Caltex (India) Ltd. vs E. Fernandes And Anr.
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: Supreme Court of India
Case Number: Not extracted
Decision Date: 31 October 1956
Coram: Bhagwati
Caltex (India) Ltd. versus E. Fernandes and another was listed for hearing on 31 October 1956 before the Supreme Court of India. The judgment was authored by S K Das and delivered by Justice Bhagwati. The Court observed that the facts giving rise to the Special Leave Appeal were limited to a single incident involving the first respondent, who was employed as a driver at the appellants’ Santa Cruz Airport Service Station.
On the morning of 28 November 1952 the first respondent was on duty at the Santa Cruz Aerodrome, an area where smoking was expressly prohibited and where an aircraft was being refuelled by the appellants. While the refuelling operation was in progress a “No Smoking’’ sign had been placed on the re-fueller, and the appellants had issued clear instructions to all staff, including the first respondent, that smoking was forbidden within the prohibited zone. Despite these warnings the first respondent was observed smoking approximately twenty-five feet from the aircraft. The District Manager, who was an eyewitness, caught him in the act. Because of this breach the airport authorities decided that the first respondent could no longer work on the aerodrome. A charge-sheet was served on him and he was required to answer a charge of serious misconduct. An enquiry was held on 4 December 1952 before the Sales Manager of the appellants; the District Manager again gave evidence. The first respondent was allowed full opportunity to be represented, to defend himself and to cross-examine witnesses. He pleaded guilty and was found guilty of misconduct. Consequently the appellants resolved to punish him by dismissal, which they regarded as the normal penalty for such a breach.
At the same time adjudication proceedings under Reference (IT) No. 78 of 1952 were pending before the Industrial Tribunal at Bombay. The appellants therefore filed an application under Section 33 of the Industrial Disputes Act, 1947, seeking the Tribunal’s permission to dismiss the first respondent. The Tribunal examined the merits of the case and concluded that dismissal would be excessive, particularly in view of certain alleged mitigating factors. These factors included the respondent’s prior service record, his admission of guilt, his request for leniency, and an assurance from the relevant Union that a similar lapse would not recur. The Tribunal therefore held that a less severe punishment would be more appropriate.
The Tribunal observed that the misconduct in question could recur. It then sought to place conditions on the employer by stating that, were the employer to modify its request and seek a remedy less severe than dismissal, the Tribunal would readily grant permission; however, if the employer persisted in demanding dismissal, the Tribunal would reject the application altogether. The employer, contending that it was acting in good faith to safeguard public security, the petroleum industry, and the protection of life and property, insisted that the severity of the proven gross and wilful misconduct warranted dismissal and refused to accept any lesser punishment. Accordingly, the Industrial Tribunal declined the employer’s application. The employer subsequently lodged an appeal before the Labour Appellate Tribunal, requesting that the Tribunal’s order be set aside and that permission be granted to dismiss the first respondent from his employment. By a decision dated 1 April 1953, the Labour Appellate Tribunal set aside the Industrial Tribunal’s order and granted the employer the sought permission. The Tribunal of Appeal held that a substantial question of law was involved and that the Industrial Tribunal had exercised its jurisdiction perversely. It reasoned that where the offence was established on its face, and there was no allegation—nor proof—of lack of good-faith, unfair labour practice, or victimisation on the part of the employer, the Industrial Tribunal possessed no authority to deny the permission sought for dismissal.
Following the appellate decision, the first respondent filed a petition in the High Court of Judicature at Bombay (Miscellaneous No. 167 of 1953) seeking a writ of certiorari or any other appropriate writ under Article 226 of the Constitution. The petition argued, inter alia, that the Labour Appellate Tribunal’s decision was beyond its jurisdiction because the appeal before it did not raise any substantial question of law. On 29 April 1953, Mr Justice Desai issued a rule nisi directing the respondents to show cause why the writ should not be issued. After hearing the petition, the learned judge delivered a considered judgment on 14 July 1953, dismissing the petition and discharging the rule nisi. Undeterred, the first respondent then filed an appeal in the High Court of Bombay (Appeal No. 77 of 1953), contending, inter alia, that the Industrial Tribunal, while hearing an application under Section 33 of the Industrial Disputes Act, functioned as an arbitrator possessing a broad and unfettered discretion. The respondent asserted that Mr Justice Desai had erred in holding that the claim of unfettered discretion by the Tribunal raised a substantial question of law.
The appeal was heard by a Division Bench of the High Court of Bombay composed of Chief Justice Chagla and Justice Shah. Both judges allowed the appeal and consequently issued a writ directed against the second respondent, the Labour Appellate Tribunal of India in Bombay. In doing so they held that the Labour Appellate Tribunal lacked jurisdiction to entertain the appeal because the matter did not present any substantial question of law. In a separate proceeding, the appellants had filed a petition before the High Court seeking a Certificate under Article 133(1)(c) of the Constitution. That petition was dismissed, and as a result the appellants sought and were granted Special Leave to Appeal from this Court under Article 136 of the Constitution.
The present appeal raises exactly the same legal issue that was considered in earlier decisions of this Court, namely Atherton West and Co. Ltd. v. Suti Mill Mazdoor Union, The Automobile Products of India Ltd. v. Rukmaji Bala, and Lakshmi Devi Sugar Mills Ltd. v. Ram Sarup, Civil Appeal No. 244 of 1954. In those cases the Court clearly held that an Industrial Tribunal has no jurisdiction to entertain an application filed under Section 33 of the Industrial Disputes Act, 1947, for the purpose of examining whether the punishment proposed by an employer for a workman is harsh or excessive. The power to determine the appropriate measure of punishment rests solely with the employer, who must decide for himself the punishment that is proportionate to the offence proven against the workman. The only function that the Industrial Tribunal may perform under Section 33 is to ascertain whether the employer has established a prima facie case for imposing such punishment and to verify that the employer is not acting with mala fides, engaging in an unfair labour practice, or victimising the workman.
In the present case the Industrial Tribunal concluded that the enquiry conducted by the appellants was fair, that no principles of natural justice had been breached, and that the appellants, acting in good faith, had determined that dismissal was the sole appropriate punishment for the first respondent. Having reached that conclusion, the Tribunal possessed no authority to replace the dismissal with any other form of punishment, nor could it impose any additional conditions on the appellants before the requisite permission could be granted. The Court therefore found that the Tribunal’s overall approach was erroneous. By attempting to impose the conditions set out earlier in the proceedings, the Industrial Tribunal was exercising a power that the law did not confer upon it. Consequently, a substantial question of law concerning the jurisdiction of the Industrial Tribunal did arise in the appeal filed before the Labour Appellate Tribunal, and that question must be addressed.
The Court observed that the Labour Appellate Tribunal possessed the authority to entertain the present appeal. Consequently, the view expressed by the Division Bench of the High Court at Bombay, which had held that the Labour Appellate Tribunal lacked jurisdiction to consider the appeal, was identified as plainly erroneous. In light of this finding, the Court concluded that the appellant’s petition should succeed. Accordingly, the judgment rendered by the Division Bench of the High Court of Bombay in the earlier appeal was set aside. The Court restored the earlier judgment and order issued by the learned Justice Desai, thereby reinstating the decision of the Labour Appellate Tribunal dated 1 April 1953, which authorised the appellants to terminate the employment of the first respondent.
While granting the relief sought, the Court also took into account the unusual features of the present dispute and directed that each party bear its own costs throughout the litigation. This cost order reflected the Court’s assessment that neither side should be obligated to meet the opponent’s expenses under the circumstances of the case.