Delhi Cloth And General Mills Co., Ltd vs Shri Rameshwar Dyal And Anr

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 353 of 1959

Decision Date: 22 November 1960

Coram: K.N. Wanchoo, P.B. Gajendragadkar, A.K. Sarkar

In this decision, the Supreme Court recorded that the matter involved Delhi Cloth and General Mills Company Limited as the petitioner and Shri Rameshwar Dyal together with another respondent as the respondents. The judgment was rendered on 22 November 1960 by a bench comprising Justice K.N. Wanchoo, Justice P.B. Gajendragadkar and Justice A.K. Sarkar. The case was reported in the 1961 All India Reporter at page 689 and also in the 1961 Supreme Court Review at page 590. The central issue concerned an industrial dispute arising under the Industrial Disputes Act, 1947 (Act 14 of 1947) and specifically the operation of section 33A of that Act. One of the respondents, Sharda Singh, who was employed by the appellant‑mills, had been dismissed on the ground that he disobeyed lawful orders of the managing authority. Singh subsequently filed an application before the Industrial Tribunal invoking section 33A, contesting the dismissal on several grounds. The Tribunal, acting as an interlocutory authority, issued an order directing that, as an interim measure, Singh should be permitted to resume work in the appellant’s mills and that, should the management refuse to take him back, his full wages should be payable from the date he reported for duty. The appellant‑mills challenged this interim order by filing a writ petition before the High Court, which upheld the Tribunal’s interim relief as justified. The matter then proceeded to the Supreme Court after the High Court granted a certificate of appeal. The Supreme Court held that the interim order reinstating the respondent was erroneous because such relief could not be granted by the Tribunal; granting it would amount to a premature determination of the case and effectively confer the entire relief without a proper hearing on the legality of the dismissal. The Court referred to the decisions in Management, Hotel Imperial and Others v. Hotel Workers’ Union, AIR 1959 SC 1342, and Punjab National Bank v. All India Punjab National Bank Employees’ Federation, AIR 1960 SC 160, in support of this reasoning. The judgment was delivered in a civil appellate jurisdiction as Civil Appeal No. 353 of 1959, arising from the Punjab High Court’s order dated 22 April 1958 in Civil Writ No. 257‑D of 1957. The appellant was represented by counsel including the Attorney‑General of India, while the respondents were represented by separate counsel. The Court pronounced its opinion through Justice Wanchoo, noting the procedural history and the legal principles governing the grant of interim relief in industrial disputes.

In the circumstances, the workman failed to report for the day shift and was consequently recorded as absent. On 1 September 1956, he addressed an application to the General Manager stating that he had actually reported for duty on 30 August at ten‑thirty in the evening, had worked the entire night, and had nevertheless not been marked as present. He further explained that he had again gone to the mills on the night of 31 August but had been prevented from working because he had been transferred to the day shift. The workman asserted that the management had dealt with him arbitrarily in order to harass him, and although he claimed to have no objection to carrying out lawful orders, he requested the manager’s intervention to protect him from what he described as high‑handed action, adding that the mills should be held responsible for the wages of the days on which he was denied work. On 4 September 1956, he filed an application before the industrial tribunal, which was already handling a separate dispute, invoking section 33‑A of the Industrial Disputes Act, No XIV of 1947. In that application he complained that he had been transferred from one shift to another without any rational basis, that such a transfer amounted to an alteration of the conditions of his service, and that this alteration was prejudicial and detrimental to his interests; he further contended that the transfer contravened the provisions of section 33 of the Act and therefore prayed for appropriate relief under section 33‑A. The following day, on 5 September 1956, the General Manager replied to the workman’s earlier letter, confirming that the order to transfer him from one shift to another had been issued on 28 August and that he had been instructed to report for the day shift from 30 August. The General Manager asserted that instead of complying with the normal order, the workman had deliberately disobeyed it by reporting for the night shift on 30 August, had subsequently been ordered to leave and to report for the day shift, and had again failed to do so, intentionally absencing himself and thereby wilfully refusing to obey the lawful orders of the departmental officers. Consequently, the General Manager called upon the workman to show cause why disciplinary action should not be taken against him for such wilful disobedience and required him to submit an explanation within forty‑eight hours. The workman complied and submitted his explanation on 7 September 1956. Shortly thereafter, the appellant‑mills received notice of the workman’s application under section 33‑A and filed a reply on 5 October 1956. In that reply the appellant‑mills argued that a transfer from one shift to another fell within the legitimate powers of management, could not be characterised as an alteration of the terms and conditions of service to the workman’s prejudice, and therefore the complaint under section 33‑A was not maintainable. The appellant‑mills also highlighted that a domestic inquiry into the workman’s conduct was in progress and prayed that the proceedings under section 33‑A be stayed until the domestic inquiry was concluded.

The respondent’s later conduct was taken into account, and the applicant sought a stay of the proceedings filed under section 33‑A until the domestic inquiry was completed. No further action appears to have been taken on that section 33‑A complaint, despite the applicant’s request for a stay. Nevertheless, the domestic inquiry proceeded, and on 25 February 1957 the inquiry officer reported that the charge of misconduct against the respondent had been proved. Following this finding, the General Manager issued an order on 5 March 1957 stating that, in view of the respondent’s serious misconduct and his prior record, dismissal was warranted. However, because an industrial dispute was then pending, the General Manager directed that permission from the industrial tribunal be obtained before the dismissal could be effected and that an application for such permission be filed under section 33 of the Act. In the interim, a notification dated 1 March 1957 announced that the provisions of the Central Act No. XXXVI of 1956, which amended sections 33 and 33‑A, would come into force on 10 March 1957. The amendment brought a substantial change to section 33, effective from that date, by modifying the absolute prohibition on an employer altering any terms of service to the prejudice of workmen or taking action for misconduct. The revised provision stipulated that an employer could act on any matter connected with the dispute, or on misconduct linked to the dispute, only with the written permission of the authority before which the dispute was pending. Conversely, if the matter for which the employer sought to act, in accordance with the applicable Standing Orders, was not connected with the dispute, the employer could proceed as he deemed fit, provided that in cases of discharge or dismissal one month’s wages were paid and an application for approval of the action was made to the tribunal hearing the dispute. Relying on this legislative change, the appellant‑mills concluded that the respondent’s misconduct was unrelated to the pending dispute and therefore they were entitled to dismiss him after paying one month’s wages and seeking the tribunal’s approval of the action taken. Accordingly, they did not file the application for permission that the General Manager’s 5 March 1957 order had required. Subsequently, on 2 April 1957 the General Manager issued an order of dismissal after tendering one month’s

After paying one month’s wages to the respondent, the appellant‑mills applied to the appropriate authority for approval of the dismissal. In response, the respondent filed a fresh application under section 33‑A of the Act on 9 April 1957, alleging that his termination had been effected without the express permission of the tribunal, which he said violated the provisions of section 33, and he prayed for the relief deemed necessary. On 18 April 1957 the tribunal issued an interim order on the basis of that application; the order directed that, as a temporary measure, the appellant‑mills should allow the respondent to resume work beginning on 19 April, and it required the respondent to report for duty. The tribunal further ordered that, should the management refuse to take the respondent back, he would be entitled to full wages effective from 19 April, the date on which he reported for duty. However, on 6 May 1957 the tribunal dismissed the 9 April application as defective, and consequently the interim order of 18 April was terminated. On the same day the respondent lodged another application under section 33‑A, this time curing the defects identified in the earlier filing, and once again asserted that his dismissal on 2 April 1957, which had been carried out without the prior express permission of the tribunal, contravened section 33, and he again sought appropriate relief. That subsequent application remains pending, even though more than three years have elapsed. It is also unclear what outcome, if any, resulted from the respondent’s earlier application of 4 September 1956, in which he complained that his conditions of service had been prejudicially altered by a shift transfer. The delay in disposing of applications under sections 33 and 33‑A is regrettable, and the appellant‑mills share responsibility for the protracted status of the matter. The appellant‑mills replied on 14 May 1957 to the latest section 33‑A application, contending that no breach of section 33 had occurred because the amended provision applied to the dismissal order dated 2 April 1957, and they further argued that, on the merits, the dismissal was justified under the circumstances. The matter was again before the tribunal on 16 May 1957, where the tribunal issued another interim order, directing that the respondent be permitted to work from 17 May and to report for duty, and stipulating that if the management failed to reinstate him, he would be paid his full wages from the date of his reporting. Following this interim order, the appellant‑mills filed a writ petition in the High Court.

In the proceedings before the High Court the appellant‑mills raised two principal arguments. First, they asserted that the tribunal lacked authority to consider an application under section 33‑A of the Industrial Disputes Act because the amended sections 33 and 33‑A had become effective on 10 March 1957, and therefore the earlier statutory framework could not apply to the facts of this case. In the alternative, they contended that even if the tribunal could entertain the application, it did not have power to issue an interim order directing reinstatement of the respondent or, in lieu of reinstatement, to direct payment of the respondent’s full wages before the merits of the application under section 33‑A had been fully examined.

The High Court addressed each of these contentions in turn. Regarding the first contention, the Court examined section 30 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, No XXXVI of 1956, and concluded that, notwithstanding the amendment, the case at hand fell within the ambit of the pre‑amendment version of section 33. Consequently, the Court held that the tribunal possessed jurisdiction to entertain the complaint filed on 6 May 1957 under section 33‑A of the Act. On the second contention, the Court found that the tribunal’s interim order granting relief was within the scope of its jurisdiction and was therefore justified. As a result, the High Court dismissed the writ petition filed by the appellant‑mills.

Subsequent to the dismissal, the appellant‑mills applied to the High Court for a certificate authorising an appeal to this Court, and such a certificate was granted. The matter therefore reached the Supreme Court, and the same two points raised before the High Court were again argued before us. The Court was of the view that it was unnecessary to decide the first point concerning the applicability of the amended provisions, because the Court had already concluded that the interim order dated 16 May 1957 was manifestly erroneous as a matter of law and could not be sustained. Apart from the issue of whether the tribunal had authority to grant an interim order without first making an interim award—a question that had been left open by this Court in the earlier decision of The Management of Hotel Imperial v. Hotel Workers’ Union—the Court was of the opinion that, when a tribunal is considering an application under section 33‑A and the question before it is whether a dismissal contravenes section 33, it is legally incorrect for the tribunal to order reinstatement or full wages as an interim measure when the employer has not yet taken the workman back into service.

The Court further explained that, in a complaint under section 33‑A that challenges a dismissal on the ground that it violates section 33, the ultimate remedy that the tribunal may grant, if it finds in favour of the workman, is reinstatement. Such a final reinstatement order can be issued only after the employer has failed to justify the dismissal before the tribunal, either by demonstrating that a proper domestic inquiry was conducted and that it established misconduct, or, where no domestic inquiry was held, by producing sufficient evidence before the tribunal to justify the dismissal. This principle was reaffirmed in Punjab National Bank Ltd. v. All‑India Punjab National Bank Employees’ Federation, where the Court explained that proving a contravention of section 33 alone does not automatically entitle the employee to reinstatement; the employer retains the opportunity to justify the dismissal on the merits.

In the judgment the Court observed that, where a petition is filed under section 33‑A, an employee cannot obtain an order of reinstatement solely by establishing that the employer violated the provisions of section 33. Even after the employee proves such a violation, the employer remains entitled to justify the dismissal on its merits, and that justification forms an essential part of the dispute that the tribunal must examine because the employee’s complaint is regarded as an industrial dispute and every relevant issue of that dispute falls within the ambit of section 33‑A. Consequently, when the tribunal is disposed to decide, after a full hearing under section 33‑A, whether the employee ought to be reinstated, it does not have the authority to grant reinstatement as an interim measure, for such an interim order would confer upon the workman the very relief that he may obtain only after a final determination that the employer has failed to substantiate the dismissal. The interim order that had been issued in the present case directed that the workman be allowed to resume his duties, that is, he was ordered to be reinstated; alternatively, the order provided that if the management refused to take him back, the employer should pay him his full wages. The Court held that this type of interim order is not permissible because it effectively grants the respondent at the outset the relief that could be awarded only if the employer were to lose the final proceedings under section 33‑A. As noted in the case of Hotel Imperial (1), an interim measure should ordinarily not amount to the complete relief that a successful workman would ultimately receive. Accordingly, the Court concluded that the tribunal’s order permitting reinstatement as an interim relief, or, in lieu thereof, full wages, was manifestly erroneous and therefore had to be set aside. The appeal was allowed, and the orders of the High Court as well as the tribunal dated 16 May 1957 granting the interim relief were annulled. Counsel for the respondent asked that some form of interim relief be granted pending the decision on the appeal, but the Court found that no such interim relief was justified in the circumstances. The Court further emphasized that applications under sections 33 and 33‑A must be disposed of expeditiously and expressed confidence that the applications dated 4 September 1956, which had apparently been overlooked, and 6 May 1957 would now be promptly considered and finally decided by the tribunal, as required for all applications under section 33‑A. No order as to costs was made, and the appeal was allowed. (1) [1960] 1 S.C.R. 476.