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Andhra Scientific Co. Ltd., Masulipatam by the General Manager Vs. A. Seshagiri Rao represented by Andhra Scientific Co. Employees' Union, Masulipatam and Anr. (25.08.1959 - APHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petn. No. 589 of 1958
Reported inAIR1960AP526; (1959)IILLJ717AP
ActsIndustrial Disputes Act, 1947 - Sections 2 and 10(1); Constitution of India - Articles 226 and 227
AppellantAndhra Scientific Co. Ltd., Masulipatam by the General Manager
RespondentA. Seshagiri Rao represented by Andhra Scientific Co. Employees' Union, Masulipatam and Anr.
Appellant AdvocateR.M. Seshadri, ;V. Srinivasamurthy and ;K.V. Ramana Rao, Advs.
Respondent AdvocateE. Venkatesam, ;P. Kodandaramaiah, ;N.K. Acharya, Advs. and ;3rd Govt. Pleader
DispositionPetition dismissed
labour and industrial - dismissal of employee - sections 2 (s) and 10 (1) of industrial disputes act, 1947 and articles 226 and 227 of constitution of india - employee dismissed - store manager held workman by trial court - high court will not interfere with findings of trial court with applicability of section 2 (s) - not designation but nature of work to determine 'workman' - enquiry vitiated due to departmental bias - held, dismissal of employee wrongful. - all india services act, 1951.sections 8 & 11 & a.p. buildings (lease, rent and eviction) control rules, 1961, rule 5: [v.v.s. rao, g. yethirajulu & g. bhavani prasad, jj] refusal by landlord to receive rent - deposit of rent in court - held, a tenant has the option to take recourse to section 8 in case of refusal or evasion by.....seshachalapati, j.1. this is a petition under article 226 of the constitution of india to call for the records relating to the award made in industrial dispute no. 8 of 1957, on the file of the labour court, andhra pradesh, guntur, and to quash the award of the labour court dated 11-3-1958, directing the reinstatement of the 1st respondent in service ,and granting him certain other ancillary reliefs.2. the petitioner before this court is the andhra scientific company ltd., masulipatam, represented by its general manager. the company originally started as a private proprietary concern of one a. r. murthy. in or about 1937, it was converted into a public limited liability company and incorporated under the indian companies act. after such incorporation, a. r. murthy and company were the.....

Seshachalapati, J.

1. This is a petition under Article 226 of the Constitution of India to call for the records relating to the award made in Industrial Dispute No. 8 of 1957, on the file of the Labour Court, Andhra Pradesh, Guntur, and to quash the award of the Labour Court dated 11-3-1958, directing the reinstatement of the 1st respondent in service ,and granting him certain other ancillary reliefs.

2. The petitioner before this Court is the Andhra Scientific Company Ltd., Masulipatam, represented by its General Manager. The Company originally started as a private proprietary concern of one A. R. Murthy. In or about 1937, it was converted into a public limited liability Company and incorporated under the Indian Companies Act. After such incorporation, A. R. Murthy and Company were the managing agents till 1949, when Srimanth Industrial (Private Limited) became the managing agents. The principal business of the Company is the manufacture and sale of scientific instruments, apparatuses, glassware and chemicals with its factory and head office located- at Masulipatam.

The Company has a General Stores Department for receiving, stocking and issuing the manufactured goods against orders. The Stores Department consists of a number of Store Keepers, Clerks, Attenders, Packers, Despatching and Forwarding Clerks. The functions of the various employees of the Company are regulated by certain staff regulations and orders to which references will be made in due course.

3. It is not in dispute that at the relevant period to this enquiry, Sri K. Ramanatha Babu one of the Directors of the Managing Agents Company was in charge of the administration of the Company, and Sri Laxmipathi was the General Manager.

4. The 1st respondent, Sri A. Seshagiri Rao, is the brother of A. R. Murthy, the founder of the concern and had been in its employment since 1927 and continued in service even after it was converted into a public limited liability Company. From 1937 to 1940 he was the Office Manager in the Madras Branch. In 1940 he was transferred to the head office and from that time onwards he worked as the stores manager. It is alleged by the petitioner-Company that in 1953 due to the unsatisfactory nature of the work of the 1st respondent his salary which was then Rs. 300/- was reduced by Rs. 50/-with effect from 1-9-1953. It is immaterial to discuss the question whether the reduction of the 1st respondent's salary was a punitive act or a measure of retrenchment. In May 1955, Sri K. Ramanatha Babu, the Director of the Managing Agents Company inspected the Stores Department and gave certain instructions to the 1st respondent for the improvement of the work in that Department and directed him to complete the work in the manner suggested, by 17-10-1955.

It is alleged that though further extensions of time were applied for by the 1st respondent and granted by the petitioner-company for the due implementation of the directions given by the Director, the 1st respondent had not finished the work. On 25-4-1956, the 1st respondent was transferred to the Quotations Department. On 28-4-1956, he-was placed under suspension by an order of the Director, Sri K. Ramanatha Babu, and a charge-sheet containing specific charges was communicated to the 1st respondent on the same day. The charges framed against the 1st respondent are in these terms:

'1. Your handling of the Stores has throughout been most reckless and inefficient and your work was always very unsatisfactory.

(a) The items in the Stores were never arranged properly and were never labelled.

(b) A very large number of discrepancies between the physical inventories and ledger balances were being noticed at every time of annual closing and stock taking which were not properly explained or reconciled at any time though assistance was given; vide note dated 17-11-1955.

(c) The annual stock taking was never properly done and the stock lists were never submitted for audit within reasonable time.

2. Your work was found so unsatisfactory that the Directors felt that they had no option but to dispense with your services in August 1953 But at the request of Sri A. N. Rao, your brother, who was then a Director of the Company and on the personal undertaking of the General Manager for your good conduct, your, salary was reduced by Rs. 50/- per month with effect from 1-9-1953. You did not show improvement in any manner even after this drastic action. The closing stock lists as on 30-6-1954 as audited clearly revealed how recklessly the stores were handled.

3. In day to day handling of the stores you were very careless. To mention a few instances:

(a) On 23-11-1953 you sent leaky drums for getting spirit from Vuyyuru.

(b) As admitted in your, explanation dated 25-12-1953, you did not maintain any record for the packing materials of considerable value being purchased from time to time.

(c) You were required to submit stock list of slow-selling items. As admitted in your explanation dated 8-8-1955, you got the lists prepared from the ledgers without reference to the actual stocks, (d) Several items in stock for which orders were received, were recklessly certified as not available, in stores-vide, your explanations dated 8-8-1955 and 10-8-1955.

(e) You were refusing to receive items into the stores

4. That after several reminders you submitted closine stock-lists as on 30-6-1955, at 4-25 p. m. on 16-4-1956.

5. You proved yourself to be unfit for any place of trust or responsibility by utilising for yourself over Rs. 5,000/- when you were President of the Employees' Co-operative Society and also allowed the other servants of the Society to indulge in acts of temporary misappropriation.

6. Your work in handling stores for despatches against orders, was found as unsatisfactory, that by Memo dated 18-2-1956 Mr. T. Kameswara Rao, bad to be placed in charge of the stores.

7. It was your slogan throughout that the stocks and stock ledgers can never be kept properly and that the annual stock lists can never be correct unless all work (of receipts and issues) be stopped for 1 1/2 months for physical dock taking and another 1 1/2 months for reconciliation of discrepancies.

8. (a) The stores were kept by you in such a hopeless and confused manner that the Managing Agents were obliged to make a personal inspection in September 1955. At your request time was given to you upto 17-10-1955 for arranging the items in order and fixing up labels. You did not do this work in spite of repeated instructions.

(b) Even on 21-11-1955 you stated, 'When I committed previously about the finding of the work by 17-10-55, I did so on the spur of the moment without an idea whatsoever'. You wanted time upto 31-12-1955.

(c) You were definitely intimated on 25-11-1955 that if the work be not finished by 1-1-1956, the Management would have no option but to replace all the members of the Stores Section.

(d) You did not complete the work even by28-4-1956 the day on which you were suspendedand the work entrusted to others.

You are, therefore, requested to show causewhy your services should not be dispensed with for utter carelessness, negligence of duty amounting to grave and unpardonable misconduct and inefficiency. You may file a written statement, if you so desire, on or before 9-6-1956, and cite such witnesses as you may desire to be examined on your behalf in the enquiry to be conducted as early as possible after 9-6-1956'.

5. The 1st respondent does not appear tohave filed a regular written statement on or before8-6-1956, as required in the charge memo. But on7-6-1956, he wrote a letter denying in a generalway any act of remissness on his part and assertingthat he had completed all the work entrusted tohim from time to time. He requested the Companyto continue him in the quotations Department, ifhis work in the Stores Department was not foundsatisfactory. Finally, he appealed to the Companyto forgive his faults, mistakes, commissions andomissions and give him a final opportunity to servethe institution. On 24-6-1956, he wrote a letteragain to the Director of the Managing Agents asking for reinstatement in service by rescinding theorder of suspension and dropping all further proceedings and assuring that, all the mistakes wouldbe rectified.

The order of suspension was not rescinded. On 30-7-1956 the General Manager informed the 1st respondent that he (the General Manager) was directed by Sri K. Ramnatha Babu, the Director,to conduct an enquiry into the charges framedagainst the 1st respondent. By his letter dated22-8-1956, the 1st respondent requested the Director that the enquiry, may be conducted by anyperson other than fie General Manager as he waspersonally associated with many matters connected,with the charges framed against him.

By a letter dated 3-8-1956, the 1st respondent was informed that there was no basis for his apprehension and that his request could not be acceded to. The enquiry was started on 3-9-1959 and was adjourned more than once at the instance of the 1st respondent. Witnesses were examined on various dates between 18-9-1956 and 28-2-1957. On 28-2-1957, the 1st respondent intimated that he would file a written statement before the General Manager and actually filed one on 7-3-1957 The enquiry was closed on that day and by an order dated 16-3-1957, the Director of the Company of the Managing Agents, Sri K. Ramanatha Babu, dismissed the 1st respondent from the service of the Company.

6. The 1st respondent's cause was espoused by the Andhra Scientific Company Employee's Union, Masulipatam. In G.O. M/s. No. 882 (Social Welfare and Labour Department) dated 30-8-1957 the Government of Andhra Pradesh referred the industrial dispute between the 1st respondent represented by the Union and the Management of the petitioner-company to the Labour Court under Section 10(1)(c) of the Industrial Disputes Act for adjudication. The dispute as stated in the annexure is as follows:

'Whether the suspension of Sri A. Seshagiri Rao, from 28-4-1956 and his subsequent dismissal from 16-3-1957 is justified. If not to what relief is he entitled?'

7. Before the Labour Court, three witnessesexamined on behalf of the petitioner-workman the1st respondent herein and 7 witnesses on behalf ofthe Company.

8. The Labour Court found that all charges, other than charges 1(a) and 8 had not been made out and that even charges 1 (a) and 8 had been only partially made out, that the laches proved against the 1st respondent was not so grave as to deserve a dismissal and, therefore, set aside the order of the dismissal. But inasmuch as charges 1 (a) and 8 were held to have been partially proved, the Labour Court thought that the ends of justice would be met by directing that the period from 16-3-1957 to 16-3-1958 be treated as suspension from service and that the 1st respondent should be reinstated with effect from 16-3-1958 and that the 1st respondent was entitled to compensation at the rate of Rs. 250/- per mensem from 16-3-1958 to the actual date of reinstatement It was also held that the Company was at liberty to absorb the 1st respondent in any Department other than the Stores Department and that during the pendency of the enquiry that 1st respondent should be given subsistence wage, a sum representing half his salary for the period commencing from 28-4-1956 till 18-3-1957.

9. It is this decision of the Labour Court that is assailed in this Writ Petition.

10. Sri R.M. Seshadri, the learned counsel For the petitioner-company has raised before, us four main contentions: (i) that the Labour Court should have held that, the 1st respondent was not a workman within the meaning of Section 2(s) of the Industrial Disputes Act and, therefore, outside the scope of its jurisdiction: (ii) that fee Labour Court was wholly in error in holding that the departmental enquiry conducted into the conduct of the 1st respondent is full of grave irregularities and, therefore, vitiated; (in) that in view of the finding that charges 1 (a) and 8 have been partially proved, the Labour Court had no right to set aside the order of dismissal; and (iv) even if the dismissal is to be set aside, the Labour Court had no right to direct the reinstatement of the 1st respondent.

11. For the 1st respondent, it has been contended: firstly that he was a workman within the meaning of the definition; secondly, the examination as a witness of the General Manager who conducted the enquiry constitutes a gross violation of all principles of natural justice; thirdly, that the finding of the Labour Court that charges 1 (a) and 8 have been partially proved mean and can only mean that the charges as framed have not been made out and that there is nothing in law like a partial proof; and fourthly that the Labour Court is fully competent to direct reinstatement, and lastly, that in any view interference under Article 228 of the Constitution being discretionary, it should not be exercised to set at naught a decision rendered by the Labour Court after a full and careful assessment of the evidence especially when it is so manifestly in accord with the substantial justice of the case.

12. The first, question that falls to be considered is whether the first respondent is a workman or not within the meaning of Section 2(s) of the Act. Whether a particular person is a workman as defined in the Act or not is, essentially a question of fact to be decided by the Labour Court on the evidence available and with regard to the nature of the work assigned to the person or persons as the case may be. When the Labour Court has given a finding that the 1st respondent in this case is a workman within the meaning of Section 2(s) of the Act, that finding would normally be conclusive and the High Court would be loath to interfere under Article 226 of the Constitution except in cases where there is a clear error on the fare of the record. It has to be seen, therefore, whether the conclusion which the Labour Court has come to is so vitiated by any manifest error.

13. The expression 'Workman' is denned in Section 2(s) of the Act in these terms :


(i) who is subject to the Army Act, 1950 (XLVI of 1950) or the Air Force Act, ,1950 (XLV of 1950) of the Navy (Discipline) Act, 1934 (XXXIV of 1934); or

(ii) who is employed in the police service or as an officer or other employee of a prison; or

(iii) who is employed mainly in a managerial or administrative capacity; or

(iv) who being employed in a supervisory capacity, draws wages exceeding five bundled rupeesper mensem or exercises, either by the nature ofthe duties, attached to the office or by reason ofthe powers vested in him, functions mainly of amanagerial nature.'

14. The contention of the petitioner is that the nature of the functions performed by the 1st respondent are mainly of a managerial character and, therefore, he Would fall within the scope of the exclusion enacted in the second limb of Sub-clause (4) to Section 2(s). The meaning of the expression 'Manage' as stated in, the Oxford Dictionary is: 'the action or manner of managing; management; conduct of affairs, administration, direction; control.' It has to, be seen whether the functions assigned to and performed by the 1st respondent path, take of administration, direction and control. In deciding this question the particular designation given to the 1st respondent is by no means conclusive. The decision must rest upon the nature of the work assigned to and performed, by the employee and whether it requires initiative, control and command. In the Staff Regulations issued by the Company, and marked as Ex A-8 there is a classification of the staff into five categories:

(A) Professor, Madras Branch Manager, General Manager and General Assistant.

(B) Stores Manager, Sales Managers, WorksManagers, Welfare Officers and Assistant Managersat the Branches.

(C) Representatives, Asst Works Managers, Asst. Stores Managers, Asst. Sales Managers, Supervisors, Accountants, Headclerks, and Internal auditors.

(D) Asst. Supervisors, Asst. Accountants, Cashiers, Clerks and Typists.

(E) Attenders, Peons, Offices Boys and otherservants.

15. The stores Manager to designated as an Officer of 'B' category and, under Reg. 18(3) Officers of classes A and B are given the right to reprimand the employees under classes C, D and E and impose a fine not exceeding Rs. 2/-. The functions assigned to the 1st respondent as Stores Manager are specified in the Office Order dated 31-12-1949 and marked as Ex. A-10. It is in these terms.

'4. Mr. A. Seshagiri Rao: Stores Manager: Maintenance of general stores-packing and despatching, stock accounts and effective check over them -- stock requisitions.'

16. The General Manager, as D.W. 6 has stated in his evidence that as Stores Manager, Seshagiri Rao, was in full charge of the Stores including valuable material like platinum-ware and high power foreign objectives like microscopes and that he had to maintain all the stores and the records concerned with stores in proper order, that he had to issue, gate passes for any article going out of the stores, and arrange for the despatch of the same and that he could also fine and reprimand the employees in the section under his control. He has also stated that Seshagiri Rao enjoyed special privileges as an Officer in matter of attendance, leave and taking part in high level discussions, on all matters of policy, and that he had absolute discretion in all matters relating to the Stores and none couldwelfere with him and that even after retrench-merit he had four clerks, three attenders and about 8 packers working under him. He has asserted that as Stores Manager the duties of Seshagiri Rao were administrative and not clerical. In the cross-examination, however, he has stated as follow:

'Seshagiri Rao could not make any appointment in his Department. He could not suspend or dismiss any employee under him. He could not grant leave independently without my sanction. He issues gate passes to the articles sold leaving the Stores. He also issues personal gate passes to the persons employed under him. He was not consulted when retrenchment took place. Seshagiri Rao has not imposed any fine on any employee.'

17. Of the other witnesses the only evidence that has real bearing on this question is that of D.W. 3, the present Stores Manager. He claims that he has discretion in effecting sales and that with regard to cash sales be could fix prices and with regard, to purchase items he could fix the price taking into consideration the cost price, market condition and the condition of the articles and that he could do so without consulting the General Manager. He has also stated that the officers have a separate attendance register and that the salaries of the officers unlike those of other clerks are brought to their tables and placed in covers.

18. The oral evidence of these two witnesses appears to be inconsistent with a number of staff orders or memoranda issued by the Company and marked as Exs, A-1, A-2, A-3, A-4, A-5, A-6 and A-7. Ex. A-1 which is a staff memo dated 10th June 1950 states dearly that no purchase should be made without specific sanction of the Managing Agents in the future. Ex. A-3 provides that only the General Manager or the Works Manager should issue pass orders in the absence of the Managing Director. Ex. A-3 shows that no conduct or service certificate could be issued to any particular member of the staff unless authorised by the Managing Agents. Ex. A-5 which is also a staff memo is in these terms:

'Any money given to General Stores or Workshop under petty cash account must be spent invariably for the specific purposes for which it is given. All moneys used except for railway freightinwards and outwards and conveyance inwards and outwards must be spent only after specific sanction in writing is obtained. This procedure should not be violated under, any circumstances whatsoever.'

Ex. A-5, shows that small purchases like waste cloth, dealwood boxes and newspapers could be made by the Stores Manager with the General Manager's sanction. In Ex, A-7, the General Managerwas not permitted even to keep Rs. 10/- as imprest advance.

19. Whatever be the high sounding words employed by the General Manager as P. W. 8, and the present Stores Manager, as D.W. 3, the functions actually assigned to and performed by the 1st respondent are devoid of real initiative, command and control.

20. The learned counsel for the petitioner very strenuously contended that the 1st respondent himself had characterised his work in a manner indicative of control and command. Reliance is placedon the statement D/- 7-3-1957 of the 1st respondent with respect to the nature of the work performed by him. In that statement he has categorised his functions and stated as follows:

'Accordingly my duties and responsibilities as Stores Manager were never laid down on paper and I was given very wide powers and I was allowed to use my discretion so far as the management of the stores were concerned.'

21. We are not very much impressed with the argument that this statement constitutes an admission on the part of the 1st respondent as to the nature of the work that he was performing. It is obvious that the 1st respondent has inflated notions of his own importance in the work of the Company. There is no warrant for these high pretensions. Both in the staff Regulations and the various meoranda issued from time to time by the Company, the work of a General Manager had been divested of all elements that make for control and command. It is argued that the mere fact that the 1st respondent is under the control of his higher officers like the General Manager and the Managing, Agents will not militate against his possessing powers of command and control.

It is suggested that in every organisation or a Company there needs must be a hierarchy of officers and the fact that the actions of the 1st respondent are subject to the confirmation or veto as the case may be of his higher officers will not take away the element of control and command vested in him. In this connection, Mr. Seshadri the leached counsel for the petitioner has, invited our attention to a decision of the Madras High Court in T. P. Chandra v. Commissioner for Workmen's Compensation, : AIR1957Mad668 .

That was a case where the expression 'in a position of management' in Section 1(a) of the Madras Shops and Establishments Act, had to be construed. It was found as a fact that the appellant in that case was in sole charge of the Madras Branch, supervised the work of the clerks employed therein, operated on the bank account of the firm, made payments and entered into agreements with third parties on behalf of the firm, granted leave to the staff and appointed some of them. In those circumstances, it was held that the appellant must be regarded to be a person in the position of management. Mr. Seshadri, relied upon certain observations in the judgment, where referring to the earlier findings of the Labour Commissioner, the learned Chief Justice pointed out that even if the head office was issuing directions to the appellant as Branch Manager and the latter had no authority to incur expenditure not sanctioned by the Company and could not make appointments or dismiss all the employees of the Branch and had no power to decide policies still, it could not be said that the appellant was not in a position of management.

In the first place, this decision did not torn upon the scope of the definition of Section 2(s) of the Industrial Disputes Act, as amended by the Act XXXVI of 1956. In the second place, the facts found by Rajagopalan J., and another learned Judge would clearly indicate that the Branch Manager had in some respects initiative, command and control.

22. It is unnecessary to refer to several other decisions cited which are anterior to the amendment of Section 2(s) of the Act, and which turned upon the particular facts of each case.

23. We are of opinion that even on the assumption that the functions assigned to and exercised by the 1st respondent as Stores Manager are not entirely lacking in the elements of initiative command and control, they are essentially supervisory in character. Under the office order dated 31st December 1949 he has to be in charge of the maintenance of General Stores, packing and despatching, Stock accounts and effective check over them and incharge of stock requisitions. His functions being supervisory in character and inasmuch as he was on the material date not receiving a salary of more than Rs. 500/- the 1st respondent would be a workman within the meaning of the 1st limb of provision IV of Section 2(s) of the Industrial Disputes Act.

24. Before the Labour Court a contention was advanced on behalf of the 1st respondent that whatever be the nature of the function and status of the Stores Manager, when the disciplinary action was taken against him he was in the charge of the quotations Department and that the functions that were assigned to and discharged by him in that capacity cannot be considered as managerial In character. In support of that contention, reliance was placed upon a decision of the Madras High Court in Ramaswami Bank Ltd. v. Addl. Commissioner for Workmen's Compensation, 1956-2 Mad LJ 254, where it was held that in order to decide whether a given employee of an establishment is a person employed in a position of management within the meaning of Section 4 (1) (a) of the Madras Shops and Establishment Act 1947, it is the valid assignment of the work by the employer to the employee and the actual work an employee was doing under such assignment that should furnish the real test and that the relevant time for deciding the question is the period immediately preceding the claim and that it was not enough to show that a person was at one time employed in a position of management.

The Labour Court agreed with the contention advanced on behalf of the 1st respondent and held that on the date of the suspension, the 1st respondent was in the Quotation Department where he was looking after the enquiries and giving instructions to send catelogue and other price lists which could not be regarded as functions of a managerial or administrative character, and, therefore, on the date of the disciplinary proceedings he would be a workman. Mr. Seshadri very strenuously contended before us that the 1st respondent actually worked for three days in the Quotation Department, that his assignment thereto did not alter his status as an officer or in any manner abridge the scope of his work and that the decision of the Madras High Court upon which the Labour Court relied was easily distinguishable on the facts. We do not think it necessary to consider this question further, as we have taken the view that even as Stores Manager the work of the 1st respondent was not administrative or managerial, but merely supervisory in character.

25. Further, there appears to be one material circumstance against the contention of the learned counsel. Under Regulation 5 (II) of the Staff Regulations (Ex. A-S) the Company is entitled to terminate the services of an employee with 30 days notice in writing or of the payment of the sum equivalent to his pay in lieu thereof. But in the case of a workman, a different procedure is prescribed in the Industrial Employment (Standing Orders) Rules marked as Ex. A-9. Rule 20 (1) therein provides that no order, of dismissal shall be made unless the workman concerned is informed in writing of the alleged misconduct and is given an opportunity to explain the alleged misconduct against him.

In this case, it is not in dispute that the 1st respondent was given notice to show cause why his services ought not to be terminated. There was an enquiry held, The Management, therefore, has treated him as a workman and it would not now be open to them to repudiate the implications of the procedure which they themselves have pursued. We are, therefore, of the opinion that the finding of the Tribunal that Seshagiri Rao is a workman is correct. That being so, there is no substance in the argument of the learned counsel for the petitioner that the Labour Court had decided the essential jurisdictional fact wrongly and the assumption of jurisdiction to enquire into the dispute based upon that erroneous finding is an error that needs rectification by a writ of certiorari under Article 226 of the Constitution.

26. The second argument of Sri Seshadri is that the Labour Court is in error in holding that the Departmental enquiry against the 1st respondent culminating in his dismissal is vitiated by grave irregularities and opposed to natural justice. It is further contended that on account of the unwarranted findings with respect to the irregularities vitiating the enquiry the Labour Court converted itself into a Court of appeal, as it were, and determined whether the charges framed were proved or not, a procedure which is unsustainable in law.

27. It has been very strenuously pressed on us that the 1st respondent was given, notice of the action proposed to be taken against him, that charges were framed with precision and particularity with full opportunities given to him to submit his explanation, that in the departmental enquiry the witnesses were examined with full opportunities for the 1st respondent to cross-examine them and that he was permitted to file a final written statement which was duly considered and that, therefore there is no violation of the principles of natural justice. It is contended that all that conformity to natural justice requires is that action should not be taken against the employee without adequate opportunities being given to him to meet the charges and that on the facts of this case such opportunities were given and, therefore, the Labour Court misapprehended the scope of its jurisdiction and set aside the order of dismissal.

28. It is true that a Company or Management is entitled to regulate its administration and takedisciplinary action against such of its employees as are found to have been guilty of conduct justifying dismissal or suspension as tie case may be. But the tights and autonomy of a Company or the Management are not absolute. In cases where the disciplinary action is vitiated by not complying with the principles of natural justice, the appropriate Labour Tribunals have jurisdiction to interfere. In G. McKenzie and Co., Ltd. v. Its Workmen, : (1959)ILLJ285SC , the Supreme Court held as follows ;

'It is for the management to determine what constitutes major misconduct within its standing orders sufficient to merit dismissal of a workman, but in determining such misconduct it must have facts upon which to base its conclusions and it must act in good faith without caprice or discrimination and without motives of vindictiveness, intimidation or resorting to unfair labour practice and there must be no infraction of the accepted rules of natural justice. When the management does have facts from which it can conclude misconduct its judgment cannot be questioned provided, the above mentioned principles are not violated. But in the absence of these facts or in case of violation of the principles set out above its position is untenable.'

29. To the same effect is another decision of the Supreme Court in Indian Iron and Steel Co. v. Their Workmen, AIR 1958 SC 130, where their Lordships have observed as follows:

'Undoubtedly, the management of a concern has power to direct its own internal administration and discipline; but the power is not unlimited and when a dispute arises. Industrial Tribunals have been given the power to see whether the termination of service of a workman is justified and to give appropriate relief. In cases of dismissal on misconduct, the Tribunal does not, however, act as a Court of Appeal and substitute its own judgment) for the management. It will interfere (i) when there is a want of good faith; (ii) when there is a victimisation or unfair labour practice, (iii) when the management has been guilty of a basic error or violation of a principle of natural justice, and (iv) when on the materials, the finding is completely baseless or perverse.'

30. It has, therefore, to be seen whether the Management has been guilty of a violation of the principles of natural justice. The expression 'Natural Justice' may not be capable of precise definition. But the basic and fundamental requirements of 'natural justice' are well known and have been repeatedly affirmed by Courts of highest authority. In Local Government Board v. Arlidge, 1915 AC p. 120 at 132, Lord Chancellor Viscount Haldane states:

'My Lords, when the duty of deciding an appeal is imposed, those whose duty it is to decide it must act judicially. They must deal with the question referred to them without bias, and they must give to each of the parties the opportunity of adequately presenting the case made. The decision must be come to in the spirit and with the sense of responsibility of a tribunal whose duty it is to mete out justice.'

31. Particular forms of legal procedure may I not be necessary, but it is of the very essence of an enquiry and a decision that the person enquiring must be one without bias and should render the decision in a judicial spirit and in accordance with the principles of substantial justice.

32. It has, therefore, to be seen whether the enquiry culminating in the dismissal of the 1st respondent is opposed to the principles of natural justice.

33. The finding of the Labour Court on this part of the case is based upon three circumstances: (i) that the General Manager who was directly associated with the work of the 1st respondent conducted the enquiry; (ii) that the General Manager who was conducting the enquiry got himself examined as a witness for the Company in the enquiry, and (iii) the Director of the Managing Agents, Sri Ramanatha Babu, did not bring to bear on the decision he had given an open, fair and impartial mind.

34. As regards the first point that the General Manager should not have conducted the enquiry, the argument of Sri Seshadri is twofold. Firstly, that there is nothing illegal in the General Manager conducting the enquiry, and secondly, that inasmuch as the final decision rested with and was actually rendered by the Director representing the Managing Agents, the 1st respondent could possibly have no grievance. In respect of the first argument it is pointed out that there is nothing in the staff Regulations or the Standing Orders and the Rules of the Company interdicting the conduct of the enquiry by the General Manager.

Assistance in this behalf was sought from the observation of Balakrishna Ayyar J., in Sridharan Motor Service, Attur v. Industrial Tribunal Madras, 1959-1 Lab LJ 380 (Mad), that in most of the large establishments enquiry into the allegations of misconduct by a member of the subordinate staff is held by some one placed above him and so long as the principles of natural justice are not violated, the person against whom the enquiry is being conducted will not be heard to say that the enquiry is being held by a person in the employment of the management. The objection of the 1st respondent is based not so much to the jurisdiction of the General Manager to hold the enquiry under the directions of the Director but to the fact that the particular General Manager was intimately connected with the charges. On August, 22, 1956, the 1st respondent wrote to the Managing Agents a letter (Ex. A-24) to the following effect:

'With reference to the letter dated 30-7-1956 from the General Manager informing me that he was directed by you to conduct an enquiry into the charges framed against me, I beg to submit that the General Manager is directly and personally associated with many matters connected with the charges framed against me and as such I very strongly feel that he cannot sit with an open mind in conducting the enquiry, which is absolutely necessary for dispensing a just and an equitable verdict. So, I request you that any person of year choice other than the General Manager may be appointed to conduct the enquiry.

I further submit that Sri R. D. L. Narasimha Murthy Garu, one of the Directors of the Company and Sri B. Venkatappiah Garu, Secretary of theEmployees Union of the Company may be allowed to be present at the proceedings of the proposed enquiry as observers.'

35. To this letter, the General Manager replied on 30-8-1956 (Ex. A-27) in these terms:

'Mr. A. Seshagiri Rao is hereby informed that the Managing Agents know how best to conduct an impartial departmental enquiry and that he cannot choose to dictate by whom the enquiry is to be conducted and the terms of the enquiry. The whole trend shows that he is somehow trying to evade facing the enquiry. He may rest assured that every fair and reasonable opportunity will be given to him in the enquiry. His fears, if any, to the contrary are merely imaginary and groundless. He is required to attend the enquiry as previously intimated. The Director, Managing Agents, may, if possible, conduct the enquiry himself. In any event the final decision based wholly on evidence, will be by him.'

36. After receiving this letter, the 1st respondent again wrote a letter (Ex. A-28) to the Director, Managing Agents recording his objections and protest at the rejection of his request for the appointment of any person other than the General Manager to conduct the enquiry. The General Manager, replied in these words:

(Ex. A-29).

'The applicant should note that it is not open to him to dictate, terms of the enquiry. His objection and protest are uncalled for and meaningless. The General Manager who is the occupier, is the proper authority to conduct the departmental enquiry. The applicant has a right of appeal against his final decision under the Staff Regulation, to the Managing Agents.

However, the decision in this case, based on the evidence, will as desired by the applicant, he by one of the Directors of the Managing Agents. The applicant is obviously trying to evade and delay the enquiry. If the applicant does not choose to attend, the enquiry will be held ex parte, this evening (3 p.m.).'

37. It cannot be denied that the General Manager had on several occasions been critical of the work of the 1st respondent and that it is on his report that the 1st respondent was placed under suspension. Whether it is true that the General Manager himself framed the charges and also drafted the suspension order or not, it is manifest from the evidence that he had taken a very unfavourable view of the work of the 1st respondent, It might have perhaps been more appropriate, as the Labour Court has suggested if the Management had deputed a person other than the General Manager to conduct the enquiry. But at the same time we are not prepared to hold that the mere conduct of the enquiry by the General Manager is by itself so opposed to the principles of natural justice so as to render, the entire proceedings illegal.

38. The second irregularity mentioned by the Labour Court is that the General Manager who conducted the enquiry got himself examined. That a person who conducts the departmental enquiry ought not to have given evidence in that enquiry is such an obvious principle of natural justice that it does not require any amplification. In Ashutosh Das v. State of West Bengal, : AIR1956Cal278 , it was held that in a departmental enquiry the Enquiring Officer cannot rely upon his own evidence and to do so would be contrary to all rules of natural justice, because no person can be both a judge and a witness.

39. In Bejoy Chandra Chatterjee v. The State of West Bengal, 58 Cal WN 988, it has been held that although a departmental enquiry need not be carried out strictly according to rules applicable to judicial proceedings, still, the principles of natural justice should be followed and that it is fundamental principle of natural justice that a judge cannot give evidence before himself and weigh the same while coming to a decision.

40. In State of U.P. v. Mohammed Nooh, AIR 1958 SC 86, the Supreme Court held that where in a departmental 'trial' against a police constable, before a Deputy Superintendent of Police, to contradict the testimony of a prosecution witness, the Deputy Superintendent of Police himself had his testimony recorded, there was a grievous violation of natural justice, as it indubitably evidenced a state of mind which clearly disclosed considerable bias against the constable and that it was shocking to the notions of judicial propriety and fair-play.

41. It has, however, been contended that this rule has no application to the present case, because all that the General Manager did was merely to record the evidence and that the final decision was rendered by the Director of the Managing Agents. Though perhaps technically this argument may be plausible, we cannot however, resist the conclusion that it was wholly inappropriate for the officer conducting the enquiry to himself give evidence, and that, that circumstance considerably impairs the fairness and the justice of the proceedings that ultimately have ended in the dismissal of the 1st respondent.

42. It is contended by Mr. Seshadri that the 1st respondent did not object to the examination of the General Manager as a witness at the time when he was giving evidence and, therefore, he cannot make a grievance of it subsequently. In his written statement dated 7-3-57 and marked as Ex. A-42 the 1st respondent has stated his objection in these words;

'For some time the General Manager sat as Judge and conducted the proceedings. After finding that no useful evidence is forthcoming from the witnesses, he wanted to become a witness to give evidence against me. So, Sri Ramanadha Babu, a Director, of the Managing Agents had to fit as judge. This is a novel procedure adopted by the Management wherein the Judge himself became a witness.'

43. Finally in his claim statement in the Industrial dispute, he has also reiterated the objection. At all material times, therefore, he was taking the objection. Even if at the time when the General Manager was giving evidence there was no formal protest by the 1st respondent, we are unable to agree with the contention of Sri Seshadri that the 1st respondent must be deemed to have acquiesced in the procedure adopted and is thereby precluded from raising the objection at a later stage.

44. The third ground upon which the Labour Court has come to the conclusion that the enquiry is vitiated by serious irregularity also appears to us to be correct. After the five witnesses were examined. Sri Ramanadha Babu himself took over the enquiry and examined the General Manager as a witness on behalf of the Company. He says in his evidence as follows;

'I did not decide as to who should be witnesses when the enquiry began. General Manager earns as witness in the enquiry. I wanted the General Manager, to be a witness towards the end. So, I took up the enquiry myself. I did not know at the beginning that the General Manager should be a witness. While going through the evidence and perusing the records I decided that, the General Manager should depose as a witness.'

45. The meaning of this evidence is obvious. The Director of the Managing Agents obviously read the evidence and came to the conclusion that there were gaps in the evidence which could only be supplied by the General Manager. In the circumstances, it cannot be said that the Director, Sri K. Ramanadha Babu, had an open, impartial and unbiased mind in deciding the case. It cannot also be said that he did not have preconceived notions as to the remissness and derelictions, such as they were of the 1st respondent. He had inspected the Stores in the 3rd week of May 1955 and had recorded his opinion that the arrangement in the Stores was found very unsatisfactory.

It is very hard to believe that he did not import his personal impressions about the work of the 1st respondent into the decision to which he ultimately came. We are, therefore, in agreement with the Labour Court that the enquiry is vitiated by irregularities constituting violation of the principles of natural justice.

46. The third contention of Mr. Seshadri is that inasmuch as the Labour Court has found that charges 1 (a) and 8 have been partially proved, it had no jurisdiction to set aside the dismissal and direct reinstatement of the 1st respondent from 16th March 1957 to 16th March 1958. It is true that when once misconduct is proved, the Labour Court would not have jurisdiction to substitute its own judgment as to punishment. But it has been contended by the learned counsel for the respondent, and in our view, rightly, that there is nothing like a partial proof. It is also argued by him that 95 p.c. of the labelling of the articles and the racks were completed by April 1956 as admitted by R.W. 5, and that there was only delay in the completion of the directions.

It is further argued that all that the labour Court has said was that there was some delay in the completion of the work and that there is no finding at all that it would amount to 'habitual negligence or neglect of work' constituting misconduct within the meaning of Clause (L) of Rule 19 of the Industrial Employment (Standing Orders) Rules, Exhibit A-9. In the circumstances of this case, we agree with the contention of the learned counsel for the respondent that charges 1 (a) and 8 should be deemed to have been not proved at all. In view of the finding of the Labour Court that the enquiry is vitiated by grave irregularities and the order of dismissal is unsustainable, it seems to us that the Management cannot have any ground for complaint regarding the suspension.

47. Lastly, it has been very strenuously contended by Sri Seshadri that even on the footing that the order of dismissal made by the management is untenable in law; the Labour Court has no right to direct reinstatement. It is argued that the autonomy with respect to the internal management and administration of a Company should not be lightly interfered with, that planting an unwanted workman would be untenable and would also lead to deleterious effects as affecting the morale and discipline of other workers. The inconvenience of that Management is no doubt, worthy of consideration.

But it cannot override the right of the Labour Court to direct reinstatement if after due consideration of all facts and circumstances of the case it has come to the conclusion that the order of the dismissal is bad and has to be set aside. It has been held by the Federal Court in Western India Automobile Association v. Industrial Tribunal Bombay, AIR 1949 FC 111, that in appropriate cases the Industrial Tribunal can direct reinstatement. The principle of that decision was in terms affirmed by the Supreme Court in J. K. Iron and Steel Co. Ltd., Kanpur v. Iron and Steel Mazdoor Union, (S) : (1956)ILLJ227SC . It is, therefore, unnecessary to labour the point further. We hold that in appropriate cases when the dismissal is set aside by the Labour Court it has the jurisdiction to direct reinstatement.

48. Interference under Article 226 of the Constitution is discretionary and the High Court will rot normally interfere with the decision of the Labour Court or other similar Tribunals, unless there has been a clear want of jurisdiction or manifest error and injustice. In D.N. Banerji v. P.R. Mukherjee, : [1953]4SCR302 , the Supreme Court has held as follows:

'Whether on the facts of a particular case the dismissal of an employee was wrongful or justified is a question primarily for the Tribunal to decide, and here the Tribunal held that the dismissals were clear, cases of victimisation and hence wrongful. Unless there was any grave miscarriage of justice or flagrant violation of law calling for intervention, it is not for the High Court under Articles 226 and 227 of the Constitution to interfere.'

49. We are of opinion that in the instant Case there has been no miscarriage of justice, or a flagrant violation of law calling for. interference in the decision of the Labour Court.

50. For all the above reasons, the writ petition fails and is dismissed with costs of the 1st raspondent. Advocate's fee Rs. 100/-.

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