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Central Bank of India Vs. State of Jammu and Kashmir and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtJammu and Kashmir High Court
Decided On
Judge
Reported in(1968)IILLJ646J& K
AppellantCentral Bank of India
RespondentState of Jammu and Kashmir and ors.
Cases ReferredLtd. v. Santi Patnaik
Excerpt:
- .....of the power of the employer to act under such provisions has come up for consideration before labour tribunals many a time. in buckingham and carnatic co. ltd. v. workers of the co. 1951 ii l.l.j. 314, the labour appellate tribunal had occasion to consider this matter relating to discharge by notice or in lieu thereof by payment of wages for a certain period without assigning any reason. it was of opinion that even in a case of this kind, the requirement of bona fides is essential and if the termination of service is a colorable exercise of the power or at a result of victimization or unfair labour practice, the industrial tribunal would have the jurisdiction to intervene and set aside such termination.... we are of opinion that this correctly lays down the scope of the power of the.....
Judgment:

Jaswant Singh, J.

1. This Letters Patent appeal is directed against the judgment and order dated 22 may 1967 of J.N. Bhat, J., dismissing the petition of the appellant, a barking company registered under the Indian Companies Act, under Section 103 and 104 of the Constitution of Jammu and Kashmir for issue of a writ of certiorari to quash the award of the labour court, Jammu, dated 30 November 1986, in an industrial dispute between the appellant and respondent 2 published in the Jammu and Kashmir Government Gazette, dated 15 December 1986, and for a writ of prohibition to restrain respondent 1 from enforcing the said award. The facts giving rise to this appeal are: By a letter appointment, dated 23 January 1985, issued by the Chief Agent, the Central Bank of India, Ltd., Amritsar, respondent 2 was appointed as a clerk in the Jammu branch of the appellant on probation cash order equivalent to one month's salary in lieu of notice served on the said respondent. Instead of submitting to and cashing the order, the respondent approached the union to which he belonged. The union took up his cause and on their raising a dispute and urging that the order was unjustified, mala fide, arbitrary, illegal, and could not have been made without charge sheeting the respondent and holding an enquiry into his alleged misconduct or inefficiency, the matter was vide notification No. SRO. 188, dated 27 April 1966, referred by respondent 1 to respondent 3 who was constituted as a labour court; vide SRO. No. 187 for determination of the legality or otherwise of the action taken by the appellant. The labour court which tried the dispute came to the conclusion that the termination of the service of respondent 2 was not legally justified, that his service was terminated a day earlier than the expiry of the period of probation on the basis of confidential report regarding his unsatisfactory work of which he had no notice or knowledge, that his service book as enjoined by Para. 516 of the Sastri award had not been maintained, that no notice of termination of service excepting the cash order referred to above, was given to him, that the action taken did not smell of fair labour practice and that such a termination on the alleged ground of misconduct (inefficiency) without following any procedure and without holding any enquiry could not be held to be a bona fide exercise of the power conferred on the appellant. On these findings, the labour court ordered the reinstatement of respondent 2 and payment to him of back-wages from the date his services were terminated to the date of his reinstatement. This order was challenged by a writ petition before J.N. Bhat, J., who as stated above dismissed the same holding that the labour court was the sole judge of the matters placed before it, that the said court having considered the respective cases of the parties and come to a categorical finding after taking evidence of the parties that the termination of the services of respondent 2 was mala fide, its interpretation of the evidence could not be interfered with in a writ petition, that the requirements of Para. 516 of Sastri award which enjoined the maintenance of his service back and incorporation therein of adverse remarks by him superiors and communication thereof to him had not been complied with that a writ order terminating his services signed by the manager as laid down in Paras. 519 and 522 of the Sastri award had not order that the present appeal is directed.

2. At the hearing of the appeal, Sri Bhagirath Dass, the learned Counsel for the appellant, has raised the following contentions:

(1) That respondent 2 was merely a probationer, that termination of his services though made on the ground of inefficiency and incompetency was a discharge simpliciter and was in conformity with the terms of the contract with the respondent and Para. 522(1) of Sastri award terminate the services of respondent without serving any chargesheet on him or holding an enquiry into his inefficiency and the labour court had no jurisdiction to consider the propriety of the appellant's section in discharging the respondent.

(2) That neither any allegation had been made nor any proof adduced by respondent 2 in regard to mala fides. As such the finding of the labour court suffered from an error apparent on the face of the record.

(3) That, in any case, the finding of mala fides on the part of the appellant was not justified by the material on the record.

3. The learned Counsel for respondent 2, on the other hand, has contended that the discharge of the respondent from service was a colorable and mala fide exercise of the power on the part of the appellant and the labour court was competent to go into the question, that the termination of the respondent's service was not justified and could not have been ordered during the period or probation without holding an enquiry and following the procedure, and that there was sufficient material on the record to justify the findings of the labour court.

4. We have heard the learned Counsel for the parties length and have also gone through the entire record.

5. Before dealing with the submissions made by the learned Counsel for the parties, it is necessary to emphasize at the very outset that the position of an industrial employee stands on an entirely different footing from that of a government servant, in the matter of his dismissal, removal, or discharge from service. This proposition is well settled by a catena of authorities. Reference in this connexion may, however, be made only to the following observations at p. 377 of their lordships of the Supreme Court in U.B. Dutt & Co. (Private). Ltd. v. its workmen Kozhikode taiuk Earcha Mill Thozilali Union 1962 I L.L.J. 374:

Learned Counsel for the appellant, however, urges that the employee was empowered to take action under Rule 18(a) of the standing orders and having taken action under that rule, there was nothing for it to justify before the tribunal. We have already said that this position cannot be accepted in industrial adjudication relating to termination of service of an employee and has not been accepted by industrial tribunals over a long course of years now and the view taken by industrial tribunals has been upheld by this Court in the two cases referred to above. Learned Counsel for the appellant, however, relies on the decision of this Court in Parshotam Lal Dhingra v. Union of India 1958 I L.L.J. 544; that was, however, a case of a public servant and the considerations that apply to such a case, in our opinion are entirely different. Stress was laid by the learned Counsel on the observations at p. 561 where it was observed as follows:It is true that the misconduct, negligence, insufficiency or other disqualification way be the motive or the inducing factor which influences the Government to take action under the terms of the contract of employment or the specific service rule; nevertheless, if a right exists, under the contract or the rules, to terminate the service, the Government is, as Chagla, C.J., has said in Shrinivas Ganesh v. Union of India 1957 II L.L.J. 189 wholly irrelevant.

6. It is urged that the same principle should be applied to industrial adjudication. It is enough to any that the position of Government servant stands on an entirely different footing as compared to industrial employees. Articles 310 and 311 of the Constitution apply to Government servants and it is in the light of these articles read with the rules framed under Article 309 that questions relating to termination of service of Government servant have to be considered. No such constitutional provisions have to be considered when one is dealing with industrial employees. Farther an employer cannot now press his right purely on contract and say that under the contract he has unfettered right 'to hire and fire' his employees. That right is now subject to industrial adjudication and even a power like that granted by Rule 18(a) of the standing orders in this case, is subject to the scrutiny or industrial courts in the manner indicated above. The appellant, therefore, cannot rest its case merely on Rule 18(a) and say that having acted under that rule, there is nothing more to be said and that the industrial court cannot inquire into the causes that led to the termination of service under Rule 18(a). The industrial court, in our opinion, has the right to inquire into the causes that might have led to termination of service even under a rule like 18(1) and if it is satisfied that the action taken under such a rule was a colorable exercise of power and was not bona fide or was a result of victimization or unfair labour practice, it would have jurisdiction to intervene and set aside such termination....

7. Having defined the legal position of industrial employees, we now proceed to consider the contentions raised by the learned Counsel for the appellant. Before doing so, however, we may also observe has not get an unqualified right to terminate the services of a probationer during the probationary period without following a certain procedure in certain cases. In Express Newspapers, Ltd. v. Labour Court, Madras, and Anr. 1964 I L.L.J. 9, their lordships of the Supreme Court while examining the question as to whether the management and the right to dispense with the service of a probationer within the period of probation and if so, on what grounds, observed as follows at p. 11:.It appears clear to us that without anything more an appointment on probation for six months gives the employer no right to terminate the service of an employee before six months had expired except on the ground of misconduct or other sufficient reasons in which case even the services of a permanent employee could be terminated....

Now adverting to the three contentions raised on behalf of the appellant was find that all of them are untenable and cannot be allowed to prevail. The first of these is based on a total misconception of the true legal position. It is now too late in the day to contend that the labour court has no jurisdiction to consider the propriety of the order of discharge of an industrial employee when the employees' services are dispensed in terms of the contract. That industrial tribunal is competent to inquire whether the impugned discharge has been effected in bona fide exercise of the power conferred by the contract was made amply clear in the Chartered Bank, Bombay v. Chartered Bank Employees' Union and Anr. 1960 II L.L.J. 222, wherein Wanchoo, J. (as his lordship them was), speaking on behalf of the Court said as follows at p. 226:

Many standing orders have provisions similar to Para. 522(1) of the Bank award, and the scope of the power of the employer to act under such provisions has come up for consideration before labour tribunals many a time. In Buckingham and Carnatic Co. Ltd. v. workers of the Co. 1951 II L.L.J. 314, the Labour Appellate Tribunal had occasion to consider this matter relating to discharge by notice or in lieu thereof by payment of wages for a certain period without assigning any reason. It was of opinion that even in a case of this kind, the requirement of bona fides is essential and if the termination of service is a colorable exercise of the power or at a result of victimization or unfair labour practice, the industrial tribunal would have the jurisdiction to intervene and set aside such termination.... We are of opinion that this correctly lays down the scope of the power of the tribunal to interfere where service is terminated simpliciter under the provisions of a contract or of standing orders or of some award like the Bank award. In order to judge this, the tribunal will have to go into all the circumstances which led to the termination simpliciter and an employer cannot say that it is not bound to disclose the circumstances before the tribunal. The form of the order of termination is not conclusive of the true nature of the order, for it is possible that the form may be merely a camouflage for an order of dismissal for misconduct. It is, therefore, always open to the tribunal to go behind the form and look at the substance, and if it comes to the conclusion, for example, that though in form the order amounts to termination simpliciter, it in reality cloaks a dismissal for misconduct, it will be open to it to set it aside as a colourable exercise of the power.

8. Again in U.B. Dutt & Co. (Private), Ltd. v. its workmen, Kozhikode Taluk Earcha Mill Thozilali Union 1962 I L.L.J. 874, their lordships of the Supreme Court observed as follows at p. 376:.As far as 1952, the Labour Appellate Tribunal had occasion to consider this matter relating to discharge by notice or in lieu thereof by payment of wages for a certain period without assigning any reason see Buckingham and Carnatic Co. Ltd. v. workers of the Co. 1951 II L.L.J. 314 (vide sputa). It was of opinion that even in a case of this kind, the requirement of bona fides is essential and if the termination of service is 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. Further it held that where the termination of service is capricious, arbitrary or unnecessarily harsh on the part of the employer judged by normal standards of a reasonable man, that may be cogent evidence of victimization or unfair labour practice. These observations of the Labour Appellate Tribunal were approved by this Court in Chartered Bank, Bombay v. Chartered Bank Employees' Union 1960 II L.L.J. 222 (vide supra) and Assam Oil Co. v. its workmen 1980 I L.L.J. 587.

9. These observations were again reiterated by the Supreme Court in Utkal Machinery Co. Ltd. v. Santi Patnaik (Miss) 1986 I L.L.J. 398 in the following words at p. 400:

We shall, however, assume in favor of the appellant that the respondent was appointed on 9 December 1961, on probation for a period of six months and it was stipulated in the contract that during the probationary period the services of the respondent could be terminated without notice and without assigning any reason. In other words, the management had the contractual right to terminate the services of the respondent without assigning any reason therefore. But if the validity of the termination is challenged in an industrial adjudication, it would be competent to the industrial tribunal to enquire whether the order of termination has been effected in the bona fide exercise of its power conferred by the contract. If the discharge of the employee has been ordered by the management in bona fide exercise of its power, the industrial tribunal will not interfere with it, but it is open to the industrial tribunal to consider whether the order of termination is mala fide or whether it amounts to victimization of the employee or an unfair labour practice or is so capricious or unreasonable as would lead to the inference that it has been passed for ulterior motives and not in bona fide exercise of the power arising out of the contract. In such a case it is open to the industrial tribunal to interfere with the order of the management and to afford proper relief to the employee. This view is borne out by the decision of this Court in Assam Oil Co. Ltd. v. its workmen 1960 I L.L.J. 587 (vide supra):

10. In this ruling their lordships further observed as follows in 1966 I L.L.J. 398 at 400 (vide supra):.In the absence of any standing order the unsatisfactory work of an employee may be treated as misconduct and when the respondent was discharged according to the management for unsatisfactory work, it would be taken that her discharge was tantamount to punishment for an alleged misconduct. If this conclusion is correct, the management was not justified in discharging the respondent from service without holding a proper enquiry....

11. The position was again reviewed by their lordships of the Supreme Court in Tata Oil Milla Co. Ltd. v. their workmen 1966 II L.L.J. 602 when P.B. Gajendragadkar, J. (as his lordship) then was), speaking for the Court observed as follows at p. 605:

The appellant had alleged that the termination of Banerjee's services was not dismissal but was a discharge simpliciter and, according to it, this discharge was justified by the terms of contract, between the appellant and Benerjee as embodied in Rule 40(1) of the service rules of the appellant. The appellant, therefore, urged that the labour court had no jurisdiction to consider the propriety of the appellant's action in discharging Benerjee....

* * *The true legal position about the industrial court's jurisdiction and authority in dealing with cases of this kind is no longer in doubt. It is true that in several cases contracts of employment or provisions in standing orders authorize an industrial employer to terminate the services of his employees after giving notice for one month or paying salary for one month in lien of notice, and normally, an employer may, in a proper case, be entitled to exercise the said power. But, where an order of discharge passed by an employer gives rise to an industrial dispute, the form of the order by which the employee's services are terminated, would not be decisive; industrial adjudication would not be decisive; industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpliciter or it amounts to dismissal which has put on the cloak of a discharge simpliciter. If the industrial court is satisfied that the order of discharge is punitive, that is it is mala fide, or that it amounts to victimization or unfair labour practice, it is competent to the industrial court to set aside the order and, in a proper case, direct the reinstatement of the employee. In some cases, the termination of the employee's services may appear to the industrial court to be capricious or so unreasonably severe that an inference may legitimately and reasonably be drawn that in terminating the services, the employer was not acting bona fide. The test always has to be whether the act of the employer is bona fide or not. If the act is mala fide, or appears to be a colourable exercise of the powers conferred on the employer either by the terms of the contract or by the standing orders, then notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case. This position was recognized by the Labour Appellate Tribunal as early as 1951 in Buckingham and Carnatic Co. Ltd. v. their workmen of the Co. etc. 1951 II L.L.J. 814 and since then it has been consistently followed-vide Chartered Bank Bombay v. Chartered Bank Employees' Union and Anr. 1960 II L.L.J. 222 and U.B. Dutt & Co. (Private), Ltd. v. its workmen 1962 I L.L.J. 374 (vide supra).

12. In view of the foregoing authorities we have no hesitation in holding that the labour court was justified in going into the question whether the order of discharge of respondent 2 was legally correct and was made bona fide or not.

13. The second contention of the learned Counsel for the appellant which is closely allied and connected with the first contention is also devoid of substance. The submission does not seem to be based on a correct reading of the contentions raised by respondent 2 or the union to which he belonged. As would appear from the perusal of the record of the labour court, the Jammu Bank Employees' Union which championed the cause of the respondent had clearly pleaded in Paras. 4, 9 and 10 of their statement of claim before the labour court that the respondent worked satisfactorily, that there was no cause of complaint about his work and conduct, that the action of the bank management in terminating the services of the respondent was unjustified, mala fide, arbitrary, capricious, illegal and against the principles of natural justice. They further pleaded that the procedure laid down under the Detai award had not been followed and the services of the respondent had been terminated in an arbitrary manner and that even in cases of termination of services due to unsatisfactory work a regular enquiry must be held before taking any action against a workman as held by the Supreme Court of India in the case of Utkar Machinery, Ltd. v. Santi Patnaik (Miss) 1966 I L.L.J. 398 at 401. The parties also want to trial and led evidence bearing on the point before the labour court. Respondent 2 had also gone into the witness-box and stated before the labour court that no verbal or written notice was given to him during the period of his service that his work was unsatisfactory. He had further stated that his work was appreciated, that the agent of Jammu branch never gave him any warning to improve his work, that he was all along working conscientiously and diligently, that he was never apprised of any report regarding his work and that he was ousted from the service unlawfully. It does not, therefore, lie in the mouth of the learned Counsel for the appellant to say that neither any allegation had been made nor any proof adduced in regard to mala fides. Be that as it may, this matter has also now been settled in a series of rulings of the Supreme Court. Reference in this connection may be made to the following observations of their lordships of the Supreme Court. Reference in this connection may be made to the following observations of their lordships of the Supreme Court in Assam Oil Co. v. its workmen 1960 I L.L.J. 587 (vide supra):

If the contract gives the employer the power to terminate the services of his employee after a month's notice or subject to some other condition, it would be open to him to take recourse to the said term or condition and terminate the services of his employee but when the validity of such termination is challenged in an industrial adjudication, it would be competent to the industrial tribunal to enquire whether the impugned discharge has been effected in the bona fide exercise of the power conferred by the contract (590).

14. Reference in this behalf may also be made with advantage to a ruling of the Patna High Court in 1967 II L.L.J. 182 where it was laid down as follows:

The industrial tribunal can justifiably consider the main and real controversy between the parties to a reference, even though the reference does not mention that aspect. In a case where the reference mentioned only a question of minor importance, viz. the one regarding the validity of order of dismissal of a workman with retrospective affect and the tribunal recognizing the real controversy to be victimization and the parties also joined issue, considered that aspect also and came to the concision that there was victimization, the tribunal cannot be said to have exceeded its jurisdiction under the reference.

15. The third contention of the learned Counsel for the appellant is equally untenable. It is well-settled that the High Court while exercising writ jurisdiction does not act as a court of appeal and cannot review the evidence and come to a conclusion different from the authority whose order is impugned unless there is no evidence to support the findings. In regard to the Court's jurisdiction to disturb the findings of the labour court their lordships of the Supreme Court observed as follows in another passage of their aforementioned judgment in Express Newspapers, Ltd. Labour Court, Madras and Anr. 1964 I L.L.J. 9 at 11 (vide supra)

Sri Gupta also tried to persuade us to examine the correctness of the High Court's view that the labour court's finding on the question of victimization was not liable to interference. It appears to us clear that when the labour court came to the conclusion on a consideration of the evidence that the management's action was not bona fide but amounted to victimization of the employee, it would not have been open to the High Court to disturb that finding except on the ground of an error apparent on the face of the record or on the ground that there was no evidence at all to support it....

16. Reference in this connecxion may also usefully be made to a recant ruling of Madhya Pradesh High Court in A.I.R. 1967 M.P. 272. (vic) We have, heaving the aforesaid observations in mind, gone through the evidence adduced by the parties in the instant case before the labour court and are instant case before the labour court and are of opinion that considering the material on the record and the totality of attendant circumstances specially the failure to maintain the service book of respondent 2 and non-communication to him in writing of the gist of adverse remarks as enjoined by Para, 516 of Sastri award, the absence of any record showing the alleged defective or unsatisfactory working of the said respondent, the absence of any report to the Chief Agent, Amritsar, by the Jammu branch of the appellant-company, about the unsatisfactory nature of work of the respondent except the one which is alleged to have been made on 26 July 1965 in reply to the letter alleged to have been received from the Chief Agent, the absence of any separate file for conferential and private correspondence, the non-entry of the correspondents that is alleged to have passed towards the end of July 1965 between the Chief Agent of the appellant-company at Amritsar and Manager of its Jammu branch is the dispatch and receipt registers, the fact that though the letter Ex D.A. alleged to have been received from the Chief Agent asking for confidential still it was not entered in the receipt register as it should have been according to the admitted normal practice the under haste with which the whole action was taken by the mansgement and non-production by the appellant before the labour court of any document illustrating the unsatisfactory work of respondent 2 it is difficult to hold that the power to dispense with the service of respondent 2 was exercised bona fide or that there was no unfair labour practices or that the findings of the labour court or those of the learned single Judge on the face of the record.

17. The discharge of the respondent also appears to us to be illegal as admittedly no written order signed by the manager of the appellant-company as contemplated by Para. 523(5) of Sastri-award was issued or served on the respondent.

18. For the foregoing reasons we find no force in this appeal which is dismissed with costs.


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