J.M. Shelat, C.J.
1. This petition is for a certiorari or for any other appropriate writ or direction quashing the order of the Industrial Court requiring the petitioner to pay wages to the second respondent from the date of the order of discharge by the petitioner company whereby the second respondents services were terminated upto the date of the decision of the Labour Court.
2. The second respondent was at the material time serving as a supervisor in the dyeing department of the petitioner company. On September 17 1959 he was served with a show cause notice along with a preliminary suspension order. The notice alleged that in the morning of September 11,1959 the second respondent had behaved towards his superior officer one Varma in an insulting and indisciplined manner that the incident took place in the presence of the Chief Chemist one B.D. Patel and called upon the Second respondent to show cause before the Factory Manager why his services should not be terminated.
3. It is not in dispute that an enquiry was held on September 19 1959 but it is also not in dispute that during that enquiry the said Varma was not examined in the presence of the second respondent nor was he offered for cross-examination. The Chief Chemist the said B.D. Patel in whose presence the incident was alleged to have taken place was also not examined though he was offered for cross-examination. On that very day i.e. September 19 1959 an order was served upon the second respondent whereby he was discharged from his service with one months wages in lieu of notice. The second respondent thereupon filed an application under Section 79 of the Bombay Industrial Relations Act 1946 alleging (1) that he was discharged with an ulterior motive on account of his having given a notice as a share-holder to another concern the Behari Mills Co. Ltd. in connection with the affairs of that company whose agent was a relation of the petitioner companys agent; and (2) that the enquiry held on September 19 1959 was a defective enquiry inasmuch as the said Varma was not examined thereat and though the Chief Chemist was offered for cross-examination he had not been examined by the company in his presence. Both the parties were allowed to and did in fact adduce evidence before the Labour Court and the Labour Court on the basis of the evidence led before it came to the conclusion that the enquiry held by the company was defective and further that though the impugned order was in form an order of discharge it was in substance one of dismissal and therefore a proper enquiry was obligatory before such punitive action could be taken against the second respondent. In the opinion of the Labour Court no proper inquiry was held and therefore an opportunity was given to the parties to lead evidence. The Labour Court came to the conclusion that the second respondent had behaved in an insolent manner towards the said Varma. It was thus of the view that the charge against the second respondent was established and on that basis declined to pass an order of reinstatement. It however directed that as no proper enquiry was held the petitioner company was liable to pay wages to the second respondent upto the date of its order.
4. Against this order both the second respondent and the petitioner company filed appeals to the Industrial Court the former for refusal to grant reinstatement and the latter against the direction to pay wages upto the date of the said order. The Industrial Court agreed with the Labour Court in refusing to grant reinstatement and dismissed the second respondents appeal. So far as the appeal by the company was concerned the Industrial Court also declined to interfere with the Labour Courts decision and held that inasmuch as the action taken against the second respondent was penal in nature the order passed against the second respondent though one of discharge in form was in substance an order of dismissal and as no proper enquiry was held the second respondent was not properly or legally discharged and therefore the company was liable to pay wages from the date of the order of discharge until the date of the order of the Labour Court. It is the correctness of this order that is challenged in this petition.
5. Before we proceed further it is necessary first to know the Standing Orders which were applicable to the parties under the Bombay Industrial Relations Act. It is not in dispute that the Standing Orders applicable in the present case were the Standing Orders known as Model Standing Orders for employees other than operatives. Standing Order 23 of the Model Standing Order provides that the employment of a permanent clerk may be terminated by one months notice or on payment of one months wages in lieu of notice. Clause (2) thereof provides that the reasons for the termination of service of a permanent clerk shall be recorded in writing and shall be communicated to him if he so desires at the time of discharge unless such communication in the opinion of the Manager is likely directly or indirectly to lay any person open to civil or criminal proceedings at the instance of the clerk. Clause (6) provides that when the employment of any clerk is terminated or when he leaves the service the wages earned by him and all other dues shall be paid before the expiry of the second working day from the day on which he leaves the service. Clause (7) provides that an order relating to discharge or termination of service shall be in writing and shall be signed by the Manager and a copy of such order shall be supplied to the clerk concerned. Standing Order No. 24 sets out various acts or omissions on the part of a clerk which would amount to misconduct. This Standing Order inter alia in Clause (1) provides that commission of any act subversive of discipline or good behaviour on the premises of the undertaking shall amount to misconduct. Standing Order 25 provides that a clerk guilty of misconduct as set out in Standing Order 24 may be (a) warned or censured or (b) subject to and in accordance with the provisions of the Payment of Wages Act 1946 fined or (c) by an order in within signed by the Manager suspended for a period not exceeding four days or dismissed without notice. Clause (2) provides that no order under Clause (1)(b) of this order shall be made unless the clerk concerned has been informed in writing of the alleged misconduct or given an opportunity to explain the circumstances alleged against him. Clause (3) provides that no order of dismissal under Clause (1)(c) of this order shall be made except after holding an enquiry against the clerk concerned in respect of the alleged misconduct in the manner set forth in Clause (4). Clause (4) provides that a clerk against whom an enquiry has to be held shall be given a charge-sheet clearly setting forth the circumstances appearing against him and requiring explanation. It also provides that he should be given an opportunity to answer the charge and permitted to be defended by a representative of employees in the industry and the clerk should be permitted to produce witnesses in his defence and cross-examine any witness on whose evidence the charge rests. It further provides that a concise summary of the evidence led on either side and the clerks plea shall be recorded.
6. One thing which may be observed in these Standing Orders is that though an employer has the power to terminate the services of an employee governed by these Standing Orders that right is not absolute inasmuch as the employer has to give one months notice or pay one months wages in lieu of notice and has also to record reasons for such termination and communicate them to the employee at the time of the discharge if the employee so desires. Standing Order 24 lays down that certain acts and omissions on the part of the employee therein set out in Clauses (a) to (t) constitute misconduct and Standing Order 25 provides that an employee guilty of misconduct may be warned or censured or fined or by an order in writing signed by the Manager suspended for a period not exceeding four days or dismissed without notice. Clause (2) provides that no order of fine can be made unless the employee has been informed in writing of the alleged misconduct and given an opportunity to explain the circumstances alleged against him. Clause (3) provides that no order of dismissal can be made except after holding an enquiry against the employee concerned in respect of the alleged misconduct in the manner set forth in Clause (4). It may be noticed that as provided by Clause (3) an enquiry is obligatory only if an order of dismissal is contemplated as a punishment for misconduct. Under Clause (2) even though an order of fine is made no enquiry is necessary and the only thing that is necessary is that the employee concerned is to be either informed in writing of the alleged misconduct and to be given an opportunity to explain the circumstances alleged against him. It is also clear that though warning or censure or even suspension for a period not exceeding for days are punishments for misconduct no enquiry is necessary nor is it necessary even to inform the employee concerned of the alleged misconduct or to give an opportunity to explain the circumstances alleged against him. Therefore the only cases where such an opportunity is to be given or an enquiry is necessary are cases where for misconduct the punishment given is either fine under Clause (1)(h) or dismissal under Clause (1)(c). Therefore so far as these Standing Orders are concerned even though an order passed by an employer amounts to punishment and that punishment is for any of the acts or omissions amounting to misconduct no enquiry is necessary unless such an order is one of dismissal falling under Clause (1)(c) of Standing Order 25. It would also follow that if an order of termination of service is passed even though it may be of a penal nature no enquiry would be necessary as the enquiry is made obligatory only if the order is one of dismissal passed under Clause (1)(c) of Standing Order 25.
7. The Industrial Court relying on certain decisions of the Supreme Court accepted the contention urged on behalf of the second respondent that it was obligatory on an employer when any penal action was sought to be taken against a workman to hold an enquiry under the Standing Orders applicable to the undertaking and if no such enquiry was made and a workman was dismissed the Labour Court in an application under Section 79 of the Bombay Industrial Relations Act can hold that the action of the employer was improper or illegal within the meaning of Section 78(i) and the Labour Court would be justified in granting relief to the workman It also held that just as an employer can justify his action by producing evidence before the Industrial Tribunal as held by the Supreme Court the Labour Court also has jurisdiction to permit such an employer to adduce evidence in justification of the action taken by him against a workman and that this was a latitude given to the employer in exercise of the equitable jurisdiction held by the Labour Court and therefore until the Labour Court has decided on the evidence produced before it that the employers action was justified the workman would still be in service as he was improperly dismissed or discharged and therefore he would be entitled to his wages upto the date of the decision of the Labour Court. The Industrial Court accepted the contention that where an employer has issued a show cause notice for misconduct but instead of imposing any punishment under Standing Order 25 simply passes an order of discharge under Standing Order 23 it would be open in such a case to the Labour Court to go behind such an order and determine whether the action taken was in reality one of discharge simpliciter or was a penal action. And though the order might be in form one of discharge the Labour Court like the Industrial Tribunal under the Industrial Disputes Act would have jurisdiction to consider whether the action was in substance and reality a penal action. In para 9 of its order the Industrial Court observed that it would be necessary to consider whether the employer had in the instant case taken penal action against the workman or not. Relying on the fact that a show cause notice Exhibit 8 was served on the second respondent which showed that a charge of misconduct was made against him the fact that the second respondent had submitted his explanation and also the fact that the order of discharge stated that the charge of misconduct was established during the enquiry the Industrial Court found that though the order in form was one of discharge it was in reality by way of punishment for misconduct set out in the show cause notice. The Industrial Court on this basis held that it was obligatory on the company to hold an enquiry as laid down in Standing Order 25 and to give an adequate opportunity to the workman to make his defence and that not having been done the workman was not properly and legally discharged and therefore the second respondent was entitled to have his wages until the decision of the Labour Court. The Industrial Court negatived the contentions urged on behalf of the petitioner company (a) that no enquiry was necessary under the Standing Order for the order was not one of dismissal and in an enquiry under Section 79 it was open to the petitioner company to justify its order by leading evidence and (b) that in cases arising under the Industrial Disputes Act an employer was under a disability in the sense that by reason of Section 33 of that Act he cannot discharge or dismiss a workman until the approval of the Industrial Tribunal is obtained thereunder. But there was no such restriction to his power of terminating employment under the Bombay Industrial Relations Act and therefore an employer can take action against a workman first and then justify it when such action is challenged under Section 79 of the Act by adducing evidence. The Industrial Court repelled these contentions and held that even though there was no such ban in the Bombay Industrial Relations Act the employer was nonetheless under an obligation to hold an enquiry before taking penal action as the Standing Orders provided for such enquiry and therefore an employer cannot be permitted to circumvent the provisions of the Standing Orders by merely passing an order of discharge when in reality the action taken is penal in nature. The Industrial Court therefore upheld the order of the Labour Court observing, that the Labour Court had taken the correct view in following the decision in M/s. Sara Musa Sugar Works (P) Ltd. v. Shobrati Khan and others : (1959)IILLJ388SC in the instant case to which though arising under a different Act the principles enunciated by the Supreme Court were applicable.
8. The contentions urged by Mr. Nanavati on behalf of the petitioner company were--
(1) that where an impugned order is one of termination of services under Standing Order 23 and not one of dismissal under Standing Order 25 inasmuch as it is only an order of dismissal which requires that an enquiry must be held no enquiry is obligatory;
(2) that the Labour Court having held an enquiry and having come to the conclusion on the evidence led before it that the employee was guilty of misconduct namely of insolence towards his superior officer the Labour Court and the Industrial Court were in error in granting wages to the employee from the date of discharge until the date of the decision of the Labour Court;
(3) that the Standing Orders being determinative of the relations between an employer and an employee the Labour Court had no jurisdiction under Sections 78 and 79 to go beyond the scope of the Standing Orders in an enquiry as to the legality or propriety of that order in other words in deciding such an application the Labour Court cannot brush aside the Standing Orders but has to take them into account and decide the question as to the legality or propriety of the order in question;
(4) that the Labour Court had no jurisdiction to award wages once it was proved by evidence led before it and having itself held the enquiry and found on such enquiry that the termination of service was justified i.e. having found that the employee was guilty of insolence and the employer was entitled to terminate his services and such termination was justified under the Standing Orders; and
(5) that assuming that the order though in form one of discharge was in substance one of dismissal the Labour Court on an enquiryheld by it and the employee having had the opportunity of defending himself and having found that the impugned order was justified had no jurisdiction to award the back wages.
9. On the other hand Mr. Daru for the second respondent urged that--
(1) under Section 78 the jurisdiction of the Labour-Court will be to decide the dispute both as to the legality and propriety of the impugned order. Therefore when a dispute is raised the Labour Court would enquiry in a case where the charge is one of misconduct and the enquiry held is defective whether the order though one of discharge is a proper one;
(2) that Standing Order 23 does no more than recognise the employers common law right to terminate an employees services but such a right is subject to two qualifications (a) to give in writing reasons for such an order and (b) that it is subject to a scrutiny by the Labour Court whether such an order is legal and or proper;
(3) that when the order terminates the services of a workman as and by way of punishment on the basis of misconduct it is but fair that an employer should hold an enquiry and if on such enquiry it is found that the workman was guilty of such misconduct if the employer does not wish to impose the drastic punishment of dismissal he may pass an order of mere discharge. But even if the order is one of discharge only it is nonethelss penal and carries the stigma of guilt of misconduct and the mere fact that the employer pays one months wages makes no difference to the order being of a penal character;
(4) that if the Labour Court comes to the conclusion that the impugned order was not proper and the termination of service was improperly made it can award wages for the termination of service can be said to be proper only when on an enquiry held by the Court it is found that the employee is guilty and his service can be said then only to be properly terminated. Since the Labour Court has jurisdiction under Section 78 to say that the impugned order is bad the Court would normally set aside such an order and there would in such a case be no termination of services and the employer would be liable to pay wages to the workman. The only thing that happens under the industrial law is that since the Court acts on equity and it is fair that the employer should be given an opportunity to satisfy the Court that there was proper reason to terminate the services or to dismiss and the employer does so at the time of such enquiry by the Court it cannot be said that there was valid termination and therefore the employer would be liable to pay wages until the Court is satisfied on an enquiry held by it that the workman was guilty of the charge against him; and
(5) that the power of a Labour Court is to be read in Section 78 of the Act. The section does not contain limitations to that power. Therefore if the Labour Court finds that injustice has resulted by the employer having terminated the services on the ground of misconduct without holding a proper enquiry the Court would find the order improper. The mere fact that such an order is made under a Standing Order is not enough because it is the propriety of such an order made in fact under a Standing Order that Section 78 requires the Labour Court to adjudge. Therefore whenever an order of 3 penal nature is made whether the act of the employee falls under any of the items of misconduct under Standing Order 24 or not and the punishment is not dismissal an enquiry is still necessary.
10. Before we proceed to examine these rival contentions it is necessary first to consider a few provisions of the Act and ascertain the scope of the jurisdiction or the Labour Court under Section 78 of the Act. Section 3(17) defines an industrial dispute as meaning any dispute or difference between an employer and an employee or between employers and employees or between employees and employees and which is connected with any industrial matter. An industrial matter in Clause (18) means any matter relating to employment work wages hours of work privileges rights or duties of employers or employees or the mode terms and conditions of employment and includes the several matters therein set out. An industrial dispute as contemplated by the Bombay Industrial Relations Act 1946 therefore not only means a dispute between an employer and his employees collectively but also includes a dispute between an individual employee against his employer which is connected with any industrial matter. It will be observed that this definition is wider than that of an industrial dispute in the Industrial Disputes Act 1947 for there an industrial dispute means one that is collective and not one concerning an individual workman. Section 35 provides for the making of Standing Orders which when brought into operation are under Section 40(1) or in their absence the Model Standing Orders applicable under Section 35(5) are determinative of the relations between an employer and his employees in regard to all matters specified in Schedule I to the Act. Sub-section (2) of Section 40 however provides that notwithstanding anything contained in Subsection (1) the State Government may refer or an employee or a representative union may apply in respect of any dispute referred to in Clause (a) of paragraph A of Section 78 to a Labour Court. Under Section 78(1) paragraph A the Labour Court is empowered to decide inter alia disputes regarding propriety or legality of an order passed by an employer acting or purporting to act under the Standing Orders. Therefore the combined effect of Section 40(2) read with Section 78 is that though Standing Orders are determinative of the relation ship between an employer and his employees an employee can apply to a Labour Court and the Labour Court can decide the dispute regarding the legality or propriety of an order passed by his employer acting under the Standing Orders. The determinative character of the Standing Orders thus does not preclude the Labour Court from entertaining and deciding an application which disputes the legality or propriety of an order of an employer though made or purported to have been made under the Standing Orders.
11. It was however urged by Mr. Nanavati that though the fact that an action is taken under the Standing order does not preclude a Labour Court from deciding an application which challenges the legality or propriety of such action inasmuch as the Standing Orders are made determinative of the relationship between an employer and his employees the question of the legality or propriety of an order made by an employer has to be decided in the light of the Standing Orders and therefore if the I order made by an employer satisfies the requirements of the Standing Orders the Labour Court cannot interfere with such an order or set it aside on the ground of either legality or propriety. In support of this proposition he relied upon an unreported-judgment of a Division Bench of the High Court of Bombay consisting of Mudholkar and Patel JJ. in Special Applications Nos. 3321 and 3322 of 1958 decided on January 6 1959 It appears that two workmen in the petitioner company there were found fighting in a rowdy manner in the department where they were working. The management thereupon issued a show cause notice and held an enquiry as required by the Standing Orders and thereafter passed an order dismissing the two workers. The two workers then filed an application before the Labour Court challenging the order of dismissal alleging that the order was mala fide and also alleging victimization. These allegations were denied by the employer. The Labour Court held that the enquiry was properly held and negatived the allegations as to mala fides of the petitioner company and also the allegation of victimization but held that the order of dismissal was harsh and therefore set it aside and directed reinstatement of the two workers. There was an appeal against the order but the appellate Court agreeing with the Labour Court upheld the aforesaid order. It was urged in the High Court on behalf of the company that the powers of a Labour Court under paragraph A(a) of Section 78 were merely revisional powers conferred in well-known legal phraseology viz. legality or propriety which imported only revisional power and no more and that they were in contrast to the powers given to the Labour Court in Clauses (b) and (c) of paragraph A relating to industrial disputes and the question whether a strike or a lock-out etc. is illegal under the Act. The High Court found substance in this contention and observed that--
The wording of the Section 78 itself is such that it leaves no room for doubt that the powers with regard to Clause (i)(A)(a) are limited to great extent and are not coextensive with those with regard to disputes mentioned in the other clauses of the section.
On this construction the learned Judges held that there was not the least doubt that the orders of dismissal were orders passed under the Standing Orders by virtue of the discretion vested in the management and as the powers under the Act were limited to revisional powers it was not open to the Tribunal to substitute its own discretion for that of the management. If the discipline of the industrial establishment its production and its quality have to be maintained it is but necessary that the management must have discretion to decide as to what punishment is necessary in a particular case and if after having applied its mind to the relevant facts which are provided by the Standing Orders it takes a decision it would not be open to the Tribunal to review the decision merely by calling it an unfair labour practice. Another decision that was pointed out in support of the contention that the expression legality or propriety occurring in Section 78 must mean revisional powers and no more was Chhugomal v. District Judge Thana (1956) 58 B.L.R. 545. But that was a decision under Section 27(2) of the Administration of Evacuee Property Act 1950 where the question was as to the nature of jurisdiction of the High Court in a reference made to it by the Deputy Custodian General. The High Court held that Section 27(1) conferred revisional jurisdiction upon the Custodian General and that jurisdiction was confined to the legality or propriety of an order passed by the authority mentioned in the Act. It was therefore in connection with the provisions of Section 27 of that Act that the learned Chief Justice observed that the very fact that the Legislature had conferred revisional jurisdiction upon the Custodian General and not appellate jurisdiction must mean that the revisional jurisdiction is different from appellate jurisdiction and that it could not possibly be suggested that when the Custodian General made the reference to the High Court appellate jurisdiction was conferred upon the High Court and the High Court became entitled to interfere with the findings of fact arrived at by the Custodian General. The jurisdiction that the High Court could exercise in references under Section 27(2) could only be the jurisdiction which the Custodian General himself could exercise under Section 27(1). Section 78 of the Bombay Industrial Relations Act is enacted in a different context and contains a totally different language and therefore this decision cannot be used for its construction. In a recent decision in Vithoba Maruti v. S. Taki Bilgrami (1963) 66 B.L.R. 426 a Division Bench of the High Court of Maharashtra has on the other hand taken a view different from the one taken by Mudholkar and Patel JJ. The learned Judges here have held that under Section 78(1)(a)(i) the Labour Court can examine the propriety of an order made by an employer acting under the Standing Orders and in appropriate cases can set aside the order or alter that order to avoid miscarriage of justice. They also held that the section gives ample power to the Labour Court to interfere with a finding or with punishment imposed by the domestic tribunal if such an interference is called for on the ground of its impropriety in order to avoid grave injustice occurring in a particular case. After examining the language of Section 78(1)A of the Act. the learned Judges came to the conclusion that the Labour Court was empowered to decide disputes regarding legality or propriety of an order passed by an employer acting under the Standing Orders and was not confined only to satisfy itself as to the legality or propriety of an order passed by an employer as the language of the section itself showed that the powers of the Labour Court were wider than the powers of a Court exercising a revisional jurisdiction. The learned Judges examined the scheme of the Bombay Act and that of the Industrial Disputes Act 1947 and observing that the Bombay Act materially differed from the Central Act held that the limitations placed by the Supreme Court in its decisions under the Central Act on the powers of interference of the Industrial Tribunals thereunder would not apply to the Labour Court under the Bombay Act. They further held that the limitations on the power of an Industrial Tribunal as held by the Supreme Court to interfere only when there is want of good faith or where there is victimization or unfair labour practice or when the management had been guilty of the basic error or violation of a principle of natural justice or where on the materials the finding is completely baseless or perverse do not apply to a Labour Court and an Industrial Court while exercising their jurisdiction under Section 78 of the Bombay Act.
12. It is not necessary for us in the present case to enter into the question as to whether the powers of a Labour Court under the Bombay Act are wider than those of the Industrial Tribunals under Section 15 of the Industrial Disputes Act. We are for the moment concerned with the limited question whether as contended by Mr. Nanavati the expression legality and propriety used in Section 78(1)A limits the jurisdiction of the Labour Court to a revisional jurisdiction. It is sufficient for us to say that looking to the language used in this clause it would be difficult to accede to such a limited construction as suggested by Mr. Nanavati. Chapter XII deals with Labour Courts and Section 78 lays down jurisaiction of Labour Courts in disputes therein set out. To take paragraph A only in that section the section provides that the Labour Court shall have jurisdiction to decide
(a) disputes regarding--
(i) the propriety or legality of an order passed by an employer acting or purporting to act under the standing orders;
(ii) the application and interpretation of standing orders;
(iii) any change made by an employer or desired by an employee in respect of an industrial matter specified in Schedule III and matters arising out of such change:
(b) industrial disputes--
(i) referred to it under Section 71 or 72;
(ii) in respect of which it is appointed as the Arbitrator by a submission;
(c) whether a strike lock-out closure stoppage or any change is illegal under this Act.
Under Clause (a)(i) of paragraph A the jurisdiction though confined to the question of propriety or legality of an order passed by an employer cannot be held to be a revisional jurisdiction for the domestic tribunal which has passed the order is not a tribunal inferior to the Labour Court and therefore it is not as if the Labour Court like a revision Court can call for the record of such inferior tribunal and decide for itself the correctness or the legality or the propriety of an order passed by such a tribunal. The order passed by an employer and in respect of which this jurisdiction is conferred is one which is or is purported to have been passed under Standing Orders which are made determinative of the relationship between the employer and his employees. But this Clause read with Sub-section (2) of Section 40 shows that even though the Standing Orders are determinative an order passed thereunder or in accordance therewith is subject to the jurisdiction conferred on a Labour Court under Section 78 It is clear therefore that even though an order is passed under a Standing Order such an order is subject to the scrutiny by a Labour Court though such scrutiny is confined to the question of legality or propriety of such an order. Section 78 gives a right to an employee when such an order is passed to file an application challenging the legality or propriety of such an order. The Labour Court in dealing with such an application does not exercise revisional jurisdiction but the jurisdiction which is conferred on it by this section is an original jurisdiction. Except that such an application can only challenge the order on the ground of legality and propriety there is no limitation such as a revisional jurisdiction would have. On the question as to the legality and propriety the Labour Court can and does usually record evidence that the parties adduce which if it was revisional jurisdiction it cannot and would not record. It is therefore not possible to take a narrow view of the jurisdiction of the Labour Court under Section 78 as contended by Mr. Nanavati.
13. Mr. Nanavati then contended that assuming that the Labour Court has jurisdiction to go into the question of legality or propriety of an order made under a Standing Order it cannot go beyond the Standing Order in other words the jurisdiction of the Labour Court would be confined to seeing whether the impugned order is made legally or properly under the Standing Orders and if it finds that it is both legal and proper it cannot question such an order or interfere with it. His contention was that since the executive management of the company rests entirely with the company the discretion used by a manager while passing an order cannot be interfered with by a Labour Court so long as the impugned order is passed under the Standing Orders and is in accordance with such Standing Orders. Therefore the question of the legality and propriety of such an order has to be adjudged by the Labour Court from the point of view of the Standing Orders under which it is passed and within the four corners of such Standing Orders. In support of this contention he relied on Digambar Ramchandra v. The Khandesh Spinning and Weaving Mills Company Ltd. 52 B.L.R. 46. That was a case under the Bombay Industrial Disputes Act of 1938 and where the High Court held that where standing orders have been framed and settled under Section 26 of the Act the arbitrator to whom a dispute falling under the standing order is referred by Government under Section 49A of the Act has jurisdiction to determine the liability flowing from and arising out of the standing an orders. He has no jurisdiction to determine any liability outside the standing orders for instance what is fair and right as between the employer and the employee and to give relief on moral and humanitarian considerations. We do not however see how this decision can assist the petitioner company for the High Court there did not have before them such a provision as Section 78 of the present Act which in express terms when read with Sub-section (2) of Section 40 lays down that even when an order is made under a Standing Order notwithstanding that such Standing Order is determinative of the relations between an employer and his employees a Labour Court has jurisdiction to decide a dispute regarding the legality or propriety of such an order. An order may be held to be legal in the sense that it is made under an appropriate Standing Order or that it is made under a power given under a Standing Order but it is one thing to say that it is legally made under a Standing Order and another thing to say that it is proper. Even if an order is legal and is made in accordance with a Standing Order it can still be challenged on the ground that it is not a proper order. Similarly the dicision in Tata Chemicals Ltd. v. Kailash Adhvaryu (1964) I.L.R. 5 Guj. 612 G.L.R. 649 where the Standing Orders when certified under the Industrial Employment (Standing Orders) Act 1964 were held to be binding upon the employer and his workmen and as governing the relations between them cannot be used in support of the present contention as there was no question arising in that case of the jurisdiction of an Industrial Tribunal to decide the legality or the propriety of an order made under a Standing Order.
14. The question that really arises in this petition is whether the Labour Court can under its jurisdiction under Section 78(1) A (a) interfere with an order passed by an employer under a Standing Order which empowers him to discharge his workmen, on an application disputing its legality or propriety. As aforesaid Mr. Nanavatis contention was that the Labour Court has no jurisdiction to interfere with an order which an employer is entitled to pass under a Standing Order as the Standing Orders are determinative under Section 40(1) of the Act and therefore an order of the Labour Court has to be in accordance with the Standing Orders. In R.M.M. Sangh v. The Apollo Mills Ltd. : (1960)IILLJ263SC a contention was urged on behalf of the respondent Mills as against its employees who claimed compensation for loss of wages owing to temporary stoppage of work as a result of short supply of power that no such compensation was claimable in a reference under Section 73 of the Bombay Industrial Relations Act to the Industrial Court by the Government of Bombay which contention was based on Section 40(1). On behalf of the employees it was contended that Subsection (2) of Section 40 excluded the first sub-section because of the non-obstante Clause and that the Industrial Court was not bound by the first sub-section or the Standing Orders. Though the Supreme Court dealt with the case on the footing that Standing Orders 16 and 17 which were invoked by the mills did not apply the learned Judges also observed that there was some force in the aforesaid contention of the appellants and that the non-obstante clause in Section 73 clearly showed that inspite of the other provisions of the Act an industrial dispute may be referred to the Industrial Court and that the powers of the Industrial Court were very wide under Section 73 inasmuch as the State Government can refer an industrial dispute to it not withstanding anything contained in the Act. Similarly under Sub-section (2) of Section 40 an employee or a representative union can apply in respect of any dispute of the nature referred to in Clause (a) of paragraph A of Section 78 to a Labour Court. Just as the determinative character of the Standing Orders does not prevent an Industrial Court from going into adjudication under Section 73 the determinative character of the Standing Orders likewise would not bind or circumscribe the jurisdiction of the Labour Court in deciding an application under Section 78 challenging the legality or propriety of an order made by an employer acting under a Standing Order and it would seem that while deciding such a question the Labour Court would not be bound by the Standing Orders for Section 78 postulates that the order has been or is purported to have been made under a Standing Order and though it is made under a Standing Order it has to adjudge its legality or propriety. The contention therefore. that a Labour Court cannot traverse beyond a Standing Order while deciding an application under Section 78 does not seem correct.
15. On merits Mr. Nanavati argued (a) that as the impugned order was one of termination of service though the order was passed on the ground of misconduct the case fell under Standing Order 23 and therefore no enquiry was necessary and (b) that even assuming that an enquiry was necessary since the Labour Court and the Industrial Court were satisfied that the employee was guilty of misconduct no order of compensation could be made. As against this contention Mr. Daru relied upon Assam Oil Co. Ltd. v. Its Workmen A.I.R. 1953 S.C. 1254? where the Supreme Court laid down the following principles:
(1) that even if the contract of employment gives an employer power to terminate the service of his employees and the employer resorts to that power if the validity of the termination of service is challenged in an industrial adjudication an Industrial Tribunal would be competent to enquire whether the termination was effected in bona fide exercise of the power conferred by the contract;
(2) that whether the termination is the result of a bona fide exercise of such power or whether in substance it is punishment for the alleged misconduct would depend upon the facts and circumstances of each case;
(3) that just as an employers right to exercise his option in terms of the contract is recognised by the industrial law an employees right to expect security of tenure has also to be taken into account;
(4) therefore it does not follow that whenever an employer purports to terminate services by virtue of the power conferred on him by the terms of the contract an Industrial Tribunal cannot question its validity propriety or legality;
(5) that if it is found that the order of discharge proceeded on the basis that the employee was guilty of misconduct and was punitive in nature it would be competent for an Industrial Tribunal to hold that the employer was not justified in discharging the workman without holding a proper enquiry and the Tribunal could go behind the words of the form of an order of discharge and decide whether the discharge is discharge simpliciter or the result of misconduct alleged against the workman. The exercise of the power to be valid must always be bona fide and if the bona fides are successfully challenged the Tribunal can interfere with the order in question;
(6) in the context of this power a Tribunal is competent to consider whether the discharge is mala fide or amounts to victimization or an unfair labour practice or is so capricious or unreasonable that it must lead to the inference that it was passed for ulterior motives;
(7) in a case where an order on the face of it appears to be one of discharge but is in substance founded on misconduct of which according to the employer the workman is guilty the order would be a punitive dismissal and fair-play and justice require that the employee should be given a chance to explain the allegations weighing in the employers mind and would necessitate a proper enquiry.
In R.M.M. Sangh v. The Appolo Mills (supra) the Supreme Court laid down that in an industrial adjudication the principle is that social justice is not based on contractual relations and is not to be enforced on the principles of contract of service. It is something outside these principles and is invoked to do justice without a contract to back it. In this case the Supreme Court gave the imprint of its approval to the observations of the Industrial Tribunal in Textile Labour Association v. Ahmedabad Mill owners Association 1946 Industrial Court Reporter 87 that though the workers were not entitled to wages during the period of stoppage of work under the Standing Orders the jurisdiction of the Industrial Court to adjudicate a demand therefor was not barred by the Standing Order and that Section 73 of the Bombay Industrial Relations Act was wide enough to cover a reference of such a dispute. In the Chartered Banks case A.I.R. 1953 S.C. 919 the bank was entitled under the Bank Award of 1953 to terminate the services of its workmen in cases not involving disciplinary action for misconduct by three months notice or on payment of three months pay in lieu of notice. The Supreme Court laid down that in the case of such a provision whether in a contract or in a Standing Order or an award the requirement of bona fides was essential and if the termination of service was a colourable exercise of the power or as a result of victimization or unfair labour practice the Industrial Tribunal would have the jurisdiction to intervene and set aside such termination. The Tribunal can go behind the form of the order and see whether it is a mere camouflage for a dismissal for misconduct without following the prescribed procedure. It added however that the mere fact that there was an allegation of misconduct by an employee did not necessarily preclude the exercise of power of termination of service and compel the employer to follow the procedure prescribed for dismissal for misconduct. These principles were repeated in U.B. Dutt and Co. v. Its Workmen (1952) I.L.L.J. 374 where the facts showed that the employer issued a charge-sheet against a workman but subsequently terminated his services dropping the disciplinary proceedings purporting to act under the powers conferred on the management under the provisions of certain Standing Orders. The order terminating his services stated that the proposed enquiry if conducted would lead to further friction among the employees and that discipline would be prejudiced if the workman was retained in service. The Industrial Tribunal found that these reasons were not established and that the employer failed to prove that there was in fact misconduct on the part of the workman and consequently held the action to be not bona fide and ordered reinstatement. Approving the principle laid down by the Labour Appellate Tribunal in Buckingham and Carnatic Mills Ltd. v. Their Workmen (1951) 2 L.L.J. 314 the Supreme Court held that it was no longer possible for an employer to raise a plea to terminate the services of his employees at any time by just giving a notice or paying wages in lieu of notice for it would amount to a claim to hire and fire an employee as the employer pleased and would thus completely negative the security of service secured to the industrial employees through industrial adjudication. In the case of such termination the requirement of bona fides would be essential and if the termination was a colourable exercise of power or the result of victimization or unfair labour practice an Industrial Tribunal would have jurisdiction to intervene and set aside such an order of termination. An employer cannot now therefore press his right purely on contract and say that under the contract he has an unfettered right to hire or fire his employees. Such a right is now subject to industrial adjudication and even a power granted under the provisions of the Standing Orders to terminate the services of a workman without assigning any reasons or merely giving a notice or paying wages in lieu of such notice is now subject to industrial adjudication. The Tribunal has the right to enquire in such a case into the causes that led to the termination and if it is satisfied that the action taken was a colourable exercise of power it would have jurisdiction to set aside such termination. The Supreme Court held on the facts that it the employer wanted to take action for misconduct and then suddenly were to drop the enquiry which was intended to be held and were to discharge an employee under the Standing Orders it was clearly a colourable exercise of power under the Standing Orders inasmuch as the Standing Orders were used to get rid of an employee instead of following the course of holding an enquiry for misconduct the notice for which had in fact been given to the employee.
16. Mr. Nanavati however relied upon an unreported judgment of the Bombay High Court in Special Civil Application No. 877 of 1956 decided by Chagla C.J. and Tendolkar J. on July 31 1956 The petitioner there was a clerk employed by the first opponent company. The company served him with a notice to show cause why he should not be discharged from service on three grounds (1) negligence (2) insubordination and insolence towards the manager and (3) quarrelling with another clerk. The manager held an enquiry and served a discharge notice intimating to the employee that one months notice was given to him for being negligent in work for quarrelling with the other clerk and for insolence towards the manager. The employee challenged this order under Section 78 and the Labour Court held that the order of discharge was justified. The Industrial Court on appeal held to the contrary and ordered reinstatement and on an appeal to the Labour Appellate Tribunal the Tribunal allowed the appeal and restored the order of the Labour Court. The High Court observed that there were two Standing Orders Standing Order No. 10 whereunder the company could terminate services without an enquiry and Standing Order No. 12 which dealt with punishment for misconduct and the power to order suspension and dismissal but which required an enquiry. Mr. Nanavati relied on the observations made by the learned Chief Justice where he has stated that if an order of dismissal was passed under Standing Order 2(1) an Industrial Tribunal could deal with the question of legality or propriety of such an order and consider whether a proper opportunity was given to the employee to explain the allegation of misconduct against him but that no such enquiry was contemplated under Standing Order 10 and that was for a good reason because only Standing Orders 12 and 13 dealt with misconduct and punishment for such misconduct whereas an order of discharge was governed by Standing Order 10 and an order under that Standing Order would not be punishment and where the employer terminated the services and paid him one months wage and the only obligation cast on him under the Standing Order was that he must record reasons for discharging the employee. But this decision cannot assist Mr. Nanavati for his proposition that if the order is one of discharge the only thing that the employer need do is to pay the employee one months wages in lieu of notice and that so long as that is done the Industrial Tribunal cannot interfere with the order of discharge. The learned Chief Justice on the contrary has expressly stated that under the industrial law there is no absolute liberty to an employer to put an end to the contract of employment because even in a case of discharge an employer has to record reasons for discharge and secondly because the Industrial Tribunal has been given the power to consider the legality or propriety of an order passed by an employer and the Tribunal can consider whether the reasons given for termination are proper reasons and whether such reasons are established. Mr. Nanavati is not entitled to rely upon this decision because the Court there did not concern itself with the question before us. The only question there was whether the Appellate Tribunal was competent to interfere with the order passed by the Industrial Court and whether there was a point of law on which it could so interfere. It was while pointing out that there was such a point of law that the learned Chief Justice pointed out that the Industrial Court proceeded on a wrong basis namely that the order of the manager was assumed to be one for misconduct whereas one of the allegations was one of negligence an allegation which did not constitute misconduct. That being so the question of law on which the Appellate Tribunal could interfere was whether the approach of the Industrial Court was erroneous in the sense that it demanded an enquiry though on the ground of negligence an order of discharge could be passed without the necessity of an enquiry. This decision therefore does not lay down the proposition for which Mr. Nanavati canvasses. On the contrary there are express observations in this decision to show that notwithstanding the determinative character of the Standing Orders an Industrial Tribunal by virtue of powers conferred on it by Section 78 can interfere with an order of termination or dismissal whenever such an order is challenged on the ground of legality or propriety.
17. Though the decisions of the Supreme Court cited above were decisions under the Industrial Disputes Act 1947 relating to the power of adjudication the principles laid down relate to the industrial law and would aptly apply to the Tribunals created under the Bombay Industrial Relations Act especially as the Act confers power on them to examine the legality or propriety of orders passed by employers against their employees under powers conferred on them either by the contract of employment or by the Standing Orders.
18. In the instant case it is clear that the order of discharge was not termination simpliciter but was in fact an order punishing the employee for misconduct This is obvious from the fact that a show cause notice on the ground of misconduct was served upon the employee and an enquiry was held on the basis of that misconduct. There can therefore be no manner of doubt that the order of termination was by way of punishment for misconduct set out in the notice. The Labour Court and the Industrial Court while examining the legality and propriety had jurisdiction to consider whether the order suffered from lack of legality and/or propriety and since the order was not one of termination simpliciter but was based on misconduct and the enquiry held was not proper they were justified in coming to the conclusion that the order was passed on a defective enquiry. If an employer terminates the services of an employee as and by way of punishment and his mind is weighed by an allegation of misconduct on the part of the employee it is but fair and just that he should give proper opportunity to the employee to explain by holding a proper enquiry. Termination of services of an employee without giving such an opportunity would constitute nothing short than a colourable exercise of powers conferred by the Standing Orders. The Labour Court and the Industrial Court were therefore right in the conclusion that the order of discharge was not properly passed and that thought purported to be one of discharge it was in substance one of dismissal for misconduct on the part of the employee.
19. It follows that if the Industrial Tribunal comes to the conclusion that the order of termination of service is not a proper order by reason of its being a colourable exercise of the power or otherwise it would have the power to set aside the impugned order. But since the Tribunal acts on principles of equity and fair-play it permits an employer to lead evidence in an enquiry where his order is impugned to establish that there is good reason for dismissal. In the case of U.B. Dutt and Co (supra) the Supreme Court held that even if the enquiry was not held by the employer it was well-settled that the employer could defend his action by proving the misconduct alleged against the employee by leading evidence before the Tribunal to show that there was in fact misconduct and therefore the action taken by him was bonafide and was not colourable exercise of power under the Standing Orders. The question then would be whether in such a case the order relates back to the date when the impugned order was passed.
20. It must be borne in mind however that there is a clear distinction between an enquiry to be held under a Standing Order by an employer and an enquiry held by a Labour Court under Section 78. In Management of Ranipur Colliery v. Bhuban Shingh : (1959)IILLJ231SC the Supreme Court brought out this distinction between an enquiry under a Standing Order and an enquiry by the Tribunal under Section 33 of the Industrial Disputes Act 1947 In M/s Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan : (1959)IILLJ388SC a case under Section 33 of the Industrial Disputes Act 1947 the Supreme Court laid down the principle that where an employer has not held an enquiry necessary under a Standing Order to establish misconduct on the part of his employee but in an application by him for approval of dismissal under Section 33 pending the decision by the Tribunal of an industrial dispute between him and his workmen and the Tribunal on enquiry held for such approval is satisfied that there was misconduct the Tribunal would be bound to accord permission. The Supreme Court further held that as the management had merely passed suspension orders not as punishment but as an interim measure pending an enquiry and proceedings before the Tribunal the proceedings under Section 33 were practically converted into an enquiry for misconduct which normally the management should hold before applying for permission the management was bound to pay wages to its workmen till a case for dismissal was made out in the proceedings under Section 33. This would be so because there was no question of an order of dismissal relating back on account of there being no order of dismissal by way of punishment the only order there being one of suspension and that too not by way of punishment but by way of an interim measure pending the enquiry. But whereas the case in Sasa Musa Sugar Works was a case under Section 33 of the Industrial Disputes Act 1947 the case in Phulbari Tea Estate s. Its Workmen : (1959)IILLJ663SC was one of adjudication under Section 15 of the Act and in which the facts and the disputes were somewhat similar to the facts in the present case. In an enquiry by the management against its employee the witnesses who were present at the enquiry were not examined in the presence of the employee. Copies of the statements made by the witnesses were not supplied to him before he was asked to question them and the statements which had been recorded were not even read over to the employee at the enquiry before he was asked to question the witnesses. Even in the reference made before the Industrial Tribunal the only thing that the management did was to produce the statements which were recorded but the management did not produce witnesses for being cross-examined by the employee. In these circumstances the Tribunal held that the dismissal was not justified on the ground of a proper procedure not having been followed. The Supreme Court upheld the order of the Tribunal observing that--
The defect in the conduct of the enquiry could have been cured if the company had produced the witnesses before the Tribunal and given an opportunity to Das to crossexamine them there. In Sasa Musa Sugar Works (Private) Ltd. v. Shobrati Khan C. As. Nos. 746 and 747 of 1957 D/-4-4-1959 A.I.R. 1959 S.C. 932 we had occasion to point out that even where the employer did not hold an enquiry before applying under Section 33 of the Act for permission to dismiss an employee he could make good the defect by producing all relevant evidence which would have been examined at the enquiry h fore the Tribunal in which case the Tribunal would consider he evidence and decide whether permission should be granted or net. The same principle would apply in case of adjudication under Section 15 of the Act and if there was defect in the enquiry by the employer he could make good that defect by producing necessary evidence before the Tribunal. But even that was not done in this case....
Thus in the case of Phulbari Tea Estate the Supreme Court applied the principles laid down in Sasa Musa Sugar Works cases which was a case of approval under Section 33 of the Industrial Disputes Act to a case of adjudication. In the Management of Hotel Imperial v. Hotel Workers Union : (1959)IILLJ544SC the question for consideration related to the employers power to suspend an employee. The Supreme Court there held that the power to suspend an employee under the ordinary law of master and servant is not an implied term of contract between master and servant and such an order can only be the creature of either a statute governing the contract or of an express term in the contract itself. Therefore the absence of such power in the contract or in the rules framed under some statute would mean that the master would have no power to suspend a workman and if he does so he would be liable to pay wages during the suspension. But where there is power to suspend the suspension has the effect of temporarily suspending the relations of master and servant and the servant is not bound to serve and the master is not bound to pay wages. The Supreme Court also held that the ordinary law of master and servant as to suspension is modified in view of Section 33 of the Industrial Disputes Act in that an Industrial Tribunal could read as implied in that law a term that if the master has held a proper enquiry and has come to the conclusion that the servant should be dismissed and in consequence suspends him pending the permission required under Section 33 he has the power to suspend. It follows that if the Tribunal grants the permission under Section 33 the contract comes to an end and there would be no obligation to pay wages after the date of the suspension. But if the permission is not granted. the suspension would be wrong and the workman would be entitled to wages from the date of suspension. The principle thus laid down is that of an order of suspension is made on a conclusion properly arrived at by an employer that dismissal should be ordered i.e. after a proper enquiry and if the Tribunal gives its approvalin proceedings under Section 33 the suspension woul d be proper and the workman would not be entitled to get any wages from the date of suspension.
21. But what is the position where an order of discharge has been passed without holding a proper enquiry but on the appraisal of evidence before it the Tribunal comes to the conclusion that the order was justified? Is the workman in such a case entitled to get wages or compensation for the period between the date of discharge and the date of the order of the Tribunal? Under the ordinary law of contract an employer has the right to terminate the contract of service but such a right is no longer absolute by reason if the industrial law or a statute governing such right or rules or standing orders made under some statute. Such a right is subject to the right of an employee to have an opportunity to explain the allegations against him. The right of termination of service being thus qualified such termination is liable to be set aside if the right of the employee is violated or the principles of natural justice are not observed before the order is made. But where an enquiry is obligatory and it is not held or where it is held but it is defective or the rules of natural justice are not observed and the order in such a case is challenged before a Tribunal the Tribunal can go into the question of justification of such an order under its jurisdiction to consider the legality or propriety of such an order. If the employer then leads evidence to justify his order and if on a consideration of such evidence the Tribunal comes to the conclusion that the order was justified and that misconduct on the part of the employee was established the order of dismissal would not be section aside. In such a case it is difficult to see how it can be legitimately argued that the order of dismissal would date from the date of the Tribunals order and the workman therefore would be entitled to wages for the period between the date of the order of the employer and the date of the Tribunals order. Such a thing was not held in Phulbaris case by the Supreme Court. No doubt the Supreme Court said in that case that the principle laid down in Sasa Musas case was applicable to cases of adjudication also. But a scrutiny of that decision shows that the Supreme Court did not also lay down that the order or discharge or dismissal would not relate back to the date of such order where such an order is held to be 2 justified or that inspite of such an order by the Tribunal justifying the employers order the employer would still be liable to pay wages for the intervening period. In our view an employee would not be entitled to wages for the intervening period and Phulbaris case lays down no such principle. This is clear from P.H. Kalyani v. M/s Air France : (1963)ILLJ679SC . In that case one of the contentions raised before the Supreme Court was that the domestic enquiry held by the employer was defective and that therefore there could be no approval of the action taken in consequence of such an enquiry and the Labour Court even if it held that the dismissal was justified should have ordered the dismissal from the date its award would become operative. For this contention reliance was placed on Sasa Musas case. Negativing this contention the Supreme Court said after quoting the principle laid down in Sasa Musas case that that was a case where an application was made under Section 33(1) of the Industrial Disputes Act for permission to dismiss the employee and such permission was asked though no enquiry whatsoever had been held by the employer and no decision taken that the employee should be dismissed. The Supreme Court observed that it was in those circumstances that a case for dismissal was made out only in proceedings under Section 33(1) and therefore the employees were entitled to their wages till the decision of the application under Section 33. The Supreme Court then explained--
The matter would have been different if in that case an inquiry had been held and the employer had come to the conclusion that dismissal was the proper punishment and then had applied under Section 33(1) for permission to dismiss. In those circumstances the permission would have related back to the date when the employer came to the conclusion after an enquiry that dismissal was the proper punishment and had applied for removal of the ban by an application under Section 33(1).
22. As a further clarification the Supreme Court stated that the case before it was a case where the employer had held an enquiry though it was defective and had passed an order of dismissal and sought thereafter approval of that order under Section 33(1) of the Industrial Disputes Act. If the enquiry was not defective the Labour Court had only to see whether there was a prima facie case for dismissal and whether the employer had come to the bona fide conclusion that the employee was guilty of misconduct. Thereafter on coming to the conclusion that the employer had bona fide come to the conclusion that the employee was guilty i.e. there was no unfair labour practice and no victimization the Labour Court would grant the approval which would relate back to the date of the order of the employer. If the enquiry was defective for any reason the Labour Court would also have to consider for itself on the evidence adduced before it whether the dismissal was justified. However on coming to the conclusion on its own appraisal of evidence adduced before it that the order of dismissal was justified its approval of the order of dismissal made by the employer in a defective enquiry would still relate back to the date when the order was made. The Supreme Court also added that the observations made in Sasa Musas case applied only to a case where the employer had neither dismissed the employee nor had come to the conclusion that the case for dismissal had been made out. In that case dismissal takes effect from the date of the award and so until then the relation of employer and employee continues in law and in fact.
23. It is thus incorrect to say as argued by Mr. Daru that the principle laid down in sasa Musas case was together with the rider as to wages payable by an employer from the date of his order till the date of the order of the Tribunal applied in cases of adjudication also by the decision in Phulbaris case. It is clear however from the decisions referred to above that the Labour Court as also the Industrial Court had jurisdiction to examine the legality and propriety of the order passed by the petitioner company and though the order was passed under Standing Order 23 under which the company had the power to terminate the services of the second respondent the matter did not conclude and the Labour Court had jurisdiction to ascertain the true effect and substance of that order.
24. From the facts of the case there can be no doubt that the order was in the nature of punishment and was not one of discharge simpliciter and the Labour Court and the Industrial Court were correct in coming to the conclusion that such an order could not be passed without holding a proper enquiry consistent with the rules of natural justice. It was hardly in dispute that though an enquiry was held it was defective a proper opportunity to explain not having been given to the second respondent. But as held in the case of Sasa Musa Sugar Works and in Phulbaris case the Labour Court could allow the petitioner company to justify its order by adducing evidence and the Labour Court on its own appraisal of that evidence could arrive at a conclusion that the order of the company was justified. Both the Labour Court and the Industrial Court were agreed that on the facts and circumstances of the case the company was justified in making the order and therefore declined to order reinstatement. Though the order was punitive in nature and the enquiry held was not proper and the company had terminated the services of the second respondent that termination was held to be justified and therefore on the principles laid down in P.H. Kalyani v. Air France the order of the Labour Court would relate back to the date of the order of the petitioner company and therefore the second respondent would not be entitled to wages or compensation for the period between the two orders. To that extent the order passed by the Labour Court and confirmed by the Industrial Court directing the petitioner company to pay those wages or compensation was contrary to the principles laid down in P.H. Kalyanis case and was consequently erroneous and will have to be set aside. Rule absolute in terms of Prayer (a) of the petition. No order as to costs.