2013 (1) TMI 656 - HC - Indian Laws

High Court remands Labour Court decision for review based on Supreme Court guidelines

The High Court quashed the Labour Court's award and remanded the matter for reconsideration in line with the Supreme Court's guidelines in B. Karunakar. ... Dismissal from service by the management - Whether it was illegal and/or unjustified and to what relief is he entitled - whether the non-supply of the Inquiry Report to the respondent workman before the imposition of the punishment of dismissal from service would vitiate the entire disciplinary proceedings and entitle the respondent workman to reinstatement with full back wages and seniority, etc.? - Held that:- Even if Labour Court were to come to the conclusion that the respondent did suffer prejudice on account of non-supply of the Enquiry Report, while setting aside the dismissal order, it would be required to grant liberty to the petitioner management to proceed with the enquiry by placing respondent employee under suspension and continuing the enquiry from the stage of furnishing him with the Report. In that event, the reinstatement that may be ordered as a result of setting aside of the order of punishment for failure to furnish the Enquiry Report would be treated as reinstatement for the purpose of holding a fresh enquiry from the stage of furnishing the report and no more, where such fresh enquiry is held. Unfortunately, the Labour Court has not adopted the aforesaid approach while passing the impugned award dated 04.09.2009, though the judgment of the Constitution Bench has held sway since 1993. On this short ground, the impugned award dated 04.09.2009 deserves to be set aside and the matter remanded back to the Labour Court for consideration of the aforesaid aspect and for proceeding further in terms of the decision of the Supreme Court in B. Karunakar (1993 (10) TMI 310 - SUPREME COURT). Finding merit in the petitioner's submission that there was no question of the past record of the respondent being put to him as perusal of the order of dismissal dated 30.03.1992 shows that the management did not hold the respondent's past record against him for dismissing him from service. All that was observed was that no extenuating circumstances were found in the past record in favour of the respondent. Also that the misconduct, if taken as proved against the respondent, was sufficient to warrant his dismissal from service. There is also merit in the petitioner's submission that Section 25-F of the act had no application in the facts of the respondent's case since his dismissal from service was by way of punishment and this species of termination is excluded from the definition of retrenchment. Thus fail to appreciate how the Industrial Adjudicator could have observed that in view of Section 25-F, dismissal without any notice is in violation of principles of natural justice. The Industrial Adjudicator, while directing the respondent's reinstatement with full back wages, allowances, seniority, etc. has not even applied its mind to the fact that the Enquiry Report had found the respondent guilty of misconduct. It is not that in all cases the Labour Court is bound to reinstate the workman with full back wages. There is no application of mind by the Labour Court to this aspect. Thus the present petition succeeds and the impugned award is quashed & set aside with the matter is remanded back to the Labour Court concerned in terms of the observations made above. Issues Involved:1. Validity of the enquiry conducted against the respondent workman.2. Legality and justification of the respondent's dismissal from service.3. Applicability of Section 25-F of the Industrial Disputes Act, 1947.4. Proportionality of the punishment imposed on the respondent.5. Impact of non-supply of the Enquiry Report to the respondent.Issue-wise Detailed Analysis:1. Validity of the Enquiry:The Labour Court framed the first issue on 02.02.1994, focusing on whether a valid and proper enquiry was held against the respondent workman in accordance with the principles of natural justice. The Industrial Adjudicator concluded on 25.04.2009 that the enquiry was conducted fairly and properly, and the findings were not perverse. This finding was accepted by the respondent and remained unchallenged.2. Legality and Justification of Dismissal:The Labour Court, in its award dated 04.09.2009, held that the dismissal breached Section 25-F of the Industrial Disputes Act, 1947, and deemed the punishment disproportionate to the charges. Consequently, the respondent was to be reinstated with all legal dues. However, the High Court found that the Labour Court failed to assess whether the respondent suffered prejudice due to the non-supply of the Enquiry Report, as mandated by the Supreme Court in B. Karunakar (1993). The High Court remanded the matter back to the Labour Court for reconsideration.3. Applicability of Section 25-F:The petitioner argued that Section 25-F, which pertains to retrenchment, was inapplicable since the respondent's termination was a disciplinary action. The High Court agreed, citing the Supreme Court's decision in Maharashtra State Seeds Corporation Limited Vs. Vilas, which clarified that retrenchment excludes termination as a punishment.4. Proportionality of Punishment:The petitioner contended that the dismissal was proportionate to the misconduct, which included failure to perform assigned duties and unauthorized absence. The High Court supported this view, referencing the Division Bench judgment in DCM Shriram Consolidated Ltd. Vs. O.P. Gupta, which upheld dismissal for similar misconduct. The High Court found merit in the petitioner's argument that the punishment was justified given the established misconduct.5. Impact of Non-supply of Enquiry Report:The petitioner admitted the non-supply of the Enquiry Report was improper but argued it did not automatically warrant reinstatement with full benefits. The High Court, referencing B. Karunakar, stated that the Labour Court should have required the respondent to demonstrate prejudice due to the non-supply of the report. The Labour Court's failure to do so necessitated remanding the case for proper assessment.Conclusion:The High Court quashed the Labour Court's award and remanded the matter for reconsideration in line with the Supreme Court's guidelines in B. Karunakar. The Labour Court must reassess whether the non-supply of the Enquiry Report prejudiced the respondent and proceed accordingly. The High Court also clarified that Section 25-F was inapplicable and upheld the proportionality of the dismissal given the established misconduct. The parties were directed to appear before the Labour Court on 13.02.2013.