1. The second respondent was the employee under the petitioner herein and his services were terminated by an order dated 16th February, 1966. Prior to this order certain charges were framed against the second respondent. However, it is admitted before me that subsequent to the framing of the charges, actually no inquiry was conducted and no evidence was recorded. It is under these circumstances, the second respondent preferred an appeal under Section 41(2) of the Madras Shops and Establishments Act, 1947 (Madras Act 36 of 1947), hereinafter referred to as the Act. The first respondent herein, who is the appellate authority, by an order dated 13 July, 1967, allowed the appeal and set aside the order of termination of the services passed by the petitioner against the second respondent herein. It is to quash this order of the first respondent, the present writ petition under Article 226 of the Constitution of India has been filed.
2. For the purpose of appreciating the argument of the learned Counsel for the petitioner, it is necessary to refer to the terms of Section 41 of the Act. That section is:
41. (1) No employer shall dispense with the services of a person employed continuously for a period of not less than six months, except for a reasonable cause and without giving such person at least one month's notice or wages in lieu of such notice, provided, however, that such notice shall not be necessary where the services of such person are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose.
(2) The person employed shall have a right to appeal to such authority and within such time as may be prescribed either on the ground that there was no reasonable cause for dispensing with his services or on the ground that he had not been guilty of misconduct as held by the employer.
(3) The decision of the appellate authority shall be final and binding on beta the employer and the person employed.
The language of Sub-section (1) of the section clearly contemplates two different situations. One is the termination of the service of an employee for a reasonable cause after giving the employee at least one month's notice or wages in lieu of such notice. The second is the services of such an employee being dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose. In the second case the question of notice will not arise, as the section itself dispenses with the same and the misconduct held to be established itself constitutes the reasonable cause. In this particular case, it is admitted that one month's notice was not given nor wages in lieu of one month's notice were paid to the second respondent. Again, equally it is admitted that no inquiry was conducted in which any evidence was recorded for the purpose of establishing the misconduct of the second respondent. Under these circumstances, the provisions of Section 41(1) have not been complied with and obviously the order of the first respondent setting aside the order of termination of the services of the second respondent made by the petitioner is correct and in accordance with law.
3. However, the learned Counsel for the petitioner contended that even though the petitioner itself had not conducted an inquiry, it had made an offer before the first respondent to adduce evidence to prove the misconduct of the second respondent and it was the duty of the first respondent to take evidence and hold an enquiry and to arrive at a conclusion whether the second respondent is guilty of the alleged misconduct or not. The scheme of the Act, in my opinion, does not lend any support whatever to this contention Section 41(1) of the Act actually contemplates the employer himself conducting an inquiry and recording evidence for the purpose of establishing the misconduct. The appellate authority functioning under Section 41(2) cannot convert itself into the original authority and conduct the inquiry, when the original authority has not conducted such an inquiry. The learned Counsel relied on Rule 9(2) of the rules framed by the Government under the Act which are called the Madras Shops and Establishments Rules, 1948. That rule states that the procedure to be followed by the Commissioner for Workmen's Compensation when hearing appeals preferred to him under Sub-section (2) of Section 41 shall be summary and he shall record briefly the evidence adduced before bun and then pass orders giving his reasons therefor. In my opinion, the scope of this Rule 9(2) has to be correlated with the scope of the appellate jurisdiction conferred on the first respondent under Section 41(2) of the Act. I have already extracted the said section and the said section enables the aggrieved employee preferring an appeal on the ground that there was no reasonable cause for dispensing with his services or on the ground that he had not been guilty of misconduct as held by the employer. The recording of evidence contemplated by Rule 9(2) has to be correlated to and understood against the background of the scope of appellate jurisdiction as defined under Section 41(2) of the Act, and certainly Rule 9(2) does not lend support to the contention put forward by the learned Counsel for the petitioner that the evidence contemplated in that rule is the evidence officed to be adduced by the petitioner to establish the guilt of the employee, for the first time, when he himself admittedly had not conducted any inquiry in this behalf. As a matter of fact, this position derives support from the following observations of Raja-gopala Ayyangar, J., in Venkateswara Bank Ltd., Salem v. Krishnan 1960 M.L.J. 165 :
'Besides, under Section 41(1) it is the employer that is vested with jurisdiction to terminate the services of a person employed, subject to the fulfilment of the statutory conditions and to hold that the appellate authority can conduct as it were an original inquiry into the charge of misconduct would not be in accordance with the scheme of Section 41 and would nullify the protection afforded by the statute and place the servant in the same position as if the conditions laid down by the second limb of Section 41(1) were not there. It is only when at an original enquiry held by the employer, that the charges are held by him to have been proved that the appellate authority is directed to enquire as to whether the charge of misconduct could be taken to have been properly established. In my opinion, Section 41(2) was not intended to convert the appellate authority into a forum where an original enquiry into the misconduct of the employee justifying his dismissal could be conducted so as practically to deprive the servant of any right beyond what he was entitled to at common law.' This observation of the learned Judge fully supports the conclusion I have already arrived at.
4. As against this, the learned Counsel for the petitioner was not able to draw my attention to any authority of this Court or any other court holding that when an employer dispenses with the services of an employee without any enquiry as contemplated by Section 41(1) of the Act, it is open to him to invite the appellate authority to conduct such an enquiry and it is competent for the appellate authority, functioning under Section 41(2) of the Act, to conduct an enquiry as if it were the original authority. But the learned Counsel relied on certain observations of this Court in Srirangam Janopagara Bank v. Rangarajan 1964 I.L.J. 221 . But that judgment does not deal with or cover the case where the employer did not conduct any enquiry at all and the court did not come to the conclusion that the appellate authority under Section 41(2) of the Act is competent and bound to conduct an enquiry as if it were the original authority. The observations contained in that judgment really have reference to the appellate authority taking additional evidence while disposing of the appeal and not to that authority conducting an enquiry, which the employer is obliged to conduct under Section 41(1) of the Act. Under these circumstances, no case has been made out for interference with the order of the first respondent and this writ petition fails and it is dismissed with costs of the second respondent. Counsel fee is fixed at Rs. 250.