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K.P. Hormis, Managing Director, Federal Bank Ltd. Vs. P.A. John and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Judge
Reported in(1970)IILLJ351Ker
AppellantK.P. Hormis, Managing Director, Federal Bank Ltd.
RespondentP.A. John and anr.
Cases ReferredLord Krishna Textile Mills v. Its Workmen
Excerpt:
- - if before dismissing an employee the employer has held a proper domestic enquiry and has proceeded to pass the impugned order as a result of the said enquiry, all that the authority can do is to enquire whether the conditions prescribed by section 33(2)(b) and the proviso are satisfied or not. it is conceivable that even in holding an enquiry under section 33(2)(b), if the authority ii satisfied that the finding recorded at the domestic enquiry is perverse in the sense that it is not justified by any legal evidence whatever, only in such a case it may be entitled to consider whether approval should be accorded to the employer or not;.....since by issuing the said fresh order of dismissal and filing a petition for approval of that action the management had deprived the employee of a vested right which had already accrued to him of having an adjudication conducted by the tribunal about the validity of its earlier order of dismissal dated 5.9.1966 inasmuch as the petition under section 33-a is liable to be tried as an industrial dispute. secondly, the tribunal has recorded the conclusion that no prima facie case was made out against the delinquent worker at the domestic enquiry because, in the opinion of the tribunal, the facts elicited at the enquiry were not sufficient to justify a conclusion that the accused worker was guilty of the charges.5. counsel appearing on behalf of the writ petitioner has challenged the.....
Judgment:

Balakrishna Eradi, J.

1. The question raised in this writ petition concerns the validity and correctness of an order passed by the Industrial Tribunal, Calicut in an application made before it under the proviso to Section 33(2)(b) of the Industrial Disputes Act, 1947.

2. The 1st respondent before me was employed as Senior Accountant in the Chalakudy Branch of the Federal Bank Limited, Alwaye. The Managing Director of the said Bank has preferred this writ petition. By an order dated 12.3.1966 passed by the management the 1st respondent was placed under suspension pending enquiry into certain charges of misconduct levelled against him. After conducting a domestic enquiry into those charges he was dismissed from service by a proceeding of the management dated 5.8.1966. At that time an industrial dispute was pending before the 2nd respondent--The Industrial Tribunal, Calicut--in which the dismissed employee was also interested. This aspect appears to have been overlooked by the management and while dismissing the 1st respondent from its service as per the aforementioned order, neither of the requisite formalities prescribed by Section 33(2)(b) of the Act was complied with by the management. Based on this contravention of the terms of Section 33, the 1st respondent filed a complaint before the second respondent, the Tribunal under Section 33-A of the Act. On 5.9.1966 the management passed a fresh proceeding cancelling the earlier order of dismissal dated 5.8.1966 on the ground that it was found to be vitiated by non-compliance with the provisions of Section 33(2)(b). By this fresh order, the management informed the 1st respondent that in view of the cancellation of the earlier order of dismissal, he will be regarded as having continued in employment, but under suspension and that his dismissal from service will take effect only from the date of the said order, i.e., 5.9.1966. Simultaneously, the 1st respondent was paid one month's wages and an application for approval of the fresh order of dismissal was also duly riled before the Tribunal, This application was numbered by the Tribunal as C.M.P. No. 78 of 1966 and the same was disposed of by it by the order Ext. P-1 which is under challenge in this writ petition.

3. It may be mentioned that no adjudication was conducted by the Tribunal into the complaint filed by the 1st respondent under Section 33-A which had been numbered as I.D. 55 of 1966 and that complaint was ultimately dismissed by the Tribunal as per an award dated the 24th June, 1969 On the ground that the counsel for the complainant made an endorsement on the complaint petition to the effect that the complaint was not pressed in view of the order passed by the Tribunal on C.M.P. No. 78 of 1966 declining to grant the management's prayer for approval. This award is not under challenge before me and hence this Court is not now concerned with the merits of the complaint which had been originally raised by the 1st respondent under Section 33-A of the Act.

4. It is seen from the impugned order, Ext. P 1, that the reason stated by the Tribunal for refusing to grant the approval prayed for by the management under Section 33(2)(b) is two-fold; firstly, it has been held by the Tribunal that the petition filed by the management for approval of the action taken by it on 5.9.1966 was not maintainable since by issuing the said fresh order of dismissal and filing a petition for approval of that action the management had deprived the employee of a vested right which had already accrued to him of having an adjudication conducted by the Tribunal about the validity of its earlier order of dismissal dated 5.9.1966 inasmuch as the petition under Section 33-A is liable to be tried as an industrial dispute. Secondly, the Tribunal has recorded the conclusion that no prima facie case was made out against the delinquent worker at the domestic enquiry because, in the opinion of the Tribunal, the facts elicited at the enquiry were not sufficient to justify a conclusion that the accused worker was guilty of the charges.

5. Counsel appearing on behalf of the writ petitioner has challenged the validity and correctness of both the above grounds stated by the Tribunal in justification of its order declining to grant the approval. It is contended that the Tribunal has committed a manifest error of law in thinking that it is not open to the management to rectify a technical defect committed by it in the matter of compliance with the provisions of Section 33(2)(b) by adopting the procedure of cancelling the defective order and passing a fresh order in compliance with the terms of the said section. It is urged that the mere circumstance that a complaint under Section 33-A had been already filed by the concerned employee will not deprive the management of its elementary right to suo moto rectify any technical or procedural defect and that such action does not involve the deprivation of any vested right of the employee. Counsel points out that in essence the subject-matter for adjudication in a complaint made under Section 33(2)(b) is the grievance of the employee that there has been a contravention of the terms of Section 33(2)(b) and in such a case nothing prevents the employer from admitting such contravention and agreeing to reinstate the worker. On this basis, it is further argued that this process of reinstatement need not necessarily be by inviting the Tribunal to pass an award directing the reinstatement of the worker but may also be by a separate action taken by the management in that behalf, the matter being thereafter duly brought to the notice of the Tribunal. It is also contended by the learned Counsel for the petitioner that in arriving at its finding regarding the existence of a prima facie case there has been a complete misapprehension by the Tribunal regarding the scope of the enquiry to be conducted by it in dealing with an application of the kind that was before it. According to him what has been done by the Tribunal in this case is not so much to see whether a prima facie case existed against the workman but to conduct a detailed re-examination of the whole case including an independent fresh evaluation by the Tribunal itself of the evidence adduced in the domestic enquiry and substituting its own findings in the place of the findings arrived at by the domestic enquiry. It is the petitioner's contention that by reason of such faulty approach the Tribunal has outstepped the legitimate bounds of its jurisdiction and that its conclusion that no prima facie case had been made out against the delinquent worker cannot, in the circumstances, be sustained.

6. After an anxious consideration of all aspects of the case, in the light of the arguments advanced by counsel appearing on behalf of the contesting parties and also by the learned Government Pleader appearing on behalf of the Tribunal, I have come to the conclusion that both the contentions put forward by the petitioner's counsel have to be upheld. From the facts, which have been already set out, it would be clear that what has been done by the management in the instant case was suo motu to cancel an order of dismissal passed by it against an employee on its being alerted to the fact that the said order suffered from a technical infirmity. At the time when this was done a complaint filed by the employee under Section 33-A of the Act happened to be pending before the 2nd respondent Tribunal. The question is whether there is anything either in the Industrial Disputes Act or in the general law which prohibits such action being taken by the employer to rectify a mistake committed by him on his becoming aware of it. Section 33(2)(b) of the Industrial Disputes Act, 1947 is in the following terms:

33(2). During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute or, where there are no such standing orders, in accordance with the terms of the contract, whether express or implied, between him and the workman-

(a) * * *(b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise, that workman:

Provided that no such workman shall be discharged, or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer.

It is also necessary to extract in full the terms of Section 33-A. It reads:

Where an employer contravenes the provisions of Section 33 during the pendency of proceedings before a Labour Court, Tribunal or National Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the prescribed manner to such Labour Court, Tribunal or National Tribunal and on receipt of such complaint that Labour Court, Tribunal or National Tribunal shall adjudicate upon the complaint as if it were a dispute referred to or pending before it, in accordance with the provisions of this Act and shall submit its award to the appropriate Government and the provisions of this Act shall apply accordingly.

As I understand Section 33(2)(b), its object and purpose is to provide a statutory safeguard to the employees against any action taken by the employer for their discharge or punishment by dismissal or otherwise disguising it under the cloak of a legitimate disciplinary action whereas it really may be an act intended to victimise the employee concerned for having played a part in raising the pending dispute. The safeguard introduced by the section is the provision for a limited scrutiny of the matter by the Tribunal before whom the main dispute is pending for the purpose of satisfying itself prima facie that the action by the management by way of discharge or punishment was justified and bona fide. This intendment of the section will not be in any manner frustrated if the management is allowed to pass a fresh order of discharge or punishment in respect of the same misconduct and based on the same domestic enquiries after rectifying the technical defect of non-compliance with the terms of Section 33(2)(b) because this very process ensures that the matter will be directly brought before the Tribunal by the application made by the management for approval of the action taken by it under the fresh order.

7. On behalf of the 1st respondent it was strongly contended that while it may be open to the management to take such action in a case where a complaint under Section 33-A has not already been instituted by the concerned workman, the position will be materially and substantially different in the eyes of law once such a proceeding has been commenced. It is argued that on the filing of a complaint under Section 33-A the employee acquires a vested right to have an adjudication conducted by the Tribunal into the validity of the action taken against him by the management and that this right should not be permitted to be abrogated by the other contending party, namely the management, by its purporting to cancel the order which has led to the complaint. My attention was invited to the observations of the Supreme Court in Punjab National Bank Ltd. v. Their Workmen 1959-II L.L.J. 666 at page 680, and to the earlier decision of their Lordships in State of Bihar v. Ganguli (D.N.) 1958-II L.L.J. 634, wherein the scope of the adjudication before the Tribunal in a proceeding under Section 33-A has been explained. I do not, however, see anything in these decisions which lends support even indirectly to the proposition urged by the learned Counsel for the 1st respondent. It is clear from the above decisions that the primary question which falls for decision in a complaint under Section 33-A is whether or not there has been a contravention by the employer of the provisions contained in Section 33 of the Act. The jurisdiction of the Tribunal is not, however, limited to a consideration of the above question alone because as pointed out at page 681 of 1959-II L.L.J. 666 (Punjab National Bank Ltd. v. Their Workmen):

After such contravention is proved it would still be open to the employer to justify the impugned dismissal on the merits. That is a part of the dispute which the tribunal has to consider because the complaint made by the employee is treated as an industrial dispute and all the relevant aspects of the said dispute fall to be considered under Section 33-A.

This latter question relating to the merits of the impugned order of dismissal, therefore, is one which will arise for consideration before the Tribunal only after it is found that there has been a contravention by the employer of Section 33. When such stage is reached the law permits the employer notwithstanding the contravention by him of Section 33, to sustain the impugned action by proving to the satisfaction of the Tribunal that the dismissal of the employee was in fact justified on the merits. The right to have an adjudication on this matter conducted in the proceeding under Section 33-A itself is one which the employer is entitled to avail of. This aspect becomes important because the contention urged before me on behalf of the respondent is that whenever a complaint is filed under Section 33-A the employee automatically acquires a right to have an adjudication conducted by the Tribunal regarding the merits of the action taken against him. If this contention is to be accepted as correct the result will be that even in a case where an employer concedes before the Tribunal in a proceeding under Section 33-A that the action taken by him against the employee is illegal on account of non-compliance with Section 33 and that the employee may be reinstated into service it will be incumbent on the Tribunal to embark upon an adjudication about the merits of the disciplinary action taken against the employee. There is nothing in the terms of Section 33 or Section 33-A or in any of the observations of the Supreme Court in the two decisions above mentioned which supports this contention. In my view, no right of the kind contended for by the 1st respondent becomes vested in an employee merely by reason of his filing a complaint under Section 33-A and neither the institution nor the pendency of such a complaint will debar the employer from exercising his ordinary right of rectifying a mistake committed by him by cancelling the defective proceeding and passing a fresh order in accordance with law. That is exactly what has been done by the management in the present case. The Tribunal went wrong in holding that the action so taken by the management is illegal since it has the effect of depriving the employee of a vested right. The first ground stated by the Tribunal for rejecting the management's application for approval, cannot, therefore be sustained.

8. The scope of the enquiry to be conducted by the Tribunal regarding the merits of the disciplinary action taken by the management while dealing with an application for approval filed under Section 33(2)(b) has been explained by the Supreme-Court in the decisions reported in Punjab National Bank Ltd. v. Their Workmen 1959-II L.L.J. 666, and Lord Krishna Textile Mills v. Its Workmen 1961-I L.L.J 211. In the first case above cited at page 678 their Lordships have observed thus:

Where an application is made by the employer for the requisite permission under Section 33, the jurisdiction of the tribunal in dealing with such an application is limited. It has to consider whether a prima facie case has been made out by the employer for the dismissal of the employee in question. If the employer has held a proper enquiry into the alleged misconduct of the employee, and if it does not appear that the proposed dismissal of the employee amounts to victimisation or an unfair labour practice, the tribunal has to limit its enquiry only to the question as to whether a prima facie case has been made cut or not. In those proceedings it is not open to the tribunal to consider whether the order proposed to be passed by the employer is proper or adequate or whether it errs on the side of excessive severity; nor can the tribunal grant permission, subject to certain conditions, which it may deem to be fair. It has merely to consider the prima facie aspect of the matter and either grant the permission or refuse it according as it holds that a prima facie case is or is not made out by the employer.

The position was further explained thus in Lord Krishna Textile Mills v. Its Workmen 1961-I L.L.J. 211 at 218:

In view of the limited nature and extent of the enquiry permissible under Section 33(2)(b) all that the authority can do in dealing with an employer's application is to consider whether a prima facie case for according approval is made out by him or not. If before dismissing an employee the employer has held a proper domestic enquiry and has proceeded to pass the impugned order as a result of the said enquiry, all that the authority can do is to enquire whether the conditions prescribed by Section 33(2)(b) and the proviso are satisfied or not. Do the standing orders justify the order of dismissal? Has an enquiry been held as provided by the standing order? Have the wages for the month been paid as required by the proviso?; and, has an application been made as prescribed by the proviso? This last question does not fall to be decided in the present appeal decause it is common ground that the application has been properly made. Standing Order 21 specifies acts of omission which would be treated as misconduct, and it is clear that under Standing Order 21(s) threatening or intimidating any operative or employee within the factory premises is misconduct for which dismissal is prescribed as punishment. This position also is not in dispute. There is also no dispute that proper charge-sheets were given to the employees in question, an enquiry was properly held and opportunity was given to the employees to lead their evidence and to cross-examine the evidence adduced against them; in other words, the enquiry is found by the tribunal to have been regular and proper. As a result of the enquiry the officer who held the enquiry came to the conclusion that the charges as framed had been proved against the workmen concerned, and so orders of dismissal were passed against them. In such a case it is difficult to understand how the tribunal felt justified in refusing to accord approval to the action taken by the appellant..It is conceivable that even in holding an enquiry under Section 33(2)(b), if the authority ii satisfied that the finding recorded at the domestic enquiry is perverse in the sense that it is not justified by any legal evidence whatever, only in such a case it may be entitled to consider whether approval should be accorded to the employer or not; but it is essential to bear in mind the difference between a finding which is supported by any legal evidence and a finding which may appear to be not supported by sufficient or adequate or satisfactory evidence.

Judged in the light of the above principles enunciated by the Supreme Court, there cannot be the slightest doubt that in the present case the second respondent-Tribunal has trespassed very much beyond the legitimate bounds of its jurisdiction in conducting the adjudication under Section 33-A. It is not disputed that the rules of the petitioner company warrant an order of dismissal being passed against the employee for misconduct of the kind with which he was charged. There is also no case put forward by the workman that the impugned action has been taken against him by way of victimisation. That there has been payment of one month's wages and that an application for approval was duly made before the Tribunal are not in controversy. There is also an express finding entered by the Tribunal that a proper domestic enquiry had been conducted by the management after affording due opportunity to the employee to participate therein by cross-examining the prosecution witnesses and by adducing defence evidence. In such circumstances one should have expected the Tribunal to limit the scope of its enquiry to an investigation as to the existence or other-wise of a prima facie case instead of embarking, as it has done, upon a detailed investigation of its own by re-appreciating the evidence adduced in the enquiry and substituting its findings in the place of those entered by the management. What has been stated by the Tribunal in justification of its conclusion that there is no prima facie case, is that in its opinion, the facts elicited in the enquiry were not sufficient to arrive at a conclusion that the delinquent worker was guilty of the charges. Nowhere in its fairly lengthy order is there any opinion recorded by the Tribunal that the finding of guilt entered by the management was either based on no evidence or was in any sense perverse. It is therefore manifest that the Tribunal has completely misconceived the scope of its jurisdiction and has wrongly arrogated to itself the functions of an appellate authority.

9. Counsel appearing on both sides have taken me through the enquiry report containing the findings which were accepted by the management. In the said report there is a detailed discussion of the evidence adduced in the enquiry. The learned advocate appearing for the 1st respondent stated that the evidence of the witnesses examined in the enquiry has been correctly summarised in this report and that, therefore, he did not wish to read out before this Court the depositions themselves which were also available in the records produced by the learned Government Pleader. Having been taken through the materials adduced in the enquiry, on the basis of which the management has recorded its conclusion of guilt against the 1st respondent, I have no hesitation to hold that it is not possible to characterise the said finding either as one based on no evidence or as unreasonable or perverse. The mere circumstance that the Industrial Tribunal was inclined to arrive at a different conclusion of fact on its appreciation of the same evidence, will not entitle it to withhold the approval sought for by the management so long as the management's finding could not be regarded as perverse or based on no evidence.

10. It follows from the above discussion that both the grounds stated by the Tribunal for declining to grant the approval sought for by the management are incorrect and unsustainable in law. The order, Ext. P 1, is therefore set aside and the matter is remitted back to the Tribunal for fresh disposal in the light of the observations contained in this judgment.

11. I make it clear that nothing contained in this judgment will prejudice whatever rights or claims the 1st respondent may have in respect of the alleged balance pay due to him for the period between 5.8.1966 and 5.9.1966. I say this because a contention was urged before me by learned Counsel that the management was not justified in directing that the 1st respondent will be deemed to have been under suspension during the period mentioned above and that the 1st respondent was entitled to reinstatement with full wages when the first order of dismissal was set aside. I express no opinion whatever on the merits of this contention since it does not legitimately arise for consideration in this proceeding.

12. The original petition is allowed in the manner indicated above. There will be no direction regarding costs.


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