatives of the Bank and the Labour Department of the Central Government and it was reached on or about May 9, 1951.
Thereafter the head office of the Bank sent a circular letter to all its branches calling for names of the employees who according to the branch managers could not be considered for reinstatement. The list of such employees received by the head office from the respective managers of its branches was examined by the head office and the Bank then compiled the 103 814 list of 150 workmen whom it was not prepared to reinstate.
This list was in due course communicated by the Bank to the Central Government; and in pursuance of the agreement aforesaid the Central Government referred the dispute in respect of the said 150 workmen for adjudication before the tribunal by its notification issued on July 2, 1951.
Before the tribunal the case for the Federation and the Union was that the refusal of the Bank to take back the 150 workmen in question was a part of the concerted and deliberate plan adopted by the management of the Bank for victimising the President, the Vice-President, the General Secretary and Secretaries and Treasurer of the Federation and of the working committees of the different trade unions of workers and the members of the strike committees, and it showed that the sole object of the Bank in refusing to take back those employees was to teach a lesson to the Federation and -the Union and to penalise all active trade union workers who supported the cause of the employees.
On the other hand, the Bank contended that the strikes in which the 150 employees had participated were illegal and had been resorted to not with a view to obtain relief for the employees but with a view to paralyse the business of the Bank and to scare away its customers. The Bank further alleged that the said 150 employees were guilty of " unpardonable acts of violence, intimidation, coercion and victimisation." The tribunal gave two interim awards by which it directed the Bank to make some payments to the 150 employees by way of allowance pending the final disposal of the dispute. On February 2, 1952, the tribunal pronounced its final award.
It held that the strikes were illegal and that the' Bank was entitled to dismiss the employees solely on the ground that the said employees had participated in an illegal strike.
On this view the tribunal did not think it necessary to allow evidence to be given on the question as to whether some of the strikers were guilty of specific subversive or violent acts. It also did not allow 815 evidence to be led by workmen in support of their plea that their dismissal was the result of victimisation. It decided the dispute on the sole ground, that the strikes were illegal and participation in illegal strikes justified the dismissal of the employees. Even so the tribunal made an order directing the Bank to pay certain amounts to the said employees on compassionate grounds.
The direction issued by the tribunal for the payment of the said amount was challenged by the Bank by its appeal (No. 25 of 1952) before the Labour Appellate Tribunal (hereinafter called the appellate tribunal), whereas the decision of the tribunal that the 150 employees were not entitled to reinstatement was challenged by the two sets of employees by two different appeals (Nos. 69 and 70 of 1952). The appellate tribunal recorded its interlocutary decision on September 22, 1952. As a result of this decision the dispute was set down for further hearing on the points indicated by it. It was urged by the Bank before the appellate tribunal as a preliminary objection that the appeals preferred by the employees were incompetent. This objection was overruled. The appellate tribunal then proceeded to consider two questions of law, (1) whether an employer has the right to dismiss a workman for his absence from duty by reason of his mere participation in an illegal strike, and (2) if he has, can the tribunal scrutinise the exercise of that right and grant relief to such a workman when it comes to the conclusion that the right has been exercised capriciously or by unfair labour practice. The appellate tribunal held that the strike started by the Federation was illegal under s. 23 (b) read with s. 24 (1) of the Industrial Disputes Act, 1947 (14 of 1947) (hereinafter called the Act). It appears that on February 21, 1950, an industrial dispute between the Bank and the Federation had been referred to the arbitration of Mr.
Campbell Puri, and whilst the proceedings in the said reference were pending before the tribunal the strike was commenced on or about April 17, 1951. That is why the strike was illegal. The appellate tribunal, however, held that, even if mere participation 816 in an illegal strike by workmen is assumed to give the employer certain rights against the striking workmen, the employer can waive these rights, that is to say, rafrain from exercising those rights against the workmen. According to the appellate tribunal such waiver or relinquishment can be inferred from conduct, and it thought that the conduct of the Bank evidenced by the agreement which it reached with the Central Government on or about May 9, 1951, unambiguously proved that it had waived or relinquished its rights to take any penal action against its employees merely for their participation in the illegal strike. In other words, the effect of the findings of the appellate tribunal was that, though the strike was illegal, by its conduct the Bank had precluded itself from exercising its alleged right to dismiss its employees for their participation in such an illegal strike.
The appellate tribunal also considered the general question of law as to whether participation in an illegal strike can be said to deserve dismissal of the striking workmen. It took the view that an illegal strike absolves the liability of the employer to pay to its employees wages during the period of absence of the striking workmen, but that it cannot be stated as a general proposition that participation in an illegal strike would by itself necessarily involve the penalty of dismissal. The Bank attempted to justify the dismissal in the present case by urging that the 150 employees were guilty of violent or subversive acts but the appellate tribunal held that it was not open to the Bank at that stage to plead in justification of their dismissal any such acts of violence or subversive acts. " There is abundant authority ", observed the appellate, tribunal, " for the proposition that an employer can justify before the tribunal a dismissal only on the ground on which he purported to dismiss him and not a ground different from it ". That is why in the end the appellate tribunal held that the dismissals were wrongful. The appellate tribunal had no doubt that mere participation by a workman in an illegal strike or his absence due to such participation does not entitle an employer to dismiss him and that it is 817 open to a tribunal to order reinstatement in a proper case.
Having reached this conclusion the appellate tribunal observed that "though in the case of wrongful dismissals the normal rule is that the employees wrongfully dismissed should be reinstated, it would nevertheless be necessary to consider the question of reinstatement in the case of each individual employee in the light of requirements of social justice and fair play for which the employee claims and industrial peace and discipline which the employer emphasizes." In order to decide the cases of the several employees from this twofold point of view the appellate tribunal thought it was necessary to allow the parties to lead additional evidence on relevant points. The employees wanted to lead evidence in support of their case of victimisation and they were allowed to do so by the appellate tribunal. The Bank wanted to lead evidence on five points. The appellate tribunal held that evidence on items (3) and (5) would be irrelevant and it thought that item (4) was too vague. That is why 'the Bank was allowed to lead evidence only in respect of item (2) and some heads mentioned in item (1). In the result opportunity was given to the parties to lead evidence on the following points: (1) victimisation, (2) past service records of the 150 employees, (3) conduct of those 150 employees or any of them during the strike confined to acts of violence, intimidating loyal workers and acts subversive of the credit of the Bank, (4) employment which any of those 150 persons got after this dismissal, the period during which they were in employment and the wages or emoluments they received. The appellate tribunal then directed the Bank to file a statement within a month giving particulars of the acts confined to the matters on which the Bank was allowed to lead evidence in respect of each one of the 150 employees after supplying a copy of the same, one to the Federation and one to the Union. In the meanwhile the appellate tribunal directed the Bank to make interim payments to the employees as indicated in its order.
This interlocutary judgment was challenged by the Bank before this Court by its appeal under Art. 136 818 of the Constitution. On behalf of the Bank it was urged that the conclusion of the appellate tribunal that the Bank had condoned the illegal strike by its workmen was unjustified and that it was open to the Bank to rely upon the illegal strike as justifying the dismissal of the said workmen. The case of the Bank thus was that the order passed by the appellate tribunal setting down the dispute for further enquiry was illegal and should be set aside.
The judgment of this Court delivered by Patanjali Sastri, C. J., shows that this Court thought it unnecessary to express any opinion on the question of condonation or waiver of the illegal strike because, in its opinion, even if there was no such condonation or waiver and even if it was open to the Bank to rely upon the illegal strike as a valid ground for dismissing its employees, there was no doubt that the order of dismissal was illegal having regard to the provisions of s. 33 of the Act. The said section furnished a short answer to the Bank's contention that the appellate tribunal had no jurisdiction to order reinstatement of the 150 workmen. In other words, just as the strike of the employees was illegal so was the order of dismissal passed by the Bank illegal and for a similar reason. S. 23(b) of the Act made the strike illegal while s. 33 of the Act made the dismissal also illegal. In the result the appeal preferred by the Bank was dismissed; and it was held that there was no substance in the plea of the Bank that the appellate tribunal had no jurisdiction to direct reinstatement of the employees. This judgment was pronounced on April 10, 1953.
The proceedings before the appellate tribunal were subsequently resumed and they terminated on January 4, 1955, when the appellate tribunal directed the reinstatement of the 136 employees and passed incidental orders about the payment of their wages. It refused to reinstate the remaining 14 employees but passed orders in regard to payment of compensation even in their cases. Before the appellate tribunal four general points were sought to be raised at this subsequent hearing. The first was in regard to the invalidity of the reference itself. The second was in regard to 819 the ultra vires character of the relevant provisions of the Act. Both these contentions were not allowed to be raised by the appellate tribunal and they have not been urged before us either. The third contention' raised was that both the strikes were not bona fide and so the striking workmen were not entitled to reinstatement; and the last contention was that the pen-down strike was illegal and participation in it should be considered as a circumstance disqualifying the strikers from reinstatement. The appellate tribunal has held that the strikes in question were bona fide and that mere participation in the pen-down strike cannot be treated as a valid ground for refusing reinstatement to the strikers. It considered the evidence led by the parties in regard to the character of the strike, and it held that the definite instruction issued to the employees was to continue occupation of their seats till the police intervened and threatened to arrest and so it was not prepared to accept the employees' case that the pen-down strikers "vacated their seats on the mere asking by the management" According to the finding, the persons who took part in the pen-down strike not only ceased to work but continued to occupy their seats. The appellate tribunal also found that the pen-down strikers were quiet and peaceful, that no slogans were shouted, no attempt at violence or coercion was made and that they simply occupied their seats without doing any work.
It was conceded before the appellate tribunal that pen-down strike falls within the definition of strike prescribed by s. 2(q) of the Act; but it was urged that the act of not vacating their seats when asked by the management to do so introduced an element of illegality and made the strikers liable in a civil court for trespass. The appellate tribunal was not impressed with this argument but it held that even if the striking workmen are assumed to have made themselves liable for civil trespass that itself would not be sufficient ground for refusing reinstatement.
It appears that the Bank relied upon several documents to show that the employees were guilty of subversive actions during the course of the strike. The 820 appellate tribunal was not satisfied that these documents were genuine and could be effectively pressed into service by the Bank in support of its case. It was also urged by the Bank that during the course of the strike posters and circulars were issued which were clearly subversive of the credit of the Bank and it was contended that employees who were guilty of issuing such posters and circulars did not deserve reinstatement. The appellate tribunal examined these documents and held that three of them amounted to subversive acts. They are Exs. 255(a), 255(c) and 302. In regard to Ex. 302 the findings recorded by the appellate tribunal in two places of its decision are somewhat inconsistent; but the operative portion of the decision shows that the appellate tribunal was inclined to hold that Ex. 302 was also objectionable and that it amounted to a subversive act. The rest of the documents no doubt used strong and intemperate language but the appellate tribunal was not prepared to treat them as constituting subversive activity. On this finding a question which arose before the appellate tribunal was : Who should be held responsible for the offending documents ? The appellate tribunal was not prepared to hold all the 150 employees responsible for them.
In this connection it considered the statement made by H. N. Puri in this evidence and it field that since Puri had admitted that he consulted 11 specified persons in preparing Exs. 255(a) and 255(c) as well as other documents they must share the responsibility for the said documents along with Puri. Similarly the appellate tribunal held that the persons who were shown to have been responsible for Ex. 302 must be treated on the same basis. It was as a result of this finding that the appellate tribunal refused to direct reinstatement of 14 employees. In regard to the remaining 136 employees the appellate tribunal held that it would not be right to impute the responsibility for the publication of the three subversive documents to them merely because they were members of the working committee or were otherwise active leaders of the Union. The appellate tribunal the considered the voluminous evidence led by the parties in respect 821 of each one of the 150 employees, and it held that in regard to the 136 employees no case had been made out by the Bank for refusing them reinstatement.
It is clear from the decision of the appellate tribunal that it was not at all satisfied with a substantial part ,of the documentary evidence adduced by, the Bank. It held that the affidavits filed by the Bank were sometimes prepared en masse and the deponents simply put their signatures on them.
In most of the affidavits there were blank spaces for the name, parentage and age of the deponents and they have been subsequently filled up in ink. Some of them, though sworn at different places, used identical language; while in some others material additions and alterations have been made which do not bear the initials either of the deponents or of the oath commissioner. It appeared to the appellate tribunal that some of the statements made by the witnesses of the Bank showed that their affidavits had been prepared by the Bank's lawyers and they simply put their signatures thereon and affirmed them before the oath commissioner.
Indeed the appellate tribunal apparently thought that there was some force in the contention raised by the employees that some of the documents produced by the Bank had been manufactured or tampered with long after the strike was over, It has noticed the argument urged by the Bank that even if it was so the Bank cannot be condemned for the act or acts of its branch managers in that behalf. This argument did not appeal to, the appellate tribunal. Thus the decision of the appellate tribunal substantially upheld the case made by the employees in that it directed the reinstatement of the 136 out of the 150' employees and ordered payment of compensation to the remaining 14 whose reinstatement was not granted.
This decision has given rise to the three present appeals before us. Civil Appeal No. 519 of 1958 has been filed by the Bank against the order of reinstatement in respect of 126 employees represented by the Federation. Similarly Civil Appeal No. 520 of 1958 has been filed by the Bank against the order directing 104 822 the reinstatement of 10 employees represented by the Union;
and Civil Appeal No. 521 of 1958 has been filed by the Federation on behalf of the 14 employees the claim for whose reinstatement has been rejected. In regard to the first two appeals preferred by the Bank special leave was granted to the Bank on February 21, 1958, limited to grounds (b), (c), (d), (f) and (g) set out in paragraph 162 of its petitions.
These grounds are:(b) Whether employees, who have been propagating against the stability and solvency of the Bank by propaganda oral as well as written through open letters, posters, leaflets and hand-bills amongst the customers and constituents of the Bank and the public at large before, during and after an illegal strike are entitled to an order of reinstatement ? (c) Whether after the declaration of an illegal strike, forcible occupation of the seats and refusal to vacate them, when ordered to do so by the Management, does not constitute as act of criminal trespass, it having been held by the appellate tribunal that the employees formed a large riotous assembly in and outside the premises of the Bank and delivered fiery and provocative speeches to accompaniment of scurrilous slogans directed against the institution and its high officers with a view to render impossible the business of the institution, are entitled to an order of reinstatement ? (d) Whether a 'pen-down' strike of such a character does not contravene the provisions of the law of the land and is exempted under the Trade Unions Act or the Industrial Disputes Act ? (f ) Whether employees, who, notwithstanding the fact that they resorted to an illegal strike and were guilty of rioting, had been invited by the Management to come back and resume work and who spurned at this offer and in so many words treated it with contempt and whose places had, therefore, to be replaced by fresh recruits are entitled to an order that those fresh recruits be dismissed and replaced by the strikers ? 23 (g) Whether it is open to the employees of a concern to raise with their Employers a question as to whether the Employers should employ in their service employees of a concern other than their own and whether such a question constitutes an 'industrial dispute' within the meaning of the Industrial Disputes Act ? It may be mentioned that the Bank's petitions had raised several other grounds in paragraph 162 -but leave has not been granted to the Bank to raise any of them.
Almost a month and a half after limited leave was thus granted to the Bank the Federation filed its petition for special leave on April 4, 1955, and it applied for condonation of delay made in presenting the petition. On April 9, 1956, this Court granted the employees' application for condonation of delay and gave special leave to them to prefer their appeal. This leave has not been limited to any particular grounds. Broadly stated these are the relevant facts which give rise to the three present appeals.
Before dealing with the merits of these appeals we must consider two preliminary objections raised by the learned Attorney-General on behalf of the employees. He has claimed that if these objections are upheld the Bank's appeals would have to be dismissed and the employees' appeal allowed without considering the merits of the orders under appeal.
In pressing these objections he urged that the questions raised were of considerable importance, and, though he conceded that some aspects of the matter were covered by the previous decisions of this Court, he requested us to examine the whole question afresh once more. We would accordingly deal with these contentions at some length.
The first contention is that as a result of the decision of this Court in the appeal preferred by the Bank against the interlocutary judgment of the appellate tribunal, the whole of the enquiry held by the said tribunal pursuant to the said interlocutary judgment is invalid and infructuous.
This Court has held that the dismissal of the 150 employees is illegal having 824 regard to the provisions of s. 33 of the Act; if the dismissal is illegal it is void and inoperative and as such it cannot be said to have terminated the relationship of master and servant between the Bank and its employees.
Despite the said order of dismissal the employees continued to be in the employment of the, Bank and are entitled to reinstatement without any further enquiry. That, it is said, is the effect of the Bank's failure to comply with the provisions of s. 33.
It is next contended that the Bank does not dispute the fact that it had held no enquiry into the alleged misconduct of its employees before it passed the impugned: orders of dismissal against them. It is well established that even where an employer is justified in terminating the services of his employees he is bound to give them a charge-sheet and hold a proper enquiry at which they would have, a chance to meet the said charge-sheet. This requirement is universally treated as consistent with natural justice and fairplay and since the Bank has not complied with it the impugned orders of dismissal are wholly invalid for this additional reason;
and the result again would be that the said orders are inoperative and void and the employees are entitled to reinstatement as a matter of course.
In support of this argument reliance has been placed on the decision of the Privy Council in the case of The High Commissioner for India and High Commissioner for Pakistan and I.M. Lall (1). This decision holds that the order of dismissal passed against a person who is a member of the Civil Service of the Crown in India without complying with the mandatory relevant provisions of s. 240 of the Government of India Act, 1935, is void and inoperative, and that the Civil Servant against whom such an order is passed is entitled to a declaration that he remained a member of the Indian Civil Service at the date of the institution of the suit in which he challenged the validity of the impugned order. Similarly in Khem Chand v. The Union of India(2), this Court has held that an order of dismissal passed against a public servant specified in Art. 311(a)with out complying with the mandatory (1) 75 1. A. 225.
(2) [1958] S.C.R. 1080.
825 provisions of Art. 311 (2) is void and that the public servant sought to be dismissed by such an invalid order continued to be a member of the service at the date of the institution of the suit. It is in the light of these decisions that the learned Attorney-General asks us to hold that the relationship between the Bank and its employees remains wholly unaffected by the' orders of dismissal passed by the Bank against them; and so, as soon as the orders are held to be void nothing more remains to be done but to make a declaration about the the continuance of the relationship of master and servant between the parties and to direct reinstatement. Thus presented the argument no doubt appears prima facie to be attractive; but in our opinion, a careful examination of the relevant sections of the Act shows that it is not valid.
The three sections of the Act which are relevant are ss. 33, 33A and 10. Let us first consider s. 33. This section has undergone several changes but we are concerned with it as it stood in 1951. It provides inter alia that during the pendency of any proceedings before a tribunal in respect of any industrial dispute no employer shall discharge or punish, whether by dismissal or otherwise, any workman concerned in such dispute save with the express permission in writing of the tribunal. It is clear that in cases to which this section applies a ban has been imposed on the power of the employer to dismiss his employees -save with the express permission in writing of the ,tribunal. The object of the Legislature in enacting this section is obvious. By imposing the ban s. 33 attempts to provide for the continuance and termination of the pending proceedings in a peaceful atmosphere undisturbed by any causes of friction between the employer and his employees. In substance it. insists upon the maintenance of the status quo pending the disposal of the industrial dispute between the parties; nevertheless it recognises that occasions may arise when the employer may be justified in discharging or punishing by dismissal his employees; and so it allows the employer to take such action subject to the condition that before doing so he must obtain the 826 express permission in writing of the tribunal. It is true that the ban is imposed in terms which are mandatory and s.
31(1) makes the contravention of the provisions of s. 33 an offence punishable as prescribed therein. But the question which calls for our decision is: What is the effect of such contravention on the decision of the industrial dispute arising from it ? Where an application is made by the employer for the requisite permission under s. 33 the jurisdiction of the tribunal in dealing with such an application is limited. It has to consider whether a prima facie case has been made out by the employer for the dismissal of the employee in question. If the employer has held a proper enquiry into the alleged misconduct of the employee, and if it does not appear that the proposed dismissal of the employee amounts to victimisation or an unfair labour practice, the tribunal has to limit its enquiry only to the question as to whether a prima facie case has been made out or not. In these proceedings it is not open to the tribunal to consider whether the order proposed to be passed by the employer is proper or adequate or whether it errs on the side of excessive severity; nor can the tribunal grant permission, subject to certain conditions, which it may deem to be fair.
It has merely to consider the prima facie aspect of the matter and either grant the permission or refuse it according as it holds that a prima facie case is or is not made out by the employer.
But it is significant that even if the requisite permission is granted to the employer under s. 33 that would not be the end of the matter. It is not as if the permission granted under s. 33 validates the order of dismissal. It merely removes the ban; and so the validity of the order of dismissal still can be, and often is, challenged by the union by raising an industrial dispute in that behalf. The effect of compliance with the provisions of s. 33 is thus substantially different from the effect of compliance with s. 240 of the Government of India Act, 1935, or Art. 311(2) of the Constitution. In the latter classes of cases, an order of dismissal passed after duly complying with the 827 relevant statutory provisions is final and its validity or propriety is no longer open to dispute; but in the case of s. 33 the removal -of the ban merely enables the employer to make an order of dismissal and thus avoid incurring the penalty imposed by s. 31(1). But if an industrial dispute is raised on such a dismissal, the, order of dismissal passed even with the requiste permission obtained under s.
33 has to face the scrutiny of the tribunal.
The decisions of this Court show that this position is well established. In Atherton West & Co. Ltd. v. Suti Mills Mazdoor Union (1) this Court was dealing with the provisions of cl. 23 of the relevant U. P. Government notification which is similar to the provisions of s. 33 of the Act. " The enquiry to be conducted by the Regional Conciliation Officer under the said clause ", observed Bhagwati, J., " was not an enquiry into an industrial dispute as to the non-employment of workmen who was sought to be discharged or dismissed which industrial dispute would only arise after an employer, his agent or manager discharged or dismissed the workman in accordance with the written permission obtained from the officer concerned. The only effect of obtaining permission from the officer concerned was to remove the ban imposed on the employer. But the order of dismissal passed after obtaining the requisite permission can still become the subject-matter of an industrial dispute under s. 2(k) of the Act and the workman who has been dismissed would be entitled to have the industrial dispute referred to the appropriate authority. " In The Automobile Products of India, Ltd. v. Rukmaji Bala & Ors. (2), this Court was dealing with a similar problem posed by the provisions of s. 22 of Act 48 of 1950, and s. 33 of the Act. Dealing with the effect of these sections this Court held that the object of s. 33 was to protect the workmen against the victimisation by the employer and to ensure the termination of the proceedings in connection with the industrial disputes in a peaceful atmosphere. That being so, all that the tribunal, exercising its jurisdiction under s. 33, is (1) [1953] S.C.R. 780, (2) [1955] 1 S.C.R. 1241.
828 required to do is to grant or withhold the permission, that is to say, either to lift or to maintain the ban. This section does not confer any power on the tribunal 'to adjudicate upon any other dispute or to impose conditions as a prerequisite for granting the permission asked for by the employer. The same view has been ,expressed in Lakshmi Devi Sugar Mills Ltd. v. Pt. Ram Sarup (1).
In cases where an industrial dispute is raised on the ground of dismissal and it is referred to the tribunal for adjudication,-the tribunal naturally wants to know whether the impugned dismissal was preceded by a proper enquiry or not. Where such a proper enquiry has been held in accordance with the provisions of the relevant standing orders and it does not appear that the employer was guilty of victimisation or any unfair labour practice, that tribunal is generally reluctant to interfere with the impugned order. The limits of the tribunal's jurisdiction in dealing with such industrial disputes have been recently considered by this Court in the -Indian Iron & Steel Co.
Ltd. v. Their Workmen (2 ) and it has been held that the powers of the tribunal to interfere with cases of dismissal are not unlimited because the tribunal does not act as a court of appeal and substitute its own judgment for that of the management. In this judgment this Court has indicated the classes of cases in which the tribunal would be justified in interfering with the impugned order of dismissal. It would and should interfere when there is want of good faith, when there is victimisation or unfair labour practice, when the management has been guilty of a basic error or violation of the principle of natural justice, or when, on the materials, the finding of the management is completely baseless or perverse. The same view has been again expressed by this Court in O. McKenzie & Co., Ltd., and Its Workmen (3).
There is another principle which has to be borne in mind when the tribunal deals with an industrial dispute arising from the dismissal of an employee. We have already pointed out that before an employer can (1) [1956] S.C.R. 916. (2) [1958] S.C.R. 667.
(3) (1959) 1 L.L.J. 285.
829 dismiss his employee he has to hold a proper enquiry into the alleged misconduct of the employee and that such an enquiry must always begin with the supply of a specific charge-sheet to the employee. In Lakshmi Devi Sugar Mills, Ltd. (1), it has been held by this Court that in dealing with the merits of the dismissal of an employee the employer would be confined to the' charge-sheet given by him to his employee when an enquiry was held into his conduct. It would not be open to the employer to add any further charges against the employee and the case would have to be considered on the original charge-sheet as it was framed. It is significant that in the case of Lakshmi Devi Sugar Mills, Ltd. (1), this Court was apparently inclined to take the view that the additional acts of insubordination on which the appellant-mills wanted to rely would have justified the employee's dismissal; but even so it was not allowed to raise that plea because the said plea had not been included in the original charge-sheet. It, therefore, follows that where a proper enquiry has been held by the employer and findings are recorded against the employee that the principles laid down by this Court in the case of Indian Iron & Steel Co. Ltd. (2)would be applicable; and in applying the said principles the employer would be confined to the grounds set out by him in his charge-sheet against the employee.
This position is not disputed before us. Indeed the learned Attorney-General contends that the principles applicable to the decision of an industrial dispute arising from the dismissal of an employee to which we have just referred serve to emphasise the obligatory character of the limitation imposed on the employer by s. 33 of the Act and by the requirements of natural justice that every dismissal must be preceded by a proper enquiry. Where the ban imposed by s. 33 of the Act has been defied and/or where a proper enquiry has not been held at all the action of the employer in dismissing his employee must be treated as void and inoperative. Such a case (1) [1956] S.C.R. 916.
(2) [1958] S.C.R. 667, 105 830 stands outside the principles which we have discussed, so far. That in brief is the main contention raised by the employees.
This contention is, however, untenable in view of the decisions of this Court where the provisions of s. 33A have been construed and considered, and so we must now turn to s. 33A. This section was inserted in the Act in 1950. Before it was enacted the only remedy available to the employees against the breach of s. 33 was to raise an industrial dispute in that behalf and to move the appropriate Government for its reference to the adjudication of a tribunal under s. 10 of the Act. The trade union movement in the country complained that the remedy of asking for a reference under s. 10 involved delay and left the redress of the grievance of the employees entirely in the discretion of the appropriate Government; because even in cases of contravention of s. 33 the appropriate Government was not bound to refer the dispute under s. 10. That is why s. 33A was enacted for making a special provision for adjudication as to whether s. 33 has been contravened. This section enables an employee aggrieved by such contravention to make a complaint in writing 'in the prescribed manner to the tribunal and it adds that on, receipt of such complaint the tribunal shall adjudicate upon it as if it is a dispute referred to it in accordance with the provisions of the Act.
It also requires the tribunal to submit its award to the appropriate Government and the provisions of the Act shall then apply to the said award. It would thus be noticed that by this section an employee aggrieved by a wrongful order of dismissal passed against him in contravention of s. 33 is given a right to move the tribunal in redress of his grievance without having to take recourse to s. 10 of the Act.
After this section was thus enacted the scope of the enquiry contemplated by it became the subject matter of controversy between the employers and the employees. This Court bad occasion to deal with this controversy in the case of the Automobile Products of India Ltd. (1). Das, J., as he then was, who delivered (1) [1955] 1 S.C.R. 1241.
831 the judgment of the Court construed s. 33A of the Act and the corresponding s. 23 of Act 48 of 1950, which applied to the Labour Appellate Tribunal then in existence, and observed that " the scheme of the section clearly indicates that the authority to whom the complaint is made is to decide both the issues, viz., (1) the effect of contravention, and (2) the merits of the act or order of the employer ". " The provision in the section that the complaint shall be dealt with by the tribunal as if it were a dispute referred to or pending before it quite clearly indicates ", said the learned Judge, "that the jurisdiction of the authority is not only to decide whether there has been a failure on the part of the employer to obtain the permission of the authority before taking action but also to go into the merits of the complaint and grant appropriate reliefs (p. 1253) ". It was urged before this Court that in holding an enquiry under s. 33A the tribunal's duty was only to find out whether there had been a contravention of s. 33, and if it found that there was Such a contravention to make a declaration to that effect. The argument was that no further question can or should be considered in such as enquiry. This contention was, however, rejected.
The same question was raised before this Court in Equitable Coal Co. Ltd. v. Algu Singh (1) and following the previous decision of this Court in the case of the Automobile Products of India Ltd. (2) it was held that in an enquiry under s. 23 two questions fall to be considered: Is the fact of contravention of the provisions of s. 22 proved ? If yes, is the order passed by the employer against the employee justified on the merits ? Thus there can be no doubt that in an enquiry under s. 33A the employee would not succeed in obtaining an order of reinstatement merely by proving contravention of s. 33 by the employer. After such contraventionis proved it would still be open to the employer to justify the impugned dismissal on the merits. That is a part of the dispute which the tribunal has to consider because the complaint made by the employee is treated as an industrial dispute and all the relevant (1) A.I.R. 1958 S.C. 761.
(2) [1955] 1 S.C.R. 1241.
832 aspects of the said dispute fall to be considered under 3.
33A. Therefore, we cannot accede to the argument that the enquiry under s. 33A is confined only to the determination of the question as to whether the alleged contravention by the employer of the provisions of s. 33 has been proved or not.
In the present case the impugned orders of dismissal have given rise to an industrial dispute which has been referred to the tribunal by the appropriate Government under s. 10.
There can be no doubt that if under a complaint filed under s. 33A a tribunal has to deal not only with the question of contravention but also with the merits of the order of dismissal, the position cannot be any different when a reference is made to the tribunal like the present under s. 10. What is true about the scope of enquiry under s. 33A is a fortiori true in the case of an enquiry under s. 10. What is referred to the tribunal under s. 10 is the industrial dispute between the Bank and its employees. The alleged contravention by the Bank of s. 33 is no doubt one of the points which the tribunal has to decide; but the decision on this question does not conclude the enquiry. The tribunal would have also to consider whether the impugned orders of dismissal are otherwise justified; and whether, in the light o the relevant circumstances of the case, an order of reinstatement should or should not be passed. It is only after all these aspects have been considered by the tribunal that it can adequately deal with the industrial dispute referred to it and make an appropriate award.
In this connection it would be relevant to remember that in dealing with industrial disputes arising out of dismissal of employees the tribunal undoubtedly has jurisdiction to direct reinstatement in proper cases. The question about the jurisdiction of an industrial tribunal to direct reinstatement was raised as early as 1949, before the Federal Coort in Western India Automobile Association v.
Industrial Tribunal, Bombay (1). In this case the Federal Court considered the larger question about the powers of industrial tribunals in (1) [1949] F.C.R. 321.
833 all its aspects and rejected the argument of the employer that to invest the tribunal with jurisdiction to order reemployment amounts to giving it authority to make a contract between two persons when one of them is unwilling to enter into a contract of employment at all. " This argument ", observed Mahajan, J., as he then was, "overlooks the fact that when dispute arises about the employment of a person at the instance of a trade union or a trade union objects to the employment of a certain person, the definition of industrial dispute would cover both those cases. In each of those cases, although the employer may be unwilling to do so, there will be jurisdiction in the tribunal to direct the employment or non-employment of the person by the employer ". The learned Judge also added that " the disputes of this character being covered by the definition of the expression 'industrial disputes, ' there appears no logical ground to exclude an award of reinstatement from the jurisdiction of the industrial tribunal." Since this judgment was pronounced the authority of the industrial tribunals to direct reinstatement in appropriate cases has never been questioned.
In exercising its jurisdiction to direct reinstatement of dismissed employees industrial tribunals have indicated certain general considerations for their own guidance. In the case of a wrongful dismissal the normal rule adopted in industrial adjudication is that reinstatement should be ordered. "But", observed the Full Bench of the Labour Appellate Tribunal in Buckingham & Carnatic Mills Ltd., And Their Workmen (1), " in so ordering the tribunal is expected to be inspired by a sense of fair play towards the employee on the one hand and considerations of discipline in the concern on the other. The past record of the employee, the nature of his alleged present lapse and the ground on which the order of the management is set aside are also relevant factors for consideration." It is obvious that no hard and fast rule can be laid down in dealing with this problem.
Each case must be considered on its own merits, and, in reaching the (1) [1951] 11 L.L.J.314.
834 final decision an attempt must be made to reconcile the conflicting claims made by the employee and the employer.
The employee is entitled to security of service and should be protected against wrongful dismissals, and so the normal rule would be reinstatement in such cases. Nevertheless in unusual or exceptional cases the tribunal may have to consider whether, in the interest of the industry itself, it would be desirable or expedient not to direct reinstatement.
As in many other matters arising before the industrial courts for their decision this question also has to be decided after balancing the relevant factors and without adopting any legalistic or doctrinaire approach. No such considerations can be relevant in cases where in civil courts the validity of dismissals is challenged on the ground of non-compliance with s. 240 of the Government of India Act, 1935 or Art. 311(2) of the Constitution.
There is one more point which still remains to be considered and that is the effect of the Bank's default it not holding an enquiry in the present case. If the Bank has not held any enquiry it cannot obviously contend before the tribunal that it has bona fide exercised the managerial functions and authority in passing the orders of dismissal and that the tribunal should be slow to interfere with the said orders.
It is true as we have already pointed out that if the employer holds a proper enquiry, makes a finding in respect of the alleged misconduct of the employee and then passes an order of dism
