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1986 DIGILAW 176 (PAT)

Raj Narayan Singh v. Presiding Officer, Labour Court, Bokaro Steel City

1986-05-13

S.B.SANYAL

body1986
JUDGMENT : Satya Brata Sanyal, J. In this writ application the petitioner seeks quashing of Annexure 1 by which his services were terminated by respondent no. 2. M/s Instrumentation Ltd., Bokaro Steel City, a public sector undertaking, as well as Annexure 4 by which the Presiding Officer Labour Court dismissed the complaint filed under section 26 of the Bihar Shops and Establishments Act, both on merits as well as on the ground of non-maintainability and also for reinstating the petitioner with all back wages treating him on duty and in continuous service with effect from the date on which the petitioner was put under suspension. 2. FACTS : The petitioner was appointed as a driver in the year 1971. Under Receipt No. 412 dated 16.7.1974 the petitioner deposited a sum of Rs. 10/- for two quintals of scrap wood and under Receipt No. 456 dated 27.9.74 he deposited the price of quintals of the same for his taking out 12 quintals of scrap wood under Gate Pass No. 6173 dated 20.9.74. On 7.10.74 he was served with a charge-sheet, namely, (1) under what circumstances the petitioner had taken out 12 quintals of scrap wood without prior sanction of the competent authority; (2) the circumstances under which the petitioner used Company's truck without advance and written approval of the competent authority; and (3) charge of dishonesty, theft, breach of trust and faith and misutilisation of Company's vehicle without proper authorisation and as to why the petitioner should not be removed from the service of the Company. The petitioner submitted show cause un 9.10.74, which reads as under : "To The Manager (Projects), Instrumentation Ltd., B.S City. Dear Sir, With reference to your letter no. BOK/01/74 at 7.10.74, I beg to, state the following points in support of your confidential Office ORDER :. (1) I had paid a sum of Rs. 10/for 2. Qtls. as per receipt no. 412. But when the scrap wood was weighed by the Security Guards it was found to be 12 Qtls. (2) The reason for excess scrap wood is that there is no weighing machine in our Company for which reason this discrepancy. (3) When I was informed by the Management that I should pay another Rs. 50/- for 10 Qtls. 1 did the same vide receipt no. 456. (2) The reason for excess scrap wood is that there is no weighing machine in our Company for which reason this discrepancy. (3) When I was informed by the Management that I should pay another Rs. 50/- for 10 Qtls. 1 did the same vide receipt no. 456. (4) Permission for use of vehicle No. BRX 5104 was given to me by Sri Ved Prakash, Sr. Engineer. Thanking you. Date 9.10.74. Yours faithfully, Sd. R.N. Singh Driver." On that very date without any enquiry whatsoever the letter of termination (Annexure 1) was issued holding the petitioner guilty of theft, breach of trust and faith as also imposing penalty and ORDER :ing deduction of the penal amount of Rs. 400/- being the cost of 10 quintals of excess wood taken by him without any authorisation and Rs. 100/- being the penalty for using the Company's truck-from the sums due to the petitioner. The petitioner filed his representation before the higher authorities with a copy to the Deputy Labour Commissioner. In spite of several requests by the Deputy Labour Commissioner for conciliation of the dispute on various dates the management did not participate in the said conciliation whereupon the Deputy Labour Commissioner asked the petitioner vide letter no. 6207 dated 26.12.74 to file a complaint under the provisions of the Bihar Shops and Establishments Act, hereinafter referred to as "the Act" before the Labour Court, Bokaro Steel City. The petitioner thereafter filed a complaint under section 26(1) of the Act which was registered as B.S.E. Case No. 1 of 1975. In his complaint the petitioner averred that there was no reasonable cause for dispensing with the service of the petitioner nor the petitioner was given notice as required under section 26 (1) of the Act. In the written statement filed by the respondent Company the plea taken was that the petitioner was governed by the provisions of the Provincial Motor Transport Workmen Act. As such no notice was required to be served under section 26 of the Act. The petitioner did commit an act of misconduct and was so found. The charges framed and levelled against the petitioner are just true and proper. The dismissal ORDER :was passed on perusal of the show cause where the petitioner did not raise any controversy or objection to the charges instead admitted his guilt. The imposition of penalty was sought to be justified as Rs. The charges framed and levelled against the petitioner are just true and proper. The dismissal ORDER :was passed on perusal of the show cause where the petitioner did not raise any controversy or objection to the charges instead admitted his guilt. The imposition of penalty was sought to be justified as Rs. 5/- per quintal is allowed to the employees as a special case with the specific permission of the competent authority. The higher price charged by way of penalty is just and proper. 2A. The Labour Court held that the applicant being a driver was a motor transport worker within meaning of section 2(h) of the Motor Transport Workers Act which precludes him from invoking the provisions of Act, and, therefore, the petition is not maintainable. It further held that even if the Act applied, merely because there was no full-fledged domestic enquiry before termination of the service of the petitioner, it did nor vitiate the ORDER :because “the allegations have almost been admitted by the applicant with the only qualification that he carried 12 quintals of wood on 26.9.74 against a money receipt and a gate pass for only 2 quintals unknowingly", and this plea of the petitioner was disbelieved. Thus there was a reasonable cause before the management for ORDER :ing his dismissal. 3. Mr. Jaya Narayan, learned counsel for the petitioner, submitted that once the Labour Court held that the petitioner was covered by the Motor Transport Workers Act and, therefore, the complaint petition under section 26 (1) of the Act was not maintainable, it had no jurisdiction to further probe into the matter and dismiss the case on merits. He further submitted that respondent no. 2 Instrumentation., Ltd. is a State which would be evident from the Articles of Association. The impugned ORDER :terminating the petitioner's service on the ground of misconduct without conforming to the principles of natural justice is wholly arbitrary and violative of Article 14 of the Constitution of India. He also submitted that even on merits the decision of the Labour Court is vitiated by errors of law apparent on the face of the record. The impugned ORDER :terminating the petitioner's service on the ground of misconduct without conforming to the principles of natural justice is wholly arbitrary and violative of Article 14 of the Constitution of India. He also submitted that even on merits the decision of the Labour Court is vitiated by errors of law apparent on the face of the record. It may be stated here that a supplementary affidavit was filed stating that respondent Instrumentation Ltd. is a public undertaking wholly owned and controlled by the Government of India and is an agency and instrumentality of the Government and is thus amenable to writ jurisdiction of this Court. 4. Mr. Ranen Roy, on the other hand, contended that the Labour Court was wholly justified to hold, in view of the two decisions of this Court in Bihar State Road Transport Corporation v. Orang Babadur and another (A.I.R. 1968 Patna 200) and Amarnath Singh v. Presiding Officer, Industrial Tribunal, Bihar and others (A.I.R. 1970 Patna 269 F.B.), that the complaint petition was not at all maintainable. The remedy of the workman, therefore, is to raise an industrial dispute afresh and he can obtain no relief from this Court whatsoever. He also submitted that an enquiry prior to dismissal was not at all necessary since the ORDER :of dismissal was founded upon admission of guilt. As to whether respondent Instrumentation Ltd., is an agency and instrumentality of the Government, learned counsel drew my attention to the counter-affidavit and submitted that even though respondent no. 2 is a public undertaking it is neither wholly owned nor controlled by the Government of India. In the Articles of Association there is no provision empowering the Central Government to exercise any control over the affairs of the Company. It is true that the President of India has been given some powers of superintendence over the affairs of the Company but he is so entitled not by virtue of being the President of India and powers given to him by the Constitution. He does so under the Articles of Association although he happens to be the executive head of the Central Government under the Constitution. 5. I am bound by the Full Bench decision of this Court in Amarnath Singh's case (supra) and sitting singly I have to abide by that decision. He does so under the Articles of Association although he happens to be the executive head of the Central Government under the Constitution. 5. I am bound by the Full Bench decision of this Court in Amarnath Singh's case (supra) and sitting singly I have to abide by that decision. In that view of the matter, the Labour Court was wholly justified to hold that the complaint under section 26 (1) of the Act was not maintainable. Once the Labour Court expressed its inability to entertain the complaint petition, its decision on merit is not binding on the parties and is really non est. 6. The question, therefore, arises whether the petitioner is entitled at, all to any relief from this Court in its writ jurisdiction. The petitioner did raise an industrial dispute immediately on the termination of his service. He was misdirected by the State Labour agency to file a complaint. Pursuant to the direction he filed a complaint as far back as 1975. After eleven years of waiting before the Labour Court and this Court, would it be justified to direct him to raise an industrial dispute once again for the redressal of his grievance? In my view if the petitioner is entitled to question the justifiability of the ORDER :of his termination of service under writ jurisdiction legally, the writ petition cannot be thrown away on the ground of availability of an alternative remedy. Further the petitioner did exhaust his alternative remedy by challenging the ORDER :of termination before moving this Court. It, however, turned futile. It would be, in my view, massacring justice to throwaway the writ petition, if otherwise maintainable, either on the ground of alternative remedy or on the ground of delay in questioning the ORDER :of termination. The question therefore boils down (a) whether Instrumentation Ltd., is an instrumentality and agency of the Government, (b) whether the ORDER :of termination on the ground of misconduct wit bout holding any enquiry is violative of Article 14 of the Constitution of India and (c) whether the show cause filed by the petitioner is au admission of his guilt. 7. The Articles of respondent Instrumentation Ltd. has been brought on record at the instance of the respondents themselves Mr. Jaya Narayan has drawn my attention to the definition of the word "President" in the Articles of Association which means the President of India. 7. The Articles of respondent Instrumentation Ltd. has been brought on record at the instance of the respondents themselves Mr. Jaya Narayan has drawn my attention to the definition of the word "President" in the Articles of Association which means the President of India. He has also drawn my attention to Article 31 showing only with the approval of the President the Directors may increase the share capital, or, as under Article 35, decrease the share capital. Under Article 36 the subdivision and consolidation of shares can also be subject to the approval of the President as also the different classes of shares to be floated as required under Article 37. The power of borrowing of the Company is subjected to the approval of the President by floating debenture stock, bonds or other securities as envisaged under Articles 38 and 41 of the Articles of Association. The President is empowered to nominate persons to represent him in the Board (Article 50), to determine the number of Directors (Article 72), the emoluments to be paid to a Director or Directors (Article 75), power to issue directives from time to time as to how the Company to be managed by the Directors (Article 74), capital expenditure Rs. The President is empowered to nominate persons to represent him in the Board (Article 50), to determine the number of Directors (Article 72), the emoluments to be paid to a Director or Directors (Article 75), power to issue directives from time to time as to how the Company to be managed by the Directors (Article 74), capital expenditure Rs. 50 lakhs must be with the approval of the President except where detailed project reports with estimates have been prepared earlier and approved by the Central Government [Article 75 (1A)], with the approval of the President to give any person employed by the Company a Commission on the profits of any particular business, transaction or such share in the general profits of the Company [Article 75 (13)] the President may empower the Chairman nominated to exercise the functions of the Managing Director or appoint one of the Directors to be the Managing Director, who will be the Chief Executive Officer of the Company (Article 76), the President may from time to time entrust to and confer upon the Chairman; a Managing Director, a Resident Director 'such powers as he may think fit and may confer such powers for such time and to be exercised for such objects and purposes upon such terms and conditions and with such restrictions as he may think expedient, and he may confer such powers either collaterally with or to the exclusion of and in substitution for all or any of the powers of the Directors in that behalf and may from time to time revoke, withdraw alter or vary all or any of such powers (Article 80), the Chairman shall reserve for the decision of the President any matter which in his opinion should be so reserved. No action shall be taken by the Company in respect of any proposal or decision of the Board reserved for the approval of the President until the President's approval to the same has been obtained (Article 90) the Auditor of the Company shall be appointed or reappointed by the Central Government all the advice of Comptroller and Auditor General of India (Article 120). Thereafter Article 124 provides as hereunder: "(1) Notwithstanding anything contained in any of the Articles, the President may, from time to time, issue such directives or instructions as may be considered necessary in regard to the finance, conduct of business and affairs of the Company or directives thereof and in like." manner may vary or annul them. The Directors shall give immediate effect to the directives or instructions so issued. (2) The President shall have the right to call for such returns, accounts and other information With respect to properties and activities of the Company as may be required from time to time. (3) The President shall have the powers to give directions to the Company in writing as to the exercise and performance of its functions in matter involving the National security or substantial public interest and to ensure that the Company gives effect to such directions.” 8. Learned counsel for the petitioner contends, after having referred to the said Articles of Association, that the President’s power all pervasive both with respect to finance, conduct of business, control over the Directors, their appointments, the remuneration payable to them and to run the business for substantial public interest. Mr. Roy, On the other hand, contended that the President of India has only 97 shares and three other shares have been allotted to Joint Secretary, Ministry of Finance, Officer on Special Duty, Ministry of Industry and Deputy Secretary, Ministry of Industry even the ugh the authorised capital of the Company is divided into 70,000 equity shares of Rs. 1,000/- each. By reference to Articles 4 and 7 he contended that the shares are under the control of the Directors who may allot or otherwise dispose of the same to such persons on such terms and conditions as they think fit. He submitted that the Company is required to be run under the Companies Act read along with the Articles of Association. The President of Indian his personal capacity has been given some extra powers but that does not change the character of the Company and, therefore, it cannot be held to be an instrumentality and agency of the Government. He has relied mainly on Articles 32, 35, 36, 37, 38, 41 and 50 of the Articles of Association. Merely because according to Mr. He has relied mainly on Articles 32, 35, 36, 37, 38, 41 and 50 of the Articles of Association. Merely because according to Mr. Roy, the Managing Director and/or the Chairman has to be appointed by the President of India, that is of no consequence. He relied strongly upon a Bench decision of this Court in Harender Narain Banker v. State of Bihar (1985 P.L.J.R. 1078) where this Court held that Bihar State Co-operative Marketing Union Ltd., a society registered under the Bihar and Orissa Co-operative Societies Act, 1935, did not satisfy the six tests laid down by the Supreme Court in Ajay Hasia etc. v. Khalio Mujib Subravardi and others etc. (A.I.R. 1981 Supreme Court 487) to constitute State and/or instrumentality thereof under Article 12 of the Constitution of India. Their Lordships at the very outset highlighted the fact that so far as Bihar State Co-operative Marketing Union is concerned, it is not enjoying any finical kind of State control which is adequate to satisfy the stringent requirements for establishing that a body is an instrumentality of the State or an agency thereof. Their Lordships thereafter referred to six tests which were summarised in Ajay Hasia's case (supra), namely, whether the entire share capital is held by the Government, the financial assistant is so much as to meet almost entire expenditure of the corporation, whether the corporation enjoys monopoly status which is State protected, existence of deep and pervasive State control, if the functions of the corporation of public importance are closely related to governmental functions and specifically if a department of Government is transferred to a corporation. It was held that the Co-operative Marketing Union did not fulfil anyone of those requirements. Their Lordships referred to bye-law 17 of the Bye Laws of the Co-operative Marketing Union which stated. "The supreme authority of the Union shall be vested in the General Meeting". They referred to bye laws 22, 26 and 28 and held that the management of the registered society wholly vested in the Managing Committee constituted in accordance with the bye-laws and even though there were ex-officio Directors nominated by the State, they had only 1/5th of the total voting power in the Board of Directors in which again the elected Chairman would have the casting vote and the voting is by a plain majority with no exceptional right to the State nominees. The case of Harender Narain Banker (supra) is clearly distinguishable and is an authority so far as the case is decided. In the instant case from the Articles of Association, referred to above, it is clear that it is a Central Government Company and all pervasive power vests in the President of India. It is more in the nature of Bharat. Petroleum Corporation Ltd See Om Prakash versus Union of India (A.I.R. 198) Supreme Court 212). The holding of shares referred to by Mr. Roy as 97 to the President of India and three each to the different officers of the Ministry of the Central Government manifests that the Company was floated with hundred shares and 97 per cent of the shares belongs to the President of India. Without the president's approval on important matters the Company cannot function properly. Only day to day matters are left to be managed by the Board of Directors and that too when a decision as to important matters is taken that must have prior approval of the President, It is true that the Company has not been constituted under a separate Act See U.P. Warehousing Corporation v. Vijay Narayan Vajpayee (A.I.R. 1980 Supreme Court 840) nor like in B.S. Minhas v. Indian Statistical Institute (1984 Labour and Industrial Cases 15 S.C) where these institutes were held to be departments of Government. On a proper assessment of facts in the light of the relevant Articles of Association I find that it is on authority within the meaning of Article 12 of the Constitution and is, therefore, an instrumentality and agency of the Government-See A.L. Kaira v. Project and Equipment Corporation of India Ltd. [1984 (2) L.L.J. 1861 and Om Prakash,s case (supra). The undertaking has to be run in Public interest and it has to give effect to the directions in this regard in the matter of conduct of its business and other affairs, which is an immense indication as to its being an authority and/or an agency/ instrumentality of the Government under Article, 12 of the Constitution of India. I do not accept the submission of Mr. Roy, that the President of India's power of superintendence is not by virtue of his office as President of India under the Constitution of India Central Government also exercises certain powers as envisaged by Article 75 (1A) of the Articles of Association. 9. I do not accept the submission of Mr. Roy, that the President of India's power of superintendence is not by virtue of his office as President of India under the Constitution of India Central Government also exercises certain powers as envisaged by Article 75 (1A) of the Articles of Association. 9. The impugned ORDER :of termination, therefore, has to be tested with the touchstone of Article 14 of the Constitution. The petitioner has been removed on the allegations of theft, breach of trust and faith under Model Standing ORDER :s. This conclusion has been arrived at by giving three reasons in Annexure 1, the letter of termination, which read as follows: "(1) Even if the weighing machine was not available in the company there cannot be a difference of 6 times in the weight. (2) You are not authorised to drive Company's truck, 'which was done voluntarily by you. (3) No permission for using truck for transporting the wood was given to you by the Company's authorised representative.' The termination was, therefore, for a proved misconduct by rejecting the show cause filed by the petitioner without, however, holding an enquiry into the explanation furnished by the petitioner. Apart from the fact that the petitioner was never charged for the second ground aforesaid, according to the petitioner, Mr. Ved Prakash, senior Engineer, under whom he was working had authorised him to use the truck for transporting the wood. It is not known as to who is the competent authority for such authorisation and whether that was made known to its employees. These are matters which require to be enquired into by a participatory proceeding. Further the management permitted the petitioner to take away 12 quintals of scrap wood and the price thereof was realised from him. The excess amount payable was demanded from the petitioner by the management which was paid under a receipt granted by the Company. A plausible reason has also been offered for the excess loading. The reality and correctness of this matter could have only been arrived at by a departmental enquiry as has been envisaged under the Model Standing ORDER :s. Mr. Roy wants to wriggle out of the situation and takes the same plea as was given by the Labour Court that the petitioner has admitted his guilt. It is settled law that admission has to be taken as a whole and not except therefrom. Roy wants to wriggle out of the situation and takes the same plea as was given by the Labour Court that the petitioner has admitted his guilt. It is settled law that admission has to be taken as a whole and not except therefrom. I do not find there is an admission of guilt. On the contrary it explains the circumstances under which the petitioner took out 12 quintals of scrap wood on payment of the price as demanded by the management. Payment of consideration can be a deferred one also. I am, therefore of the opinion that the dismissal of the petitioner from service on the alleged misconduct of theft, breach of trust and faith without bolding any domestic enquiry but treating the explanation given in the show cause as an admission of guilt is arbitrary, capricious and in complete breach of the principles of natural justice and thus violative of Article 14 of the Constitution of India and is justiciable under Article 226 of the Constitution of India. Further, as indicated above, the petitioner was not at all charged for being not authorised to drive Company's truck, which was done voluntarily by" him Mr. Roy is not correct in his submission that the departmental enquiry would have been an empty formality in this case and his reliance on the case of Burn & Co. v. Their Employees (A.I.R 1957 Supreme Court 38) is wholly misplaced. This case has no applicability so far as the facts and circumstances of the present case are concerned. That was a case where the petitioners services were terminated for their being absent from duty and it was admitted that they were in jail custody during those days. Therefore, absence from duty was proved which brought about their termination under their respective Standing ORDER :s. 10. Similarly after having realised the price of the scrap wood, the imposition of penalty by way of deduction of Rs. 400/- being the cost of 10 quintals of excess wood and realisation of Rs. 100/- for using the truck from the dues of the petitioner incorporated in the ORDER :of dismissal, appear to be unreasonable and vindictive. 11. Lastly, the submission of Mr. 400/- being the cost of 10 quintals of excess wood and realisation of Rs. 100/- for using the truck from the dues of the petitioner incorporated in the ORDER :of dismissal, appear to be unreasonable and vindictive. 11. Lastly, the submission of Mr. Roy is that the respondent Company has lost confidence and, therefore, the letter of termination be treated as such does not appeal to me because loss of confidence is also a stigma as has been held by the Supreme Court in Chandu Lal v. The Management of M/s Pan American World Airways Inc. (A.I.R. 1985 Supreme Court 1128). 12. I, therefore, quash Annexure 1, the letter of termination, as being violative of Article 14 of the Constitution of India and the principles of natural justice as well as that pan of Annexure 4 by which the Presiding Officer of the Labour Court has rendered JUDGMENT : on the merits of the case even though it held that the complaint before him was not maintainable as a matter of law. 13. The next question is what relief the petitioner is entitled to Disengagement brought about by Annexure 1 being ipro facto void and non est, it would be deemed that the petitioner continued in service irrespective of Annexure 1. I, therefore, issue a direction that the petitioner be treated as in continuous service till date and to pay him all his arrears of wages and other benefits to which he would have been entitled to by his having continued in service. There is no averment by the management as to mitigation of damages by acceptance of any other employment by the petitioner. It is true that a public undertaking has been put to loss but that is so because the management acted in an illegal manner in dispensing with the services of the petitioner. 14. The writ application is accordingly allowed. Hearing fee is determined at Rs. 1000/-.