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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8434 OF 2014

(Arising out of SLP(C) NO. 22487 of 2012)

RAGHUBIR SINGH ………APPELLANT

Vs.

GENERAL MANAGER,

HARYANA ROADWAYS, HISSAR ………RESPONDENT

J U D G M E N T

Leave granted.

2. This appeal has been filed by the appellant

against the order dated 09.01.2012 passed by the High

Court of Punjab and Haryana at Chandigarh in L.P.A.

No. 20 of 2012, whereby the High Court dismissed the

L.P.A. and affirmed the order dated 14.11.2011 passed

by the learned Single Judge of the High Court in the

C.W.P. No.20996 of 2011, urging various grounds.

3. The necessary relevant facts are stated hereunder

to appreciate the case of the appellant and to

ascertain whether the appellant is entitled for the

relief as prayed in this appeal.

In 1976, the appellant joined the Haryana

Roadways as a conductor. On 10.08.1993, the appellant

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was charged under Section 409 of the Indian Penal Code

in a criminal case at the instance of the respondent

for alleged misappropriation of the amount collected

from tickets and not depositing the cash in relation

to the same in time. The appellant was arrested by the

Jurisdictional police and sent to judicial custody on

15.09.1994. Further, on 21.10.1994 the services of the

appellant were terminated by the General Manager,

Haryana Roadways, Hissar, the respondent herein. On

15.11.1994, the appellant upon being released on bail

was given an oral assurance by the respondent that he

will be reinstated to the post after his acquittal by

the Court.

4. On 11.07.2002, upon being acquitted by the Court of

Judicial Magistrate, First Class, Hissar, in Crl. Case

No. 33-I of 1994, the appellant reported to join his

duty, but he was informed by the respondent that his

services stood terminated w.e.f. 21.10.1994. The

appellant served the demand notice upon the respondent

which was not acceded to and therefore, the industrial

dispute with regard to order of termination from his

services was raised before the conciliation officer.

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On failure of the conciliation proceedings before him,

the industrial dispute was referred by the State

Government in exercise of its statutory power under

Section 10 (1) (c) of the Industrial Disputes Act,

1947 (for short ‘the Act’) to the Labour Court, Hissar

for adjudication of the existing industrial dispute in

relation to the order of dismissal of the appellant

from his services. After adjudication of the points of

dispute referred to it, the Labour Court vide its

award dated 22.05.2009 declared that the termination

of the appellant from his services was illegal and

passed an award of reinstatement of the appellant with

60% back wages from the date of issuance of demand

notice till publication of the award and full back

wages thereafter, till reinstatement.

5. Aggrieved by the same, the respondent-Haryana

Roadways filed C.W.P. No. 13366 of 2009 before the

High Court of Punjab and Haryana at Chandigarh. The

High Court vide its order dated 01.04.2010 set aside

the award dated 22.05.2009 and remanded the case back

to the Labour Court for fresh adjudication in the

light of the applicability of the provisions of

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Article 311(2)(b) of the Constitution of India, to the

appellant/workman.

6. The Labour Court vide its award dated 17.05.2011 in

R.M. No.3 of 2010 answered the reference by passing an

award against the appellant on the ground that the

reference of the industrial dispute is time barred.

The appellant challenged the correctness of the said

award by filing a Civil Writ Petition No.20996 of 2011

before the High Court, which was dismissed on

14.11.2011 by the learned single Judge of the High

Court holding that the decision of the disciplinary

authority of the respondent is in the public interest

and therefore, the same does not warrant interference.

7. The appellant thereafter filed Letters Patent Appeal

No. 20 of 2012 before the Division Bench of the High

Court against the order of the learned single Judge.

The same was dismissed vide order dated 09.01.2012 on

the ground that the services of the appellant were

terminated by the respondent on 21.10.1994 in exercise

of the powers conferred upon it under the provisions of

Article 311(2)(b) of the Constitution of India,

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whereas the appellant had raised the industrial dispute

vide the demand notice in the year, 2002. The Division

Bench of the High Court found no illegality or

irregularity in the impugned judgment passed by the

learned single Judge of the High Court.

8. Aggrieved by the impugned judgment and order dated

09.01.2012 of the High Court of Punjab and Haryana,

the appellant has filed this appeal urging various

grounds.

9. It has been contended by the learned counsel for

the appellants that the services of the appellant was

illegally terminated from his services on the ground

of alleged misconduct of unauthorised absence, and no

enquiry was conducted before the termination of

services of the appellant. Further, it is contended

that the reasons accorded by the respondent are not

justified for dispensing with the inquiry procedure in

relation to the allegations against the appellant and

invoking the provisions of Article 311(2)(b) of the

Constitution of India and the respondent had

terminated the services of the appellant without

complying with the principles of natural justice.

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10. The learned Additional Advocate General for the

State of Haryana, Mr. Narender Hooda has vehemently

contended that the Labour Court was right in rejecting

the reference of the industrial dispute being on the

ground that it was barred by limitation by answering

the additional issue No. 2 by placing reliance upon

the decision of this Court in the case of Assistant

Engineer, Rajasthan State Agriculture Marketing Board,

Sub-Division, Kota v. Mohan Lal

1

wherein this Court has

held as under:-

“19. We are clearly of the view that

though Limitation Act, 1963 is not

applicable to the reference made under

the Industrial Disputes Act, 1947, but

delay in raising industrial dispute is

definitely an important circumstance

which the Labour Court must keep in

view at the time of exercise of

discretion irrespective of whether or not

such objection has been raised by the

other side. The legal position

laid down by this Court in

Assistant Engineer, Rajasthan Development

Corporation and Anr. v. Gitam Singh

(2013) 5 SCC 136 that before exercising

its judicial discretion, the Labour Court

has to keep in view all relevant factors

including the mode and manner of

appointment, nature of employment, length

of service, the ground on which

termination has been set aside and the

1

(2013) 14 SCC 543

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delay in raising industrial dispute

before grant of relief in an industrial

dispute, must be invariably followed.”

11. In our view of the facts and circumstances of the

case on hand, the reference was made by the State

Government to the Labour Court for adjudication of the

existing industrial dispute; it has erroneously held

it to be barred by limitation. This award was further

erroneously affirmed by the High Court, which is bad

in law and therefore the same is liable to be set

aside. According to Section 10(1) of the Act, the

appropriate government ‘at any time’ may refer an

industrial dispute for adjudication, if it is of the

opinion that such an industrial dispute between the

workman & the employer exists or is apprehended.

Section 10(1) reads as follows:

“10(1)[Where the appropriate government

is of opinion that any industrial dispute

exists or is apprehended, it may at any

time], by order in writing-

(a) refer the dispute to a Board for

promoting a settlement thereof; or

(b) refer any matter appearing to be

connected with or relevant to the dispute

to a court for inquiry; or

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(c) refer the dispute or any matter

appearing to be connected with, or

relevant to, the dispute, if it relates

to any matter specified in the Second

Schedule, to a Labour Court for

adjudication; or

(d) refer the dispute or any matter

appearing to be connected with, or

relevant to, the dispute , whether it

relates to any matter specified in the

Second Schedule or the Third Schedule, to

a Tribunal for adjudication.”

Thus, it is necessary for us to carefully observe

the phrase ‘at any time’ used in this section.

Therefore, there arises an issue whether the question

of limitation is applicable to the reference of the

existing industrial dispute that would be made by the

State Government either to the Labour Court or

Industrial Tribunal for adjudication at the instance

of the appellant. This Court in Avon Services

Production Agencies (Pvt.) Ltd. v. Industrial

Tribunal, Haryana & Ors.

2

, after interpreting the

phrases ‘at any time’ rendered in Section 10(1) of the

Act, held thus:-

“7…….Section 10(1) enables the

appropriate Government to make reference

of an industrial dispute which exists or

2

(1979) 1 SCC 1

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is apprehended at any time to one of the

authorities mentioned in the section. How

and in what manner or through what

machinery the Government is apprised of

the dispute is hardly relevant.……The only

requirement for taking action under

Section 10(1) is that there must be some

material before the Government which will

enable the appropriate Government to form

an opinion that an industrial dispute

exists or is apprehended. This is an

administrative function of the Government

as the expression is understood in

contradistinction to judicial or quasi-

judicial function…”

Therefore, it is implicit from the above case

that in case of delay in raising the industrial

dispute, the appropriate government under Section

10(1) of the Act has the power, to make reference to

either Labour Court or Industrial Tribunal, if it is

of the opinion that any industrial dispute exists or

is apprehended at any time, between the workman and

the employer. Further, in Sapan Kumar Pandit v. U.P.

State Electricity Board & Ors.

3

, it is held by this

Court as under:-

“15.There are cases in which lapse of

time had caused fading or even eclipse

of the dispute. If nobody had kept the

dispute alive during the long interval

it is reasonably possible to conclude in

3

(2001)6 SCC 222

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a particular case that the dispute

ceased to exist after some time. But

when the dispute remained alive though

not galvanized by the workmen or the

Union on account of other justified

reasons it does not cause the dispute to

wane into total eclipse. In this case

when the Government have chosen to refer

the dispute for adjudication

under Section4K of the U.P. Act the High

Court should not have quashed the

reference merely on the ground of delay.

Of course, the long delay for making the

adjudication could be considered by the

adjudicating authorities while moulding

its reliefs. That is a different matter

altogether. The High Court has obviously

gone wrong in axing down the order of

reference made by the Government for

adjudication. Let the adjudicatory

process reach its legal culmination.”

(Emphasis laid by the court)

12. Therefore, in our considered view, the

observations made by this Court in the Rajasthan State

Agriculture Marketing Board case (supra) upon which

the learned Additional Advocate General for the State

of Haryana has placed reliance cannot be applied to

the fact situation of the case on hand, for the reason

that the Labour Court has erroneously rejected the

reference without judiciously considering all the

relevant factors of the case particularly the points

of dispute referred to it and answered the 2

nd

issue

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regarding the reference being barred by limitation but

not on the merits of the case. The said decision has

no application to the fact situation and also for the

reason the catena of decisions of this Court referred

to supra, wherein this Court has categorically held

that the provisions of Limitation Act under Article

137 has no application to make reference by the

appropriate government to the Labour Court/Industrial

Tribunal for adjudication of existing industrial

dispute between workmen and the employer.

13. In the case on hand, no doubt there is a delay in

raising the dispute by the appellant; the Labour Court

nevertheless has the power to mould the relief

accordingly. At the time of adjudication, if the

dispute referred to the Labour Court is not

adjudicated by it, it does not mean that the dispute

ceases to exist. The appropriate government in

exercise of its statutory power under Section 10(1)(c)

of the Act can refer the industrial dispute, between

the parties, at any time, to either the jurisdictional

Labour Court/Industrial Tribunal as interpreted by

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this Court in the Avon Services case referred to

supra. Therefore, the State Government has rightly

exercised its power under Section 10(1)(c) of the Act

and referred the points of dispute to the Labour Court

as the same are in accordance with the law laid down

by this Court in Avon Services & Sapan Kumar Pandit

cases referred to supra.

14. Further, the workman cannot be denied to seek

relief only on the ground of delay in raising the

dispute as held in the case of S.M. Nilajkar &

Ors. v. Telecom District Manager, Karnataka

4

it was

held by this Court as follows-

“17. It was submitted on behalf of the

respondent that on account of delay in

raising the dispute by the appellants the

High Court was justified in denying

relief to the appellants. We cannot

agree...... In Ratan Chandra Sammanta and

Ors. v. Union of India and Ors.

(supra)1993 AIR SCW 2214, it was held

that a casual labourer retrenched by the

employer deprives himself of remedy

available in law by delay itself, lapse

of time results in losing the remedy and

the right as well. The delay would

certainly be fatal if it has resulted in

material evidence relevant to

adjudication being lost and rendered not

available. However, we do not think that

the delay in the case at hand has been so

4

(2003)4 SCC 27

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culpable as to disentitle the appellants

for any relief.....”

(Emphasis laid by the Court)

In view of the legal principles laid down by this

Court in the above judgment, the reference of the

industrial dispute made in the case on hand by the

State Government to the Labour Court to adjudicate the

existing industrial dispute between the parties was

made within a reasonable time, considering the

circumstances in which the workman was placed,

firstly, as there was a criminal case pending against

him and secondly, the respondent had assured the

workman that he would be reinstated after his

acquittal from the criminal case. Moreover, it is

reasonable to adjudicate the industrial dispute in

spite of the delay in raising and referring the

matter, since there is no mention of any loss or

unavailability of material evidence due to the delay.

Thus, we do not consider the delay in raising the

industrial dispute and referring the same to the

Labour Court for adjudication as gravely erroneous and

it does not debar the workman from claiming rightful

relief from his employer.

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15. In the case of Ajaib Singh v. The Sirhind Co-

Operative Marketing Cum-Processing Service Society

Limited & Anr .

5

this Court has opined that relief

cannot be denied to the workman merely on the ground

of delay, stating that:-

“10. It follows, therefore, that the

provisions of Article 137 of the

Schedule to Limitation Act, 1963 are

not applicable to the proceedings under

the act and that the relief under it

cannot be denied to the workman merely

on the ground of delay. The plea of

delay if raised by the employer is

required to be proved as a matter of

fact by showing the real prejudice and

not as a merely hypothetical defence.

No reference to the labour court can be

generally questioned on the ground of

delay alone. Even in a case where the

delay in shown to be existing, the

tribunal, labour court or board,

dealing with the case can appropriately

mould the relief by declining to grant

back wages to the workman till the date

he raised the demand regarding his

illegal retrenchment/ termination or

dismissal. The Court may also in

appropriate cases direct the payment of

part of the back wages instead of full

back wages.....”

(Emphasis laid by the Court)

5

(1999)6 SCC 82

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16. Hence, we are of the opinion, having regard to the

fact and circumstances of the case that there is no

delay or latches on the part of the workman from the

date of his acquittal in the criminal case.

Thereafter, upon failure of the respondent in adhering

to the assurance given to the workman that he would be

reinstated after his acquittal from the criminal case,

the workman approached the conciliation officer and

the State Government to make a reference to the Labour

Court for adjudication of the dispute with regard to

the order of dismissal passed by the respondent.

Keeping in mind the date of acquittal of the appellant

and the date on which he approached the conciliation

officer by raising the dispute, since the respondent

had not adhered to its assurance, the State Government

had rightly referred the dispute for its adjudication.

Therefore it cannot be said that there was a delay on

the part of the appellant in raising the dispute and

getting it referred to the Labour Court by the State

Government.

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17. Further, the Labour Court on an erroneous

assumption of law framed the additional issue

regarding the limitation in raising the dispute and

its reference by the State Government to the Labour

Court. Thus, the Labour Court has ignored the legal

principles laid down by this Court in the cases

referred to supra. The award passed by the Labour

Court was accepted erroneously by both the learned

single Judge and the Division Bench of the High Court

by dismissing the Civil Writ Petition & the Letters

Patent Appeal without examining the case in its proper

perspective, keeping in view the power of the State

Government under Section 10(1)(c) and the object and

intendment of the Act. Not adjudicating the existing

industrial dispute on merits between the parties

referred to it may lead to disruption of industrial

peace and harmony, which is the foremost important

aspect in Industrial Jurisprudence as the same would

affect the public interest at large.

18. The Labour Court has failed to exercise its

statutory power coupled with duty by not going into

the merits of the case and adjudicating the points of

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dispute referred to it while answering the additional

issue No. 2 framed by it regarding limitation.

Therefore, it is a fit case for us to exercise the

jurisdiction of this Court for the reason of non

adjudication of dispute on merits between the parties

with regard to the justifiability of the order of

dismissal passed by respondent.

19. In the instant case, as could be seen from the

order No.5278/ECC dated 21.10.1994, the charge sheet

bearing No. 8648/ECC dated 08.09.1994 was sent to the

village residence of the appellant through special

messenger of the respondent. However, the charge sheet

was not served upon the appellant according to the

said order; for the reason that the appellant was

neither found in his village residence nor did anyone

know of his whereabouts. Therefore, the appellant was

informed through the newspaper ‘Dainik Tribune’ dated

04.10.1994 that he should join his duties and deposit

the amount regarding tickets within 15 days of

publication of the notice and submit his reply.

Despite the same, the appellant neither joined his

duties nor filed his reply. Since the appellant was

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being unresponsive, the respondent was of the view

that it is in public interest to not keep the

appellant in its service. Therefore, an order under

Article 311(2)(b) of the Constitution was passed,

giving effect to order of termination of services of

the appellant and disentitling him of any benefits for

the period of absence.

20. From the reason mentioned in the termination

order, it is clear that the appellant continuously

remained absent from his duties for more than five

months. Despite the publication of the notice, the

appellant neither joined his duty nor did he submit

his reply. Therefore, the respondent straight away

passed an order of termination without conducting an

enquiry as required in law against the appellant to

prove the alleged misconduct of unauthorised absence

by placing reliance upon Article 311(2)(b) of the

Constitution of India.

21. In view of the undisputed facts narrated as above,

it is clear that no enquiry was conducted by the

appellant against the workman to prove the alleged

misconduct of unauthorised absence from his duties.

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The reason for dispensing with the enquiry is not at

all forthcoming in the order of termination which

refers to the aforesaid constitutional provision. With

regard to conduct and discipline of its employees the

respondent is bound to follow the Industrial

Employment Standing Orders Act, 1946. The Labour Court

has failed to take into account these important legal

aspects of the case and has erroneously rejected the

reference by answering the additional issue no.2 on

the question of limitation which is totally irrelevant

and not adjudicating the points of dispute on merits

has rendered its award bad in law. This amounts to

failure to exercise its statutory power coupled with

duty.

22. We are of the considered view that the

disciplinary proceedings initiated by the respondent

under Rule 7 of the Haryana Civil Services (Punishment

and Appeal) Rules, 1987 are not only untenable in law

but also contrary to the legal principles laid down by

this Court. The appellant being a workman as defined

under Section 2(s) of the Act is an employee of the

respondent therefore he will be governed by the Model

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Standing Orders framed under the Industrial Employment

(Standing Orders) Act, 1946.

23. Thus, the fact remains that the disciplinary

proceedings were not initiated under the provisions of

the Industrial Employment (Standing Orders) Act, 1946.

The respondent, both before the Labour Court and the

High Court, has erroneously placed reliance on the

order of termination passed against the workman

without producing any evidence on record to justify

the alleged misconduct of unauthorised absence of the

appellant. Therefore, the points of dispute referred

to the Labour Court should have been answered

affirmatively by it and an award granting the reliefs

as prayed by the appellant should have been passed.

This aspect of the matter is not examined by the High

Court either in the Writ Petition or in the Letters

Patent Appeal. Therefore, the impugned judgment and

order of the High Court and award of the Labour Court

are bad in law and liable to be set aside.

24. Both the Labour Court and the High Court have

failed to examine the findings recorded in the order

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of termination which was the subject-matter of

reference made by the state government for

adjudication. The Labour Court and the High Court have

failed to examine another important aspect that there

is neither any tenable explanation nor any material

evidence produced by the respondent before the courts

below to justify its adoption of the Haryana Civil

Services (Punishment and Appeal) Rules for initiating

the disciplinary proceedings against the appellant-

workman. In the absence of plea and material documents

produced by the respondent, the proceedings initiated

and passing of the order of termination is bad in law.

The appellant is a workman in terms of Section 2(s) of

the Act, therefore, Model Standing Orders framed under

the provisions of Industrial Employment (Standing

Orders) Act of 1946 and the principles of natural

justice are required to be followed by the respondent

for initiating disciplinary proceedings and taking

disciplinary action against the workman. Since the

respondents have not followed the procedure laid down

therein from the beginning till the passing of the

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order of termination, the same is vitiated in law and

hence, liable to be set aside.

25. We are of the view that the Labour Court and the

High Court have erred in not deciding the industrial

dispute between the parties on the basis of admitted

facts, firstly, the enquiry not being conducted for

the alleged misconduct of unauthorised absence by the

appellant from 02.04.1993 and secondly, the enquiry

being dispensed with by invoking Article 311(b)(2) of

the Constitution of India without any valid reason.

Moreover, an order stating the impossibility of

conducting the enquiry and dispensing with the same

was not issued to the appellant. The reasoning

assigned in the order of termination is bad in law.

Therefore, the impugned judgment, order and award of

the High Court and the Labour Court are required to be

set aside as the same are contrary to the provisions

of the Act, principles of natural justice and the law

laid down by this Court in catena of cases referred to

supra.

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26. In addition to the above findings and reasons, the

case of Calcutta Dock Labour Board and Ors. v. Jaffar

Imam and Ors

6

. is aptly applicable to the fact

situation of the case on hand. In the aforesaid case,

the respondents had been detained under the Preventive

Detention Act, 1950. Thereafter, they were terminated

by the appellants without being given a reasonable

opportunity to show cause as to why they shouldn’t be

terminated. It was held by this Court as follows:-

“13.Even in regard to its employees who

may have been detained under the Act, if

after their release the appellant wanted

to take disciplinary action against them

on the ground that they were guilty of

misconduct, it was absolutely essential

that the appellant should have held a

proper enquiry. At this enquiry,

reasonable opportunity should have been

given to the respondents to show cause

and before reaching its conclusion, the

appellant was bound to lead evidence

against the respondents, give them a

reasonable chance to test the said

evidence, allow them liberty to lead

evidence in defence, and then come to a

decision of its own. Such an enquiry is

prescribed by the requirements of natural

justice and an obligation to hold such an

enquiry is also imposed on the appellant

6

AIR 1966 SC 282

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by clause 36(3) of the Scheme of 1951 and

cl. 45(6) of the Scheme of 1956. It

appears that in the present enquiry, the

respondents were not given notice of any

specific allegations made against them,

and the record clearly shows that no

evidence was led in the enquiry at all.

It is only the detention orders that were

apparently produced and it is on the

detention orders alone that the whole

proceedings rest and the impugned orders

are founded. That being so, we feel no

hesitation in holding that the Court of

Appeal was perfectly right in setting

aside the respective orders passed by the

two leaned single Judges when they

dismissed the three writ petitions filed,

by the respondents.

14.……The circumstance that the

respondents happened to be detained can

afford no justification for not complying

with the relevant statutory provision and

not following the principles of natural

justice. Any attempt to short-circuit the

procedure based on considerations of

natural justice must, we think, be

discouraged if the rule of law has to

prevail, and in dealing with the question

of the liberty and livelihood of a

citizen, considerations of expediency

which are not permitted by law can have

no relevance whatever… ”

(Emphasis laid by the Court)

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27. In the present case, before passing the order of

dismissal for the act of alleged misconduct by the

workman-appellant, the respondent should have issued a

show cause notice to the appellant, calling upon him

to show cause as to why the order of dismissal should

not be passed against him. The appellant being an

employee of the respondent was dismissed without

conducting an enquiry against him and not ensuring

compliance with the principles of natural justice. The

second show cause notice giving an opportunity to show

cause to the proposed punishment before passing the

order of termination was also not given to the

appellant-workman by the respondent which is mandatory

in law as per the decisions of this Court in the case

of Union of India and others v. Mohd. Ramzan Khan

7

and

Managing Director, ECIL, Hyderabad, v. Karunakar

8

.

28. With respect to the case on hand, the appellant

was on unauthorised absence only due to the fact that

7

(1991)1 SCC 588

8

(1993)4 SCC 727

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he had genuine constraints which prevented him from

joining back his duties. The unauthorised absence of

the appellant which lead to his termination was due to

the fact that the he was falsely implicated in the

criminal case filed at the instance of the respondent

and that he must have had reasonable apprehension of

arrest and was later in judicial custody. It is to be

noted that out of the total period of the alleged

unauthorised absence, the appellant was under judicial

custody for two months due to the criminal case filed

against him at the instance of the respondent.

29. Further, assuming for the sake of argument that

the unauthorised absence of the appellant is a fact,

the employer is empowered to grant of leave without

wages or extraordinary leave. This aspect of the case

has not been taken into consideration by the employer

at the time of passing the order of termination.

Therefore, having regard to the period of unauthorised

absence and facts and circumstances of the case, we

deem it proper to treat the unauthorised absence

period as leave without wages. In our view, the

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termination order is vitiated since it is

disproportionate to the gravity of misconduct alleged

against him. The employment of the appellant-workman

with the respondent is the source of income for

himself and his family members’ livelihood, thereby

their liberty and livelihood guaranteed under Article

21 of the Constitution of India is denied as per the

view of this Court in its Constitution Bench decision

in Olga Tellis & Ors. v. Bombay Municipal Corporation

and Ors.

9

wherein it was held as under:-

“32.....The sweep of the right to life

conferred by Article 21 is wide and far

reaching. It does not mean merely that

life cannot be extinguished or taken

away as, for example, by the imposition

and execution of the death sentence,

except according to procedure

established by law. That is but one

aspect of the right to life. An equally

important facet of that right is the

right to livelihood because, no person

can live without the means of living,

that is, the means of livelihood. If

the right to livelihood is not treated

as a part of the constitutional right

to life, the easiest way of depriving a

person his right to life would be to

deprive him of his means of livelihood

to the point of abrogation. Such

deprivation would not only denude the

life of its effective content and

meaningfulness but it would make life

9

(1985)3 SCC 545

Page 28 C.A.@ SLP© No.22487 of 2012 - 28 -

impossible to live. And yet, such

deprivation would not have to be In

accordance with the procedure

established by law, if the right to

livelihood is not regarded as a part of

the right to life. That, which alone

makes it possible to live, leave aside

what makes life liveable, must be

deemed to be an integral component of

the right to life. Deprive a person of

his right to livelihood and you shall

have deprived him of his life.....”

30. The appellant workman is a conductor in the

respondent-statutory body which is an undertaking

under the State Government of Haryana thus it is a

potential employment. Therefore, his services could

not have been dispensed with by passing an order of

termination on the alleged ground of unauthorised

absence without considering the leave at his credit

and further examining whether he is entitled for

either leave without wages or extraordinary leave.

Therefore, the order of termination passed is against

the fundamental rights guaranteed to the workman under

Articles 14, 16, 19 and 21 of the Constitution of

India and against the statutory rights conferred upon

him under the Act as well as against the law laid down

by this Court in the cases referred to supra. This

Page 29 C.A.@ SLP© No.22487 of 2012 - 29 -

important aspect of the case has not been considered

by the courts below. Therefore, the impugned award of

the Labour Court and the judgment & order of the High

Court are liable to be set aside.

31. The rejection of the reference by the Labour Court

by answering the additional issue no. 2 regarding the

delay latches and limitation without adjudicating the

points of dispute referred to it on the merits amounts

to failure to exercise its statutory power under

Section 11A of the Act. Therefore, we have to

interfere with the impugned award of the Labour Court

and the judgment & order of the High Court as it has

erroneously confirmed the award of the Labour Court

without examining the relevant provisions of the Act

and decisions of this Court referred to supra on the

relevant issue regarding the limitation.

32. Further, in the case of The Managing Director,

U.P. Warehousing Corporation and Ors., v. Vijay

Narayan Vajpayee

10

, in which the ratio decidendi has

got relevance to the fact situation of the case on

hand this Court held as under :-

10

(1980)3 SCC 459

Page 30 C.A.@ SLP© No.22487 of 2012 - 30 -

“21.The question whether breach of

statutory regulations or failures to

observe the principles of natural justice

by a statutory Corporation will entitle

an employee of such Corporation to claim

a declaration of continuance in service

and the question whether the employee is

entitled to the protection of Arts. 14

and 16 against the Corporation were

considered at great length in Sukhdev

Singh & Ors. v. Bhagatram Sardar Singh

Raghuvanshi & Anr. (1) The question as to

who may be considered to be agencies or

instrumentalities of the Government was

also considered, again at some length, by

this Court in Ramana Dayaram Shetty v.

The International Airport Authority of

India & Ors.(2)

22. I find it very hard indeed to

discover any distinction, on principle,

between a person directly under the

employment of the Government and a person

under the employment of an agency or

instrumentality of the Government or a

Corporation, set up under a statute or

incorporated but wholly owned by the

Government..... There is no good reason

why, if Government is bound to observe

the equality clauses of the constitution

in the matter of employment and in its

dealings with the employees, the

Corporations set up or owned by the

Government should not be equally bound

and why, instead, such Corporations could

become citadels of patronage and

arbitrary action. In a country like ours

which teems with population, where the

State, its agencies, its

instrumentalities and its Corporations

Page 31 C.A.@ SLP© No.22487 of 2012 - 31 -

are the biggest employers and where

millions seek employment and security, to

confirm the applicability of the equality

clauses of the constitution, in relation

to matters of employment, strictly to

direct employment under the Government is

perhaps to mock at the Constitution and

the people. Some element of public

employment is all that is necessary to

take the employee beyond the reach of the

rule which denies him access to a Court

so enforce a contract of employment and

denies him the protection of Arts. 14 and

16 of the Constitution. After all

employment in the public sector has grown

to vast dimensions and employees in the

public sector often discharge as onerous

duties as civil servants and participate

in activities vital to our country's

economy. In growing realization of the

importance of employment in the public

sector, Parliament and the Legislatures

of the States have declared persons in

the service of local authorities,

Government companies and statutory

corporations as public servants and,

extended to them by express enactment the

protection usually extended to civil

servants from suits and prosecution. It

is, therefore, but right that the

independence and integrity of those

employed in the public sector should be

secured as much as the independence and

integrity of civil servants.”

(Emphasis given by the Court)

The above cardinal legal principles laid down by this

Court with all fours are applicable to the case on

hand for the reasons that the respondent is a

Page 32 C.A.@ SLP© No.22487 of 2012 - 32 -

statutory body which is under the control of the State

Government and it falls within the definition of

Article 12 of the Constitution of India and therefore

Part III of the Constitution is applicable to its

employees.

33. Once the reference is made by the State Government

in exercise of its statutory power to the Labour Court

for adjudication of the existing industrial dispute on

the points of dispute, it is the mandatory statutory

duty of the Labour Court under Section 11A of the Act

to adjudicate the dispute on merits on the basis of

evidence produced on record. Section 11A was inserted

to the Act by the Parliament by the Amendment Act 45

of 1971 (w.e.f. 15.12.1972) with the avowed object to

examine the important aspect of proportionality of

punishment imposed upon a workman if, the acts of

misconduct alleged against workman are proved. The

“Doctrine of Proportionality” has been elaborately

discussed by this Court by interpreting the above

provision in the case of Workmen of Messrs Firestone

Page 33 C.A.@ SLP© No.22487 of 2012 - 33 -

Tyre & Rubber Company of India v. Management & Ors.

11

as under:-

“33. The question is whether section 11A

has made any changes in the legal

position mentioned above and if so, to

what extent? The Statement of objects

and reasons cannot be taken into account

for the purpose of interpreting the

plain words of the section. But it gives

an indication as to what the Legislature

wanted to achieve. At the time of

introducing section 11A in the Act, the

legislature must have been aware of the

several principles laid down in the

various decisions of this Court referred

to above. The object is stated to be

that the, Tribunal should have power in

cases, where necessary, to set aside the

order of discharge or dismissal and

direct reinstatement or award any lesser

punishment. The Statement of objects and

reasons has specifically referred to the

limitation on the powers of an

Industrial Tribunal, as laid, down by

this Court in Indian Iron & Steel Co.

Ltd. V. Their Workmen (AIR 1958 SC130 at

P.138).

34. This will be a convenient stage to

consider the contents of section 11A. To

invoke section 11A, it is necessary that

an industrial dispute of the type

mentioned therein should have been

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

11

1973(1) SCC 813

Page 34 C.A.@ SLP© No.22487 of 2012 - 34 -

comes to such a conclusion, the 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.”

Thus, we believe that the Labour Court and the High

Court have failed in not adjudicating the dispute on

merits and also in not discharging their statutory

duty in exercise of their power vested under Section

11A of the Act and therefore, the impugned judgment,

order and award are contrary to the provisions of the

Act and law laid down by this Court in the above

case.

34. Further, the object of insertion of Section 11A

of the Act is traceable to the International Labour

Organisation resolution as it is stated in the case

of Workmen of Messrs Firestone Tyre & Rubber case

(supra) that:-

“3.The International Labour Organisation,

in its recommendation (No. 119)

concerning termination of employment at

the initiative of the employer adopted in

June 1963, has recommended that a worker

Page 35 C.A.@ SLP© No.22487 of 2012 - 35 -

aggrieved by the termination of his

employment should be entitled, to appeal

against the termination among others, to

a neutral body such as an arbitrator, a

court, an arbitration committee or a

similar body and that the neutral body

concerned should be empowered to examine

the reasons given in the termination of

employment and the other circumstances

relating to the case, and to render a

decision on the justification of the

termination. The International Labour

Organisation has further recommended that

the neutral body should be empowered (if

it finds that the termination of

employment was unjustified) to order that

the worker concerned, 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....”

Therefore, we are of the firm view that the Labour

Court and the High Court have failed to adjudicate the

Page 36 C.A.@ SLP© No.22487 of 2012 - 36 -

dispute referred to it on the merits. This has lead to

gross miscarriage of justice and therefore, we have to

exercise our jurisdiction under Article 136 of the

Constitution of India and interfere with the impugned

judgment, order and award of the High Court and the

Labour Court to do justice to the workman who has been

relentlessly litigating for his legitimate rights.

35. Having regard to the facts and circumstances of

this case, we are of the view that it is important to

discuss the Rule of the ‘Doctrine of Proportionality’

in ensuring preservation of the rights of the workman.

The principle of ‘Doctrine of Proportionality’ is a

well recognised one to ensure that the action of the

employer against employees/workmen does not impinge

their fundamental and statutory rights. The above said

important doctrine has to be followed by the

employer/employers at the time of taking disciplinary

action against their employees/workmen to satisfy the

principles of natural justice and safeguard the rights

of employees/workmen.

36. The above said “Doctrine of Proportionality”

should be applied to the fact situation as we are of

Page 37 C.A.@ SLP© No.22487 of 2012 - 37 -

the firm view that the order of termination, even if

we accept the same is justified, it is

disproportionate to the gravity of misconduct. In this

regard, it would be appropriate for us to refer to

certain paragraphs from the decision of this Court in

the case of Om Kumar and Ors. v. Union of India

12

,

wherein it was held as under:-

“66. It is clear from the above

discussion that in India where

administrative action is challenged

under Article 14 as being

discriminatory, equals are treated

unequally or unequals are treated

equally, the question is for the

Constitutional Courts as primary

reviewing Courts to consider

correctness of the level of

discrimination applied and whether it

is excessive and whether it has a nexus

with the objective intended to be

achieved by the administrator. Hence

the Court deals with the merits of the

balancing action of the administrator

and is, in essence, applying

'proportionality' and is a primary

reviewing authority.

67. But where, an administrative action

is challenged as 'arbitrary' under

Article 14 on the basis of Royappa (as

in cases where punishments in

disciplinary cases are challenged), the

12

(2001)2 SCC 386

Page 38 C.A.@ SLP© No.22487 of 2012 - 38 -

question will be whether the

administrative order is 'rational' or

'reasonable' and the test then is the

Wednesbury test. The Courts would then

be confined only to a secondary role

and will only have to see whether the

administrator has done well in his

primary role, whether he has acted

illegally or has omitted relevant

factors from consideration or has taken

irrelevant factors into consideration

or whether his view is one which no

reasonable person could have taken. If

his action does not satisfy these

rules, it is to be treated as

arbitrary. [In G.B. Mahajan vs.

Jalgaon Municipal Council] AIR 1991 SC

1153 )]. Venkatachaliah, J. (as he then

was) pointed out that 'reasonableness'

of the administrator under

Article 14 in the context of

administrative law has to be judged

from the stand point of Wednesbury

rules. In Tata's Cellular vs. Union of

India AIR 1996 SC 11 , Indian Express

Newspapers vs. Union of India

(: [1986]159ITR856(SC) ), Supreme Court

Employees' Welfare Association vs.

Union of India and Anr. (1989)II LLJ

506 SC ) and UP. Financial Corporation

v. GEM CAP (India) Pvt. Ltd. ( [1993]2

SCR 149 ), while Judging whether the

administrative action is 'arbitrary'

under Article 14(i.e. otherwise then

being discriminatory), this Court has

confined itself to a Wednesbury review

always.

68. Thus, when administrative action is

attacked as discriminatory under

Article 14, the principle of primary

Page 39 C.A.@ SLP© No.22487 of 2012 - 39 -

review is for the Courts by applying

proportionality. However, where

administrative action is questioned as

'arbitrary' under Article 14, the

principle of secondary review based on

Wednesbury principles applies.”

37. Additionally, the proportionality and punishment

in service law has been discussed by this Court in

the Om Kumar case (supra) as follows:-

“69. The principles explained in the

last preceding paragraph in respect of

Article 14 are now to be applied here

where the question of 'arbitrariness'

of the order of punishment is

questioned under Article 14.

70. In this context, we shall only

refer to these cases. In Ranjit Thakur

vs. Union of India (1988CriLJ158),

this Court referred to

'proportionality' in the quantum of

punishment but the Court observed that

the punishment was 'shockingly'

disproportionate to the misconduct

proved. In B.C. Chaturvedi v. Union of

India: (1996)ILLJ1231SC), this Court

stated that the Court will not

interfere unless the punishment awards

was one which shocked the conscience

of the Court. Even then, the court

would remit the matter back to the

authority and would not normally

substitute one punishment for the

other. However, in rare situations,

the Court could award an alternative

penalty. It was also so stated in

Ganayutham.”

Page 40 C.A.@ SLP© No.22487 of 2012 - 40 -

38. With respect to the proportionality of the

punishment of ‘censure’, it was further observed by

this Court in the Om Kumar case (supra) that:-

“75. After giving our anxious

consideration to the above submissions

and the facts and the legal principles

above referred to, we have finally

come to the conclusion that it will be

difficult for us to say that among the

permission minor punishments, the

choice of the punishment of 'censure'

was violative of the Wednesbury rules.

No relevant fact was omitted nor

irrelevant fact was taken into

account. There is no illegality. Nor

could we say that it was shockingly

disproportionate. The administrator

had considered the report of Justice

Chinnappa Reddy Commission, the

finding of the Inquiry Officer, the

opinion of the UPSC which was given

twice and the views of the Committee

of Secretaries. Some were against the

officer and some were in his favour.

The administrator fell that there were

two mitigating factors (i) the

complicated stage at which the officer

was sent to DDA and (ii) the absence

of malafides. In the final analysis,

we are not inclined to refer the

matter to the Vigilance Commissioner

for upward revision of punishment.”

39. Now, it is necessary for this Court to examine

another aspect of the case on hand, whether the

Page 41 C.A.@ SLP© No.22487 of 2012 - 41 -

appellant is entitled for reinstatement, back wages

and the other consequential benefits. In the case of

Deepali Gundu Surwase V. Kranti Junior Adhyapak

Mahavidyalaya (D. Ed) and Ors.

13

, this Court opined as

under:-

“22. The very idea of restoring an

employee to the position which he held

before dismissal or removal or termination

of service implies that the employee will

be put in the same position in which he

would have been but for the illegal action

taken by the employer. The injury suffered

by a person, who is dismissed or removed

or is otherwise terminated from service

cannot easily be measured in terms of

money. With the passing of an order which

has the effect of severing the employer

employee relationship, the latter's source

of income gets dried up. Not only the

concerned employee, but his entire family

suffers grave adversities. They are

deprived of the source of sustenance. The

children are deprived of nutritious food

and all opportunities of education and

advancement in life. At times, the family

has to borrow from the relatives and other

acquaintance to avoid starvation. These

sufferings continue till the competent

adjudicatory forum decides on the legality

of the action taken by the employer. The

reinstatement of such an employee, which

is preceded by a finding of the competent

judicial/quasi judicial body or Court that

the action taken by the employer is ultra

vires the relevant statutory provisions or

13

(2013) 10 SCC 324

Page 42 C.A.@ SLP© No.22487 of 2012 - 42 -

the principles of natural justice,

entitles the employee to claim full back

wages. If the employer wants to deny back

wages to the employee or contest his

entitlement to get consequential benefits,

then it is for him/her to specifically

plead and prove that during the

intervening period the employee was

gainfully employed and was getting the

same emoluments. Denial of back wages to

an employee, who has suffered due to an

illegal act of the employer would amount

to indirectly punishing the concerned

employee and rewarding the employer by

relieving him of the obligation to pay

back wages including the emoluments.

23. A somewhat similar issue was

considered by a three Judge Bench in

Hindustan Tin Works Pvt. Ltd. v. Employees

of Hindustan Tin Works Pvt. Ltd.

(supra)......The relief of reinstatement

with continuity of service can be granted

where termination of service is found to

be invalid. It would mean that the

employer has taken away illegally the

right to work of the workman contrary to

the relevant law or in breach of contract

and simultaneously deprived the workman of

his earnings. If thus the employer is

found to be in the wrong as a result of

which the workman is directed to be

reinstated, the employer could not shirk

his responsibility of paying the wages

which the workman has been deprived of by

the illegal or invalid action of the

employer. Speaking realistically, where

termination of service is questioned as

invalid or illegal and the workman has to

go through the gamut of litigation, his

capacity to sustain himself throughout the

Page 43 C.A.@ SLP© No.22487 of 2012 - 43 -

protracted litigation is itself such an

awesome factor that he may not survive to

see the day when relief is granted. More

so in our system where the law's

proverbial delay has become stupefying. If

after such a protracted time and energy

consuming litigation during which period

the workman just sustains himself,

ultimately he is to be told that though he

will be reinstated, he will be denied the

back wages which would be due to him, the

workman would be subjected to a sort of

penalty for no fault of his and it is

wholly undeserved. Ordinarily, therefore,

a workman whose service has been illegally

terminated would be entitled to full back

wages except to the extent he was

gainfully employed during the enforced

idleness. That is the normal rule. Any

other view would be a premium on the

unwarranted litigative activity of the

employer. If the employer terminates the

service illegally and the termination is

motivated as in this case viz. to resist

the workmen's demand for revision of

wages, the termination may well amount to

unfair labour practice. In such

circumstances reinstatement being the

normal rule, it should be followed with

full back wages.....

In the very nature of things there cannot

be a strait-jacket formula for awarding

relief of back wages. All relevant

considerations will enter the verdict.

More or less, it would be a motion

addressed to the discretion of the

Tribunal. Full back wages would be the

normal rule and the party objecting to it

must establish the circumstances

necessitating departure. At that stage the

Tribunal will exercise its discretion

keeping in view all the relevant

Page 44 C.A.@ SLP© No.22487 of 2012 - 44 -

circumstances. But the discretion must be

exercised in a judicial and judicious

manner. The reason for exercising

discretion must be cogent and convincing

and must appear on the face of the record.

When it is said that something is to be

done within the discretion of the

authority, that something is to be done

according to the Rules of reason and

justice, according to law and not humour.

It is not to be arbitrary, vague and

fanciful but legal and regular.....

24. Another three Judge Bench considered

the same issue in Surendra Kumar Verma v.

Central Government Industrial Tribunal-

cum-Labour Court, New Delhi (supra) and

observed: Plain common sense dictates that

the removal of an order terminating the

services of workmen must ordinarily lead

to the reinstatement of the services of

the workmen. It is as if the order has

never been, and so it must ordinarily lead

to back wages too... ...In such and other

exceptional cases the court may mould the

relief, but, ordinarily the relief to be

awarded must be reinstatement with full

back wages. That relief must be awarded

where no special impediment in the way of

awarding the relief is clearly shown.

True, occasional hardship may be caused to

an employer but we must remember that,

more often than not, comparatively far

greater hardship is certain to be caused

to the workmen if the relief is denied

than to the employer if the relief is

granted.”

(Emphasis supplied by this Court)

Page 45 C.A.@ SLP© No.22487 of 2012 - 45 -

40. The above critical analysis of law laid down by

this Court in the case referred to supra, is very much

relevant to the case on hand, which is neither

discussed nor considered and examined by the courts

below while answering the reference made by the State

Government and passing the award, judgments & orders

in a cavalier manner. Thus, the lives of the appellant

and his family members have been hampered. Further, on

facts, we have to hold that the order of termination

passed is highly disproportionate to the gravity of

misconduct and therefore shocks the conscience of this

Court. Hence, we hold that the appellant is entitled

for the reliefs as prayed by him in this appeal.

41. In view of the foregoing reasons, the award of the

Labour Court and the judgment & order of the High

Court are highly erroneous in law. Therefore, the same

are required to be interfered with by this Court in

exercise of the appellate jurisdiction as there is

miscarriage of justice for the workman in this case.

42. It is an undisputed fact that the dispute was

raised by the workman after he was acquitted in the

Page 46 C.A.@ SLP© No.22487 of 2012 - 46 -

criminal case which was initiated at the instance of

the respondent. Raising the industrial dispute

belatedly and getting the same referred from the State

Government to the Labour Court is for justifiable

reason and the same is supported by law laid down by

this Court in Calcutta Dock Labour Board (supra). Even

assuming for the sake of the argument that there was a

certain delay and latches on the part of the workman

in raising the industrial dispute and getting the same

referenced for adjudication, the Labour Court is

statutorily duty bound to answer the points of dispute

referred to it by adjudicating the same on merits of

the case and it ought to have moulded the relief

appropriately in favour of the workman. That has not

been done at all by the Labour Court. Both the learned

single Judge as well as the Division Bench of the High

Court in its Civil Writ Petition and the Letters

Patent Appeal have failed to consider this important

aspect of the matter. Therefore, we are of the view

that the order of termination passed by the

respondent, the award passed by the Labour Court and

the judgment & order of the High Court are liable to

Page 47 C.A.@ SLP© No.22487 of 2012 - 47 -

be set aside. When we arrive at the aforesaid

conclusion, the next aspect is whether the workman is

entitled for reinstatement, back wages and

consequential benefits. We are of the view that the

workman must be reinstated. However, due to delay in

raising the industrial dispute, and getting it

referred to the Labour Court from the State

Government, the workman will be entitled in law for

back wages and other consequential benefits from the

date of raising the industrial dispute i.e. from

02.03.2005 till reinstatement with all consequential

benefits.

43. For the foregoing reasons, we grant the following

reliefs to the workman by allowing this appeal:

(i) The award of the Labour Court, judgment and

orders passed by the High Court are set aside;

(ii)The respondent is directed to reinstate the

appellant-workman with back wages from the

date of raising the industrial dispute i.e.

02.03.2005 till the date of his reinstatement

with all consequential benefits such as

continuity of service, wage revisions and

other statutory monetary benefits as the

Page 48 C.A.@ SLP© No.22487 of 2012 - 48 -

respondent has been litigating the dispute

without tenable and acceptable reason; and

(iii)Since the appellant-workman was compelled to

take on this long battle of litigation to get

his rights enforced from the Court of law, the

respondent is directed to implement this order

within six weeks from the date of receipt of

the copy of this Judgment.

The appeal is allowed. No costs.

……………………………………………………………………… J.

[SUDHANSU JYOTI MUKHOPADHAYA]

……………………………………………………………………… J.

[V. GOPALA GOWDA]

New Delhi,

September 3, 2014