J. K. Jute Mills Co. Ltd. Kanpur v. Labour Court Meerut
1987-04-22
A.N.VARMA
body1987
DigiLaw.ai
JUDGMENT A. N. Varma, J. - This petition is directed against the order dated September 7, 1979 passed by the Labour Court at Meerut disposing of certain preliminary issues. One of the findings recorded by the Labour Court is that Dr. Gaur Hari Singhania, the Managing Director of the petitioner-company, was not competent to pass the order of dismissal, dated August 28, 1976 against Shyama Prasad, the respondent-workman. The effect of this finding would be that the dispute referred for the adjudication of the Labour Court under Section 1(1)(c) of the Industrial Disputes Act, 1947 was bound to be answered in favour of the workman and against the employers Before, however, the Labour Court could dispose of the remaining consequential issues the employers approached this Court by way of this petition which was admitted and further proceedings consequent upon the impugned order, dated September 7, 1979 were directed to be stayed. 2. Shortly stated, the case pleaded by the workman in his written statement was that he was appointed on January 8, 1962 by the Governing Director of the petitioner-company as a temporary clerk to work at the Kamla Tower, the head office of the petitioner-company. In April 1976 he was working as a general clerk in the said office and was assigned certain additional work without any increase in remuneration. Somehow the Company's Secretary was annoyed with the workman as a result of which he was asked to resign and on his refusal to oblige the Management he was placed under suspension, then charge-sheeted and after holding a pretence of a domestic enquiry, the petitioner was dismissed from service by an order, dated August 28, 1976. The enquiry conducted against the workman was unfair and violative of elementary principles of natural justice. He was not afforded any opportunity of defending himself against the charges, etc. Eventually the order of dismissal was conveyed to the petitioner through a letter of the Secretary, dated August, 30, 1976. 3. The above action of the employers gave rise to an industrial dispute which was referred by the State Government under Section 10(l)(c) of the Industrial Disputes Act for the adjudication of the Labour Court.
Eventually the order of dismissal was conveyed to the petitioner through a letter of the Secretary, dated August, 30, 1976. 3. The above action of the employers gave rise to an industrial dispute which was referred by the State Government under Section 10(l)(c) of the Industrial Disputes Act for the adjudication of the Labour Court. The dispute referred was ; "Whether the employers were justified in placing the workman Shyama Prasad under suspension from June 3, 1976 to August 29, 1976 and whether they were justified in dismissing the petitioner with effect from August 30, 1976 ?" The parties exchanged written statements and rejoinders whereupon the following issues were struck by the Labour Court : 1. Was the enquiry against the workman concerned conducted according to the principles of natural justice- 2. Did the Enquiry Officer act under the influence of the opposite party ? 3. Is the order of reference bad in law ? 4. Where the charges, framed against the workman concerned, true ? 5. To what relief, if any, is the workman concerned entitled ? 6. Was Sri P. M. Dave competent to suspend and dismiss the workman concerned ? 7. Was Sri P. M. Dave biased against the workman concerned ? 8. Was the order bearing 28-8-76 as the date, and referred to in paragraph 16 of the written statement of the Employers, passed on 28-8-76 or was it obtained subsequently by fraud and misrepresentation ? 9. Was the order, bearing 28-8-76 as the date and referred to in paragraph 16 of the written statement of the Employers, communicated to the workman concerned ? 10. Was Dr. Gaur Hari Singhania Competent to pass the order, bearing 28-8-76 as the date and referred to in paragraph No. 16 of the written statement of the Employers ? 11. Is the order, bearing 28-8-76 as the date, referred to in paragraph No. 16 of the written statement of the Employers, void or illegal ? 12. In case the letter dated 30-8-76 of Sri P. M. Dave is found to be the order, by which the workman concerned was dismissed, is it illegal on the ground that Sri P. M. Dave gave evidence against workman concerned in the enquiry ?" 4. Out of these issues, issues Nos. 1 and 9 to 12 have been disposed of by the impugned order.
Out of these issues, issues Nos. 1 and 9 to 12 have been disposed of by the impugned order. The submissions of the learned counsel were almost entirely directed towards the finding of the Labour Court on issue No. 10. The Labour Court has answered this issue against the employer and in favour of the workman on the ground that under the Articles of Association of the Company Dr. Gaur Hari Singhania was not authorised to take the impugned action singly and that such power vests only in the Company which means the Board of Directors. The resolution dated July 29, 1963 whereby Dr. Gaur Hari Singhania was authorised to do administrative acts of a routine nature on behalf of the Company did not, in the opinion of the Labour Court, confer sufficient authority on Dr. Gaur Hari Singhania to take the action of dismissal against a workman of the company. In support the Labour Court placed reliance on a decision of the Supreme Court in the case of Hindustan Brown Boveri Ltd. v. Their Workmen, reported in 1968 (I) Labour Law Journal 571 (574). 5. Learned counsel for the workman supporting the above finding of the Labour Court, reiterated the stand taken before the Labour Court on behalf of the workman, namely, that under clause (6) of Article 154 of the Articles of Association, the power to appoint and, at their discretion, remove or suspend clerks and servants of the Company, vests solely in the Company, which means the Board of Directors acting collectively. Dr. Gaur Hari Singhania could not, therefore, acting by himself, take the impugned action of dismissal. The authorisation in his favour by the resolution of the Board dated July 29, 1963 to do administrative acts of a routine nature did not empower him to dismiss an employee, such an action not being an action of a routine nature. Article 154(6) reads as follows : "154. Without prejudice to the general powers conferred by the last preceding Articles and to any other powers of authorities conferred by these presents on the Directors or on the Managing Agents, it is hereby expressly declared that the Directors shall have the following powers, that is to say, power : (1) ........ (2) ........ (3 )........ (4) ........ (5) ........
Without prejudice to the general powers conferred by the last preceding Articles and to any other powers of authorities conferred by these presents on the Directors or on the Managing Agents, it is hereby expressly declared that the Directors shall have the following powers, that is to say, power : (1) ........ (2) ........ (3 )........ (4) ........ (5) ........ (6) To appoint and at their discretion remove or suspend such agents (other then Directors), directors, managers, secretaries, officer, clerks and servants for permanent, temporary or special services as they may from time to time think fit, and to determine their powers and duties and fix their salaries or emoluments whether by way of commission or participation in profit or partly in one way or partly in another, and to require security in such instances and to such amount as they think fit". 6. Having given the matter a careful consideration and having heard learned counsel for the parties at some length am clearly of the opinion that on the facts which are not in disputed Dr. Gaur Hari Singhania was competent in law to take the impugned action of dismissal on the relevant date, namely, August 28, 1976. It is the own case of the workman that he was appointed by Sir Padampat Singhania who was the Governing Director of the Company on the date of the said appointment, namely, January 8, 1962. The position that a Governing Director of the Company enjoyed the same powers and status as the current nomenclature to that post, namely, Managing Director, was not disputed by the learned counsel for the workman. At a meeting of the Board of Directors held on July 29, 1976, Dr. Gaui Hari Singhania was appointed as a Managing Director of the Company for a term of five years. The impugned order was passed on August 28, 1976 by Dr. Gaur Hari Singhania who was undisputedly the Managing Director of the Company on that date. It is thus apparent that the workman concerned was dismissed by the same functionary of the Company, namely, a Managing Director who had appointed him. The Standing Orders of the Company which prescribe the procedure for dismissal for misconduct of clerks employed in the industrial establishment of the Company are silent as to the officer of authority who would be competent to pass an order of dismissal.
The Standing Orders of the Company which prescribe the procedure for dismissal for misconduct of clerks employed in the industrial establishment of the Company are silent as to the officer of authority who would be competent to pass an order of dismissal. That being so the dictum of the Supreme Court in Messrs. Heckett Engineering Co. v. Their Workmen, reported in 1977(2) Labour and Industrial Cases 1843 would be attracted to the facts of the present case on all ours. In that case the controversy was whether V.K. Balan, the plant Manager of the Company, was competent to pass the impugned order of dismissal against the workman. Their Lordships examined the Standing Orders applicable to the Company and came to the conclusion that the same threw no light on who was the officer competent to make the appointment of the concerned workman or to take disciplinary action including the penalty of dismissal. Having reached that conclusion the Supreme Court found that the concerned workman was appointed by the plant Manager and he was also dismissed by the Plant Manager. The Supreme Court then applied the principle embodied in Section 16 of the General Clauses Act, 1897 and held that even though the section did not apply in terms to the Standing Orders which were certified under Section 5(3) of the Industrial Employment Standing Orders Act, 1946, the general principle underlying that provision could well be made applicable to a case of the present nature for it was firmly established that the power to terminate service is a necessary adjunct to the power of appointment and, when exercised as an incident to or consequence of that power. Their Lordships placed reliance on the case of Lekhraj Satramdas Lalvani v. Deputy Custodian-Cum-Managing Officer, reported in AIR 1966 SC 334 ; Kutoor Vengayil Kayarapppn Nayanar v. Kutoor Vengayil Madhvi Amma, reported in AIR 1950 FC 140 and a passage from Woodroffe on Receivers (Fourth Edition) according to which the power to terminate flows naturally and as a necessary sequence from the power to create. This is how their Lordships summed up the law : "We may also in this connection recall the provisions of Section 16 of the General Clauses Act, 1897.
This is how their Lordships summed up the law : "We may also in this connection recall the provisions of Section 16 of the General Clauses Act, 1897. Whether or not the section in terms applies to the aforesaid Standing Orders of the Company which are certified under Section 5 (3) of the Industrial Employment Standing Orders Act, 1946 may be a moot point but the general doctrine underlying the section can well be made applicable to a case of the present nature for it is now firmly established that the power to terminate service is a necessary adjunct of the power of appointment and is exercised as an incident to or consequence of that power (See Lekhraj Satramdas Lalvani v. Deputy Custodian-Cum-Managing Officer, (1966) 1 SCR 120 : AIR 1966 SC 334 and Kutoor Vengayil Rayarappan Nayanar v. Kutoor Vengayil Madhavi Amma, 1949 FCR 667 : AIR 1950 FC 140. In Kutoor Vengayil Rayarappan Nayanar v. Kutoor Vengayil Madhavi Amma,(Supra) Mahajan, J. (as he then was) speaking for the Federal Court approved the statement of Woodroffe on Receivers, Fourth Edition, that the power to terminate flows naturally and a necessary sequence from the power to create. In other words, it is a necessary adjunct of the power of appointment and is exercised as an incident to, or consequence of that power; the authority to call such officer into being necessarily implies the authority to terminate his functions." 7. Having summed up the law, their Lordship upheld the order of dismissal on the ground that the same had been passed by the plant Manager who had also made the appointment. This decision is directly in point and completely concludes the controversy in hand. 8. The decision on which both the Labour Court as well as the workman placed strong reliance, namely, Hindustan Brown Boveri Ltd., was noticed by the Supreme Court in Heckett Engineering Companys case and distinguished, on the ground that in that case it had not been demonstrated that the Works Manager passing the dismissal order had actually appointed the workman. Further, unlike Brown Boveris case in Heckett Engineering the Standing Orders were silent as to the authority which could take punitive action.
Further, unlike Brown Boveris case in Heckett Engineering the Standing Orders were silent as to the authority which could take punitive action. In the present case too the Standing Orders are silent as to the authority which is competent to impose penalty of dismissal whereas in Brown Boveri Ltd., under the Standing Orders the Company alone was competent to take punitive action. Moreover, in the case of Brown Boveris case the Employers had failed to produce the power of attorney in favour of the office who had passed the impugned order. In the present case we find that there was an authorisation in favour of Dr. Gaur Hari Singhania by means of a resolution dated July 29, 1963 which reads as follows ; "Resolved that Dr. Gaur Hari Singhania, Director of the Company be and is hereby authorised to do administrative acts of a routine nature on behalf of the Company". There was no such authorisation in the case of Brown Boveri Ltd. 9. Learned counsel for the respondent workman, however, contended that this resolution authorised Dr. Gaur Hari Singhania to perform duties only of a routine nature and not to take a substantive action such as imposition of the penalty of dismissal of an employee. In my opinion, the words, "to do administrative acts of a routine nature on behalf of the Company are wide enough to take within its fold disciplinary action against an erring employee on behalf of the Company. It is not difficult to visualise that it would be well high impossible for a Board of Directors acting Collectively to embark upon an exercise of this kind, namely, to take disciplinary action against individual workmen of the Company. The impugned action does not involve any policy decision or any decision affecting the terms and conditions of service of the Company's employees generally. Administrative acts of routine nature when entrusted to member of the Board of Directors, may, therefore, reasonably be presumed to include the power to take disciplinary action against an erring employee. It is, however, unnecessary to pronounce finally on this controversy as the impugned order of dismissal can be sustained on the ground that the same has been taken by the Managing Director of the Company who enjoys the same powers as the Governing Director who initially appointed the petitioner as a clerk. 10.
It is, however, unnecessary to pronounce finally on this controversy as the impugned order of dismissal can be sustained on the ground that the same has been taken by the Managing Director of the Company who enjoys the same powers as the Governing Director who initially appointed the petitioner as a clerk. 10. This brings me to the second question debated at the Bar. The Labour Court has also invalidated the impugned action of dismissal on its finding that the order of dismissal passed by Dr Gaur Hari Singhania against the workman was not formally communicated to the workman concerned. The objection regarding the alleged non communication of the impugned order dated August 28, 1976 passed by Dr. Gaur Hari Singhania seems entirely untenable and is too formalistic to merit serious consideration. In my opinion, it is too late in the day to contend that the order was not formally communicated to the petitioner. Having raised an industrial dispute in respect expressly of this order dated August 28, 1976 passed by Dr. Gaur Hari Singhania and having challenged that order at all stages right from the beginning upto the reference of the dispute and even thereafter it was not open to the workman to contend that the order was not communicated to him. In paragraph 19 of his written statement the plea taken by the workman is that vide its order dated August 30, 1976 the Company dismissed the petitioner with effect from August 30, 1976 and that the said order was received by the workman on September 17, 1976. In the face of ail this, it is difficult to appreciate the objection that the impugned order of dismissal is liable to be declared void because it was not formally communicated to the workman. As mentioned above in paragraph 19 of the written statement the workman clearly admitted that the order of dismissal was duly communicated to him on September 17, 1976. 11. The upshot of the foregoing discussion, therefore, is that the impugned order is liable to be quashed except as regards the findings which have been recorded in favour of the employees, namely, issues No. 8 and 9.
11. The upshot of the foregoing discussion, therefore, is that the impugned order is liable to be quashed except as regards the findings which have been recorded in favour of the employees, namely, issues No. 8 and 9. The rest of the issues framed by the Labour Court which have remained unanswered either for the reason that they have not yet been taken up or on the ground that the same were considered unnecessary to decide because of the finding of the Labour Court on issue No. 10, shall now be determined by the Labour Court in accordance with law. 12. Before closing, I am constrained to observe that the Labour Court should have decided all the issues together and not piecemeal. Much of the agony to which the parties will now be exposed could have been avoided by following that course. The dispute was referred sometime in 1976. The impugned order was passed three years later. The remaining issues could easily have been disposed of alongwith these issues. As a result of the conclusions reached by me, the Labour Court shall have to decide the remaining issues now after a lapse of nearly ten years from the date of reference. The Supreme Court has time and again strongly disapproved of the agonising delays caused as a result of adjudication cases being held up on account of the Labour Courts not deciding all the issues together. In any case, the case should now be treated by the Labour Court with the sense of urgency which it deserves 13. In the result, the petition succeeds and is allowed. The impugned order dated September 7. 1979 is quashed. The Labour Court will now dispose of the adjudication case in accordance with law having regard to the observations made in this judgment. As the dispute was referred a little over ten years ago, the Labour Court is directed to dispose of the same expeditiously latest within two months from the date on which a certified copy of this order is presented before it by either of the two parties. No order as to costs.