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Madhya Pradesh High Court · body

1984 DIGILAW 598 (MP)

EMPLOYERS IN RELATION TO ANAND CINEMA JABALPUR v. MOHAN TIWARI

1984-09-26

B.M.LAL

body1984
JUDGMENT : ( 1. ) THIS order shall also govern the disposal of Misc. Petition no. 1465/82 and Misc. Petition No. 1463/82 respectively which have been filed under Articles 226 and 227 of the Constitution of India ( 2. ) THESE petitions relate to illegal termination of Mohan Tiwari respondent No. 1 in Misc Petition No. 1464/82, Kailash Singh Chouhan respondent No. 1 in Misc. Petition No. 1465/82 and Pratap Yadav respondent No. 1 in Misc. Petition No. 1463 /82, by the orders respectively dated 21-9-1979, 26-9-1979 and 26-9-1979 passed by the petitioners. ( 3. ) THE short facts leading to all the three petitions are as under: m Is. Maheshwari and Bernard is a registered partnership firm and carries on the trade of cinema industry which is named and styled as Anand Talkies located in Napier-Town. Jabalpur. All the three respondents referred to above were employed as gate-keepers under the management of the petitioners. ( 4. ) IT is alleged in all the three petitions by the petitioner that the respondents without any substantial cause were indulging in criminal activities which has resulted in financial loss to the petitioner. The petitioner has categorically stated the unlawful acts committed by the respondents i. e threatening and abusing the customers, causing illegal strikes, and abusing and insulting Shri Bernard who is one of the partners. According to the petitioner all these unlawful activities of the respondents resulted in misconduct and unsatisfactory work as defined under the provisions of Standing Orders but due to the violent activities of the respondents, it was not possible for them to conduct the regular departmental (domestic) enquiry in accordance with the provisions of the Standing Orders. Therefore, there was no alternative but to terminate the services of the respondents and hence under these compelling circumstances referred to above, the petitioner has terminated the service of the respondents vide orders dated 21-9-1979 and 26-9-1979. The petitioner, however, termed this termination order as a dismissal order. ( 5. ) ALL the three respondents by invoking the provisions of the Industrial Disputes Act, 1949 (hereinafter referred to as the act) have submitted applications before the Labour Commissioner, Indore, for making an appropriate reference to the Labour Court, Jabalpur for adjudicating the disputes in accordance with law. The Labour Commissioner had made the reference to the Labour Court at Jabalpur. ( 6. The Labour Commissioner had made the reference to the Labour Court at Jabalpur. ( 6. ) THE respondents have taken the common plea that their dismissal / termination order amounts to retrenchment within the meaning of section 2 (oo) read with section 25-F of the Act and under section 58 of the m. P. Shops and Establishments Act read with Rule 14 framed thereunder, the termination orders not only being bad in law but are also ab initio void. As such, the orders are nullities for non-observance of the provisions of section 25-F of the Act which is of imperative nature and, therefore, the orders of dismissal/termination are to be set aside and all the respondents be reinstated on their respective jobs with full back wages. ( 7. ) THE petitioner in all the three cases has filed its reply stating that orders of termination in question are orders of dismissal and, therefore, no case is made out within the meaning of section 2 (oo) of the Act, hence question of complying with the provisions of section 25-F of the Act does not arise at all. As far as violation of Shops and Establishments Act is concerned, it is stated that at the most, the respondents are liable to get one months salary. The petitioner also prayed for an opportunity to lead fresh evidence so as to justify their action of respondents dismissal from service. ( 8. ) THE respondent No. 2 Labour Court by its common order dated 22-10-1982 Which is contained in all the three writ petitions as Annexure G negatived the defence raised by the petitioner and has held that terminations of services of all the three respondents are illegal resulting in retrenchment within the meaning of section 2 (oo) of the Act and since the imperative provision of section 25-F of the Act has not been complied with by the petitioner, all the three respondents are entitled to be reinstated with full back wages. To this effect, the reference was made and was submitted before the Labour Commissioner for its publication and execution in accordance with law. ( 9. To this effect, the reference was made and was submitted before the Labour Commissioner for its publication and execution in accordance with law. ( 9. ) THE petitioner vide the above referred three separate writ petitions has challenged the order dated 22-10-1982 contained in Annexure G passed by the respondent No. 1 under Articles 226 and 227 of the Constitution of india for quashing the same by issuing a writ of certiorari or an appropriate writ of like nature. ( 10. ) THE learned counsel Shri R. P. Verma appearing along with Shri deepak Verma, contended that the termination order of the respondents be termed as dismissal orders which are based on misconduct of the respondents and, therefore, the petitioner should have been given an opportunity to lead fresh evidence before the Labour Court to prove and justify the respondents dismissal order. Shri Verma contended that despite repeated requests, no opportunity was given to the petitioner to lead any evidence to prove the case of the petitioner by the Labour Court i. e. only on account of misconduct that the services of the respondents have been dismissed and, therefore the said dismissal orders do not automatically come within the purview of section 2 (oo) read with section 25-F of the Act. Shri Verma, therefore, prayed for quashing the order dated 22-10-1982 contained in Annexure G in all the three petitions by issuing a writ of certiorari and further asked for remanding the case with a direction that the petitioner be given an opportunity to lead evidence so as to prove the misconduct of the respondents. ( 11. ) ON the other hand, learned counsel Shri R. K. Gupta appearing along with Shri Mukarjee for the respondent No. 1 in all the three petitions contended that the impugned order dated 22-10-1982 is valid in all respects and requires no interference by this Court under Article 226 of the Constitution of India. They further contended that although in cases of retrenchment, fresh opportunity was not required to be given before the Labour court to lead any fresh evidence but all the same, in the instant cases, full opportunity was afforded to the petitioner by the Labour Court but the petitioner itself could not avail of the opportunity and could not lead evidence as asked for by it. They further contended that instant cases are the cases of retrenchment and the orders of termination are ab initio void for want of compliance with the mandatory provision of section 25-F of the act and hence the order of termination being non est, the Labour Court cannot equate with the procedure which is to be adopted in cases of dismissal. ( 12. ) HAVING heard the learned counsel for both the parties and after going through the decisions cited by them, I am of the opinion that all the three petitions must be dismissed for the following reasons. ( 13. ) SHRI R. P. Verma, counsel for the petitioner laid great stress in relying upon the decisions of the Supreme Court reported in Delhi Cloth and General Mills Company v. Ludh Budh Singh AIR 1973 SC 1031. , Workman of M/s Firestone Tyre and Rubber Co. v. The Management and others AIR 1973 sc 1227 . , Madhya Pradesh Electricity Board, Jabalpur v. State Industrial Court, M. P. and othen 1980 MPLJ 41. and Shambhu Nath Goyal v. Bank of Baroda AIR 1984 sc 289 . and submitted that in view of the decisions of their Lordships of the Supreme Court, this is a fit case for remand. He relying on the decision reported in AIR 1972 SC 1031 (supra) vide para 60 of the judgment, stated that even if the domestic enquiry has not been made by the Management yet, for the first time, before the Labour Court the employer has a right to lead evidence straightway for justifying the action of termination and that opportunity must be given to him and the Labour Court is bound to give opportunity and is further bound to consider that evidence so adduced before it on merits and give decision thereon. In this case of the Supreme Court, a domestic enquiry was conducted which is apparent from paras 6 to 10 of the decision. Further, this was a case in which dispute relating to bonus as well as the legality of the strike and lockout were referred for adjudication by the delhi Administration by its order dated March 4, 1966, to the Industrial Tribunal. ( 14. ) SIMILARLY, in Workmen of M/s Firestone Tyre and Rubber Cos case (supra), the scope of the newly added section 11-A was considered as to whether its operation is prospective or retrospective. ( 14. ) SIMILARLY, in Workmen of M/s Firestone Tyre and Rubber Cos case (supra), the scope of the newly added section 11-A was considered as to whether its operation is prospective or retrospective. In dealing with the subject, their Lordships in para 58 of this decision have held that it is prospective. Section 11-a of the Industrial Disputes Act reads as under:-"11-A. Powers of Labour Courts, Tribunals and National Tribunal to give appropriate relief in case of discharge or dismissal of workmen-Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require: provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter. " The effect of the proviso has been considered by their Lordships of the supreme Court in numerous cases in which it has been held that Labour court shall rely only on the material on record and shall not take any fresh evidence in relation to the matter. ( 15. ) THE case referred to above deals with the situation prior to 15-12-1971 when the provision of newly added section 11-A was not in force. Therefore, if the case is referred prior to 15-12-1971 by the Labour commissioner to the Labour Court, the true position that emerges is as enumerated in para 27 of the judgment reported in Workmen of M js Firestone Tyre and Rubber Co. s case (supra) which is based on State Bank of india v. R. K. Jain and others AIR 1972 SC 736. and Delhi Cloth and General Mills Co. s case (supra ). Para 27 reads as under:- "27. s case (supra) which is based on State Bank of india v. R. K. Jain and others AIR 1972 SC 736. and Delhi Cloth and General Mills Co. s case (supra ). Para 27 reads as under:- "27. From those decisions, the following principles broadly emerge :- (1) The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but if a dispute is referred to a Tribunal, the latter has power to see if action of the employer is justified. (2) Before imposing the punishment, an employer is expected to conduct a proper enquiry in accordance with the provisions of the standing Orders, if applicable, and principles of natural justice. The enquiry should not be an empty formality. (3) When a proper enquiry has been held by an employer, and the finding of misconduct is plausible conclusion flowing from, the evidence, adduced at the said enquiry, the Tribunal has no jurisdiction to sit in judgment over the decision of the employer as an appellate body. The interference with the decision of the employer will be justified only when the findings arrived at in the enquiry are perverse or the management is guilty of victimisation, unfair labour practice or mala fides. (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 order to satisfy itself about the legality and validity of the order, had to give an 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 the 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 looting as no enquiry. 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 looting as no enquiry. (6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective. (7) It has never been recognised that the Tribunal should straightway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective. (8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power to refuse. The giving of an opportunity to an employer to adduce evidence for the first time before the Tribunal is the interest of both the management and the employee and to enable the Tribunal itself to be satisfied about the alleged misconduct. (9) Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed before a Tribunal for the first time, punishment imposed cannot be interfered with by the Tribunal except," in cases where the punishment is so harsh as to suggest victimisation. (10) In a particular case, after setting aside the order of dismissal, whether a workman should be reinstated or paid compensation is, as held by this Court in The Management of Panitole Tea Estate v. The Workmen (1971) 1 scc 742 = air 1971 sc 217 l7, within the judicial decision of a Labour Court or Tribunal. " But the above referred decisions are of a no avail to the petitioner in these petitions for two reasons - (i) that in those cases the effect of section 2 (oo) read with section 25-F of the Act was not at all considered and (ii) the proviso to section 11-A completely bars the Labour Court to take any fresh evidence. ( 16. ( 16. ) LEARNED counsel Shri Verma cited two more decisions of the supreme Court as a trump card which are reported in M/s B. R. Limited v. P. Gupta, Commissioner of Income Tax AIR 1978 sc 1320 . and Shambhu Nath Voyal v. Bank of Baroda to show that even at the stage of enquiry pending before the Labour Court, opportunity should be given to the employer to lead evidence and to justify the termination order. In these two cases, the domestic enquiry was conducted by the employer for action before the Labour Court. The employer tried to justify the validity of the termination order. In that context, their Lordships of the Supreme Court have held that opportunity must be availed of at the earliest stage without any delay and opportunity to lead evidence was afforded. But in the instant cases, admittedly without any domestic enquiry the services of the respondents have been terminated, therefore, under the proviso of section 11-A of the Act, the Management (petitioner) is not entitled to lead any fresh evidence before the trial Court. More so, the effect of section 2 (oo) and section 25-F of the Act was not at all the subject-matter before their Lordships of the Supreme Court in the cases referred to above. Therefore, all these decisions cited by learned counsel Shri Verma, are of no avail. ( 17. ) LEARNED counsel Shri Gupta and Shri Mukherjee appearing for the respondent No. 1 in each petition contended that all the three cases are the cases of retrenchment and the order issued by the petitioner terminating the services of the respondents are ah initio void having not complied with the provisions of section 25-F of the Act which is of imperative nature. They, therefore, submitted that in view of the provisions of section 2 (oo)and section 25-F of the Act, question of giving any opportunity, much less, fresh opportunity for the first time before the Labour Court does not arise at all. Further, the order of termination being ah initio void the Management, having not conducted any domestic enquiry within the meaning of the Standing Orders now at this stage of enquiry pending before the Labour court, cannot ask for the opportunity for the first time. They relied upon the decision reported in L. Robert Dsouza v. The Executive Engineer, Southern Railway AIR 1982 sc 854 . They relied upon the decision reported in L. Robert Dsouza v. The Executive Engineer, Southern Railway AIR 1982 sc 854 . , Management of Karnataka State Road Transport Corporation, Bangalore v. M. Boraish and others AIR 1983 sc 1320 , and Factory Manager, Central india Machinery Manufacturing Co. Ltd v. Naresh Chandra Saxena, 1984 MPLJ 402 . In all these cases, the effect of retrenchment was considered by their Lordships and the ratio laid down is that the termination in violation of section 25-F of the Act is null and void. ( 18. ) THE distinction between an action being illegal and invalid and the action being null and void is that if the action is illegal, the party who violates the law may have to suffer some consequence but the act even if illegal has got its factual existence and if the illegality goes to the root of the facts which are essential constituents of the act then the law will presume that in the absence of observance of the essential requirements of law, the act itself is. of no consequence and is absolutely null and void. That means that in the eye of law, the act does not exist. ( 19. ) IN the recent decision of this Court reported in 1984 MPLJ 402 (supra), while taking into consideration all the aspects and relying upon the recent catena of decisions of the Supreme Court the Division Bench of this Court held in para 5 of the judgment that- ". . . When the pre-requisite for a valid retrenchment as laid down in section 25-F was not complied with, the retrenchment bringing about termination of service of employee would be ab initio void. It may be mentioned here that in the last 4 cases the Supreme Court reiterated the view expressed in Santosh Gupta v. State Bank of Patiala AIR 1980 sc 1219 . and approved the distinguishment of the earlier decision in H. S. Shukla v. A. D. Divelkar AIR 1957 sc 12l. Therefore, law is now well settled by the Supreme Court that termination of service for any reason whatsoever, otherwise than punishment by way of disciplinary action or voluntary retirement or reaching the age of superannuation or on medical ground, amounts to retrenchment. Therefore, law is now well settled by the Supreme Court that termination of service for any reason whatsoever, otherwise than punishment by way of disciplinary action or voluntary retirement or reaching the age of superannuation or on medical ground, amounts to retrenchment. " As such, every case of retrenchment of service except those which have been embodied in the definition of section 2 (oo) amounts to retrenchment. ( 20. ) THEREFORE, in view of the above decisions of their Lordships of the Supreme Court, the view taken in 1980 MPLJ 41 (supra) stands no longer a good law. ( 21. ) FROM the discussion aforesaid, the true position that emerges is that the management has no right to ask for any opportunity before the labour Court to lead any fresh evidence if the services of the employees have been terminated without conducting any domestic enquiry in accordance with the provisions of Standing Orders and, therefore, the termination order results in retrenchment as defined under section 2 (oo) of the Act if section 25-F has not been complied with by the employer. Therefore, the pleas as raised by the petitioner in all these 3 petitions have no substance in the eye of law and hence they must be rejected. ( 22. ) IN view of the above finding, it is not necessary to deal with the non-compliance of the provisions of section 58 read with Rule 14 of the shops and Establishments Act, 1958 separately. ( 23. ) BEFORE parting with the case, I must point out that labour class as a whole is the backbone of the industries without whom the industry cannot survive. But in these days when the industrial revolution has yet to reach its peak, the employers who have amassed a good fortune (large property) at the cost of the amount of labour put by the employees, are not extending human treatment to their employees and by adopting high-handedness and unfair labour practices, are terminating the services of their employees at their sweet will without following and resorting to the imperative provisions of industrial law and in this way the employees are being put to great harassment. ( 24. ( 24. ) THE Industrial Disputes Act is legislated to ensure social justice to both employers and employees and advance progress of industry by bringing about the existence of harmony and cordial relationship between the two and with this aim and idea, all the industrial laws have been enacted to improve the service conditions of the labour so that ordinary amenities of life may be provided to the labour class and by this process to bring about the industrial peace which would accelerate production activity of the country resulting in prosperity so that the prosperity of the country, in its turn, helps to improve the general condition not only of the labour classes but also of all the citizens as a whole. But the employers by adopting unfair labour practice are victimising the employees. Therefore, now the time has come to think over the subject of legislating any appropriate provisions of law incorporating the same in Chapter VII of the Industrial disputes Act, 1947 to the effect that if termination of services of the employees results in retrenchment then the employer must be travailed with penal consequences imposing at least 6 months imprisonment. Then only employees could be saved from unfair labour practice by the employers butchering attitude. ( 25. ) FROM the discussion aforesaid, while maintaining the order of the Labour Court dated 22-10-1982 contained in Annexure G, I dismiss all the three miscellaneous petitions with costs. Counsels fee Rs. 200 in each set of the petitions. The balance of the security deposit, if any, be refunded to the petitioner. Petitions dismissed.