1979 (11) TMI 267 - SC - Indian Laws

Workmen reinstated with back wages after court clarifies arbitrator's role.

GUJARAT STEEL TUBES LTD. AND OTHERS Versus GUJARAT STEEL TUBES MAZDOOR SABHA AND OTHERS

GUJARAT STEEL TUBES LTD. AND OTHERS Versus GUJARAT STEEL TUBES MAZDOOR SABHA AND OTHERS - 1980 AIR 1896, 1980 (2) SCR 146, 1980 (2) SCC 593 Issues Involved:1. Whether the discharge of workmen amounted to dismissal due to alleged misconduct.2. Whether an arbitrator falls within the ambit of the term 'tribunal' under Section 11-A of the Industrial Disputes Act.3. Whether the High Court acted within its jurisdiction under Article 227 of the Constitution while interfering with the arbitrator's finding.Issue-wise Detailed Analysis:1. Whether the discharge of workmen amounted to dismissal due to alleged misconduct:The court examined the distinction between discharge simpliciter and dismissal as punishment. The Model Standing Orders (M.S.O.s) under the Industrial Employment (Standing Orders) Act, 1946, allow an employer to terminate the services of a workman either by discharge under M.S.O. 23 or by dismissal under M.S.O. 25, with the latter requiring an inquiry. The court held that if the termination was intended as punishment, it would be considered dismissal. However, if the discharge was motivated by reasons other than punishment, it would remain a discharge simpliciter. The court concluded that the management's action of recording reasons for discharge, which included allegations of misconduct, did not automatically convert the discharge into dismissal unless there was an intention to punish.2. Whether an arbitrator falls within the ambit of the term 'tribunal' under Section 11-A of the Industrial Disputes Act:The court analyzed the language of Section 11-A and the definition of 'tribunal' under Section 2(r) of the Industrial Disputes Act. It was argued that the term 'tribunal' should include arbitrators, especially given the legislative intent to provide arbitrators with similar powers as tribunals. However, the court found that the language of Section 11-A was unambiguous and did not include arbitrators within the definition of 'tribunal.' The court emphasized that the omission of the term 'arbitrator' in Section 11-A was deliberate, and thus, arbitrators did not have the same powers as tribunals under this section.3. Whether the High Court acted within its jurisdiction under Article 227 of the Constitution while interfering with the arbitrator's finding:The court reiterated the limited scope of jurisdiction under Article 227, which is confined to ensuring that the arbitrator functions within the scope of legal authority. The High Court's interference with the arbitrator's finding on the appropriateness of the punishment was deemed to exceed its jurisdiction. The court held that the High Court cannot act as an appellate body over the arbitrator's decision unless there is a clear case of jurisdictional overreach or perversity in the arbitrator's findings.Final Relief:The court directed the reinstatement of 139 permanent workmen and 74 long-term casual workmen, with specified timelines for their re-employment. The court also ordered the payment of 50% back wages to the reinstated permanent workmen and 75% back wages to the 100 workmen who were not reinstated but deemed to be in service until August 3, 1979. The remaining 57 short-term casual workmen were awarded a token compensation of Rs. 1,000 each in lieu of reinstatement.Dissenting Opinion:Justice Koshal dissented on three key findings:1. He argued that the discharge of workmen did not amount to dismissal as the intention to punish was absent.2. He disagreed with the inclusion of arbitrators within the term 'tribunal' under Section 11-A.3. He contended that the High Court exceeded its jurisdiction under Article 227 by interfering with the arbitrator's decision on punishment.Justice Koshal concluded that the orders of discharge were properly passed under M.S.O. 23, the arbitrator could not exercise the powers under Section 11-A, and the High Court's interference was beyond its jurisdiction. He would have reversed the High Court's judgment and restored the arbitrator's award.