1. Rule. Rule made returnable forthwith. Heard finally by consent of the parties. By this petition, the petitioners are assailing the judgment and order dated 29/02/2010 delivered by the Labour Court, Nanded in complaint U.L.P. No. 45/2002 and the judgment and order dated 10/08/2012 delivered by the Industrial Court, Jalna in Revision U.L.P. No. 29/2010.
2. The Petitioners had issued a charge sheet cum show cause notice dated 19/06/2001 to the respondent alleging commission of grave and serious mis-conducts. In the past, by an order dated 30/12/2000, the respondent was punished with permanent stoppage of one annual increment. By the charge sheet at issue, the respondent was charged with having committed 3 mis-conducts of mixing inferior quality cotton into superior quality cotton which were said to have caused a loss of Rs. 5,25,616.20 to the petitioner Cotton Federation.
3. After completion of the domestic enquiry, a second show cause notice dated 23/01/2002 was issued to the respondent proposing the punishment of compulsory retirement coupled with conversion of the period of suspension pending enquiry into punishment. He rushed to the Labour Court Jalna by filing complaint U.L.P. No. 45/2002 and thus challenged the 2nd show cause notice. The complaint was later on transferred to Nanded Labour Court. The complaint was renumbered as U.L.P. No. 1/2002. By judgment and order dated 22/02/2010, the Labour Court allowed the complaint, quashed and set aside the 2nd show cause notice dated 23/01/2002 and virtually prevented the petitioner herein from initiating any disciplinary action against the respondent.
4. The petitioners preferred revision U.L.P. No. 29/2010 before the Industrial Court at Jalna. By the impugned judgment dated 10/08/2012, the revision petition was dismissed.
5. The petitioners take exception to the impugned judgments on the following grounds:-
(a) The charge sheet cum show cause notice clearly enumerated the acts committed by the respondent and the charges invoked against him.
(b) Prayers made by the respondent in its complaint, which are at page No. 45 of the petition paper book, do not seek any relief in relation to the fairness of the domestic enquiry and the findings of the Enquiry Officer.
(c) The prayers put forth by the respondent were only to the extent of seeking a declaration of U.L.P. against the petitioners for having issued a false, bogus and arbitrary show cause notice dated 23/01/2002 and further seeking quashing and setting aside of the said notice based on the enquiry report dated 19/06/2001.
(d) Conclusions drawn by the Enquiry Officer which are at page No. 24 of the petition paper book are supported with reasons based upon oral and documentary evidence recorded in the enquiry.
(e) None of the management witnesses were cross-examined by the respondent.
(f) The respondent workman did not lead oral evidence in the domestic enquiry.
(g) Panchnama was prepared in relation to the mixing of inferior quality cotton with high quality cotton by the respondent.
(h) Documents regarding the panchnama were produced in the enquiry.
(i) Based on the report submitted by the Technical Officers and the Grading Committee, which happens to be an expert body, the fact of mixing of inferior cotton with high quality cotton on the part of the respondent was proved.
(j) Details about the total purchase of cotton and identification of the quantity of inferior quality cotton were also placed before the Enquiry Officer who has considered the same in his report, which is at page no. 21 of the petition paper book.
(k) Admission of mixing inferior cotton with high quality cotton by the respondent in presence of the Management as well as in the enquiry has been taken into consideration. Observations in this context are found in the report at page No. 22 of the petition paper book.
(l) The petitioners had contended in para No. 8 of its written statement before the Labour Court which are at page No. 51, 52 and para No. 9 at page No. 53 of the petitioner paper book that the respondent was not a workman under section 2(s) of The Industrial Disputes Act, 1947.
(m) The petitioners contended that the respondent had overall administration and managerial control of the Center as a Center In-charge and was designated as a Grade-I Officer.
(n) The fact of the respondent being Center In-charge at Mukhed Cotton Procurement Center has been totally disregarded by both the Lower Courts.
(o) The Labour Court could not have interfered with the proposed action of the petitioners since the 2nd show cause notice was intended to give the respondent an opportunity of showing cause against the proposed action.
(p) The petitioners had proposed the punishment of compulsory retirement to the respondent instead of dismissal from service.
(q) Without there being any prayer clause as regards the findings of the Enquiry Officer, the Labour Court has by itself ventured into setting aside the findings on the ground that no charge is proved against the respondent and the findings are perverse.
(r) The fact that the respondent was suspended pending disciplinary proceedings which was later on converted into punishment along with compulsory retirement from service was construed by the Labour Court to mean two different (double) punishments for the same mis-conduct.
(s) Findings of the Enquiry Officer, though not prayed for, have been held to be perverse by the Labour Court.
(t) It is settled law that if the findings of the Enquiry Officer are held to be perverse, the employer has to conduct de-novo enquiry before the Labour Court.
(u) The petitioners had reserved a right to conduct a de-novo enquiry in the event the enquiry was held to be vitiated for any reason.
(v) A specific prayer for framing of a preliminary issue in light of the preliminary objections were made.
(w) The Labour Court overstepped its jurisdiction in concluding that the findings are perverse when no such prayer was made by the respondent.
(x) Notwithstanding contentions raised in the written statement before the Labour Court, if the enquiry was vitiated on grounds of findings of the Enquiry Officer being perverse, the right to conduct a de-novo enquiry became exercisable and the Labour Court could not have proceeded to deliver a final judgment on the entire complaint itself.
(y) The Industrial Court committed the same error in its revisional jurisdiction.
(z) Both the impugned judgments deserve to be quashed and set aside.
6. The learned Advocate for the respondent was heard at length and his submissions can be summarized as follows:-
(a) The respondent employee, owing to the interim protection granted earlier by the Labour Court, by the subsequent allowing of the complaint and the dismissal of the petitioners' revision petition, continued in employment till his superannuation.
(b) Respondent has thus superannuated from service on 31/01/2003 as can be seen from the communication dated 29/01/2003 at page No. 92 of the petition paper book.
(c) In the light of the above mentioned two facts, a sympathetic view is required to be taken in the instant case.
(d) Though the respondent admitted the charges levelled upon him, the same was under pressure as can be seen from the statement of the respondent in the enquiry by which he retracted his admission. The said statement retracting his admission has been considered by the Enquiry Officer which is at page No. 16 of the petition paper book.
(e) Though the respondent did not specifically pray in the complaint seeking a declaration that the enquiry has been unfairly conducted or the findings of the Enquiry Officer are perverse, an averment was made in the complaint.
(f) Though no prayer was made in the complaint regarding proportionality of the punishment, an averment was made in the complaint.
(g) Framing of issues by the Labour Court in the absence of prayers as mentioned above, is justified since the respondent had so averred in the complaint and issues are framed based on the pleadings of the parties.
(h) No pecuniary loss has been caused to the petitioner.
(i) It is admitted that the respondent did not examine any witnesses on his behalf.
(j) The Enquiry Officer has concluded that the alleged act committed by the respondent has not put the petitioners into any loss as is so claimed.
(k) The testimony of the Management witnesses contained variations and they were fatal to the case of the petitioners.
(l) Alleged mixing of inferior grade cotton with superior grade cotton was required to be examined by an expert body so as to give an expert opinion.
(m) It is true that in the earlier domestic enquiry, the respondent was punished with permanent stoppage of one increment.
(n) The proposed punishment was shockingly dis-proportionate.
(o) Gratuity and retiral benefits of the petitioners are still not paid which could be an approximate amount of Rs. 4,00,000/-.
(p) Both the impugned judgments are legal and sustainable.
7. Submissions of the learned Advocates for the respective sides, as are summarized here in above, were advanced in the light of the contents of the petition paper book which I have gone through with their assistance.
8. The Law on conducting a de-novo enquiry is settled in light of the Apex Court judgments in case of Bharat Forge Vs. A.B. Zodge reported at: 1996 (73) FLR 1754 and K.S.R.T.C. Vs. Lakshmidevamma and another, 2001 II CLR 640. As such, there is no doubt that if an employer reserves its right in its written statement to conduct a de-novo enquiry in the event of the domestic enquiry being held as vitiated for any reason whatsoever, the Labour Court, upon concluding that the enquiry is vitiated, has to allow the employer to conduct a de-novo enquiry.
9. The petitioners had indeed reserved such a right to prove the charges against the respondent in para No. 52 of its written statement at page No. 68 of the petition paper book. When the Labour Court came to a conclusion that the enquiry is vitiated since the findings of the Enquiry Officer are perverse, it ought to have allowed the petitioner to conduct a de-novo enquiry. Issue No. 1 framed by the Labour Court is, "Whether the departmental enquiry is fair, proper and as per the principles of natural justice" The answer to the said issue is, "Not arise". This put to rest the issue as regards fairness of the enquiry.
10. In para No. 9 of the impugned judgment of the Labour Court, which is at page No. 77 of the petition paper book, the Labour Court has reproduced the following issues:-
Whether the alleged mis-conduct of the complainant is proved?
Does the complainant prove that the respondents have engaged in unfair labour practice as alleged?
Does the complainant prove that the show cause notice dated 23/01/2002 is illegal and liable to be set aside?
As per final order
Whether the findings of the Enquiry Officer are perverse?
11. The answers to the above said issues have been assigned reasons by the Labour Court from paragraph No. 9 till paragraph No. 12 from page No. 77 to 82 of petition paper book. The Labour Court has gone into the evidence recorded in the enquiry, threadbare. In the light of the above, the Labour Court concluded that the enquiry was vitiated since the findings of the Enquiry Officer were held perverse.
12. While considering a similar situation but with a slight distinction that the order of punishment was passed by the employer in those matters, the Single Judge as well as the Division Bench of this Court have laid down the Law. The learned Single Judge in the case of Permanent Magnets Vs. Vinod Vishnu Wani and others, reported at : 2002 (93) FLR 32 : 2002 (3) Mh.L.J. 413 (Coram: R M S Khandeparkar, J.) concluded that when a right to conduct a de-novo enquiry was reserved in the written statement, the Labour Court could not have delivered its final judgment at the stage of arriving at a conclusion that the findings of the Enquiry Officer are perverse.
13. In the said case (supra), while holding that the enquiry is vitiated on this count, the Labour Court Jalgaon proceeded to deliver its final judgment and allowed the complainant by directing re- instatement and continuity in service. The Industrial Court, Jalgaon upheld the judgment. The Single Judge in the said case (supra), quashed and set aside the judgment of the Labour Court as well as the judgment of the Industrial Court and concluded that the moment the inquiry is held to be vitiated for any reason, "the right to conduct a de-novo enquiry is born for the first time."
14. The judgment of the Single Judge in the Permanent Magnet's case (supra) was challenged before the Division Bench of this Court, Vinod Vishnu Wani and others Vs. Permanent Magnets : 2002 (94) FLR 66. The Division Bench upheld the view taken by the Single Judge.
15. In the instant case as well, the Labour Court concluded that the findings of the Enquiry Officer are perverse and the entire complaint has been allowed by the same judgment without affording any opportunity to conduct a de-novo enquiry to the petitioners Management. The only distinction is that in the Permanent Magnet's case (supra), the final order of the punishment was passed and in the instant case, the punishment was proposed in the 2nd show cause notice.
16. Nevertheless, the abovesaid procedure is crystallized by Judge made Law in view of catena of judgments. The ratio in cases of Bharat Forge, K.S.R.T.C. and Permanent Magnet's case (supra) shall equally apply to cases wherein the 2nd show cause notice is challenged on identical footings. Therefore, the right to conduct a de-novo enquiry is equally available to every employer, be it in a case where the order of punishment is issued or in a case where punishment is proposed by a 2nd show cause notice.
17. Unless the enquiry was set aside on any count, there was no scope for conducting a de-novo enquiry which right was reserved by the petitioners herein in its written statement. By-passing this settled procedure, the Labour Court in one stroke has branded the findings of the Enquiry Officer as perverse and by accepting the evidence adduced by the respondent, has delivered its final judgment. The conclusion drawn by the Labour Court of declaring the findings as perverse on the basis of evidence adduced before it and in the backdrop of the respondent employee having neither led evidence through his witnesses nor cross examined the management witnesses, is an unsustainable conclusion. Procedure unknown to Law has been resorted to by the Labour Court.
18. As has been held by the Apex Court in the case of Kumaon Mandal Vikas Nigam Ltd., V/s. G.S. Pant and others : 2001 (I) CLR 12, perversity in the findings of the Enquiry Officer necessarily presuppose that the conclusions drawn by the Enquiry Officer and reasons assigned in support of such conclusions are either based on no evidence in the enquiry or are based upon mis-reading of the evidence in the enquiry.
19. Perversity in the findings of an Enquiry Officer is to be pointed out on the basis of the evidence placed before the Enquiry Officer. It, therefore, necessarily needs the consideration of the evidence before the Enquiry Officer and analyzing the findings of the Enquiry Officer. Material which was not before the Enquiry Officer can not be brought on record before the Labour Court to brand the findings as being perverse. In fact, normally there is no requirement of leading fresh evidence before the Labour Court on such preliminary issues like fairness of an enquiry and the findings of an Enquiry Officer. In both these situations, what has transpired in the domestic enquiry is to be looked into to find out, firstly, whether principles of natural justice were adhered to in conducting the enquiry and secondly, whether there was any evidence on record to support the findings or as to whether the findings are based on no evidence.
20. Since the respondent employee sought to brand the findings as perverse, such a challenge needs to be considered only on the basis of the evidence recorded in the enquiry and the findings arrived at by the Enquiry Officer in light thereof. The respondent employee led evidence before the Labour Court attempting to bring on record such material which was never before the Enquiry Officer. Fresh evidence recorded before the Labour Court, in my view, can not be the basis for branding the findings of the Enquiry Officer as perverse.
21. What I find from the instant case is that on the one hand, the respondent employee merely participated in the enquiry and refrained from leading evidence through witnesses and also failed to cross-examine the management witnesses. On the other hand, these deficiencies left in the enquiry by the respondent employee were sought to be cured by leading evidence before the Labour Court.
22. There is one more angle to this case which needs to be dealt with, notwithstanding my conclusions arrived at in the foregoing paragraphs. The Labour Court appears to have lost sight of the fact that strict proof of evidence is not required in departmental or domestic enquiries for proving the allegations levelled upon the workman. The charges can be proved by leading evidence in the enquiry and by preponderance on the principles of probabilities. 'Strict proof' pitted against 'preponderance of probabilities', the Labour Court seems to have followed the former instead of the latter. In the case of Deputy Inspector General of Police Vs. S. Samuthiram reported at : 2013 (1) CLR 16, the Apex Court has once again concluded that by the preponderance on the principles of probabilities, one can come to a conclusion that the charges are proved against an employee.
23. So far as the failure to put forth substantive prayers in the complaint is concerned, the learned Advocate for the respondent has vehemently submitted that though it was not specifically prayed in the prayer clauses and though the respondent did not seek declaration that the findings of the Enquiry Officer are perverse and the punishment sought to be awarded is dis-proportionate, the Labour Court has rightly framed its issues and arrived at its conclusions.
24. In my view, going by the magnitude of the challenges to the disciplinary proceedings and disciplinary action, it is imperative that the delinquent should put forth substantive prayers in his complaint or statement of claim as regards the fairness of an enquiry and the findings of the Enquiry Officer. He should specifically set out his prayers seeking directions from the Labour Court for setting aside the domestic enquiry on account of violation of principles of natural justice or findings being perverse or for any other connected reason. Since this aspect of disciplinary proceedings happens to be of paramount importance, pleadings and prayers need to go hand in hand in order to enable the Labour Court to frame specific issues to that extent and deliver its part-I order/Award based on such prayers. A Court normally would not travel beyond the prayers put forth by a litigant.
25. So far as the right to challenge a 2nd show cause notice is concerned, the judgment of our Division Bench in case of Ashok Vishnu Kate and others Vs. M.R. Bhope and Hindustan Lever : 1992 (I) CLR 531 clearly held that such a right was available to an employee even at the penultimate stage and a complaint was maintainable under Item No. I of Schedule IV of the M.R.T.U. And P.U.L.P. Act, 1971. This view was upheld by the Apex Court dealing with the challenge raised by the employer in Hindustan Lever V/s. Ashok Vishnu Kate : (1995) 6 SCC 326. The Apex Court thus crystallized the Law by placing reliance upon its judgment in the case of Surendra Kumar Verma Vs. Central Govt. Industrial Tribunal-cum-Labour Court : (1980) 4 SCC 443 in which it was observed thus:
Semantic luxuries are misplaced in the interpretation of 'bread and butter' statutes. Welfare statutes must, of necessity receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the court is not to make inroads by making etymological excursions.
26. Nevertheless, the Apex Court has struck a serious note of caution in para No. 54 of the said judgment observing thus:-
Before parting with this case, however, we must strike a note of caution, as has been done by the Division Bench of the Bombay High Court. It could not be gainsaid that the employers have a right to take disciplinary actions and to hold domestic enquiries against their erring employees. But for doing so, the standing orders governing the field have to be followed by such employers. These standing orders give sufficient protection to the concerned employees against whom such departmental enquiries are proceeded with. If such departmental proceedings initiated by serving of chargesheets are brought in challenge at different stages of such proceedings by the concerned employees invoking the relevant clauses of Item 1 of Schedule IV before the final orders of discharge or dismissal are passed, the Labour Court dealing with such complaint should not lightly interfere with such pending domestic enquiries against the concerned complainants. The Labour Court concerned should meticulously
scan the allegations in the complaint and if necessary, get the necessary investigation made in the light of such complaint and only when a very strong prime facie case is made out by the complainant appropriate interim orders intercepting such domestic enquiries in exercise of powers under Section 30(2) can be passed by the Labour Courts. Such orders should not be passed for mere askance by the Labour Courts. Otherwise, the very purpose of holding domestic enquiries as per the standing orders would get frustrated. 27. I find from the impugned judgments of the Labour Court and Industrial Court in this case that both the Lower Courts have failed to understand the sagacious words of the Apex Court in paragraph No. 54 of the Hindustan Lever's case (supra). 28. For all the above stated reasons, the impugned judgments of the Labour Court dated 29/02/2010 in complaint U.L.P. No. 45/2002 and the Industrial Court dated 10/08/2012 in Revision U.L.P. No. 29/2010 are quashed and set aside. Consequentially, the complaint stands dismissed and the revision stands allowed. 29. Having quashed and set aside the impugned Judgments, it would have been normally possible to allow the petitioners employer to proceed in accordance with the standing orders for issuing an order pursuant to the 2nd show cause notice dated 23/01/2002 after giving the respondent an opportunity to show cause. However, since the respondent has already superannuated from service on 31/01/2003, no purpose would be served in doing so. 30. The petitioners had proposed the punishment of converting the suspension period into a punishment alongwith compulsory retirement from service. The respondent, in its submissions, has made a request that the instant case be considered sympathetically. It is an admitted position that gratuity is not paid to the respondent. The fact remains that since the respondent has now retired from service on 31/01/2003, no purpose would be served by the issuance of the order of punishment. In this backdrop and in view of the fact that the respondent has superannuated 11 years ago, I deem it fit and appropriate to direct the petitioners to consider the case of the respondent for payment of gratuity in accordance with Law, service conditions applicable and the provisions of the Payment of Gratuity Act, 1972. within a period of twelve (12) weeks from today. Ends of justice would be met with these directions. As such, the petition is allowed in the above terms. Rule is made absolute accordingly with no order to costs.