REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.3585 OF 2008

Kurukshetra University ….Appellant(s)

VERSUS

Prithvi Singh …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1.This appeal is directed against the final

judgment and order dated 22.09.2006 passed by

the High Court of Punjab & Haryana at Chandigarh

in C.W.P. No.13094 of 2006 whereby the Division

Bench of the High Court dismissed the petition filed

by the appellant herein and affirmed the Award

dated 23.01.2006 passed by the Presiding Officer,

Labour Court, Ambala in Ref.No.25 of 2003.

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2.The controversy involved in the case is short as

it would be clear from the narration of the relevant

facts infra.

3.The appellant is the Kurukshetra University

(hereinafter referred to as “the University”). The

respondent was working as Security Guard in the

University as daily rated employee.

4.On 18.08.1999, the respondent while on duty

alleged to have misbehaved with one lady Research

Scholar, who was working in the University. The

appellant took note of the incident and held

departmental enquiry by appointing Enquiry Officer

to probe into the incident.

5.The Enquiry Officer, in his report dated

20.09.1999, found the respondent guilty for

committing the misconduct. The appellant

accordingly decided to discontinue the services of

the respondent and treating him to be the daily

rated worker dispensed with his services with effect

from 30.03.2000.

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6.This led the State to make the industrial

reference to the Labour Court, Ambala under

Section 10 of the Industrial Disputes Act, 1947

(hereinafter referred to as “ID Act”) for deciding the

legality and correctness of the respondent's

termination from the services of the

appellant-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 working as a

daily wager for a period of 89 days and, therefore,

he was not entitled to claim any benefit available to

any workman under the ID Act and Second, the

respondent committed misconduct while on duty for

which a departmental enquiry was held though it

was not required because the respondent was a

daily rated employee and on being found guilty in

the domestic inquiry, his services were dispensed

with.

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8.The Labour Court, by award dated 23.01.2006,

answered the reference in respondent's favour. The

Labour Court held that the respondent has worked

for more than 240 days in one calendar year. It was

further held that since the appellant had leveled

charge of misconduct against the respondent, it was

necessary for the appellant to have held regular

departmental enquiry by issuing a charge sheet etc.

and then depending upon the outcome of the

enquiry, appropriate orders should have been

passed. It was held that the enquiry held by the

appellant was not legal and proper. With these

findings, the Labour Court held this to be a case of

illegal retrenchment and set aside the respondent’s

termination order as being illegal. The Labour Court

granted liberty to the appellant to hold regular

departmental enquiry for the charges leveled by

them against the respondent, in case the appellant

so desires.

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9.The appellant (University), felt aggrieved of the

award of the Labour Court, filed writ petition before

the High Court. By impugned judgment, the

Division Bench of the High Court dismissed the

appellant's writ petition and upheld the Award

passed by the Labour Court.

10.Against this judgment of the High Court, the

appellant(University) felt aggrieved and has filed this

appeal by way of special leave before this Court.

11.Notice of the SLP was sent to the respondent.

Despite service and repeated notices sent to the

respondent, he neither appeared nor represented

through any counsel. We have, therefore, no option

but to decide the appeal by hearing the counsel for

the appellant.

12.Having heard the learned counsel for the

appellant and on perusal of the record of the case,

we are constrained to allow the appeal and while

setting aside the judgment of the High Court and

the award of the Labour Court remand the case to

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the Labour Court for deciding the reference afresh

in the light of our observations made infra.

13.In our considered opinion, neither the Judge of

the Labour Court and nor the Judges of the High

Court applied their judicial mind while deciding the

issues arising in the case and completely ignored

the settled legal principles which are applicable to

the case at hand and proceeded to decide the case

contrary to the principles laid down by this Court.

Due to this reason, we are compelled to interfere in

the impugned judgment and remand the case to the

Labour Court for deciding it afresh.

14.The question as to what are the powers of the

Labour Court and how it should proceed to decide

the legality and correctness of the termination order

of a workman under the Labour Laws in reference

proceedings and what are the rights of the employer

while defending the termination order in the Labour

Court remains no more res integra and is settled by

series of decisions of this Court beginning from AIR

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1958 SC 130 (Indian Iron & Steel Co. Ltd. & Anr.

Vs. Their Worken) till AIR 1979 SC 1653 (Shankar

Chakravarti vs. Britannia Biscuit Co. Ltd. & Anr.)

and also thereafter in several decisions as

mentioned below.

15.In between this period, this Court in several

leading cases examined the aforesaid questions.

However, in Shankar's case (supra), this Court took

note of entire case law laid down by this Court in all

previous cases and reiterated the legal position in

detail.

16.The legal position, in our view, is succinctly

explained by this Court (two-Judge Bench) in the

case of Delhi Cloth & General Mills Co. vs. Ludh

Budh Singh, 1972(3) SCR 29=1972(Lab IC) 573 in

Propositions 4, 5 and 6 in the following words:

“(4) When a domestic enquiry has been held

by the management and the management

relies on the same, it is open to the latter to

request the Tribunal to try the validity of the

domestic enquiry as a preliminary issue and

also ask for an opportunity to adduce

evidence before the Tribunal, if the finding

on the preliminary issue is against the

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management. However elaborate and

cumbersome the procedure may be, under

such circumstances, it is open to the

Tribunal to deal, in the first instance, as a

preliminary issue the validity of the domestic

enquiry. If its finding on the preliminary

issue is in favour of the management, then

no additional evidence need be cited by the

management. But, if the finding on the

preliminary issue is against the management,

the Tribunal will have to give the employer

an opportunity to cite additional evidence

and also give a similar opportunity to the

employee to lead evidence contra, as the

request to adduce evidence had been made by

the management to the Tribunal during the

course of the proceedings and before the trial

has come to an end. When the preliminary

issue is decided against the management and

the latter leads evidence before the Tribunal,

the position, under such circumstances, will

be, that the management is deprived of the

benefit of having the finding of the domestic

Tribunal being accepted as prima facie proof

of the alleged misconduct. On the other

hand, the management will have to prove, by

adducing proper evidence, that the workman

is guilty of misconduct and that the action

taken by it is proper. It will not be just and

fair either to the management or to the

workman that the Tribunal should refuse to

take evidence and thereby ask the

management to make a further application,

after holding a proper enquiry, and deprive

the workman of the benefit of the Tribunal

itself being satisfied, on evidence adduced

before it, that he was or was not guilty of the

alleged misconduct.

(5) The management has got a right to

attempt to sustain its order by adducing

independent evidence before the Tribunal.

But the management should avail itself of the

said opportunity by making a suitable request

to the Tribunal before the proceedings are

closed. If no such opportunity has been

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availed of, or asked for by the management,

before the proceedings are closed, the

employer can make no grievance that the

Tribunal did not provide such an opportunity.

The Tribunal will have before it only the

enquiry proceedings and it has to decide

whether the proceedings have been held

properly and the findings recorded therein

are also proper.

(6) If the employer relies only on the

domestic enquiry and does not

simultaneously lead additional evidence or

ask for an opportunity during the pendency

of the proceedings to adduce such evidence,

the duty of the Tribunal is only to consider

the validity of the domestic enquiry as well

as the finding recorded therein and decide

the matter. If the Tribunal decides that the

domestic enquiry has not been held properly,

it is not its function to invite suo motu the

employer to adduce evidence before it to

justify the action taken by it.”

17.The aforesaid principle of law was quoted with

approval in Shankar's case (supra) by a Bench of

three Judges in Para 23 observing,

“…..After an exhaustive review of the

decisions bearing on the question and

affirming the ratio in R.K. Jain’s case (1972

Lab IC 13) this Court extracted the emerging

principles from the review of decisions.

Propositions 4, 5 and 6 would be relevant for

the present discussion.”

18.The aforementioned decisions were extensively

discussed by the Constitution Bench in the case of

Karnataka State Road Transport Corpn. vs.

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Lakshmidevamma(Smt.) & Anr. , 2001 (5) SCC 433

wherein the law laid down in the aforementioned

two cases was approved.

19.When we examine the facts of this case in the

light of the aforementioned principles of law, we find

that the termination of the respondent was by way

of punishment because it was based on the adverse

findings recorded against the respondent in the

domestic enquiry.

20. So the question, which the Labour Court was

expected to decide in the first instance as a

“preliminary issue”, was whether the domestic

enquiry held by the appellant (employer) was legal

and proper. In other words, the question to be

decided by the Labour Court was whether the

domestic enquiry held by the appellant was

conducted following the principles of natural justice

or not.

21.If the domestic enquiry was held legal and

proper then the next question which arose for

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consideration was whether the punishment imposed

on the respondent(delinquent employee) was

proportionate to the gravity of the charge leveled

against him or it called for any interference to award

any lesser punishment by exercising the powers

under Section 11-A of the ID Act.

22.If the domestic inquiry was held illegal and

improper then the next question, which arose for

consideration, was whether to allow the appellant

(employer) to prove the misconduct/charge before

the Labour Court on merits by adducing

independent evidence against the respondent

(employee). The appellant was entitled to do so after

praying for an opportunity to allow them to lead

evidence and pleading the misconduct in the written

statement. (see- also Para 33 at page 1665/66 of

Shankar’s case(supra) ).

23.Once the appellant(employer) was able to prove

the misconduct/charge before the Labour Court,

then it was for the Labour Court to decide as to

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whether the termination should be upheld or

interfered by exercising the powers under Section

11-A of the ID Act by awarding lesser punishment

provided a case to that effect on facts is made out

by the respondent(employee).

24.We are constrained to observe that first, the

Labour Court committed an error in not framing a

“preliminary issue” for deciding the legality of

domestic enquiry and second, having found fault in

the domestic inquiry committed another error when

it did not allow the appellant to lead independent

evidence to prove the misconduct/charge on merits

and straightaway proceeded to hold that it was a

case of illegal retrenchment and hence the

respondents’ termination is bad in law.

25.By no stretch of imagination, in our view, the

Labour Court could treat the respondent's

termination as “retrenchment” much less an “illegal

retrenchment”. The Labour Court failed to notice

the definition of retrenchment in Section 2(oo) of the

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ID Act which, in clear terms, provides that

retrenchment does not include termination of the

service if it is imposed by way of punishment.

26. In this case, the respondent's services were

terminated by the appellant by way of punishment

after holding a departmental enquiry and therefore,

the termination in question could never be regarded

as “retrenchment”. The Labour Court was,

therefore, wholly wrong in treating the termination

of the respondent as “retrenchment”.

27.We notice that the Labour Court held on facts

that the respondent had worked for 240 days in one

calendar year. We do not consider it proper to set

aside this factual finding. Indeed, it is due to this

finding, the respondent is held entitled to claim

protection of Labour Laws.

28.The High Court while deciding the appellant's

writ petition did not take note of any legal issues

mentioned above and cursorily dismissed the writ

petition.

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29.In the light of the foregoing discussion, we

cannot countenance the approach and the manner

in which the Labour Court and the High Court dealt

with the issues arising in the case. The award of the

Labour Court and judgment of the High Court are,

therefore, held per se without jurisdiction and

legally unsustainable.

30.In view of the foregoing discussion, we allow

the appeal, set aside the award of the Labour Court

to the extent indicated above and the judgment of

the High Court and remand the case to the Labour

Court.

31.The Labour Court will now afford the appellant

(employer) an opportunity to lead evidence to prove

the misconduct alleged by them in the written

statement against the respondent and depending

upon the findings, which the Labour Court would

record on the issue of misconduct, the issue of

termination would be decided in the light of what we

have observed supra.

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32.The appellant shall appear before the Labour

Court on 05.03.2018 and will file the copy of this

judgment. Since the respondent has not appeared

in this Court despite service on him, the Labour

Court will issue fresh notice to the respondent for

his appearance before the Labour Court and then

decide the case as directed above within three

months from the date of service of notice to the

respondent.

………...................................J.

[R. K. AGRAWAL]

…...……..................................J.

[ABHAY MANOHAR SAPRE ]

New Delhi;

February 15, 2018

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