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Sri Bharathi Mills Vs. D. Krishnaswamy - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Reported in(1969)1MLJ116
AppellantSri Bharathi Mills
RespondentD. Krishnaswamy
Cases ReferredAmerican Tea Trading Co. v. Workmen of N. T. Estate
Excerpt:
.....from the findings of the tribunals below, that the order, though in form is one terminating the contract of service of the worker according to the terms of the contract, is in substance one of dismissal without giving the worker an opportunity to explain the alleged misconduct of negligence of duty, leading to financial loss to the mill. consequently, when that allegation is followed by the termination of service alleged to be under the terms of the contract of employment, but which is really a case of dismissal for misconduct, the provisions of the chakravarthi award clearly require the holding of an enquiry with opportunity to the worker to show cause. in the above circumstances, the tribunals below were clearly entitled to conclude that this was a case of wrongful breaking of the..........rupture' of the agreement of service and consequently the management was liable to pay the worker damages besides the provident fund and gratuity. the claim for arrears of increment was negatived. so far as damages were concerned, on account of a more correct fixation of the salary, the amount was increased to rs. 2,400 from rs. 2,000. against the above decision of the appellate tribunal, relying upon the provisions of article 207 of the labour code, relief by way of cassation is sought before this court by the management in special appeal no. 315 of 1965 and by the worker in special appeal no. 318 of 1967.5. the question whether the order of termination of service of a worker is in reality an order in pursuance of the contract of service or one of dismissal for misconduct, is a.....
Judgment:

P. Ramakrishnan, J.

1. These two appeals seeking relief by way of cassation arise from the order of the Tribunal of First Instance at Pondicherry before which appeals were filed against the decision of the Labour Court of Pondicherry constituted under the French Labour Code of 1952, to adjudicate upon an individual dispute between one Kichenassamy, formerly Supervisor in the Bharathi Mills, Pondicherry, and the management. The prior facts which are necessary for the disposal of these two appeals are briefly the following:

2. It is common ground that the Supervisor in question started his service under the Mills as an ordinary worker in 1946 and he had therefore completed in 1962,, to which date the present enquiry relates, 16 years' of service. He has been promoted to the higher post of Supervisor on 28th May, 1962. On 19th September, 1962 the management issued a notice to him in the following terms:

The above instances clearly point out your negligence in the execution of your duty. You had been warned enough number of times to do your work properly. Nonetheless, there had been no improvement and your negligence and carelessness had caused much financial loss, as well as loss of reputation to the Mill.

In the circumstances the management finds your services not suitable and you are hereby given one calendar month's notice from 20th September, 1962 to the effect that your services will stand terminated from 19th October, 1962. The management very much regrets it has to take such a step, but it has been forced to do so to maintain their quality in the market and to preserve its clientele.

All dues payable to you will be paid to you on 19th October, 1962, which you are directed to collect from the Central Office. For Sri Bharathi Mills S.A....Managing Director. Managing Agents.

In form, in this notice, the management purported to terminate the services of the worker in terms of the contract of service, which provided for such termination after notice. The worker took the stand that this termination in effect was not a termination according to the contract of employment, but was a camouflage for dismissal from service for misconduct and therefore it amounted to a wrongful breaking of the contract of service, giving him a right to claim damages within the meaning of Article 42 of the French Labour Code. The worker thereafter claimed from the management reliefs under five heads : (1) arrears of increment of salary at Rs. 5 per month for 1954 and 1955, (2) arrears of increment of salary of Rs. 8 per month from 1957 to 1962, (3) gratuity, (4) provident fund, and (5) damages for wrongful dismissal in a sum of Rs. 43,920.

3. The Labour Court observed that:

Whereas the Manager of the Mill Sri Barathy through his Counsel, declares; that the petitioner was dismissed for repeated negligence in the work....

Whereas the mill has not executed interim judgment dated the 15th October, 1963, ordering to produce the warnings served to the requesting party and the report of inquiry

there was room to conclude that the 'requesting party' was dismissed without having been the object of warnings for the repeated negligence which are attrituted to him and which facts the Labour Court did not find proved. Thereupon, it held that the worker was entitled to payment of gratuity, provident fund, and damages for wrongful termination of the contract of service in a sum of Rs. 2,000, calculated at the rate of one month's pay for every year of service. The claim for arrears of increment was rejected.

4. Both the worker as well as the management appealed to the Tribunal of First Instance at Pondicherry. That Tribunal confirmed the finding of the Labour Court that the present case involved an 'abusive rupture' of the agreement of service and consequently the management was liable to pay the worker damages besides the provident fund and gratuity. The claim for arrears of increment was negatived. So far as damages were concerned, on account of a more correct fixation of the salary, the amount was increased to Rs. 2,400 from Rs. 2,000. Against the above decision of the Appellate Tribunal, relying upon the provisions of Article 207 of the Labour Code, relief by way of cassation is sought before this Court by the management in Special Appeal No. 315 of 1965 and by the worker in Special Appeal No. 318 of 1967.

5. The question whether the order of termination of service of a worker is in reality an order in pursuance of the contract of service or one of dismissal for misconduct, is a question of fact to be decided on the facts and circumstances of each case. The form of the order is immaterial. What is material is its substance. Both the lower Tribunals have come to the conclusion that the termination of the service of the worker in this case is really one of dismissal for misconduct. There was ample justification for this conclusion. The notice terminating the services of the worker starts with a preamble that the management was satisfied that the worker was negligent in the execution of his duty in spite of repeated warnings and that this negligence had caused much financial loss to the Mill and also loss of reputation. These imputations made against the worker clearly amount to imputations of misconduct. Read with these imputations, the subsequent order terminating his services could properly be viewed as an order, amounting, in substance, to the punishment of dismissal. I see, therefore, no good reason to differ from the findings of the Tribunals below, that the order, though in form is one terminating the contract of service of the worker according to the terms of the contract, is in substance one of dismissal without giving the worker an opportunity to explain the alleged misconduct of negligence of duty, leading to financial loss to the mill.

6. In the French Labour Code, side by side with a provision for termination of contract of employment of unspecified duration on giving the prescribed notice (Article 38), there is also a provision for compensation byway of damages in the case of wrongful breaking of the contract of service (Article 42). In the case of termination of the contract with notice, Article 30 refers to certain rules for the purpose to be framed by the Chief Officer of the territory, after consulting the Labour Advisory Board. So far as the Textile Mills in Pondicherry are concerned, reference is made to what is known as the Chakravarthi Award which is binding on them. In Appendix IV of the said Award ' Standing Orders for employees,' paragraph 13 (1) includes among the items of misconduct, 'habitual negligence in work or neglect of work.' Paragraph 14 of the award provides that no order of dismissal or suspension as substantive punishment shall be valid unless the employee concerned is informed in writing of the alleged misconduct and is given a reasonable opportunity and time of at least 48 hours' duration to explain the circumstances alleged against him. It is clear from the circumstances of this case that the Mills really proceeded against the worker on the allegation of habitual negligence in his work, amounting to misconduct. Consequently, when that allegation is followed by the termination of service alleged to be under the terms of the contract of employment, but which is really a case of dismissal for misconduct, the provisions of the Chakravarthi Award clearly require the holding of an enquiry with opportunity to the worker to show cause. In the above circumstances, the Tribunals below were clearly entitled to conclude that this was a case of wrongful breaking of the contract of service with a liability on the part of the management to pay damages under Article 42 of the Code.

7. Therefore, the main ground urged by the management in Special Appeal No. 315 of 1965 against the direction for payment of damages is without substance and should fail. Learned Counsel appearing for the management referred me to the following decisions. A Bench of this Court in V. Ramiah v. State Bank of India : (1967)2MLJ519 observed that if the order terminating the service is, in core and substance, a punishment in disciplinary jurisdiction, then the statutory authority would have to act quasi-judicially and it must observe the norms of natural justice. The other decisions, namely, Chartered Bank v. Its Employees Union : (1960)IILLJ222SC , and Murugan Mills v. Industrial Tribunal (1965) 2 S.C.J. 779 : (1966) 1 M.L.J., also lay down analogous principles. Such a principle has been borne in mind by the Tribunals below when they came to the conclusion, on the facts the case, about the real nature of the termination of the services of the worker in the present case, and that it amounted to a wrongful violation of the contract of service.

8. So far as the appeal of the worker is concerned, the finding that the worker is not entitled to arrears of increment cannot be seriously assailed, because the Tribunals below have held that there was no evidence to show that the contract of employment provided for increments of the kind mentioned by the worker in his claim. So far as the claim for damages is concerned, the quantum of damages had been calculated on the basis of one month's pay for each year of service, which is a valid principle recognised in analogous claims under the Indian Industrial Disputes Act : vide the decision of the Supreme Court in Anglo-American Tea Trading Co. v. Workmen of N. T. Estate (1961) 2 L.L.J. 625. It is clear that the Tribunals below have adopted a fair norm for calculating the quantum of damages. That also calls for no interference. Both the appeals are dismissed. No order as to costs.


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