1. This appeal, by Special leave, is directed against the award, dated November 30, 1965 of the Labour Court (II) at Kanpur. The Labour Court has held that the promotion given by the appellant, to S. Agarwal as Accountant is vitiated by unfair labour practice and victimisation and it has further directed the appellant to promote K.N. Srivastava as Accountant from February 12,1964 and pay him the back wages together with increments.
2. K.N. Srivastava jointed the Accounts Department of the appellant on April 14, 1960. S. Agarwal joined service with the appellant on August 1, 1961 and was working in the Accounts Department. On February 1, 1964 M. P. Varma, Senior Assistant Accountant, resigned his post and in his place Agarwal was promoted as Senior Assistant Accountant. On February 12, 1964 V. P, Varma, Accountant, retired and Agarwal was promoted as Accountant. The respondent Union felt that Srivastava had been superseded because of his trade union activities as Joint Secretary of the Labour Union. The Union raised a dispute and the question whether the employers should be required to promote Srivastava to the post of Accountant was referred for adjudication. The Labour Court has held in its award that the conduct of the management in superseding the claims of Srivastava amounted to unfair labour practice and victimisation.
3. On behalf of the appellant, Mr. Gokhale, learned councel, raised two contentions (i) that the finding of the Labour Court that the promotion given to Agrawal is vitiated by unfair labour practice and victimisation against Srivastava is erroneous; and (ii) in any event the Labour Court has acted illegally in directing the appellant to promote Srivastava to the post of Accountant. Mr. Gokhale urged that the giving of promotion is essentially a managerial function and he further drew our attention to the fact that the management had categorically stated that they considered the claims of the persons then in employment in their Accounts Department and having regard to their suitability, efficiency and other material factors, promoted Agarwal as Accountant as he had superior qualifications. The counsel also pointed out that according to the management Srivastava, by his conduct, had forfeited the confidence of the employers. In any event, counsel urged that even assuming that the promotion given to Agarwal had to be set aside, the Labour Court had acted without jurisdiction in directing the appellant to promote Srivastava as Accountant from February 12, 1964. The normal direction should have been to direct the management to reconsider the claims of all persons excepting of course of the candidate whose promotion has been set aside.
4. Mr. Goyal, learned counsel for the respondent, referred us to certain circumstances which, according to him, would clearly show that the management had viewed Srivastava with disfavour because of his trade union activities. The counsel also urged that Agarwal was junior in service to Srivastava and promotion was given very quickly on February 1, 1964 as Senior Assistant Accountant and then, a few days thereafter, on February 12, 1964 as Accountant. The various circumstances, counsel urged clearly showed that the promotion given to Agarwal was malafide. Counsel for the respondent, while accepting the position that the normal direction should have been to direct the management to reconsider the claims of all the other officers, urged that in this case that was unnecessary because the two candidates in the field were only Srivastava and Agarwal. The counsel urged that when once Agar-wal's promotion was set aside, as malafide, the only result would be the promotion of Srivastava and that was why the Labour Court made an order directing the promotion of the latter.
5. We are not impressed with the view taken by the Labour Court that the promotion given to Agarwal in any way amounted to an unfair labour practice or victimisation against Srivastava. No doubt promotion were given to Agarwal in rather quick succession; but that by itself, without any other circumstances, would not lead to an inference of unfair labour practice. Srivastava was the Joint Secretary of the Union. But if the Management had considered the claims of the eligible, in our opinion there was no justification for the Labour Court to interfere.
6. In their written statement before the Labour Court, the management had stated that there were nine persons employed in the Account Section. Admittedly one of the nine persons, J.K. Mazumadar, who was Cane Accountant and senior to both Agarwal and Srivastava, had been superseded. According to the Management Srivastava was only a Matriculate while Agarwal had passed his Intermediate Examination in Commerce. The Commercial Manager, as D.W. 1, has given evidence that the work turned out by Agarwal was superior to others and that was why he was given promotion. The management has definitely stated that Srivastava, by his conduct had forfeited the confidence of the employers. They have also given the instances in their written statement.
7. The limits of jurisdiction of Industrial Courts in this regard have been laid down by this Court in Brooks Bond (India) v. Their Workmen (1) This Court said;
'It is true that though promotion would normally be a part of the management's function, if it appears that in promoting one employee in preference to another, the management has been actuated by malicious considerations or that the failure to promote one eligible person amounts to an unfair labour practice, that would be a different matter. But in the absence of malafides, normally it must be left to the discretion of the management to select which of the employees should be promoted at a given time subject of course to the formula to which was have just referred'
Again, in Brooks Bond Ltd. v. Workmen (2) this Court said:
'Generally speaking, promotion is a management function; but it may be recognised that there may be occasions when a tribunal may have to interfere with promotions made by the management where it is felt that the persons superseded have been so superseded on account of the malafides or victimisation. Even so after a finding of mala fides or victimisation, it is not the function of a tribunal to consider the merits of various employees itself and then decide whom to promote or whom not to promote. If any industrial tribunal finds that promotions have been made which are unjustified on the ground of mala fides or of victimisation, the proper course for it to take is to set aside the promotions and ask the management to consider the cases of superseded employees and decide for itself whom to promote, except of course the person whose promotion has been set aside by the tribunal.'
Therefore, the question naturally arises in this case as to whether the respondent has been able to establish that Srivastava has been superseded on account of mala fides or victimisation.
8. Having due regard to the materials on record, in our opinion the respondent has not been able to establish this position, though several circumstance have been placed before us by Mr. Goyal, on behalf of the respondent-which according to him will clearly show that the management has acted mala fide in promoting Agarwal, the two important matters which have been taken into account by the Labour Court, in this regard, are : (i) that Srivastava was the Joint Secretary Labour Union; and (ii) that proper fitments were not given to Srivastava. The mere fact, without anything more, that Srivastava was the Joint Secretary of the Labour Union at the material time will not, by itself, lead to the conclusion that the promotion that the counsel urged the second aspect, viz., the failure of the management to give a proper grade to Srivastava, notwithstanding an order passed by the State Government on April 27, 1961.
9. We shall now refer to the facts relating to the order of the State Government dated April 27, 1961. The various proceedings connected with the said order, as well as the proceedings leading up to the adjudication of Case No. 71 of 1963 have been dealt with by this Court in its judgment in Tulipur Sugar Co. Ltd. v. The State of U.P. (3). The Central Wage Board for Sugar Industry, appointed by the Union Government, had made certain recommendations regarding the wage structure revision of all categories of workmen and their fitment in particular grades. The Wage Board had also recommended that its decision should be brought into effect from November 1, 1960. The U.P. Government accepted those recommendations by its Notification dated April 27, 1961. But dispute arose between the appellant company and its workmen regarding the implementation of the directions of the Wage Board and in consequence, the State Government referred to the Labour Court the dispute regarding the fitment of the workmen in the various categories as also the date which the fitment should take effect. The Labour Court, by its award dated November, 5, 1963 held that two of the said workmen should be fitted in grade II9B) and grade IV within one of month after the award became enforce-able. There is no controversy that one of the workmen involved in the dispute was K.N. Srivastava, but the Labour Court omitted to mention the date from which the said fitment should have effect. The appellant fitted Srivastava in grade II(B) one month after the award became enforceable and not from Nov. 1, 1960. The workers' Union applied to the Labour Court for amending its award on the ground that it had omitted to answer the second question referred to it by the State Government for Adjudication. The Labour Court amen-ded its award and directed that workmen should have the benefit of the grades with effect from November 1, 1960. This order of the Labour Court was challenged by the appellant before the High Court. A learned Single Judge and on appeal, a Division Bench of the Allahabad High Court, dismissed the writ petition praying for manamus. The matter was brought by the management in appeal in this Court in Civil Appeal No. 480 of 1967, wherein this Court ultimately held that the Labour Court had jurisdiction to amend its previous award.
10. The above proceedings will clearly show that there should be no question of any malafides or victimisation in the mind of the management as against K.N. Srivastava. On the other hand, the original order of the Labour Court left the date of giving grades in doubt and there was consideration controversy as to whether the Labour Court had jurisdiction to incorporate the date of fitment of grades by amending its previous award. The points involved were purely legal and were not free from doubt till the Courts adjudicated upon the same. The failure of the management of fit Srivastava in grade II (B) from November, 1, 1960 even in the first instance, cannot certainly be stated to be either malafide or an act of victimisation against Srivastava. The contrary view taken by the Labour Court, on this point, cannot therefore be sustained.
11. The management has also stated that during the course of adjudication proceedings before the Labour Court in Case No. 120 of 1962, K.N. Srivastava who was responsible for the custody of certain account records lost an important paper which was produced in Court later by the workmen. The management's case is that they asked for explanation from Srivastava and after warning him, dropped taking disciplinary action against him. Inconsequence, the management maintained that they had lost confidence in Srivastava.
12. The Labour Court has accepted the management's case that some papers had been lost by Srivastava and they were produced by the workmen before the Labour Court. Srivastava was then the Joint Secretary of the workmen's Union. The Labour Court however brushed aside these matters by observing that the management did not take any disciplinary action and therefore the claim of the management that they had lost confidence in Srivastava could not be accepted. This reasoning of the Labour Court is fallacious. Exhibits 6 to 9 clearly establish that the management was very much perturbed because of the papers in the possession of Srivastava and those documents having been produced by the Union before the Labour Court. The Commercial Manager, as E.W.I, has also spoken to the fact that after administering a warning to Srivastava the management did not think it necessary to take further action. The plea of the management that in those circumstances they had lost confidence in Srivastava, appears to be justified.
13. It follows that the view of the Labour Court that Srivastava has been superseded due to unfair labour practice and victimisation cannot be accepted. In this view, it become unnecessary for us to consider the second contention of Mr. Gokhale,
14. In the result, the award of the Labour Court under attack is set aside and this appeal, allowed with costs.