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Glaxo Laboratories (India) Limited Vs. Glaxo Staff Association and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAllahabad High Court
Decided On
Judge
Reported in(1974)IILLJ389All
AppellantGlaxo Laboratories (India) Limited
RespondentGlaxo Staff Association and ors.
Cases ReferredPanitola Tea Estate v. The Workmen
Excerpt:
.....to exercise discretion and in a case where unusual or exceptional circumstances a c found to exist compensation instead of the relief of reinstatement should be awarded, but the supreme court rejected the employers' contention that the labour court's award was vitiated as it had failed to record any reasons for the reinstatement......justified in rejecting the evidence of ratification as that evidence was outside the scope of employers' pleadings, if the employers had amended their pleadings and relied on the resolution dated 14th october, 1970, the workmen could have produced evidence to show that the resolution was not passed according to the articles of association of the petitioner-company or that the quorum of the board of directors was not complete. the employers changed their case at the time of evidence. the labour court was fully justified in rejecting the evidence which was not in accordance with the pleadings of the parties.5. learned counsel for the petitioner contended that the technical rules of pleadings were not applicable to industrial courts and in any case the labour court should have given an.....
Judgment:

K.N. Singh, J.

1. Glaxo Laboratories is a public limited company having its factory at Mazurgarhi in the district of Aligarh. It manufactures food products including dried milk for children. The company has milk centres in various parts of Aligarh and adjoining districts of Aligarh in rural areas for collecting milk. Each milk centre is under a centre incharge employed by the company. D. K. Jain, respondent No. 3 to the petition, was centre incharge at the Milk-Collecting Centre, Ratanpur. Certain charges were framed against D. K. Jain by the Factory Manager and a domestic enquiry was held. Dr. I.S. Verma, Asstt. Factory Manager, passed an order of dismissal against respondent No. 3 on 27th June, 1969. On a dispute raised by the Glaxo Staff Association, respondent No. 1, which is the union of the workmen employed by the petitioner-company, the State Government referred the dispute to the Labour Court, Agra. The dispute referred was in the following terms:

Whether the termination of service of Sri D.K. Jain, son of Pyare Lal Jain on 30th June, 1969 was legally justified If not to what relief or compensation was the workman entitled.

The Labour Court held that Dr. T. S. Verma had no authority to dismiss D. K. Jain, respondent No. 3 Hence the order of dismissal was void. On these findings the Labour Court, by its award dated 3rd July, 1972, directed that respondent No. 3 be reinstated and the past wages be paid to him. The State Government published the award in the Gazette dated 15th July, 1972. The petitioner-company thereupon filed the present petition challenging the validity of the said award.

2. Shri Shanti Bhushan, learned Counsel for the petitioner-company, contended that the Labour Court committed a manifest error of law in holding that Dr. I. S. Verma had no authority to dismiss respondent No. 3. Dr. I. S. Verma according to the learned Counsel, was Assistant Factory Manager and on 27th June, 1969, when he passed the order of dismissal he was acting as Factory Manager since Dr. B. S. Saraswat, Factory Manager was out of station. The Factory Manager was invested with the power to take disciplinary action against the workmen and to pass orders of dismissal. It was further that Dr. I. S. Verma was fully empowered to pass dismissal order under Standing Orders framed under the Industrial Employment Standing Orders Act, 1946, The Labour Court framed an issue whether Dr. I. S. Verma had authority to dismiss the concerned workman. Clause 23 of the Standing Orders confers power on the Manager of the Factory to dismiss a workman. Clause 2(c) of the Standing Orders defines ''Manager' which means the person for the time being managing the establishment and for the purposes of the Standing Orders includes the Factory Manager, Administrative Officer and such other officers as may be authorised by the employers, provided such authorisation is notified to the workman by displaying it on the notice board of the establishment. The petitioner's case before the Labour Court was that since I. S. Verma was the Assistant Factory Manager, he had authority to dismiss the workman. The Standing Orders no doubt regulate the coalitions of service of the workmen employed by the petitioner-company, but the petitioner itself conceded before the Labour Court that the Standing Orders regulated the service conditions of the workmen employed in the factory and the workmen who were employed at the milk centre outside the factory premises were not governed by the Standing Orders. The Labour Court relied upon the admission of the employers contained in Ex. 44D, dated 15th October, 1970, in holding that the Standing Orders did not apply to a workman employed at the milk centre Therefore, Dr. I. S. Verma could not derive any authority under the Standing Orders to pass the order of dismissal against respondent No. 3. There is thus no substance in the petitioner's contention that since Dr. Verma was managing the petitioner's establishment he had an implied authority to do all acts necessary to manage the establishment. Before the Labour Court the petitioner-company relied upon the Standing Orders but when the workmen produced evidence to show that the employers themselves on a previous occasion had taken the stand that the Standing Orders did not apply to the employees working at the milk centre outside the factory premises, the employers have taken a new case before this Court that there was implied authority in Dr. Verma. No case of implied authority was pleaded before the Labour Court and the workmen were not afforded any opportunity to meet this case. The petitioner, therefore, cannot be allowed to raise this question for the first time in the present proceedings.

3. Learned Counsel for the petitioner urged that even if the Standing Orders were not applicable to the staff working at the milk centre, the Standing Orders indicate that the employers had delegated their authority to the Factory Manager and Assistant Manager for taking disciplinary action including dismissal of a workman. As already noted, since the Standing Orders did not apply, Clause 23 read with Clause 2(c) of the Standing Orders cannot be pressed into service by the petitioner to show that the employers had actually delegated their power of dismissal to Dr. I. S. Verma. In fact no order issued by the employers delegating their power of dismissal of workman employed at the milk centres was ever issued in favour of Dr. I. S. Verma. Nor any such order was placed before the Labour Court. The Standing Orders no doubt contain delegation of power to the Factory Manager for taking disciplinary action against the workmen employed in the factory establishment but that delegation cannot be utilised as a general delegation of power for other purposes. The petitioners contention, therefore, must be rejected.

4. Learned Counsel for the petitioner strenuously urged that on the application of the principle of agent and principle contained in the Indian Contract Acts, Dr. Verma had full authority to pass the order of dismissal because the Board of Directors had ratified his action by its resolution dated 14th October, 1970. Once the action of Dr. Verma who was the agent of the employers was ratified by the Roard of Directors, Dr. Verma was invested with the necessary power of dismissing an employee working at a milk centre with retrospective effect The ratification by the Board of Directors, even though subsequent, validated the dismissal order passed against respondent No. 3. It appears that during the proceedings before the Labour Court the employers filed a resolution of the Board of Directors of the petitioner-company in support of their case that Dr. T. S. Verma had authority to pass the dismissal order against respondent No, 3. The resolution ratified the action taken by Dr. T. S. Verma in dismissing respondent No. 3. A copy of the resolution of the Board of Directors was filed along with an affidavit during the course of evidence. The employers, however, did not get their pleading amended. The Labour Court held that since the copy of the resolution was filed with delay and since no amendments in the pleadings were made by the employers, they were not entitled to rely on the resolution of the Board of Directors. The Labour Court further held that Dr. I. S. Verma in his statement before it had himself conceded that he was not aware of any authority delegated to him to dismiss a workman employed at the milk centre. In paragraph 23 of their written statement the workmen had taken a definite stand before the Labour Court that Dr. I.S. Verma had no authority to pass the dismissal order against respondent No. 3. In paragraph 23 of their rejoinder statement the petitioner-company stated that Dr. Verma had the authority to pass dismissal order. He was acting Manager at the relevant time, and he had been notified as Manager with copies to the Assistant Labour Commissioner, Agra, and the union of the workmen. A perusal of the pleadings of the parties makes it amply clear that the authority of Dr. I S. Verma to pass the dismissal order against a workman employed at the milk centre was questioned by the workman, the employers relied upon the Standing Orders in saying that since Dr. Verma was Manager, he was empowered to pass the dismissal order. The employers did not set up any case in their written statement or the rejoinder statement before the Labour Court that Dr. I. S. Verma had been authorised by the petitioner-company or that the Board of Directors of the petitioner-company had passed a resolution ratifying the action of its Agent Dr. I. S. Verma in dismissing respondent No. 3. The Labour Court was fully justified in rejecting the evidence of ratification as that evidence was outside the scope of employers' pleadings, If the employers had amended their pleadings and relied on the resolution dated 14th October, 1970, the workmen could have produced evidence to show that the resolution was not passed according to the Articles of Association of the petitioner-company or that the quorum of the Board of Directors was not complete. The employers changed their case at the time of evidence. The Labour Court was fully justified in rejecting the evidence which was not in accordance with the pleadings of the parties.

5. Learned Counsel for the petitioner contended that the technical rules of pleadings were not applicable to Industrial Courts and in any case the Labour Court should have given an opportunity to the employers to amend their pleadings. It is true that the proceedings before the Industrial Tribunal and Labour Court are not regulated by technical rules of procedure as embodied in the Civil Procedure Code but the general principles of pleadings are applicable to these Courts, which require that party should be confined to case set up by it. Section 15(c) of the U.P. Industrial Disputes Act requires a Labour Court to follow the procedure as laid down in the Rules framed under the Act. Rules have been framed regulating the procedure before the Industrial Tribunal or Labour Court which are known as U. P. Industrial Tribunal and Labour Court (Rules of Procedure), 1967. These rules lay down the detailed procedure required to be followed by the Labour Court in adjudicating an industrial dispute. The parties are required to state their case and the pleadings arc required to be verified and signed by the parties concerned under Rule 9. Rule 18 requires framing of issues on the pleadings of the parties and other rules relate to recording of evidence, summoning of witnesses, etc. Open hearing is given and the award is required to be announced in open Court. In view of these statutory provisions it is clear that the Labour Courts and the Tribunals though not bound by all the technicalities of the civil Courts, are required to follow the same in general pattern. The requirement of pleadings and framing of issues is necessary to ascertain the real dispute between the parties, to narrow down the area of conflict and to see just where the two sides differ. In the case of J.K. Iron and Steel Company v. Iran and Steel Mazdoor Union 1956-I L.L.J. 227 : A.I.R. 1936 S.C. 231, the Supreme Court held that it was not open to an Industrial Tribunal to fly off at a tangent and disregarding the pleadings, to reach any conclusions that they think are just and proper. In that case the Supreme Court set aside the award of the Industrial Tribunal on the ground that the award was given by ignoring the pleadings of the parties. The law laid down by the Supreme Court makes it amply clear that the Industrial Tribunals and Labour Courts are required to follow the principle relating to pleadings generally followed in civil Courts,

6. The contention that the Labour Court should have given an opportunity to the petitioner-company for the amendment of its pleadings is untenable. The petitioner-company did not make any application for the amendment of its pleadings. In the absence of any such application, the Labour Court was not under any duty to require the employers to amend their pleadings.

7. It was then urged that since the copy of the resolution of the Board of Directors of the petitioner-company had been filed along with an affidavit of one of the Directors and further since the workmen had not raised any objection to the filing of that document the Tribunal was under a duty to consider that evidence. It was further urged that arguments had also been heard and the representative of the petitioner-company had placed reliance on the resolution of the Board of Directors, therefore, the Tribunal should have considered the resolution and accepted the petitioner's contention that the employers had ratified the action of its agent Dr. I. S. Verma in dismissing respondent No. 3 from service. In my opinion the Labour Court did not exceed its jurisdiction in ignoring the evidence of ratification which was outside the scope of pleadings raised by the petitioner-company. The petitioner-company had never set up a case that the Board of Directors of the petitioner-company had ratified the action of Dr. I. S. Verma and no reference to the resolution dated 14th October, 1970, had been made in the pleadings. In the absence of any such pleadings the workmen were taken by surprise and they could not meet the employers' case at the time of evidence. The admission of the document by the workmen did not enlarge the scope of enquiry. In Rashtradoot, Jaipur v. Rajasthan Working Journalists Union and Ors. 1970-I L.L.J. 58 : (1970) 20 F.L.R. 1, the Supreme Court held that a new point raised at the time of arguments, not taken up in the pleadings of the parties, could not be allowed to be raised and the dispute could not be determined on the new point so raised. A similar argument raised on behalf of the employers that since arguments had been raised at the time of hearing before the Labour Court, they were entitled to raise that question was rejected. In the circumstances the Labour Court was fully justified in rejecting the petitioner's evidence of ratification and in doing that the Labour Court has not committed any manifest error of law or exceeded its jurisdiction.

8. Learned Counsel for the respondent-workman relied on the principles of ratification as embodied in the Contract Act regulating relationship of principle and agent but that principle cannot be made applicable to validate the agent's action which affected a third party. Section 196 of the Indian Contract Act lays down that if a certain act done by an agent, even though initially without any authority, stands validated if the principal ratified the same subsequently. It is well accepted principle that ratification relates back to the time of transaction and has complete retrospective efficacy. The ratification in the eye of law is equivalent to previous authority. Section 200 of the Contract Act, however, lays down that an act done by one person on behalf of another, without such other persons authority, which if done with authority would have the effect of subjecting a third person to damages or of terminating any right or interest of a third person, cannot by ratification be made to have such effect. The section makes it clear that if the rights of third parties are affected, the ratification cannot validate the act on which may initially be without any authority. In the instant case the order of dismissal was passed by Dr. I S. Verma on 27th June, 1969. dismissing respondent No. 1 from service of the petitioner-company. On 31st December, the dispute was referred by the State Government to the Labour Court for adjudication Issues had been framed on 22nd April, 1970. Prior to that pleadings had been filed by the petitioner-company as well as by respondent workmen. The alleged resolution of ratification of the Board of Directors of the petitioner-company as passed on 14th October, 1970. It is thus clear that the resolution was passed by the Board of Directors at the time when the dispute was before the Labour Court and it was apparent that the order terminating the respondent's services could not he sustained before the Labour Court. In the circumstances, having regard to the provisions of Section 200 of the Indian Contract Act the resolution could not validate the dismissal order, dated 27th June, 1971.

9. Learned Counsel for the petitioner lastly urged that the Labour Court exceeded its jurisdiction in directing reinstatement of respondent No. 3 as it did not record any reasons for the reinstatement. Respondent No. 3 was guilty of misconduct and the employers had lost confidence in him, as such the Labour Court was not entitled to force the emplyers to reinstate respondent No. 3. Even if the Labour Court was of the view that the dismissal of respondent No. 3 was illegal for any cause the respondent-workman should have been awarded compensation instead of reinstatement Reliance was placed on the case of Messrs. Hindustan Sreel Limited v. A.K Roy and Ors. : [1970]1SCR151 . It that case, the Supreme Court considered question as to under what circumstances the relief of reinstall merit should not be granted by the Industrial Tribunal. In that connection it made the following observations:

As exceptions of the general rule of reinstatement, there have been causes where reinstatement has rot been considered as either desirable or expedient. There were cases where there had been strained relations between the employers and the employee, where the post held by the aggrieved employee had been one of trust and confidence or where, though dismissal or discharge was unsustainable owing to some infirmity in the impugned order, the employee was found to have been guilty of an activity subversive of or prejudicial to the interest of the industry.

After making the aforesaid observations their Lordships of the Supreme Court made reference to earlier Supreme Court decisions on the point and made the following observations:

These are, however, illustrative causes where an exception was made to the general rule. No hard and fast rule as to which circumstances would in a given case constitute an exception to the general rule can possibly be laid down as the Tribunal in each case, keeping the objectives of industrial adjudication in mind, must in a spirit of fairness and justice confront the question whether the circumsiances of the case require that an exception should be made and compensation would meet the ends of jus ice.

The law laid down by the Supreme Court in Hindustan Steel case makes it amply clear that if the order of dismissal or termination of service is found unjustified or illegal, normally the workman is entitled to rein-statement But in a case where the emplovers contend that the reinstatement shall not promote industrial ha moony or the workmen who had held a post of trust and confidence had lost their confidence, the Tribunal in that case should consider the question whether any circumstances exist for not following the normal rule of reinstatement. The award of compensation, according to the Supreme Court, is exceptional while reinstatement to service is normal rule. The Tribunal has to consider the question and exercise its discretion judicially. If the Tribunal finds that the circumstances of a particular case are unusual so as to make reinstatement inexpedient or improper it should grant compensation on instead of reinstatement of the workman concerned.

10. In Tutsi Dass Paul v. Second Labour Court, West Bengal 1971-I L.L.J. 226, the Supreme Court considered its decision in the case of Hindustan Steel Limited v. A.K. Roy (supra). In the case of Tulsi Dass Paul, the termination of the services of workmen was found illegal by the Labour Court. It, therefore, directed reinstatement of those workman. On a writ petition filed by the employers challenging the order of the Labour Court the High Court of Calcutta refused to interfere with the order of reinstatement. The matter was thereupon taken before the Supreme Court and precisely the same argument which has been raised in the instant case was raided by the employers. Reliance was placed on the law laid down by the Supreme Court in its earlier case of Hindustan Steel Limited. The Supreme Court reiterated the principles laid down in Hindustan Steel Limited that no hard and last rule can be laid down and the Tribunal is required to exercise discretion and in a case where unusual or exceptional circumstances a c found to exist compensation instead of the relief of reinstatement should be awarded, but the Supreme Court rejected the employers' contention that the Labour Court's award was vitiated as it had failed to record any reasons for the reinstatement. The Supreme Court held that no plea had been raised by the employers before the Labour Court that reinstatement of the concerned workmen would result in disturbance of industrial peace. It further observed that if that plea had been raised it could have been proved that the relief of reinstatement should not be granted but since they had not raised that question in their pleadings before the Labour Court and no issue had been framed, the award of the Labour Court was not vitiated.

11. A similar view was taken by the Supreme Court in the case of the management of Panitola Tea Estate v. The Workmen : (1971)ILLJ233SC . In that case the earlier law laid down in the cases of Hindustan Steel Ltd. and Tutsi Dass Paul was reiterated. The plea raised on behalf of the employer that the relief of reinstatement had wrongly been granted by the Labour Court was rejected on the ground that no such plea had been raised before the Labour Court. The workman concerned in that case was incharge of store. On that basis the employers contended that since the workmen held a post of confidence and trust where goods of several lacs of rupees were stored, reinstatement should not have been directed even if the termination of the service of the concerned workman was found illegal. A suggestion was made that having regard to the nature of the proceedings which were taken Against the conceded workman for his misconduct, it should be presumed that the management had lost confidence. The Supreme Court repelled the contention on the ground that no such plea had been raised or substantiated before the Labour Court.

12. It is thus clear that once the Labour Court holds that the dismissal of termination of service of workman was unjusutified or illegal, the normal rule is to grant relief of reinstatement but in a case where the employers raise the plea of want of confidence of that the reinstatement would disturb the industrial peace in establishment or that the employers had lost confidence in the workman concerned, the same and if the employers to consider the same and if the employers contention is found established an exception should be nude to the normal rule and the Labour Court should grant compensation instead of reinstatement. In the instant case the workman expressly claimed a relief for his reinstatement but the petitioner in its written statement and rejoinder statement did not raise any plea that instead of the relief of reinstatement compensation should be awarded. Necessary facts for invoking the exception to the normal rule of reinstatement was not pleaded before the Labour Court, and no issue was framed on the question. In the circumstance, the petitioner is not entitled to raise the question for the first time in this Court. In the absence of any plea for applying the exception by the employers, the Labour Court, in my opinion, was fully justified in following the normal rule of reinstatement. In the circumstances the Labour Court was not required to record any reasons for reinstatement and the absence of reasons for reinstatement does not vitiate the impugned award.

13. In the result, the petition fails and is accordingly dismissed with costs.


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