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TMI Blog1973 (3) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act) by section 3 of the Industrial Disputes (Amendment) Act 1971 (hereinafter referred to as the Amendment Act). The Amendment Act passed by Parliament, received the assent of the President on December 8, 1971. Sub-section 2 of section 1 provided for its coming into force on, such date as the Central Government by notification in the official gazette, appoints. The Central Government by notification No. F.S.- 11013/1/71-LR.I dated 14-12-1971 appointed the 15th day of December, 1971, as the date on which the said Act would come into force. Accordingly, the Amendment Act came into force with effect from December 15, 1971. The Amendment Act introduced various amendments to the Act. In particular by section 3, it inserted the new section 11A in the Act. The new section 11 A so inserted runs as follows: Powers of Labour Courts, Tribunals and National Tribunals to give appropriate relief in case of discharge or dismissal of workmen "11 A. Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court., Tribunal or National Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless reinstated with unpaid wages, should be paid adequate compensation or afforded some other relief. In accordance with these recommendations, it is considered that the Tribunal's power in an adjudication proceeding relating to discharge or dismissal of a workman should not be limited and that the Tribunal should have the power in cases wherever necessary, to set aside the order of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it thinks fit or give such other relief to the workmen including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require. For this purpose, a new section 11A is proposed to be inserted in the Industrial Disputes Act, 1947............... There is no controversy that in all the four appeals,, the reference had been-made long before the date of coming into force ,of section 11A and the industrial disputes were pending adjudication at the hands of the concerned authorities on 15-12-1971. In respect of such disputes the concerned labour court or Tribunal had to consider the question whether section 1 1 A applies to those proceedings and also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scharging a workman and that if no enquiry has been held or if the enquiry held is found to be defective, there is no option but to reinstate the employee. In this view, the Labour Court has further held that an employer under those circumstances has no, right to adduce evidence in the adjudication proceedings to justify his action. In civil Appeal No. 1996 of 1972 arising out of Reference (I.D.A.) No. 207 of[1970] and in Civil Appeal No. 2386 of 1972 arising out of Reference (I.D.A.) No' 213 of [1970], the same Labour Court has expressed similar views in its orders dated June 27, 1972. Against all these three orders the company has filed appeals. The management and the workmen concerned in certain other disputes have also intervened in these appeals and they have placed before us copies of the orders passed by other authorities. It will be useful to refer to the views expressed by some of those authorities. In Reference (I.D.A.) No. 79 of 1971, the Second Labour Court in its order dated April 13, 1972 has held as follows : Section 11A gives power to the Labour Court to scrutinlse domestic enquiries similar to that of an appellate court. The said section comes into play only afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no power to alter the punishment imposed by an employer. Even in cases where the domestic enquiry is held to be: defective or even if no domestic enquiry had been conducted by an employer before passing an order of termination or discharge, the employer was given an opportunity to adduce evidence before the Tribunal to justify his action. Once the Tribunal accepts that evidence and 'holds that the misconduct is proved, it had no power to interfere with the discretion of the management regarding the quantum of punishment. The above position has been completely changed by section 11A. It is now obligatory on an employer to hold a proper domestic enquiry in which all material evidence will have to be adduced. When a dispute is referred for adjudication and it is found that ,-the domestic enquiry conducted by the management is defective ,or if it is found that no domestic enquiry at all had been conducted, the order of discharge or termination passed by the employer becomes, without anything more, 'Unjustified and the Labour Tribunals have no option but to direct the reinstatement of the workmen concerned, as his discharge or dismissal is illegal. Even in cases where a domestic enqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions that the opportunity that was so far directed to be given to an employer to adduce evidence for the first time before the Tribunal was not by way of recognising a right in an employer but really for the benefit of the workman, who will otherwise be jeopardised by a further enquiry being conducted by the employer after filling up the lacunae that are. found in the original enquiry. He pointed out that when the Tribunals have now been clothed with full power to reappraise the evidence adduced in the domestic enquiry, which an employer is under obligation to conduct, and when they have been clothed with powers to hold as unjustified an order of termination because of the enquiry Proceeding being defective or on the ground that no enquiry at all was conducted, the basis for giving an employer an opportunity to add cc evidence before the Tribunal no longer survives. Mr. Deshmukh was prepared to accept that even now, it is open to the parties, to adduce evidence before the Tribunal, strictly limited to the validity or otherwise of a domestic enquiry conducted by an employer. The counsel relied very heavily 'on the proviso to section 11A in support of his contention that it is ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If it holds that the punishment has to be modified, it has power to do so and award a lesser punishment. Section II A' comes into effect only at the time when the Tribunal considers about the punishment to be imposed. While previously the Tribunal had no power to interfere with the punishment, it is now clothe with such a power. This is the only modification regarding the powers of the management that has been introduced by section 11 A. Neither the fact that no enquiry at all has been held by an employer nor the circumstance that the enquiry, if any held, is found to be detective, stands in the way of an employer adducing evidence before the Tribunal for the first time to justify his action taken against a workman. Mr. Setalvad, learned counsel, appearing for Larsen & Toubro Ltd. adopted these contentions of Mr. Damania. He, however, referred us to the provisions of section 33 of the Act. According to him when the previous permission or an approval for dismissing discharging a workman has been obtained under section 33, the Tribunal concerned would have applied its mind and satisfied itself at least prima facie that the proposed action of the employer was justified. Such satisfa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecide what the appropriate punishment for a misconduct should be and its exercise of the discretion in this regard should not be interfered with by a Tribunal unless the punishment is unjust. In Shri Ram Swarath Sinha, Righa, Muzafferpur v. The Management of the Belsund Sugar Company Limited, Righa Muzaffarpur([1954] Labour Appeal Cases 697), the Labour Appellate Tribunal has recognised the right of a management to ask for permission to adduce evidence for the first time before the Tribunal to justify its action though no domestic enquiry had been held by it. It has been emphasised that the permission asked for cannot be thrown out in limine on the ground that the management had not made any previous enquiry into the charge. We may say that this decision was in respect of a proceeding under section 33 of the Act, but, as held by this Court, there is no difference in such matters whether the Tribunal was deciding a dispute referred to it under section 10 or an application filed before it under section 33 of the Act. In discussing the nature of the jurisdiction exercised by an Industrial Tribunal when adjudicating a dispute relating to dismissal or discharge, it has been emphasised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the supply of a specific charge-sheet to the employee". The effect of an employer not holding an enquiry has been stated as follows " But it follows that if no enquiry has in fact been held by the employer, the issue about the merits of the impugned order of dismissal is at large before the tribunal and, on the evidence adduced before it, the tribunal has to decide for itself whether the misconduct alleged is proved, and if yes, what would be proper order to make. In such a case the point about the exercise of managerial functions does not arise at all". In M/s. Bharat Sugar Mills Ltd. v. shri Jai Singh and Others ([1962] (3) S.C.R. 684), the question arose regarding the powers of an Industrial Tribunal to permit an employer to adduce evidence before it justifying its action after the domestic enquiry was held to be defective. It was contended on behalf of the workmen that when once the domestic enquiry was found to be defective, the tribunal had no option but to dismiss the application filed by an employer for approval and that it cannot allow an employer to adduce evidence before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment at the enquiry and the proceedings of the enquiry, or (2) that evidence and in addition thereto further evidence led before the Tribunal, or (3) evidence placed before the Tribunal for the first time in support of the charges". It was further emphasised--that "for a long time now, it has been settled law that in the case of in adjudication of a dispute arising out of a dismissal of a workman by the management (as distinct from an application for permission to dismiss under s. 33), evidence can be adduced for the first time before the Industrial Tribunal. The important effect of the omission to hold an enquiry is merely this : that the tribunal would not have to consider only whether there was a prima facie case but would decide for itself on the evidence adduced whether the charges have really been made out". The observations made by this Court in The Punjab National Bank L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge, had not been served on the employee or proper or full opportunity had not been given to the employee to meet the charge, or the enquiry has been affected by other grave irregularities vitiating it, then the position would be that the Tribunal would be entitled to deal with the merits of the dispute as to, the dismissal of the employee for itself. The same result follows if no enquiry has been held at all. In other words, where the Tribunal is dealing with a dispute relating to the dismissal of an industrial employee, if it is satisfied that no enquiry has been held or the enquiry which has been held is not proper or fair or that the findings recorded by the Enquiry Officer are perverse, the whole issue; is at large before the, Tribunal. This position also is well-settled". It was further held that it is only where a tribunal is satisfied that a proper enquiry has, not been held or that the, enquiry having been held properly the finding recorded is perverse, that the Tribunal derives jurisdiction to 'deal with the merits of the dispute, when permission has to be given to an employer to adduce additional evidence. The right of an employer to lead evidence before the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied ...... If the enquiry is defective or if no enquiry has been held as required by Standing Orders, the entire case would be open before the tribunal and the employer would have to justify on facts as well that its order of dismissal' or discharge was proper A defective enquiry to our opinion stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper" The reasons for allowing an employer to lead evidence before the Tribunal justifying his action have been stated thus : "If it is held that in cases where the employer dismisses his employee without holding an enquiry, the dismissal must be set aside by the industrial tribunal only on that ground, it would inevitably mean that the employer will immediately proceed to hold the enquiry and pass an order dismissing the employee once again. In that case, another industrial dispute would arise and the employer would be entitled to rely upon the enquiry which he had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all infirmities in the domestic inquiry, if one has been held and also to attack the order on all grounds available to him in law and on facts. Similarly the management has also a right to defend the action taken by it on the (,round that a proper domestic inquiry has been held by it-on the basis of which the order impugned has been passed. It is also open to the management to justify on facts that the order passed by it was proper. But the point to be noted is that the inquiry that is conducted by the Tribunal is a composite inquiry regarding the order which is under challenge. If the management defends its action solely on the basis that the domestic inquiry held by it is proper and valid and if the Tribunal holds against the management on that point, the management will fail. On the other hand, if the management relies not only on the validity of the domestic inquiry, but also adduce evidence before the Tribunal justifying its action, it is open to the Tribunal to accent the evidence adduced by the management and hold in its favour even if its finding is against the management regarding the validity of the domestic inquiry. It is essentially a matter for the management to decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the employer and employee to, adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action; and it is open to the employee to adduce evidence contra. (5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the, merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry. (6) The Tribunal gets jurisdiction to consider the evidence placed before-it for the first time in justifications of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective. (7) It has never been recognised that the Tribunal should straightaway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n referred to an Industrial Tribunal for adjudication. In the course of such adjudication, the Tribunal has to be satisfied that the ,order of discharge or dismissal was not justified. If it comes to such a conclusion, tile Tribunal has to set aside the order and direct reinstatement of the workman on such terms as it thinks fit. The Tribunal has also power to give any other relief to the work-man including the imposing of a lesser punishment having due regard to the circumstances. The; proviso casts a duty on the Tribunal to rely only on the materials- on record and prohibits it from taking any fresh evidence. Even a mere reading of the section. in our opinion, does indicate that A change in the law, ,is laid ,down by this Court, has been effected. According to the workmen the entire law has been completely altered; whereas according to the employers, a very minor change has been effected giving power to the Tribunal, only to alter the punishment, after having hold that the misconduct is proved. That is, according to the employers, the Tribunal has a mere power to alter the punishment after it holds that the misconduct is proved. The workmen, on the other hand, claim that the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharge or dismissal was not justified" clearly indicates that the Tribunal is now clothed with the power to reappraise the evidence in the domestic enquiry and satisfy itself whether the said evidence relied on by an employer, establishes the misconduct alleged against a workman. What was originally a plausible conclusion that could be drawn by an employer from the evidence, has now given place to a satisfaction being arrived at by ,lie Tribunal that the finding of misconduct is correct. The limitations imposed on the powers of the Tribunal by the decision in Indian Iron & Steel Co. Ltd. ([1958] S.C.R.667). case can no longer be invoked by an employer. The Tribunal is now at liberty to consider not only whether the finding of misconduct recorded by an employer is 'correct; but also to differ from the said finding if a proper case is made out. What was once largely in the realm of the satisfaction of the employer, has ceased to be so: and now it is the satisfaction of the Tribunal that finally decides the matter. If there has been no enquiry held by the employer or if the enquiry is held to be defective, it is open to the employer even now to adduce evidence for the first time be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first time, it is the Tribunal which has to be satisfied on such evidence about the guilt or otherwise of the workman concerned. The law, as laid 'down by this Court that under such circumstances the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and that it has to decide for itself whether the misconduct alleged is proved, continues to have full effect. In such a case, as laid down by this Court, the exercise of managerial functions does not arise at all. Therefore, it will-be seen that both in respect of cases where a domestic enquiry has been held as also in cases where the Tribunal considers the matter on the evidence adduced before it for the first time, the satisfaction under section 11 A, about the guilt or otherwise of the workman concerned, is that of the Tribunal. It has to consider the evidence and come to a conclusion one way or other. Even in cases where an enquiry has been held by an employer and a finding of misconduct arrived at, the Tribunal can now differ from that finding in a proper case and hold that no misconduct is proved. We are not inclined to accept the contentions advanced on behalf of the employer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lesser punishment instead. The power to interfere with the punishment and alter the same has been now conferred on the Tribunal by section 1 1 A. Mr. Deshmukh rather strenuously urged that in all its previous decisions, this Court had not considered a breach-or an illegality, as he calls it-committed by an employer in not holding a domestic enquiry. The learned counsel urged that this Court has consistently held in several decisions that there is an obligation on the part of an employer to conduct a proper domestic enquiry in accordance with the Standing Orders before passing an order of discharge or dismissal. Hence an order passed without such an enquiry is, on the face of it, illegal. The effect of such an illegal order deprives the employer of an opportunity being given to him to adduce evidence for the first time before the Tribunal to justify his action. These. aspects, according to the learned counsel, have not been considered by this Court when it recognised an opportunity to be given to an employer to adduce evidence before the Tribunal. The above aspect was stressed before us by Mr. Deshmukh in support of the contention that section 11A has taken not of such an illegali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of discharge. This contention was rejected by this Court and it was held that if the enquiry was defective or no enquiry had been held, as required by the Standing Orders, the entire case would be open before the Tribunal and the employer would have to justify, on evidence as well that its order of dismissal or discharge was proper. Therefore, this contention cannot be accepted. We may also state that the industrial Employment (Standing Orders) Act 1946 applies only to those industrial establishments which are covered by section 1(3). But the field of operation of the Act is much wider and it applies to employers, who may have no standing orders at all. If the contention of Mr. Deshmukh regarding Standing Orders is accepted, then the Act will have to be applied in a different manner to employers, who have no Standing Orders, and employers, who are obliged to have Standing Orders. That is- certainly not the scheme of the Act. We will now pass on to consider the proviso to Section II A. Mr. Deshmukh relied on the terms of the proviso in support of his contention that it is now obligatory to hold a proper domestic enquiry and the Tribunal can only take into account the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not certainly possible to come to the conclusion that when once it is held that an enquiry has not been held or is found to be defective, an order reinstating the workman will have to be made by the Tribunal. Nor does it follow that the Proviso deprives an employer of his right to adduce evidence for the first time before the Tribunal. The expression 'fresh evidence' has to be read in the context in which it appears, namely. as distinguished from the expression materials on record. If so read, the Proviso does not prevent any difficulty at all. The legislature in section 11A has made, a departure in certain respects in the law as laid down by this Court. For the, first time, power has been given to a Tribunal to satisfy itself whether misconduct is proved. This is particularly so, as already pointed out by us, regarding even findings arrived at by an employer, in an enquiry properly held. The Tribunal has also been given power, also for the first time, to interfere with the punishment imposed by an employer. When such wide powers have been now conferred on Tribunals, the legislature obviously felt that some restrictions have to be imposed regarding what matters could be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. Therefore, an attempt must be made to construe section 11A in a reasonable manner. This is another reason for holding that the right to adduce evidence for the first time recognised in an employer, has not been disturbed by section 11A. There may be other instances where an employer with limited number of workman may himself be a witness to a misconduct committed by a workman. He will be disabled from conducting an enquiry against the workman because he cannot both be an enquiry officer and also a witness in the proceedings. Any enquiry held by him will not be in keeping with the principles of natural justice. But he will certainly be entitled to take disciplinary action for which purpose he can serve a charge-sheet and, after calling for explanation, impose the necessary punishment without holding any enquiry. This will be a case, where no enquiry at all has been held by an employer. But the employer will have sufficient material available with him which could be produced before any Tribunal to satisfy it about the justification for the action taken. Quite naturally, the employer will place before the Tribunal, for the, first time, in the adjudication proceedings material to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anced the main arguments in this regard. Mr. Deshmukh appearing for the workman in the other Appeals, adopted her arguments. According to the learned counsel, section 11A applies not only to references, which are made on or after 15-12-1971, but also to all references already made and which were pending adjudication on that date. It is pointed out that section 11A has been incorporated in Chapter IV of the Act dealing with procedure, powering and duties of authorities. According to them, section 11A deals with matters of procedure. Applying the well known canon of interpretation, procedural laws apply to pending proceedings also. No right, much less any vested right, of the employers has been taken away or affected by section 11A. Considerable stress has been laid on the use of the expressions 'has been referred occurring in section 11A, as conclusively indicating the applicability of the section even to disputes already referred. It was stressed that even assuming that an employer has a right to adduce evidence for the first time before the Tribunal, that right enures to him only after the Tribunal had adjudicated upon the validity of the domestic enquiry. It cannot be characteris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the passages in the text books, as the principle is well established that a retrospective operation is not to be given to a statute so as to impair an existing right. This is the general rule. But the legislature is competent to pass a statute so as to have retrospective operation, either by clearly expressing such intention or by necessary and distinct intendment. The principles regarding the retrospectively or otherwise of a section or a statute have been laid down by this Court in Garikapatti Verraya v. N. Subbiah Choudhury ([1957] S.C.R.488) and Kesshavlal Jethalal Shah v. Mohanlal Bhagwandas & Anr. ([1968] (3) S.C.R. 623). Miss Indira Jai Singh, learned counsel, placed considerable reliance on the use of the expressions 'has been referred' in section 11A as indicating that the section _Applies even to all references made before 15-12-1971. In our opinion, those words cannot be isolated from the context. The said expressions may have different connotations when they are used in different context. A reference may be made to section 7(3) and section 7A(3) of the Act, laying down qualifications for being appointed as a presiding officer of a Labour Court or a Tribunal respectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the section were "if a person has been convicted ; then followed the various types of offences of which that person may have been convicted. The Deputy Commissioner of Police, Bombay, acting under section 57(1) passed an order externing the respondent from the limits of Greater Bombay. It was contended before the Bombay High Court that section 57 was prospective and could not be made applicable unless the conviction on which the action of externment was based, took place after the coming into force of that Act. The High Court upheld this contention and acquitted the accused. The High Court had held that as the legislature had used the present participle 'has been'. and not the past participle in the opening part of the section, it should be understood that the section was intended to be used only where a person was convicted of the offences referred to in section 57, subsequent to the coming into force of the Act. This Court differed from the interpretation placed by the High Court on section 57 of the Bombay Police Act and held that the section enabled the authorities to take note of the convictions of the accused prior to the Act. It was observed & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) are more apposite to the case on hand. The question arose regarding the construction to be placed upon section 23 of the Bankruptcy Act 1890. The said section was as follows: "Where a debt has been proved upon a debtor's estate under the principal Act, and such debt includes interest, or any pecuniary consideration in lieu of interest, such interest or consideration shall, for the purposes of dividend, be calculated at a rate not exceeding five per centum per annum, without prejudice to the right of a creditor to receive out of the estate any higher rate of interest to which he may be entitled after all the debts proved in the estate have been paid in full". The point that arose for consideration was whether the above section operates so as to govern the distribution of dividend under a contract made under a scheme which had taken effect before the Act was passed or came into operation. In holding that the section was not retrospective, it was observed : "Then is the section so expressed as to be plainly retrospective ? No doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'in any proceeding under this section'. A proceeding under the section can only be after the section has come into force. Further the section itself was brought into force some time after the Amendment Act was passed. These circumstances as well as the scheme of the section and particularly the wording of the Proviso indicate that section 11A does not apply to disputes which had been referred prior to 15-12- 1971. The section applies only to disputes which are referred for adjudication on or after 15-121971. To conclude, in our opinion, section 11A has-no application to disputes referred prior to 15-12-1971. Such disputes have to be dealt with according to the decisions of this Court already referred to. In Civil Appeal No. 1461 of 1972, the Industrial Tribunal had considered only the question regarding- the applicability of the section to disputes which had been referred before the section came into force. The Tribunal has held that the section does not apply to such disputes. This view is in accordance with our decision and as such is correct. This appeal is hence dismissed. In the three other orders, which are the subject of consideration in Civil Appeals Nos. 1995 of 1972, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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