Tarang Theatre v. State of Uttar Pradesh — 1991 DIGILAW 1167 (ALL)

JUDGMENT M.L.Bhat, J. 1. In favour of respondent No 3 there is an award passed by respondent No. 2 on 12-2-79 by which the termination of services of respondent No. 3 was declared illegal and it is ordered that respondent No. 3 be reinstated with back wages. The petitioner who is an employer is aggrieved by the said award and he has filed this writ petition to quash the said award and the reference No. 5090 dated 20-6-78 is also prayed to be quashed, 2. The facts as emerge from the pleadings are brief. Respondent No. 3 is said to have been an employee of the petitioner. The petitioner is engaged in the business of exhibiting motion pictures at Gorakhpur. It is stated that respondent No. 3 while in the employment of the petitioner had indulged in manhandling a customer of the petitioner. The management issued a show cause notice to respondent No. 3 who is said to have replied the show cause notice, but his reply was not found satisfactory. Therefore, it was decided to hold domestic enquiry into the matter: It is averred by the petitioner that respondent no. 3 in his explanation had admitted his guilt. The petitioner was contemplated to hold an enquiry but respondent No. 3 absented from duty from 13-7-74 and he was paid full payment upto 12-7-74. Respondent No. 3 is said to have taken employment elsewhere. The petitioner presumed that respondent No. 3 had left the service voluntarily and no domestic enquiry was called for. 3. The State Government by notification dated 28-2-75 under section 4-K of the U: P. Industrial Disputes Act, 1947 seems to have made a reference to the labour court for adjudication which was registered as Case No. 18/75 by the labour court. Gorakhpur. The reference was rejected on 3-12-76 on the ground that it was not maintainable in law. The State Government seems to ha\e referred the matter u/Sec. 10 of the Industrial Disputes Act, 1947 to the labour court on 20-6-78. The petitioner challenged the State Government's Reference No. 5090 dated 20-6-78 as being without jurisdiction. It is contended that since the earlier reference, made on the same cause of action and on the same ground, was rejected, the subsequent reference could not be competent. The petitioner challenged the State Government's Reference No. 5090 dated 20-6-78 as being without jurisdiction. It is contended that since the earlier reference, made on the same cause of action and on the same ground, was rejected, the subsequent reference could not be competent. In pursuance of the subsequent reference the labour court passed an award ordering reinstatement of respondent No. 3 with full back wages. 4. The impugned award under reference is challenged inter alia on the following grounds- (1) The labour court had rejected the reference on earlier occasion under the U. P. Industrial Disputes Act, therefore, fresh reference could not be made on the same cause of action under the Central Industrial Disputes Act by the labour court. (2) The State Government did not have an authority, to make another reference if its earlier reference was rejected by the labour court unless the earlier award was set aside in an appropriate proceeding, subsequent reference could not be made. (3) The order of reinstatement of respondent No. 3 is wrong. Only compensation could have been granted to him. The petitioner had lost confidence in respondent No. 3 and his reinstatement would adversely affect the business of the petitioner. (4) The award is without jurisdiction because it is made in pursuance of the reference which was not competent. (5) After the admission of the guilt by respondent No. 3 the petitioner was not bound to hold the domestic enquiry. (6) The petitioner was not bound to ask respondent No. 3 to join his duty because he has abandoned the service suo motu and has conveyed this fact to the management. Respondent No. 3 has filed a counter to the writ petition. It is stated that labour court while dealing with the reference made under U P. Industrial Disputes Act has held that the dispute referred to it had not been espoused by the trade union of workmen. The trade union which has espoused the dispute was a one man show. Therefore, the reference made to it was refused to be considered. The labour court at that stage had not gone into the merits of the case but had dismissed the reference on a technical ground. The ground for rejection of the reference was that it was not presented by the Union as required under Law. Therefore, the reference made to it was refused to be considered. The labour court at that stage had not gone into the merits of the case but had dismissed the reference on a technical ground. The ground for rejection of the reference was that it was not presented by the Union as required under Law. The subsequent reference made under section 10 which was considered on merits and culminated in the award passed by the labour court was therefore, competent. The labour court, therefore, had the jurisdiction and competence to pass the impugned award and lack of its jurisdiction is refuted. Respondent No. 3 further states that .he has never made any admission of his alleged misconduct. The labour court had deducted Rs; 3729.66 from respondent No. 3's back wages taking into consideration the period during which respondent No. 3 had been gainfully employed somewhere else. 5. The petitioner has filed a rejoinder-affidavit also. The contents of the counter-affidavit are denied. 6. I have heard learned counsel for the parties at some length. The first point which I would like to take up for discussion is about the jurisdiction of respondent No. 2 to quash the award having regard to the fact that reference made earlier under U. P. Industrial Disputes Act was rejected on the same cause of action. Section 12 of the U. P. Industrial Disputes Act empowers the State Government to refer any industrial dispute or matters connected therewith under the Industrial Disputes Act or to deal with any report or settlement in accordance with the provisions of the Industrial Disputes Act. It is contended by learned counsel for the petitioner that power u/Sec. 12 of the U. P. Industrial Disputes Act is to be exercised by the State Government in the alternative. If it choses to refer a matter under the U. P. Industrial Disputes Act then it cannot at the same time refer the same dispute under the Central Industrial Disputes Act to the labour court. It has to choose to make a reference either under the U. P. Industrial Disputes Act or under the Central Disputes Act. It cannot make a reference under both the Acts. 7. It has to choose to make a reference either under the U. P. Industrial Disputes Act or under the Central Disputes Act. It cannot make a reference under both the Acts. 7. On close scrutiny of the provisions of section 12 of the U. P. Industrial Disputes Act it appears that the State Government is empowered to get a dispute which is covered by the provisions of U. P. Industrial Disputes Act or Central Industrial Disputes Act, determined by the labour court under either of the two Acts. It is true that it cannot refer the dispute under the provisions of U. P. Industrial Disputes Act and Central Industrial Disputes Act to the labour court simultaneously. It is also true that if a dispute is referred either under the U. P. Industrial Disputes Act or either under the Central Industrial Disputes Act to the labour court and in pursuance of the reference made by the State Government such labour court decides the dispute on merits, a fresh reference would be incompetent. To make it more elaborate the scheme of the two Acts postulates that the disputes could be brought before the State Government which has to make a reference to the labour court for deciding such dispute either under U. P. Industrial Disputes Act or under the Central Industrial Disputes Act. Under the U. P. Industrial Disputes Act it is the Union which has to espouse the cause of the workmen. Under the Central Industrial Disputes Act, in some matters individual employee can approach the State Government for setting the dispute and the State Government is competent to make a reference at the instance of an individual employee. Under the U. P. Industrial Disputes Act it was the Union alone which could espouse the cause of the workmen and no individual workman could contest a dispute before the labour court. If a decision is given on merits on a valid reference under the U. P. Industrial Disputes Act by the labour court then on the same cause of action it will not be permissible for the State Government to make a reference to the labour court under Central Industrial Disputes Act to make a fresh reference. That will have an effect of destroying the award given by the competent labour court on a competent reference in a manner which is not provided under law. 8. That will have an effect of destroying the award given by the competent labour court on a competent reference in a manner which is not provided under law. 8. The question which falls for determination is as to whether the State Government is competent to make a fresh reference to the labour court under the provisions of Central Industrial Disputes Act when an earlier reference made by it under the provisions of U. P. Industrial Disputes Act has been rejected not on merits but on technical ground, such as the Union consisting of one man not being duly constituted and not being competent to espouse the cause of a workman before the Government or before the labour court and it refuses to consider the reference on merits. From the reading of the impugned award it would appear that earlier reference made under the provisions of U. P. Industrial Disputes Act by the State Government was not competent because the Union which had allegedly taken up the matter of respondent No. 3 was a one man show and which could not espouse the cause of respondent No, 3, therefore, without going into the merits, the labour court rejected the reference by passing an award which was published and passed on the ground that the 380 M/s. Tarang Theatre v. State (M8 L. Bhat, J.) [ 1991 reference was not competent before it. At that stage also the State Government could have made a reference about respondent No. 3 under the provisions of Central Industrial Disputes Act. However, it was not done and after the reference was rejected not on merits the State Government's competence to make a fresh reference u/Sec. 10 of the Central Industrial Disputes Act could not be barred and was competent. If an award is made in consequence of that reference, the labour court has the power to make such an award. The State Government appears to have referred the matter to the labour court under the provisions of Central Industrial Disputes Act1 in accordance with law and action of the State Government is perfectly valid. The course adopted by the State government in making the reference to the labour court under the provisions of Central Industrial Disputes Act is not in any manner repugnant to section 12 of the U. P. Industrial Disputes- Act. The course adopted by the State government in making the reference to the labour court under the provisions of Central Industrial Disputes Act is not in any manner repugnant to section 12 of the U. P. Industrial Disputes- Act. The reference which is made by the State Government is a competent reference on which the award has been passed which is challenged in this writ petition. The earlier reference made by the State Government under the -provisions of the U. P. Industrial Disputes Act shall have to be treated as non-est. 9. The controversy raised by the petitioner about the second reference made by the State Government under the provisions of Central Industrial Disputes Act is not now res-integra. In M/s. Cox and Kings Ltd. v, Their Workmen. 1977 LIC 897, the Supreme Court has held that- "Bar operates only with regard to determination made on merits- Determination by Labour Court that no industrial dispute exists, no demand, notice having been served- Held there was no determination on merits of an industrial dispute or a question relating thereto-Second reference within one year from the date of order held was not barred," 10. In view of the aforesaid discussion the contention of learned counsel for the petitioner that the second reference is incompetent is devoid of merits. Next it was contended that respondent No. 3 had admitted his guilt of having abused or assaulted. 11. In view of the aforesaid discussion the contention of learned counsel for the petitioner that the second reference is incompetent is devoid of merits. 12. Next it was contended that respondent No. 3 had admitted his guilt of having abused or assaulted a customer. From the perusal of the record it is not possible for this Court to hold that respondent No. 3 at any time admitted his guilt. If that were so there was no need to order an enquiry into the conduct of respondent No. 3. A complaint was made about respondent No. 3's conduct and the employer had directed to hold an enquiry into the allegation which enquiry was never held, If there was, in the opinion of the employer an admission of guilt on the part of respondent No. 3 the employer could have taken action without ordering enquiry. A complaint was made about respondent No. 3's conduct and the employer had directed to hold an enquiry into the allegation which enquiry was never held, If there was, in the opinion of the employer an admission of guilt on the part of respondent No. 3 the employer could have taken action without ordering enquiry. It is true that when an explanation is called from an employee about his bad conduct and if the employee admits his bad conduct his admission may be sufficient to take action against him and the employer can rely on the said admission but if there is no admission or if the employer is not satisfied with the explanation he can order an enquiry into the allegation of bad conduct levelled against the employee, that is what has been exactly done in this case. Admission is neither discernible from the record nor was ever made by respondent No. 3 in respect of his alleged misconduct. The next point which was argued by learned counsel for the petitioner was that when the employer lost confidence in an employee he is not bound to retain such employee in his service. Loss of confidence in respondent No 3 is said to have affected the .petitioner's business. As such respondent No. 3 cannot be retained by the petitioner in his service. Some authorities also are cited at the Bar to support this contention. It is contended that Joss of confidence need not be pleaded expressly. If it is gathered from the facts and circumstances of the case it can be taken note of by the Court. This argument may sound attractive but it has no substance. There is no termination order against respondent No. 3 on any ground whatsoever The petitioner has presumed that respondent No. 3 had abandoned his job because in the opinion of the petitioner, respondent No. 3 had remained absent for more than IS days which would result in deemed abandonment of the employment by an employee. 13. Before the Labour Court the petitioner has not made any grievance about loss of confidence in respondent No. 3 or petitioner having suffered in his business on account of alleged bad conduct of respondent No. 3. The petitioner has been contesting the case on the ground of alleged abandonment of job by respondent No. 3 by having remained absent for more than 15 days. The petitioner has been contesting the case on the ground of alleged abandonment of job by respondent No. 3 by having remained absent for more than 15 days. It is, therefore, too late in the day for the petitioner to say in this Court that respondent No. 3 has by his conduct lost the confidence of his employer. These are all matters of facts which ought to have been placed before the labour court so as to allow the labour court to go into these questions. In assailing the award before this Court under Article 226 of the Constitution of India it is not open to the petitioner to urge a new ground which he did not put forward before the .labour court. 14. The Supreme Court in L. Michael v. M/s. Johnson Pumps Ltd., AIR 1975 SC 661 , has sounded a note of caution as regards what is called by it as neo-formula. It says - "Loss of confidence is no new armour for the management, otherwise security of tenure, ensured by the new industrial jurisprudence and authenticated by a catena of cases of the Supreme Court can be subverted by this neo- formula." Loss of confidence is often a subjective feeling. If an employer suspects that his employee has betrayed his confidence it can terminate his employment and discharge him without any stigma but such belief or suspicion of the employer should not be a mere whim or fancy. It should be bonafide and reasonable. It must rest on some tangible basis and the power has to be exercised by the employer in good faith objectively, which would mean, honestly with due care and prudence. If the termination on account of loss of confidence in the employee is challenged before the labour court on the ground of being colourable or mala fide or an act of victimisation or unfair labour practice, the burden is on the employer to disclose to the labour court that grounds of his impupned action are {bonafide and the Court has to test the matter judicially and objectively, in view of new industrial jurisprudence which guarantees security of tenure to an employee. 15. In this view of the matter it cannot be presumed that there was any allegation about respondent No. 3 having lost confidence of the petitioner, nor can the petitioner be permitted to raise this plea at this belated stage. 15. In this view of the matter it cannot be presumed that there was any allegation about respondent No. 3 having lost confidence of the petitioner, nor can the petitioner be permitted to raise this plea at this belated stage. If this plea was bonafide and reasonable it should have been agitated before the labour court so as to enable respondent No. 3 to answer the plea of no confidence in him by the employer, 16. As already stated, the petitioner has not terminated the services of respondent No. 3. It has not held any enquiry into his alleged bad conduct; 382 M/s. Super House Ltd. v. Prescribed Authority [ 1991 (Ravi S. Dhavan. J) It relied on the fiction created by the standing order about the abandonment of the employee by the petitioner. The standing order which is relied on by the petitioner reads as under :- "A workman remaining absent without leave for a period exceeding fifteen days at a stretch shall be deemed to have abandoned the employ- meat." After an enquiry was ordered by the employer into the conduct of respondent No. 3 the petitioner seems to have been of the opinion that the conduct of enquiry was futile, let the provisions of standing order about the deemed abandonment of service by respondent No. 3 be relied upon. Therefore, the labour court was concerned only to see whether the respondent No 3's employment would be deemed to have been abandoned by him or not. In fact the labour court was not considering the question of termination of respondent No, 3's services because there is no termination of service, nor there was an enquiry in respect of termination of service. It was held by the Division Bench of Bombay High Court in Rambhuwal Thakar Prasad v. Phoenix Mills, 1976 (Vol. I) LLJ 93, that opportunity of being heard must be provided before the legal fiction of abandonment of service can come into play. In this case no such opportunity was given to respondent No. 3, nor was it found out whether the fiction created by the standing order about the abandonment of the employment would come into play or not. 17. For the foregoing reasons, there is no merit in this writ petition. The writ petition is accordingly dismissed with costs. Petition dismissed.