0  03 Oct, 1960
Listen in 00:43 mins | Read in mins
EN
HI

The Delhi Cloth and General Mills Ltd. Vs. Kushal Bhan

  Supreme Court Of India
Link copied!

Case Background

Bench

Applied Acts & Sections

No Acts & Articles mentioned in this case

Hello! How can I help you? 😊
Disclaimer: We do not store your data.
Document Text Version

-

...

3 S.C.R. SUPREME COURT REPORTS 227

cancel.

the decree in regard to the properties covered

x960

by the certificate. Section 10 provides, inter alia, "

11

d

h h

. h

11 h

C JI h b , e appagou a

t at w en it s a appear to t e o ector t at y ShankargoudaPatil

virtue of, or in execution of, a decree or order of any v.

court any watan or any part thereof, or any of the Basangouda ·

profits thereof, recorded as such in the revenue records Shiddangouda Patil

or registered under this Act, and assigned under s. 23 G . -

as remuneration of an officiator has or have, after the aJendragadkar f .

. date of this Act coming into force, passed or may pass

without the sanction of the State Government into

the ownership or beneficial possession of any person

other than the officiator for the time being, the court

shall, on receipt

of a certificate under the hand and

seal of the Collector, stating the particulars mentioned

in the section, cancel the decree or order complained

of so far as it concerns the said watan or any part

thereof. The only objection against the validity of

the certificate is that it has been addressed to a wrong

court. Since

we have overruled that objection it

follows that that portion of the decree which concerns

the watan properties must be cancelled.

In the result the petition is allowed and the decree

in question in so far as

it purports to operate on or

include

any right to the office of

Patilki and watan

lands attached thereto at Kirtgeri as enumerated in

the certificate is cancelled. Under the circumstances

of this case there will be no order as to costs.

Petition allowed.

THE DELHI CLOTH AND GENERAL

MILLS LTD.

v.

KUSHAL BHAN

(P. B. GAJENDRAGADKAR and K. N. WANCHOO, JJ.)

Industrial, Dispute-Dismissal of employees by enquiry com­

mittee pending trial in Criminal Court-Subsequent acquittal of the

employee-Jurisdiction of Tribunal, to refuse approval of dismissal­

Industrial Disputes Act, r947 (XIV of r947), s. 33(2), proviso.

The appellant company served a charge-sheet on the res­

pondent who was one

of its employees alleging that he had stolen

the cycle

of the company's Head

Clerk, A criminal case relating

March xo.

228 SUPREME COURT REPORTS [1960]

r960 to the theft was pending against him then. He was asked to

sho\v cause \vhy he should not be dismissed for misconduct, and

Delhi Cloth & as his explanation was unsatisfactory a certain date \Vas fixed for

General Mills Led. enquiry. The respondent appeared before the enquiry committee

v. but refused to participate in the enquiry by answering questions

Kushal Bhan put to him as he did not want to produce any defence till the

matter was decided by the Court. The company, however, after

completing the enquiry directed the dismissal of the respondent

on the ground that misconduct had been proved against him.

The company thereafter made an application under s. 33(2) of the

Industrial Disputes Act to the Industrial Tribunal for approval

of the disciplinary action taken against the respondent. In the

meantime the respondent was acquitted by the Criminal Court.

The judgment of the Criminal Court was produced before the

tribunal which refused to approve the order of dismissal of the

respondent. On appeal by the company by special leave :

Held, that the principles of natural justice do not require

that an employer must wait for the decision of the Criminal Trial

Court before taking disciplinary action against an employee.

Shri Bi1nal Kanta Mukherjee v. Messrs. N ewsrrian' s Printing

Works, (r956) L.A.C. r88, approved.

If a case is of a grave nature involving questions of fact and

law which are not simple it would be advisable for the employer

to await the decision of the Criminal Trial Court but in a simple

case like

the present the tribunal erred in not granting approval

under s. 33(2) of the Industrial Disputes Act. CIVIL APPELLATE JURISDICTION: Civil Appeal

No. 88

of 1959.

Appeal by special leave from the judgment and

order dated May 6, 1958, of the Industrial Tribunal,

Delhi,

in

0. P. No. 54 of 1958.

M. C. Setalvad, Attorney-General for India, S. N.

Andley, J. B. Dadachanji, Rameshwar Nath and

P. L. Vohra, for the appellant.

Janardan Sharma, for the respondent.

1960. March 10. The Judgment of the Court was

delivered

by Wanchoo J. W ANCHOO, J.-This is an appeal by special leave in

an industrial matter. The appellant is a company

carrying on the manufacture of textiles. The respon­

dent Kushal Bhan was in the employ of the company

as a peon.

It appears tha.t the cycle of Ram

Chandra,

Head Clerk of the Folding Department was stolen on

August 24, 1957. The matter was reported to the

police. Sometime later, the cycle was recovered from

the railway station cycle stand at the instance of the

respondent who took the police there and picked out

-

,.

-

·-I

-

3 S.C.R. SUPREME COURT REPORTS 229

the stolen cycle from among 50/60 cycles standing z960

there. This matter was apparently brought to the D lh' cz h

notice of the company in October 1957 and thereupon Gene:a/.u;~;s 'i.'ta.

a charge-sheet was served on the respondent to the v.

effect that he had stolen the cycle of Ram Chandra, Kushal Bhan

Head Clerk, that it had been recovered at his instance

and that a criminal case was pending against him with Wanchoo J.

the police. He was asked to show cause why he

should

not be dismissed for misconduct. The respon-

dent submitted his explanation on October 13, 1957.

As his explanation was unsatisfactory, November 14,

1957, was fixed for enquiry.

The respondent appeared

before

the enquiry committee but stated that as the

case was pending against him, he did not want to

produce any defence till the matter was decided by

the court. He further stated that he did not want to

take part in the enquiry and was not prepared to give

any answers to questions put to him. When questions

were

put to him at the enquiry he refused to answer

them and eventually he left the place. The company,

however, completed

the enquiry and directed the

dismissal of the respondent on the ground that the

misconduct had been proved

against him. Thereafter

·an application was made under s. 33(2) of the Indus­

trial Disputes Act, No. 14 of 1947, by the company to

t.he tribunal for approval of the action taken against

the respondent. The matter came before the tribunal

on May 6, 1958. In the meantime, the respondent

had been acquitted by the criminal court on April 8,

1958, on

the ground that the case against him was

not free from doubt. The copy of the

judgme_nt of

the criminal court was produced before the tribunal

and it refused to approve the order of dismissal. The

company thereupon applied for special leave to this

Court resulting in the present appeal.

The main contention on behalf of the appellant­

company is that the company was not bound to wait

for

the result of the trial in the criminal court and

that it could, and did, hold a fair enquiry against the

respondent, and if the respondent refused to

partici·

pate in it and left the place where the enquiry was

being held,

the company could do no more

th~n to

complete it and come to such conclusion as was

230 SUPREME COURT REPORTS [1960]

z960 possible on the evidence before it. Learned counsel

-. - for the respondent, on the other hand, urges that

Dell" Cfo;h 'f: d principles of natural justice require that an employer

General Mil' ' • should wait at least for the decision of the criminal

v.

Ku,hal Bhan trial court before taking disciplinary action, and that

inasmuch as the employer did not do so in this case

Wanchoo J. the employee was justified in not taking part in the

disciplinary proceedings which dealt with the very

same matter which was the subject-matter of trial in

the criminal court.

It is true that very often employers stay enquiries

pending

the decision of the criminal trial courts and

that is fair; but we cannot say that principles of

natural justice require that an employer must wait

for the decision at least of the criminal trial court

before taking action against an employee. In Shri

Bimal Kanta Mukherjee

v. Messrs. Newsman's

Print­

ing Works('), this was the view taken by the Labour

Appellate Tribunal. We may, however, add that if

the case is of a grave nature or involves questions of

fact or law, which are not simple, it would be advis­

able for the employer to await the decision of the

trial court, so that the defence of the employee in the

criminal case may not be prejudiced. The present,

however, is a case

of a very simple nature and so the

employer cannot be blamed for the course adopted by

him. In the circumstances, there was in our opinion

no failure of natural justice. in this case and if the

respondent did not choose to take part in the enquiry

no fault can be found with that enquiry. We are of

opinion that this was a case in which the tribunal

patently erred in not granting approval under s. 33(2)

of the Industrial Disputes Act. Besides it is apparent

that in making the order under appeal, the tribunal

has completely lost sight of the limits of its

jurisdic­

tion under s. 33(2). We therefore allow the appeal

and setting aside the order of the tribunal grant

approval to the order of the appellant dismissing the

respondent. In the circumstances we pass no order

as to costs.

Appeal allowed.

\1) \1956) L.A.C. 188.

Reference cases

Description

Case Analysis: Delhi Cloth and General Mills Ltd. v. Kushal Bhan (1960)

The landmark Supreme Court judgment in The Delhi Cloth and General Mills Ltd. v. Kushal Bhan remains a pivotal ruling in Indian industrial and labour law. This case, prominently featured on CaseOn, provides crucial clarity on the contentious issue of Employee Dismissal During Criminal Proceedings and the precise jurisdiction of industrial tribunals under the Industrial Disputes Act Section 33(2). It addresses whether an employer is obligated to await the verdict of a criminal court before taking disciplinary action against an employee for the same alleged misconduct. The court’s decision established a fundamental principle: domestic enquiries and criminal trials can proceed in parallel, as they operate on different standards of proof and serve distinct purposes.

Factual Background of the Case

The case revolved around Kushal Bhan, a peon employed by the Delhi Cloth and General Mills Ltd. (the appellant). In August 1957, a bicycle belonging to the company's Head Clerk was stolen. Following a police investigation, the bicycle was recovered from a railway station cycle stand at the instance of Kushal Bhan himself.

Consequently, the company served him a charge-sheet for the theft, and a criminal case was also initiated against him. The company scheduled a domestic enquiry. When Kushal Bhan appeared before the enquiry committee, he refused to participate, stating that he would not offer any defense or answer questions until the criminal court had decided his case. Despite his non-cooperation, the company proceeded with the enquiry, found him guilty of misconduct, and decided to dismiss him from service.

As required by the Industrial Disputes Act, 1947, the company filed an application under Section 33(2) before the Industrial Tribunal for approval of its decision. In the interim, the criminal court acquitted Kushal Bhan, giving him the benefit of the doubt. Presenting this acquittal judgment, the respondent argued against the dismissal. The Tribunal, influenced by the acquittal, refused to grant approval for the dismissal. The company then appealed this decision to the Supreme Court.

Navigating the nuances between departmental inquiries and criminal trials can be complex. Professionals can leverage tools like CaseOn.in's 2-minute audio briefs to quickly grasp the core principles established in rulings like this, ensuring they are well-prepared and informed.

Legal Analysis: The IRAC Method

Issue

The central legal questions before the Supreme Court were:

  1. Are principles of natural justice violated if an employer proceeds with a domestic enquiry and dismisses an employee while a criminal trial on the same set of facts is pending?
  2. Does an employee's subsequent acquittal in a criminal trial automatically invalidate the findings of a fair domestic enquiry and compel the Industrial Tribunal to refuse approval for dismissal under Section 33(2) of the Industrial Disputes Act?

Rule

The court's decision was based on the interpretation of Section 33(2) of the Industrial Disputes Act, 1947, and the overarching principles of natural justice. Section 33(2) requires an employer to seek approval from a tribunal or relevant authority for any punitive action like dismissal taken against an employee for misconduct when an industrial dispute is pending. The tribunal's role is to ascertain if a prima facie case for dismissal exists and if the employer has conducted a fair and proper domestic enquiry.

Analysis

The Supreme Court conducted a meticulous analysis, distinguishing between the nature of a domestic enquiry and a criminal trial. It noted that the two proceedings are fundamentally different:

  • Standard of Proof: A criminal trial demands a high standard of proof—"beyond a reasonable doubt." In contrast, a domestic enquiry only requires proof based on a "preponderance of probabilities." Therefore, an acquittal in a criminal case (often due to the benefit of the doubt) does not mean the employee is innocent of the misconduct from an employer's perspective.
  • Principles of Natural Justice: The Court held that natural justice does not mandate an employer to halt disciplinary proceedings pending a criminal trial. While it is often considered fair practice to do so, it is not a legal obligation. The Court acknowledged that in cases involving complex questions of fact and law, it would be “advisable” for an employer to wait, so as not to prejudice the employee's defense in the criminal case. However, in a simple case like theft, the employer was justified in proceeding.
  • Employee's Conduct: The respondent, Kushal Bhan, had voluntarily chosen not to participate in the domestic enquiry. The employer provided him with an opportunity to be heard, which he declined. The Court concluded that if an employee refuses to take part, they cannot later claim the enquiry was unfair.
  • Tribunal's Jurisdiction: The Supreme Court found that the Industrial Tribunal had “completely lost sight of the limits of its jurisdiction.” Its duty under Section 33(2) was not to act as an appellate court over the domestic enquiry or to substitute the criminal court's findings for the enquiry's conclusion. The Tribunal's role was limited to ensuring that a fair enquiry was held and a prima facie case of misconduct was established. The acquittal in the criminal case was not a sufficient ground to deny approval.

Conclusion

The Supreme Court allowed the appeal, setting aside the Industrial Tribunal's order. It granted approval to the company for the dismissal of Kushal Bhan. The judgment firmly established that an employer can proceed with a domestic enquiry irrespective of a pending criminal case on the same charges. An acquittal in the criminal trial does not automatically render the dismissal invalid, especially if the dismissal was based on the findings of a fair and proper domestic enquiry.

Final Summary of the Judgment

In essence, the Supreme Court in *The Delhi Cloth and General Mills Ltd. v. Kushal Bhan* clarified that domestic and criminal proceedings are separate and distinct. An employer is not legally bound to wait for a criminal court's verdict before taking disciplinary action. So long as the domestic enquiry is conducted fairly and establishes misconduct on a preponderance of probability, the employer's action is valid. A subsequent acquittal, particularly one based on the benefit of the doubt, does not vitiate the findings of the domestic enquiry or restrict the employer's right to dismiss the employee.

Why This Judgment is an Important Read

This case is a cornerstone of Indian labour law for several reasons:

  • For Lawyers and HR Professionals: It provides a clear legal framework for handling disciplinary matters when criminal proceedings are also involved, empowering employers to maintain workplace discipline without undue delay.
  • For Employees and Unions: It underscores the importance of participating in domestic enquiries. Refusing to engage can weaken an employee's position significantly.
  • For Law Students: It serves as a classic example of the differing standards of proof in civil/departmental and criminal jurisprudence and clarifies the limited and specific scope of a tribunal's jurisdiction under Section 33(2) of the Industrial Disputes Act.

Disclaimer: This article is for informational and educational purposes only and does not constitute legal advice. For specific legal issues, please consult with a qualified legal professional.

Legal Notes

Add a Note....