KURUKSHETRA UNIVERSITY versus PRITHVI SINGH on 15 February 2018

KURUKSHETRA UNIVERSITY

v.

PRITHVI SINGH

(Civil Appeal No. 3585 of 2008)

FEBRUARY 15, 2018

[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]

Service Law – Respondent was working as a Security Guardin the appellant-University – He was a daily rated employee –Allegation that respondent while on duty had misbehaved with onelady Research Scholar – Enquiry Officer found respondent guiltyfor committing the misconduct – Consequently, terminated by theappellant-University – Labour Court held that the enquiry held bythe appellant was not legal and proper – With these findings, theLabour Court held it to be a case of illegal retrenchment and setaside the termination order as being illegal – High Court upheldthe award passed by the Labour Court – On appeal, held: The LabourCourt committed an error in not framing a “preliminary issue” fordeciding the legality of domestic enquiry – Further, having foundfault in the domestic enquiry, it committed another error when it didnot allow the appellant to lead independent evidence to prove themisconduct/charge on merits and straightaway proceeded to holdthat it was a case of illegal retrenchment and hence the respondents’termination is bad in law – High Court did not take note of anylegal issues and cursorily dismissed the writ petition – The awardof the Labour Court and the judgment of the High Court, were perse without jurisdiction and legally unsustainable – Case remandedto the Labour Court, with direction to afford the appellant anopportunity to lead evidence to prove the misconduct alleged bythem in the written statement against the respondent and dependingupon the findings, the Labour Court to decide the issue of termination– Industrial Disputes Act, 1947 – ss.10, 11, 11-A.

Allowing the appeal, the Court

HELD: 1. The Labour Court committed an error in notframing a “preliminary issue” for deciding the legality of domesticenquiry and further having found fault in the domestic inquiry

267

A

B

CDE

FG

H

Acommitted another error when it did not allow the appellant tolead independent evidence to prove the misconduct/charge onmerits and straightaway proceeded to hold that it was a case ofillegal retrenchment and hence the respondents’ termination isbad in law. [Para 24][274-H; 275-A]

B2. The Labour Court could treat the respondent’stermination as “retrenchment” much less an “illegalretrenchment”. The Labour Court failed to notice the definitionof retrenchment in Section 2(oo) of the Industrial Disputes Actwhich, in clear terms, provides that retrenchment does not includetermination of the service if it is imposed by way of punishment.C[Para 25][275-B]

3. In this case, the respondent’s services were terminatedby the appellant by way of punishment after holding a departmentalenquiry and therefore, the termination in question could neverbe regarded as “retrenchment”. The Labour Court was,Dtherefore, wholly wrong in treating the termination of therespondent as “retrenchment”. [Para 26][275-C]

4. The Labour Court held on facts that the respondent hadworked for 240 days in one calendar year. It is not proper to setaside this factual finding. Indeed, it is due to this finding, theErespondent is held entitled to claim protection of Labour Laws.[Para 27][275-D]

5. The High Court while deciding the appellant’s writpetition did not take note of any legal issues mentioned aboveand cursorily dismissed the writ petition. The award of the LabourFCourt and judgment of the High Court are, therefore, held per sewithout jurisdiction and legally unsustainable. [Paras 28, 29][275-E-F]

7. The award of the Labour Court set aside to the extentindicated above and the judgment of the High Court and remandGthe case to the Labour Court. [Para 30][275-F-G]

8. The Labour Court will now afford the appellant (employer)an opportunity to lead evidence to prove the misconduct allegedby them in the written statement against the respondent anddepending upon the findings, which the Labour Court would record H

A

on the issue of misconduct, the issue of termination would bedecided in the light of the observations made in the judgment.[Para 31][275-G-H]

Shankar Chakravarti v. Britannia Biscuit Co. Ltd. &Anr. AIR 1979 SC 1653; Delhi Cloth & General MillsCo. v. Ludh Budh Singh 1972 (Lab IC) 573 : [1972] 3SCR 29 – relied on.

B

Indian Iron & Steel Co. Ltd. & Anr. v. Their WorkmenAIR 1958 SC 130 : [1958] SCR 667; Karnataka StateRoad Transport Corpn. v. Lakshmidevamma(Smt.) &Anr. [2001] 3 SCR 284 : (2001) 5 SCC 433 – referredto.

C

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3585of 2008.

From the Judgment and Order dated 22.09.2006 by the High Courtof Punjab and Haryana at Chandigarh in CWP No. 13094 of 2006.

E

Manu Mridul, Ms. Neha Rai (For Surya Kant), Advs. for theAppellant.

Kamal Mohan Gupta, Adv. for the Respondent.

F

The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J. 1. This appeal is directedagainst the final judgment and order dated 22.09.2006 passed by theHigh Court of Punjab & Haryana at Chandigarh in C.W.P. No.13094 of2006 whereby the Division Bench of the High Court dismissed the petitionfiled by the appellant herein and affirmed the Award dated 23.01.2006passed by the Presiding Officer, Labour Court, Ambala in Ref.No.25 of2003.

G

2. The controversy involved in the case is short as it would beclear from the narration of the relevant facts infra.

H

A

3. The appellant is the Kurukshetra University (hereinafter referredto as “the University”). The respondent was working as Security Guardin the University as daily rated employee.

4. On 18.08.1999, the respondent while on duty alleged to havemisbehaved with one lady Research Scholar, who was working in theBUniversity. The appellant took note of the incident and held departmentalenquiry by appointing Enquiry Officer to probe into the incident.

5. The Enquiry Officer, in his report dated 20.09.1999, found therespondent guilty for committing the misconduct. The appellantaccordingly decided to discontinue the services of the respondent andtreating him to be the daily rated worker dispensed with his servicesCwith effect from 30.03.2000.

6. This led the State to make the industrial reference to the LabourCourt, Ambala under Section 10 of the Industrial Disputes Act, 1947(hereinafter referred to as “ID Act”) for deciding the legality andcorrectness of the respondent’s termination from the services of theDappellant-University w.e.f. 30.03.2000.

7. Before the Labour Court, the stand of the appellant(University)in the written statement was two-fold. First, the respondent was workingas a daily wager for a period of 89 days and, therefore, he was notentitled to claim any benefit available to any workman under the ID ActEand Second, the respondent committed misconduct while on duty forwhich a departmental enquiry was held though it was not requiredbecause the respondent was a daily rated employee and on being foundguilty in the domestic inquiry, his services were dispensed with.

8. The Labour Court, by award dated 23.01.2006, answered theFreference in respondent’s favour. The Labour Court held that therespondent has worked for more than 240 days in one calendar year. Itwas further held that since the appellant had leveled charge of misconductagainst the respondent, it was necessary for the appellant to have heldregular departmental enquiry by issuing a charge sheet etc. and thendepending upon the outcome of the enquiry, appropriate orders shouldGhave been passed. It was held that the enquiry held by the appellant wasnot legal and proper. With these findings, the Labour Court held this tobe a case of illegal retrenchment and set aside the respondent’stermination order as being illegal. The Labour Court granted liberty tothe appellant to hold regular departmental enquiry for the charges leveledHby them against the respondent, in case the appellant so desires.

9. The appellant (University), felt aggrieved of the award of theLabour Court, filed writ petition before the High Court. By impugnedjudgment, the Division Bench of the High Court dismissed the appellant’swrit petition and upheld the Award passed by the Labour Court.

10. Against this judgment of the High Court, theappellant(University) felt aggrieved and has filed this appeal by way ofspecial leave before this Court.

11. Notice of the SLP was sent to the respondent. Despite serviceand repeated notices sent to the respondent, he neither appeared norrepresented through any counsel. We have, therefore, no option but todecide the appeal by hearing the counsel for the appellant.

12. Having heard the learned counsel for the appellant and onperusal of the record of the case, we are constrained to allow the appealand while setting aside the judgment of the High Court and the award ofthe Labour Court remand the case to the Labour Court for deciding thereference afresh in the light of our observations made infra.

13. In our considered opinion, neither the Judge of the LabourCourt and nor the Judges of the High Court applied their judicial mindwhile deciding the issues arising in the case and completely ignored thesettled legal principles which are applicable to the case at hand andproceeded to decide the case contrary to the principles laid down by thisCourt. Due to this reason, we are compelled to interfere in the impugnedjudgment and remand the case to the Labour Court for deciding it afresh.

14. The question as to what are the powers of the Labour Courtand how it should proceed to decide the legality and correctness of thetermination order of a workman under the Labour Laws in referenceproceedings and what are the rights of the employer while defending thetermination order in the Labour Court remains no more res integra andis settled by series of decisions of this Court beginning from AIR 1958SC 130 (Indian Iron & Steel Co. Ltd. & Anr. Vs. Their Worken)till AIR 1979 SC 1653 (Shankar Chakravarti vs. Britannia BiscuitCo. Ltd. & Anr.) and also thereafter in several decisions as mentionedbelow.

15. In between this period, this Court in several leading casesexamined the aforesaid questions. However, in Shankar’s case (supra), A

B

C

D

E

F

G

H

Athis Court took note of entire case law laid down by this Court in allprevious cases and reiterated the legal position in detail.

16. The legal position, in our view, is succinctly explained by thisCourt (two-Judge Bench) in the case of Delhi Cloth & General MillsCo. vs. Ludh Budh Singh, 1972(3) SCR 29=1972(Lab IC) 573 inBPropositions 4, 5 and 6 in the following words:

“(4) When a domestic enquiry has been held by themanagement and the management relies on the same, it isopen to the latter to request the Tribunal to try the validityof the domestic enquiry as a preliminary issue and also askfor an opportunity to adduce evidence before the Tribunal,if the finding on the preliminary issue is against themanagement. However elaborate and cumbersome theprocedure may be, under such circumstances, it is open tothe Tribunal to deal, in the first instance, as a preliminaryissue the validity of the domestic enquiry. If its finding onthe preliminary issue is in favour of the management, thenno additional evidence need be cited by the management.But, if the finding on the preliminary issue is against themanagement, the Tribunal will have to give the employeran opportunity to cite additional evidence and also give asimilar opportunity to the employee to lead evidence contra,as the request to adduce evidence had been made by themanagement to the Tribunal during the course of theproceedings and before the trial has come to an end. Whenthe preliminary issue is decided against the managementand the latter leads evidence before the Tribunal, theposition, under such circumstances, will be, that themanagement is deprived of the benefit of having the findingof the domestic Tribunal being accepted as prima facie proofof the alleged misconduct. On the other hand, themanagement will have to prove, by adducing properevidence, that the workman is guilty of misconduct and thatthe action taken by it is proper. It will not be just and faireither to the management or to the workman that theTribunal should refuse to take evidence and thereby askthe management to make a further application, after holdinga proper enquiry, and deprive the workman of the benefit C

D

E

F

G

H

of the Tribunal itself being satisfied, on evidence adducedbefore it, that he was or was not guilty of the allegedmisconduct.

(5) The management has got a right to attempt to sustainits order by adducing independent evidence before theTribunal. But the management should avail itself of the saidopportunity by making a suitable request to the Tribunalbefore the proceedings are closed. If no such opportunityhas been availed of, or asked for by the management, beforethe proceedings are closed, the employer can make nogrievance that the Tribunal did not provide such anopportunity. The Tribunal will have before it only theenquiry proceedings and it has to decide whether theproceedings have been held properly and the findingsrecorded therein are also proper.

(6) If the employer relies only on the domestic enquiry anddoes not simultaneously lead additional evidence or askfor an opportunity during the pendency of the proceedingsto adduce such evidence, the duty of the Tribunal is only toconsider the validity of the domestic enquiry as well as thefinding recorded therein and decide the matter. If theTribunal decides that the domestic enquiry has not beenheld properly, it is not its function to invite suo motu theemployer to adduce evidence before it to justify the actiontaken by it.”

17. The aforesaid principle of law was quoted with approval inShankar’s case (supra) by a Bench of three Judges in Para 23observing, “…..After an exhaustive review of the decisions bearingon the question and affirming the ratio in R.K. Jain’s case(1972 Lab IC 13) this Court extracted the emergingprinciples from the review of decisions. Propositions 4, 5and 6 would be relevant for the present discussion.”

18. The aforementioned decisions were extensively discussed bythe Constitution Bench in the case of Karnataka State Road TransportCorpn. vs. Lakshmidevamma(Smt.) & Anr., 2001 (5) SCC 433

ABC

DE

F

G

H

Awherein the law laid down in the aforementioned two cases wasapproved.

19. When we examine the facts of this case in the light of theaforementioned principles of law, we find that the termination of therespondent was by way of punishment because it was based on theBadverse findings recorded against the respondent in the domestic enquiry.

20. So the question, which the Labour Court was expected todecide in the first instance as a “preliminary issue”, was whether thedomestic enquiry held by the appellant (employer) was legal and proper.In other words, the question to be decided by the Labour Court wasCwhether the domestic enquiry held by the appellant was conductedfollowing the principles of natural justice or not.

21. If the domestic enquiry was held legal and proper then thenext question which arose for consideration was whether the punishmentimposed on the respondent(delinquent employee) was proportionate toDthe gravity of the charge leveled against him or it called for anyinterference to award any lesser punishment by exercising the powersunder Section 11-A of the ID Act.

22. If the domestic inquiry was held illegal and improper then thenext question, which arose for consideration, was whether to allow theEappellant (employer) to prove the misconduct/charge before the LabourCourt on merits by adducing independent evidence against the respondent(employee). The appellant was entitled to do so after praying for anopportunity to allow them to lead evidence and pleading the misconductin the written statement. (see- also Para 33 at page 1665/66 of Shankar’scase(supra) ).

F

23. Once the appellant(employer) was able to prove themisconduct/charge before the Labour Court, then it was for the LabourCourt to decide as to whether the termination should be upheld orinterfered by exercising the powers under Section 11-A of the ID Actby awarding lesser punishment provided a case to that effect on facts isGmade out by the respondent(employee).

24. We are constrained to observe that first, the Labour Courtcommitted an error in not framing a “preliminary issue” for deciding thelegality of domestic enquiry and second, having found fault in the domesticinquiry committed another error when it did not allow the appellant toHlead independent evidence to prove the misconduct/charge on merits and straightaway proceeded to hold that it was a case of illegalretrenchment and hence the respondents’ termination is bad in law.

25. By no stretch of imagination, in our view, the Labour Courtcould treat the respondent’s termination as “retrenchment” much lessan “illegal retrenchment”. The Labour Court failed to notice the definitionof retrenchment in Section 2(oo) of the ID Act which, in clear terms,provides that retrenchment does not include termination of the service ifit is imposed by way of punishment.

26. In this case, the respondent’s services were terminated by theappellant by way of punishment after holding a departmental enquiryand therefore, the termination in question could never be regarded as“retrenchment”. The Labour Court was, therefore, wholly wrong intreating the termination of the respondent as “retrenchment”.

27. We notice that the Labour Court held on facts that therespondent had worked for 240 days in one calendar year. We do notconsider it proper to set aside this factual finding. Indeed, it is due to thisfinding, the respondent is held entitled to claim protection of LabourLaws.

28. The High Court while deciding the appellant’s writ petition didnot take note of any legal issues mentioned above and cursorily dismissedthe writ petition.

29. In the light of the foregoing discussion, we cannot countenancethe approach and the manner in which the Labour Court and the HighCourt dealt with the issues arising in the case. The award of the LabourCourt and judgment of the High Court are, therefore, held per se withoutjurisdiction and legally unsustainable.

30. In view of the foregoing discussion, we allow the appeal, setaside the award of the Labour Court to the extent indicated above andthe judgment of the High Court and remand the case to the LabourCourt.

31. The Labour Court will now afford the appellant (employer)an opportunity to lead evidence to prove the misconduct alleged by themin the written statement against the respondent and depending upon thefindings, which the Labour Court would record on the issue of misconduct,the issue of termination would be decided in the light of what we haveobserved supra.

A

B

C

D

E

F

G

H

[2018] 2 S.C.R.

A32. The appellant shall appear before the Labour Court on05.03.2018 and will file the copy of this judgment. Since the respondenthas not appeared in this Court despite service on him, the Labour Courtwill issue fresh notice to the respondent for his appearance before theLabour Court and then decide the case as directed above within threemonths from the date of service of notice to the respondent.

B

Ankit Gyan

Appeal allowed.

C

D

E

F

G

H