M/S. Sasa Musa Sugar Works (P) Ltd vs Shobrati Khan and Others

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 746 and 747 of 1957

Decision Date: 29 April 1959

Coram: K.N. Wanchoo, Bhuvneshwar P. Sinha, P.B. Gajendragadkar

In this case the Supreme Court of India delivered a judgment on 29 April 1959 concerning the dispute between M/S Sasa Musa Sugar Works (P) Ltd. (the petitioner) and Shobrati Khan and others (the respondents). The judgment was written by Justice K N Wanchoo and the bench was completed by Justices Bhuvneshwar P Sinha and P B Gajendragadkar. The decision is reported in 1959 AIR 923 and 1959 SCR Supl. (2) 836, and it also appears in subsequent citation references such as R 1959 SC1111 (7), R 1959 SC1342 (17-19), E 1963 SC1756 (8), R 1964 SC708 (29-30), R 1965 SC1803 (11), R 1972 SC136 (33), RF 1972 SC1031 (51), D 1976 SC1760 (7-12), RF 1979 SC1652 (18), and RF 1980 SC1896 (152). The matter concerned an industrial dispute arising from a go-slow, the employer’s application for permission to dismiss workmen, the powers of the industrial tribunal, and the question of whether a perverse finding had been made under section 33 of the Industrial Disputes Act 1947.

While an adjudication proceeding between the workmen and the mill was still pending, the management of the appellant mill issued formal notices to thirty-three workmen and subsequently suspended each of them because they had taken a leading role in a prolonged go-slow that was in contravention of the Industrial Disputes Act. A few days later, for comparable reasons, the management served similar notices on a further fifteen workmen and also suspended those employees. After these suspensions the management filed two separate applications under section 33 of the Industrial Disputes Act seeking the Court’s permission to dismiss the suspended workmen. In response, the forty-eight workmen collectively filed applications under section 33A of the Act, alleging that the management had breached the provisions of section 33 by suspending them as a form of punishment. The Industrial Tribunal examined the matter and concluded that the suspensions were not punitive but were intended to address the deliberate and unjustified go-slow adopted by the workmen. Consequently, the Tribunal refused the employer’s request for dismissal with respect to sixteen of the workmen because there was insufficient evidence against them, but it granted the management leave to keep the remaining workmen suspended for a period of seven days, thereby denying the prayer for dismissal. The Tribunal also rejected the workmen’s applications under section 33A. Both parties appealed the Tribunal’s decision. When the appeals were heard, the Appellate Tribunal allowed the workmen to withdraw their appeal insofar as it related to their section 33A applications, thereby confirming the Tribunal’s finding that the suspensions were not punishments but interim measures pending an enquiry by the management and the Tribunal. While the Appellate Tribunal concurred with all other findings of the Industrial Tribunal, it took a different view on the nature of the suspension, holding that the suspension order constituted substantive punishment because the notices did not specify that the suspension was pending an enquiry. The Appellate Tribunal therefore considered the management’s subsequent application for permission to dismiss the workmen to be mala fide and dismissed the management’s appeal. The Court held that the material findings of the Industrial Tribunal had not been overturned by the Appellate Tribunal; consequently, the only appropriate order on the management’s applications under section 33 was the one consistent with those unchanged findings.

s. 33 of the Industrial Disputes Act authorized the management to dismiss workmen only when there was evidence against each of them. The Industrial Tribunal was not empowered to replace this statutory remedy with any other form of punishment or to grant permission for a different sanction. The Appellate Tribunal erred clearly when it held that the suspension in the present case was not an interim order pending enquiry and proceedings before the Tribunal under s. 33, but was instead a substantive punishment. This holding contradicted the finding of the Industrial Tribunal, which had been affirmed by its own order allowing the workmen to withdraw their appeal against that finding.

The Industrial Tribunal had concluded that there was no evidence against sixteen of the workmen. This conclusion appeared perverse on its face because the evidence presented against those sixteen individuals was the same as that presented against the thirty-two other workmen. Since the act of going-slow constituted serious and insidious misconduct that could not be tolerated, and because the workmen had been found guilty of such misconduct, the management was entitled to be granted permission to dismiss them.

The judgment was rendered in the civil appellate jurisdiction. It concerned Civil Appeals Nos. 746 and 747 of 1957, filed by special leave against judgments and orders dated 3 June 1955 and 21 May 1956 of the Labour Appellate Tribunal of India, Calcutta, in Appeal No. Cal. 366/52 and Miscellaneous Case No. 145 of 1955 respectively. These appeals arose from an award dated 22 September 1952 of the Industrial Tribunal, Bihar, which had been published in the Bihar State Government Gazette on 21 October 1952. Counsel for the appellant included the Attorney-General for India and an additional representative; the respondent did not appear. The judgment was delivered on 29 April 1959 by Justice Wanchoo.

The two appeals were brought by the management of Messrs Sasa Musa Sugar Works (Private) Ltd., a sugar factory located in the Saran district of Bihar, which had been established in 1932. In June 1942 a trade union was formed at the factory. By July 1943, industrial unrest led to the dismissal of three union office-bearers, one of whom, Shams-ud-din, was then the joint secretary. The matter was referred to adjudication, and the dismissed workmen were ordered reinstated in early 1944. In December 1944 further disturbances resulted in the dismissal of a large number of workmen, including Shams-ud-din, who had become the union president. That dispute was again referred to an Industrial Tribunal, which ordered the reinstatement of the dismissed workmen in August 1947, after which a period of peace ensued.

However, in June 1951 the management dismissed seventeen workmen, including Shams-ud-din, who at that time served as the union secretary. The unrest continued until December 1951, when an agreement between the union and management led to the reinstatement of twelve of the workmen, while the cases of five, including Shams-ud-din, were referred for adjudication.

In the settlement reached in December 1951 the parties agreed to reinstate twelve of the dismissed workmen, while five, including Shams-ud-din, were not reinstated and their cases were to be referred to adjudication. It also emerged that another reference between the management and its workmen had been pending before an Industrial Tribunal since 8 September 1951, when this agreement was concluded. After that the factory operations continued without major disturbance for a period of time. On 1 January 1952 the union served a notice on the management setting out as many as forty demands and warning that if the demands were not satisfied within seven days the union would advise the workmen to adopt a go-slow and to engage in passive resistance from 9 January 1952, and to employ all legitimate means to ensure that the go-slow persisted until the union’s demands were met. The management received the notice on 4 January and immediately informed the officers of the Labour Department as well as the Sub-Divisional Magistrate at Gopalganj. On 8 January the Deputy Labour Commissioner wrote to the union stating that, because the conciliation officer was occupied with the general elections, the status quo should be maintained until the elections were over so that the conciliation officer could later examine the matter. The union disregarded this advice and the go-slow began on 9 January and continued through 12 January. On 12 January the Labour Commissioner visited the factory and urged Shams-ud-din, who was identified as the chief orchestrator of the dispute, to call off the go-slow because conciliation proceedings were scheduled to commence in Patna on 17 January 1952. Conciliation proceedings did commence on 17 January and an agreement on some of the union’s demands was reached on 23 January, with further conciliation slated for February. Nevertheless, the go-slow was resumed from 24 January to 31 January. During this interval, a Labour Officer arrived at the factory on 28 January and held additional talks, but the workmen ignored his counsel. Consequently, the Labour Officer reported to the Labour Commissioner on 31 January that the go-slow was still in force. The Labour Commissioner then instructed the Labour Officer to inform the workmen that no further conciliation would be held until the go-slow was terminated. The Labour Officer subsequently advised the management that, with the permission of the Industrial Tribunal, disciplinary action could be taken against the workmen involved. Acting on this advice, the management issued a notice on the night of 31 January, effective from 1 February, suspending thirty-three workmen on the ground that they had taken a leading part in an unjustified go-slow that violated the Act and that they were therefore suspended pending further orders. This notice produced a temporary improvement in factory work for four days.

In this case, after the go-slow that had been halted for a few days restarted on 5 February, the management responded by suspending seven additional workmen on 6 February and eight further workmen on 7 February, giving each of them a notice that was worded in the same way as the notice served on the thirty-three workmen on 31 January. Because adjudication proceedings between the management and its workmen had been pending since September 1951, the management filed an application on 6 February 1952 under section 33 of the Act seeking permission to dismiss the original thirty-three workmen, and on 11 February 1952 it filed a second application under the same section for permission to dismiss the additional fifteen workmen who had been suspended later. The forty-eight workmen, in turn, filed an application on 29 March 1952 under section 33-A of the Act before the Industrial Tribunal, contending that their suspensions were punitive measures taken without the sanction of the Tribunal and that, consequently, the management had violated section 33. The Tribunal heard the three applications together and the workmen raised three principal contentions: first, that the management’s applications under section 33 were not preceded by any enquiry into the workmen’s alleged misconduct and therefore should be rejected; second, that the suspensions constituted punishment and thus amounted to a breach of section 33; and third, that there had been an unjustified go-slow by the workmen during January and February 1952. Regarding the first contention, the Tribunal observed that the management had indeed not conducted an enquiry before filing the applications under section 33; however, it noted that all evidence that could have been obtained in such an enquiry had already been presented before the Tribunal, which now possessed the complete factual record, and therefore there was no prejudice to the workmen, as the Tribunal could review the entire evidence and decide whether to grant the dismissal applications. On the second point, the Tribunal held that the suspensions were not punitive in the present circumstances but were provisional measures pending the management’s enquiry and the pending proceedings under section 33 before the Tribunal; it further observed that, in the absence of any standing orders governing suspension in that factory, the management remained liable to pay the workmen’s wages during the period of suspension. On the third issue, after a detailed examination of the evidence, the Tribunal concluded that the workmen had deliberately instituted a go-slow in January and February 1952 and that this action was unjustified because it occurred while conciliation proceedings were still ongoing. Having made these findings, the Tribunal then considered the applications under sections 33 and 33-A. It found no evidence indicating that sixteen of the forty-eight workmen had taken part in or incited the go-slow, and therefore it refused the application for dismissal under section 33 with respect to those sixteen individuals. For the remaining thirty-two workmen, the Tribunal noted that certain standing orders then under consideration provided for either dismissal or a seven-day suspension in cases of misconduct; consequently, it granted the management leave to suspend those workmen for seven days, taking into account the opinion of a Go-Slow Committee previously appointed by the Bihar Central (Standing) Labour Advisory Board, but it rejected the management’s request for dismissal of those thirty-two workmen. Finally, the Tribunal rejected the workmen’s application under section 33-A.

The Tribunal concluded that the sixteen workmen had either participated in the go-slow or had instigated it, and therefore it denied the application filed under section 33 for those sixteen individuals. Regarding the remaining thirty-two workmen, the Tribunal noted that at the time certain Standing Orders were being considered which prescribed either dismissal or a seven-day suspension for misconduct. Consequently, it was appropriate to allow the management to suspend those thirty-two workmen for seven days, taking into account an opinion expressed by a Go-Slow Committee that had been appointed earlier by the Bihar Central (Standing) Labour Advisory Board. In effect, the Tribunal also rejected the management’s request for dismissal of these thirty-two workmen. Finally, the Tribunal dismissed the application made under section 33-A. This award gave rise to two separate appeals before the Labour Appellate Tribunal: one filed by the management contesting the entire award insofar as it related to its applications under section 33, and another filed by the workmen challenging the dismissal of their application under section 33-A and also contesting the award concerning the management’s applications under section 33. When the Appellate Tribunal heard the matter, the workmen withdrew their appeal with respect to their section 33-A application, resulting in its dismissal. The withdrawal meant that the finding of the Industrial Tribunal—that the suspension was not a punishment but merely a measure pending an enquiry by the management and the Tribunal’s proceedings—was confirmed. The management’s appeal concerning the section 33 applications raised two substantial questions of law before the Appellate Tribunal: first, whether the Industrial Tribunal possessed the authority either to grant or refuse permission to dismiss under section 33 and whether it could go beyond that to decide the extent of any punishment; and second, whether the Tribunal erred in rejecting the applications against the sixteen workmen on the basis that there was no evidence. The Appellate Tribunal agreed with the management on both points and held that the appeal presented substantial legal questions. It also found that the Industrial Tribunal’s conclusion that the workmen had engaged in a go-slow was not perverse and could be the sole finding based on the evidence. The Tribunal further described the go-slow as an insidious form of conduct that could not be tolerated, characterising it as serious misconduct for which the normal penalty would be dismissal. Moreover, the Tribunal held that the Industrial Tribunal was incorrect in relying on the recommendations of the Go-Slow Committee and on the contemplated Standing Orders, which had not yet come into force. Having expressed all these observations, the Tribunal was expected to set aside the Industrial Tribunal’s order and to grant the management permission to dismiss the workmen on account of the serious misconduct identified.

It was observed that an employer could not impose punishment on a workman without first obtaining permission from the tribunal under section 33. The law was clear that an application for such permission would be considered mala fide if it was filed after the employer had already imposed a punishment on the workman. Applying this rule, the Tribunal held that in the present matter the management’s suspension of the workmen amounted to substantive punishment. The notice of suspension, it was said, did not expressly state that the suspension was merely pending an enquiry. Because the applications for permission under section 33 were filed after the suspension had already been imposed, the Tribunal concluded that those applications were mala fide.

In reaching that conclusion, the Appellate Tribunal appeared to overlook an earlier finding in which it had dismissed the workmen’s appeal against the order of the Industrial Tribunal on their application under section 33-A. That earlier dismissal had effectively confirmed the Industrial Tribunal’s view that the suspension was not a punishment but an interim measure pending an enquiry by the management and the proceedings before the tribunal. To support its later decision on the question of punishment, the Appellate Tribunal said that the management’s mala fides were evident because the suspensions had been effected between 31 January and 7 February 1952, yet the management’s application for permission was filed on 29 March 1952, after the workmen had filed their application under section 33-A. This chronology was inaccurate. In reality, the management’s applications under section 33 were filed on 6 February and 11 February, while the workmen’s application under section 33-A was filed on 29 March. By reversing the actual order of the applications, the Tribunal erroneously concluded that the management’s applications under section 33 were not bona fide. Consequently, it dismissed the management’s appeal and upheld the Industrial Tribunal’s order concerning the seven-day suspension of thirty-two workmen, stating that the workmen had withdrawn their appeal. Earlier in the judgment, however, it was noted that the workmen had withdrawn only their appeal under section 33-A, not their appeal under section 33.

The Appellate Tribunal’s mistake in inverting the sequence of the applications led the management to file a review application. Although the Tribunal acknowledged that the dates had been mistakenly recorded, it found no reason to revisit its order. The management consequently filed two special leave petitions before this Court. In the present opinion, the Court held that the findings of the Industrial Tribunal on the three issues it had formulated, which were not overturned by the Appellate Tribunal, left only one possible order on the management’s applications under section 33. That order was to permit the management to dismiss the forty-eight workmen, provided that evidence supported such a dismissal.

In this case the Court observed that permission to dismiss the forty-eight workmen could be granted only if there was evidence against each of them. The Industrial Tribunal was not authorized, when asked to give such permission, to replace the dismissal with any other form of punishment. The Tribunal had found that misconduct existed and that finding was affirmed by the Appellate Tribunal. Consequently, if evidence showed that the forty-eight workmen were guilty of misconduct, the Tribunal was bound to grant the dismissal that had been sought. The Court could not accept the Appellate Tribunal’s view that the suspensions constituted substantive punishment rather than interim orders pending enquiry and proceedings under section 33. The Court noted that the Labour Officer had informed the management on 31 January 1952 that disciplinary action could be taken with the Tribunal’s permission. On that same day thirty-three workmen were suspended, and the notice expressly stated that the suspension was pending further orders, thereby indicating to the workmen that the measure was only temporary. This notice was followed on 6 February by an application to the Industrial Tribunal for permission to dismiss those thirty-three workmen, which further demonstrated that the suspension was intended to be provisional pending any enquiry by the management and the Tribunal’s proceedings. In a similar manner, suspension notices dated 5 February and 6 February concerning fifteen workmen indicated that the workers were suspended “till further orders,” and on 11 February an application under section 33 was filed with the Tribunal seeking permission to dismiss them. These circumstances made it clear that the suspensions were not punishments but interim steps awaiting enquiry and the Tribunal’s adjudication. The Court reiterated that the Industrial Tribunal had reached this conclusion, which formed the basis for dismissing the application under section 33-A; that finding remained confirmed when the workmen withdrew their appeal on that application. Accordingly, the Court held that the Appellate Tribunal erred in characterising the suspension as punishment. The remaining issue concerned sixteen workmen for whom the Industrial Tribunal had found no evidence linking them to the go-slow. The management contended that the Tribunal’s finding was incorrect, and the Court observed that the evidence against these sixteen individuals derived from the same witnesses and was of the same character as that against the other thirty-two workmen. Therefore, the Tribunal’s conclusion that there was no evidence against the sixteen workmen was manifestly perverse, because the same evidence applied to both groups. As a result, the Court concluded that all forty-eight workmen—two of whom were later reported to have died—were in the same position with respect to the evidence of misconduct.

All forty-eight workmen, including the two who have since died, are held to be in exactly the same position. The Appellate Tribunal had observed that a go-slow constitutes serious misconduct, that it is insidious in nature, and that such conduct cannot be countenanced. Accordingly, because these forty-eight workmen participated in the go-slow, they were guilty of serious misconduct and the management was entitled to obtain permission to dismiss them. However, the management conducted no enquiry after suspending the workmen, and the proceedings under section 33 were, in effect, transformed into an enquiry that ordinarily should have been held by the management before it applied to the Industrial Tribunal. Consequently, the management is bound to pay the wages of the workmen until a case for dismissal is established in the section-33 proceedings, as indicated by the Court’s decision in Management of Ranipur Colliery v. Bhuban Singh (1). This approach was also adopted by the Industrial Tribunal while considering the application under section 33-A, and that view was confirmed when the workmen’s appeal against that application was dismissed. Therefore, the management must continue to pay the wages of the workmen for the period of suspension up to the date of the Industrial Tribunal’s award. The Court allowed the appeals, set aside the orders of both Tribunals insofar as the applications under section 33 are concerned, and granted the appellant the permission it sought in those applications, subject to the payment of all wages to the workmen during the suspension period, which ended on 22-9-1952. Because the workmen did not contest these appeals, no order as to costs was made. The appeals were allowed. (1) [1959] Suppl. 2 S.C.R. 719.