Supreme Court validates Industrial Disputes Act reference, overturns Labour Court decision

Rustom & Hornsby (I) Ltd. Versus T.B. Kadam

Rustom & Hornsby (I) Ltd. Versus T.B. Kadam - 1975 AIR 2025, 1976 (1) SCR 119, 1976 (3) SCC 71 Issues Involved:
1. Validity of the reference u/s 10 of the Industrial Disputes Act read with section 2A.
2. Propriety of the domestic enquiry conducted against the respondent.
3. Jurisdiction of the Labour Court in examining witnesses and setting aside the findings of the domestic enquiry.
4. Appropriateness of the punishment imposed on the respondent.

Summary:

1. Validity of the reference u/s 10 of the Industrial Disputes Act read with section 2A:
The appellant argued that the reference of the dispute was invalid as the incident occurred before section 2A came into force. The Supreme Court held that section 2A is a definition section and does not give retrospective effect. It was determined that the reference was valid as an industrial dispute existed on the day the reference was made, regardless of when the facts giving rise to the dispute occurred.

2. Propriety of the domestic enquiry conducted against the respondent:
The Labour Court found the domestic enquiry defective, citing the Inquiry officer's failure to obtain permission for a police constable to testify, thus denying the respondent a fair opportunity to defend himself. The Supreme Court disagreed, stating it was the respondent's duty to properly summon the witness and that the enquiry was fair and provided reasonable opportunity.

3. Jurisdiction of the Labour Court in examining witnesses and setting aside the findings of the domestic enquiry:
The Labour Court examined the police constable and other evidence, concluding that the dismissal was predetermined and amounted to victimization. The Supreme Court held that the Labour Court overstepped its jurisdiction as the domestic enquiry was fair and its findings were neither perverse nor unsupported by evidence. Therefore, the Labour Court had no right to re-examine witnesses or upset the findings.

4. Appropriateness of the punishment imposed on the respondent:
The Supreme Court concluded that the charge of suspected dishonesty was serious, especially for a watchman, and warranted dismissal if proved. The Labour Court's interference with the punishment was deemed inappropriate as the enquiry was fair and the findings were justified.

Conclusion:
The appeal was allowed, and the Labour Court's award was set aside. The respondent, having attained the age of 60, would have retired, and the appellant agreed not to recover payments made during the interim order. No order as to costs was made.