Laxmi Devi Sugar Mills vs Nand Kishore Singh

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 162 of 1954

Decision Date: 4 October, 1956

Coram: Natwarlal H. Bhagwati, S.K. Das, P. Govinda Menon

In this case the Supreme Court of India recorded that the matter was titled Laxmi Devi Sugar Mills versus Nand Kishore Singh and that the judgment was delivered on 4 October 1956. The judgment was authored by Justice Natwarlal H. Bhagwati, who sat on a bench together with Justices S. K. Das and P. Govinda Menon. The parties were identified as the petitioner Laxmi Devi Sugar Mills and the respondent Nand Kishore Singh. The bench composition was noted again as Justice Natwarlal H. Bhagwati together with Justices Aiyyar, T. L. Venkatarama Das, S. K. Menon and P. Govinda. The case was cited as 1957 AIR 7 and 1956 SCR 746. The principal statutory provisions involved were the Industrial Disputes (Appellate Tribunal) Act (Act XLVIII of 1950), the Uttar Pradesh Industrial Disputes Act 1947 (U. P. Act XXVIII of 1947), section 3 of that Act and clause L(1)(j) of the Standing Orders, which dealt with misconduct and indiscipline of workmen. The headnote explained that the respondent, who was employed as a stenotypist and also served as Vice-President of the labour union, had been charged by the appellant under clause L(1)(j) of the Uttar Pradesh Standing Orders for allegedly instigating workers to adopt a resolution calling for the removal of the General Manager, a speech that the appellant described as defamatory. The key issue was whether the respondent’s conduct amounted to “any act subversive of discipline” within the meaning of the clause. During correspondence with the General Manager and during an enquiry, the respondent asserted that, in his capacity as a stenotypist, he was not answerable to his employer for activities performed as Union Vice-President outside the factory, and he repeatedly refused to answer the General Manager’s questions. The appellant sought permission to dismiss the respondent under section 22 of the Industrial Disputes (Appellate Tribunal) Act of 1960, but the Labour Appellate Tribunal refused the application. Consequently, the appellant obtained special leave to appeal to the Supreme Court, contending that the passage of the resolution, the refusal to answer questions and the ensuing enquiry constituted acts subversive of discipline justifying dismissal. The Court held that the union’s resolution was perfectly legitimate, that no breach of the Standing Orders or act subversive of discipline could be attached to the respondent for his role as Vice-President at the meeting, and therefore the dismissal order of the Labour Appellate Tribunal was affirmed. The Court further observed that when union members collectively believe that circumstances justify a resolution, it is not the role of the court to scrutinise the correctness of that judgment.

In this case, the Court held that it was not for the Court to examine the correctness of, or the reasons for, the resolution adopted by the Union. The Court further held that the respondent was first and foremost an employee of the appellant and therefore was obligated to answer any questions put to him by the General Manager. The respondent’s persistent refusal to answer, on the ground that he was acting in a dual capacity as a Union officer, was considered insubordination that would have justified his dismissal. However, because the appellant failed to set this alleged insubordination as a specific charge in the charge-sheet that was served on the respondent and that formed the basis of the enquiry, the appellant could not rely on that ground to support dismissal. The judgment was rendered in civil appellate jurisdiction as Civil Appeal No. 162 of 1954, arising by special leave from the judgment and order dated 21 July 1953 of the Labour Appellate Tribunal of India, Lucknow, in Miscellaneous Case No. C-III-33 of 1952. Counsel for the appellant were H. J. Umrigar and R. A. Govind, while counsel for the respondent was B. P. Maheshwari. The judgment was pronounced on 4 October 1956. Justice Bhagwati delivered the judgment, noting that the Labour Appellate Tribunal of India at Lucknow had dismissed the appellant’s application made under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950, which sought permission to dismiss the respondent, who was a workman. The appellant thereafter obtained special leave from this Court to appeal that order.

The respondent had been employed by the appellant as a stenotypist since 3 December 1946 and also held the office of Vice-President of the workers’ union, which is affiliated with the Indian National Trade Union Congress and is known as the Chini Mills Mazdoor Sangh. M. P. Singh had continuously served as the General Manager of the appellant during all relevant periods. The relationship between the appellant and its employees was regulated by Standing Orders that were framed by mutual agreement between the labour representatives and the sugar mills in Uttar Pradesh and subsequently approved by the Government of Uttar Pradesh. Clause L(1)(j) of those Standing Orders defined misconduct to include drunkenness, gambling, riotous or disorderly conduct while on duty in the factory premises, in the housing provided by the mills, or elsewhere, or any act that is subversive of discipline. Such offences, after a proper enquiry, would entitle the appellant to dismiss a workman. There had been longstanding disputes between the appellant and its workmen dating back to October 1946. On 23 February 1949, Kedar Nath Khetan, a partner of the appellant, wrote to Shri Kashi Nath Pandey, General Secretary of the Indian National Sugar Workers Federation, promising that the General Manager would be removed after the season of the Chhitauni factory concluded. Nevertheless, an agreement was reached on 13 September 1949 between the factory partners and the Chini Mills Mazdoor Sangh whereby the workers withdrew their demand for the removal of the General Manager. The disputes, however, continued and came to a head in 1952. In May 1952, the management charged 76 members of the

In 1952 the management of the mill charged seventy-six members of the union with taking part in a “Tools-down” strike. The dispute was taken to the Labour Appellate Tribunal, and the Tribunal, by its award, ordered that all of the seventy-six workmen be reinstated. The management then filed writ petitions numbered 402 and 409 in the Allahabad High Court, but those petitions were dismissed by the High Court. The management subsequently obtained Special Leave to appeal to this Court against the High Court’s decisions, and those appeals remained pending. While the management’s application for the discharge of the same seventy-six workmen was pending before the Labour Appellate Tribunal, the workers convened a meeting on 10 June 1952 near an old mosque outside the factory premises to discuss the consequences of the suspension of the seventy-six workmen and to consider possible actions. The respondent attended that meeting in the capacity of Vice-President of the union and delivered a speech that criticised the General Manager. The content of that speech was later reported in a document dated 10 June 1952 submitted to the General Manager by two workers, Ganga Dhar Tewari and Jamuna Prasad. According to the report, the respondent’s address said that the General Manager intended to crush the labour movement from the outset, that the manager had allowed some intermediaries to join a strike after a strike notice had been served by Shri Shibban Lal Saxena, and that the manager’s men had persuaded certain union members to join the strike, leading to the decision to launch a strike. The speech further alleged that the manager was seeking the Collector’s permission to dismiss all the workers, that Shri Moti Lal Singh had uncovered this conspiracy and prevented the strike, and that the manager’s plan had failed. The respondent claimed that the manager had falsely accused the seventy-six workers of participating in a “Tools-down” strike and asserted that the workers would be reinstated, but that the efforts of the union were being thwarted by government officials, alleging that the Collector was receiving secret instructions from the manager. The respondent concluded that the only recourse was to agitate for the manager’s dismissal and said that many proprietors had written to him against the manager. At that meeting a resolution was moved and passed calling for the reinstatement of the seventy-six workers and for the dismissal of Shri Madan Pal Singh, the General Manager. The two workers who had recorded the proceedings, Ganga Dhar Tewari and Jamuna Prasad, reported the meeting to the General Manager on the same day. Subsequently, on 16 July 1952, the General Manager wrote a letter to the respondent stating that the respondent had been present at and had addressed the 10 June meeting, during which a resolution for reinstating the suspended workers and removing the General Manager had been adopted. The General Manager requested that the respondent provide information regarding the matters discussed at that meeting within twenty-four hours of receiving the letter.

In this case, the General Manager wrote to the respondent on 16 July 1952, requesting information about the facts mentioned and requiring a reply within twenty-four hours of receiving the letter. The respondent answered on 17 July 1952, declaring that he had never attended any meeting in his capacity as the stenotypist of the factory and therefore was unable to comment on the matters addressed to him in the General Manager’s correspondence dated 16 July 1952. He further observed that it was not the factory’s business to seek details of his personal, social or political activities outside the factory premises, and that, as a matter of courtesy, he would have furnished any requested information but regretted his inability to comply with the General Manager’s request. The General Manager then sent another letter on the same day, 17 July 1952, asserting that he was entitled to seek the information even in the respondent’s personal capacity and again asked the respondent to answer the queries contained in the earlier letter of 16 July 1952. In his reply dated 17 July 1952, the respondent noted that some of the conclusions drawn by the General Manager were “simply out of self-complacency,” he respectfully differed with the General Manager, and he stated that he had nothing further to add to his earlier reply of 17 July 1952. Subsequently, on 1 August 1952, the General Manager served a chargesheet on the respondent, calling upon him to show cause why disciplinary action should not be taken against him under clause L(1)(j) of the Standing Orders for having made a speech at a meeting held near the local mosque on 10 June 1952, wherein, among other defamatory remarks, he allegedly incited the workers to take steps for the removal of the General Manager. The respondent was directed to submit his explanation by 10 a.m. on 2 August 1952. In compliance, the respondent submitted a written statement denying any justification for being charged under clause L(1)(j), repudiating all the allegations contained in the charge-sheet, and concluding by requesting the General Manager to clarify under which provisions of the Factories Act, the Commercial Establishments Act or the Standing Orders a written reply concerning matters outside the respondent’s ordinary factory duties could be demanded on such short notice. The General Manager fixed the enquiry for 10 a.m. on Monday, 4 August 1952, and called upon the respondent to appear at that time, informing him that he would be at liberty to produce oral or documentary evidence in his defence against the charges framed. Accordingly, the enquiry was scheduled to be held by the General Manager on the appointed date.

On 4 August 1952 the General Manager conducted an enquiry and recorded the proceedings as a series of questions and answers. The respondent maintained the same defensive stance that he had shown in earlier written correspondence. He declined to answer the direct questions posed by the General Manager, stating that he had nothing further to add beyond his written statement. The respondent further asserted that, if he had participated in any meeting organized by the Chini Mills Mazdoor Sangh outside the factory, the General Manager should address any inquiries to the officials of the Sangh for the required information. When the General Manager specifically alleged that the respondent had taken an active and malicious interest in anti-management activities, had exploited poor labour, and had attempted to secure his own confirmation by the management, the respondent replied that he did not concur with those allegations and that the matter did not require a response. Following the enquiry, the General Manager submitted a report on 24 October 1952. In that report he concluded that the respondent had delivered a speech urging the factory workmen to pass a resolution seeking the removal of the General Manager; that such conduct would inevitably cause the management to lose confidence, especially because the respondent had incited other workers against the General Manager and had refused to answer direct questions; and that, lacking a stenotypist trusted by the management, the factory could not be operated without the risk of trouble. On these bases the General Manager found the respondent guilty of misconduct and of acts subversive of discipline.

Because a matter before the Labour Appellate Tribunal was still pending, the General Manager advised that any application for dismissal should be directed to that tribunal for permission. The management accepted the report and, invoking section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950, the appellant applied for authority to dismiss the respondent from employment. The Labour Appellate Tribunal examined the issue in light of the freedom of speech guaranteed to Indian citizens by article 19(1)(a) of the Constitution. The Tribunal observed that the speech delivered by the respondent, who acted as Vice-President of the Union, at the union meeting fell within the legitimate activities of a trade union and could not be characterised as subversive of discipline. Accordingly, the Tribunal dismissed the appellant’s application for dismissal. The present appeal therefore arises before this Court, and the sole question for determination is whether the speech made by the respondent at the meeting held on 10 June 1952 constituted an act subversive of discipline. The respondent, being the Vice-President of the Union, prima facie raised a resolution calling for the removal of the General Manager, an act that, on its face, appears to be a legitimate union activity.

In the situation before the Court, a resolution passed by the Union to remove the General Manager would be regarded as perfectly legitimate if the members of the Union genuinely believed that there existed circumstances justifying such a step. The Court explained that the correctness or incorrectness of the reasons set out for the removal of the General Manager was not a matter for judicial scrutiny; the only requirement was that the Union should not have acted in bad faith, nor should it have been motivated by malice or ill-will toward the General Manager when it adopted the resolution. The resolution itself, according to the Court, did not directly harm the General Manager. Rather, once the resolution was passed, it had to be transmitted to the management, which could then decide what actions to take after receiving it. It was the responsibility of the management to examine the reasons given for the proposed removal and to determine, after conducting any necessary inquiries, whether those reasons were sufficient to justify the General Manager’s dismissal. Consequently, as long as the Union acted without malice, the mere act of passing the resolution was innocent and could not be subject to any penalty. The members of the Union, in passing such a resolution, would not be in breach of the Standing Orders, nor would they be guilty of any act described as subversive of discipline.

The management, however, alleged a different charge against the respondent. It contended that the respondent was not only responsible for the adoption of the resolution but, in the speech he delivered in its support, he uttered statements that were false, defamatory, and motivated by personal malice toward the General Manager. According to the management, the respondent stirred up the Union members present at the meeting, directing their hostility against the General Manager, thereby rendering his conduct subversive of discipline. The management further argued that the speech lowered the General Manager’s standing in the eyes of the workmen, engendering hatred or ridicule, and that such an effect would cause the workmen to look down upon the General Manager and become uncooperative with disciplinary measures. This, the management submitted, would make it impossible for the factory to be managed efficiently in a climate of disgruntled employees. The language used by the respondent, it was claimed, was calculated to undermine factory discipline and therefore fell squarely within the prohibition of clause L(1)(j) of the Standing Orders.

In addition to the allegations concerning the speech, the management pointed out that the respondent’s behaviour in the subsequent correspondence with the General Manager was, at the very least, impudent. The management noted that the respondent relied on a distinction between his two capacities – that of a stenotypist and that of the Vice-President of the Union – to argue that the act complained of should be attributed solely to his Union role. The respondent, however, refused to answer any queries from the General Manager concerning the meeting, directing the General Manager instead to communicate with the Sangh or the Union for any required information. This refusal to provide answers, both in the letter and in later enquiries, was presented as further evidence of an attitude unbecoming an employee and as conduct that amounted to misconduct capable of justifying dismissal.

The respondent declined to answer the queries that the General Manager had sent to him in a letter in which the General Manager identified the respondent as the Steno-typist. Instead of providing the requested information, the respondent instructed the General Manager to obtain any details concerning the Union meeting held on 10 June 1952 from the Sangh or the Union itself. During the subsequent enquiry, the respondent repeated this approach, refusing once again to respond to the General Manager’s direct questions about the proceedings of that meeting. Counsel for the appellant vigorously contended that the respondent’s conduct was subversive of factory discipline and amounted to misconduct that justified dismissal. The Court found merit in this contention and held that the respondent’s behaviour was unbecoming of an employee of the appellant. The Court observed that the respondent had adopted a truculent stance in his correspondence, invoking a claim of “dual personality” by separating his role as a Steno-typist from his position as Vice-President of the Union, and consequently refused to answer the General Manager’s queries. The Court described this attitude as reprehensible. Although the respondent considered his Union office to be an august position, the Court emphasized that he remained, first and foremost, an employee of the appellant and therefore owed a duty to answer all questions addressed to him by the General Manager. The Court found the respondent’s evasion—purporting to shield himself behind his Union role—to be unjustifiable and, had such insubordination formed part of the charges, dismissal would have been unavoidable.

The Court further noted that the respondent’s conduct at the enquiry mirrored his earlier refusal to cooperate. He again declined to answer direct questions and audaciously suggested that the General Manager consult his written statement to discover the answers independently. The Court concluded that the respondent was guilty of insubordination and, if such conduct were deemed detrimental to the maintenance of discipline within the factory, it would have been difficult to reject the appellant’s claim for dismissal on those grounds. However, the charge-sheet presented against the respondent dealt solely with a speech he delivered on 10 June 1952, in which he made defamatory remarks and allegedly urged the workers to take steps toward the removal of the General Manager. The Court therefore distinguished the disciplinary issue of the speech from the separate instances of non-cooperation and insubordination highlighted in its analysis.

In this case, the Court noted that the enquiry held on 4 August 1952 was directed specifically at the charge that the respondent had delivered a speech urging the workers to adopt a resolution for the removal of the General Manager. The report prepared by the General Manager on 24 October 1952 recorded that the respondent indeed made such a speech, encouraging the workers to pass the resolution seeking the General Manager’s removal. The Court observed that the acts of insubordination which were described earlier as intended to undermine factory discipline were not part of the charge that had been framed, nor were they relied upon by the General Manager in his report as a basis for misconduct that would justify dismissing the respondent from his employment. The Court further held that the mere passage of a resolution calling for the General Manager’s removal, by itself, did not constitute a subversive act of discipline and therefore could not, on its own, give the management the right to terminate the respondent’s service. Accordingly, the Court expressed the view that, based on the record as it stood, the Labour Appellate Tribunal was correct in refusing the appellant’s request for permission to dismiss the respondent. The Court emphasized that the charge-sheet supplied by the appellant to the respondent formed the sole foundation of the enquiry conducted by the General Manager, and that the appellant could not rely on any grounds other than those expressly contained in the charge-sheet to justify the dismissal. Because the respondent had not been charged with the acts of insubordination that might have warranted dismissal, the appellant was not permitted to invoke those acts even though they could be proven later. On this basis, the Court concluded that the order of the Labour Appellate Tribunal was affirmed, although the reasoning adopted by the Tribunal differed from the reasons applied by this Court. The appeal was therefore dismissed. In view of the respondent’s conduct, which the Court described as reprehensible, the Court ordered that each party bear its own costs of the appeal, deeming that such an order would satisfy the ends of justice. Appeal dismissed.