The Calcutta Jute Mfg. Co. Ltd vs Calcutta Jute Mfg. Workers' Union

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 11 of 1961

Decision Date: 16 November 1961

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

In this matter the Supreme Court of India considered an appeal filed by The Calcutta Jute Manufacturing Company Limited against the Calcutta Jute Manufacturing Workers’ Union. The judgment was delivered on 16 November 1961. The case was heard by a bench consisting of Justice A. K. Sarkar, Justice P. B. Gajendragadkar and Justice K. N. Wanchoo. The official citation for the decision appears as 1966 AIR 1731 and 1962 SCR Suppl. (1) 483. The dispute arose under the provisions governing industrial disputes, specifically dealing with the charge of defiance and insubordination. The applicable statutory framework required that a person exercising authority must be a direct superior of the workman against whom a charge of insubordination is made, and it considered whether incidental matters could be addressed in an enquiry. The conduct in question was examined under Standing Order 14(c)(i), which defines two categories of misconduct: wilful insubordination and disobedience of any lawful and reasonable order of a superior. The factual matrix described a sardar named J from the Batching Department who reported to his department supervisor, G, that a workman identified as R from the Spinning Department was discarding usable roves. After G verified the report, he instructed J to retrieve the discarded roves. R attempted to stop J, and when G intervened, R responded with threatening and abusive language. Subsequently another sardar identified as S sided with R, also abusing G and threatening him with violence. The management, acting on the complaints, served charge‑sheets on R and S alleging misconduct under Standing Order 14(c)(i) for using abusive language and threatening a supervisor. The industrial tribunal held that G, not being the direct supervisor of the Spinning Department, was not a superior within the meaning of the order, and therefore the workmen could not be said to have committed insubordination or disobedience under that provision. The Court, however, held that defiance of persons in authority, irrespective of whether they are the direct superiors, and riotous conduct that prevents higher officers from performing their duties, constitute insubordination. The Court further observed that a dismissal order may be sustained if it is based on a finding on a charge that the workmen had the opportunity to meet, even when incidental matters arise during the enquiry. In reaching this conclusion the Court referred to the earlier decision in N. Kalindi v. M/s. Tata Locomotive & Engineering Co. Ltd. (1960) 2 L.L.J. 228.

The appeal was filed as Civil Appeal No. 11 of 1961 under special leave, challenging the award dated 7 January 1960 of the Second Labour Court, West Bengal, Calcutta, in case No. VIII‑C/157 of 1958. Counsel for the appellant included the Attorney‑General for India and additional advocates representing the company's interests. Counsel for the respondent comprised a team of advocates representing the workers’ union. The Court rendered its judgment on 16 November 1961, affirming the legal principles outlined above and providing the authority for the final order in the appeal.

The judgment was delivered by Justice Sarkar. The matter before the Court was an appeal against an award of an industrial tribunal which had held that the dismissal of two workmen by the appellant was unjustified and had ordered that the workmen be reinstated. The appellant is a factory engaged in the manufacture of yarn from jute. Within the factory there are, among other sections, two distinct departments: the Spinning Department and the Batching Department. The two workmen who were the subject of the dispute are named Ramdhani and Sitaram, and both of them were employed in the Spinning Department.

The process of yarn production begins in the Batching Department, where an unfinished stage of the yarn is prepared. This intermediate product is then transferred to the Spinning Department for final processing before it is ultimately used for weaving. According to the appellant’s version of events, on 22 March 1958 a Roving Sardar belonging to the Batching Department, identified as Jagabandhu, reported to Ghosh, who was the officer in charge of that department, that Ramdhani had been disposing of certain roves—slivers of jute that had been drawn out and lightly twisted—as unusable, even though those roves were still workable and had been transferred from the Batching Department to the Spinning Department.

Ghosh proceeded to the Spinning Department and observed that Jagabandhu’s report was correct. He then instructed the Roving Sardar to collect the roves that Ramdhani had thrown away so that they could be placed before the appropriate authority for inspection. It was clear from Ghosh’s actions that he intended to lodge an official complaint concerning Ramdhani’s conduct. When Ghosh intervened, Ramdhani, who held the position of Sardar in the Spinning Department, attempted to stop the Roving Sardar from gathering the roves. In response, Ramdhani adopted a threatening demeanor and used abusive, filthy language directed at Ghosh.

Subsequently, Sitaram, another Sardar from the Spinning Department who had no direct involvement in the original incident, arrived at the scene and sided with Ramdhani. Sitaram also resorted to abusive language against Ghosh and further threatened him with physical violence. Ghosh reported the conduct of both Ramdhani and Sitaram to the factory management. Following the complaint, the management issued charge‑sheets to the two workmen. The charge‑sheets alleged that Ramdhani and Sitaram had employed abusive, filthy language and had threatened to assault Ghosh, and consequently stated that they were guilty of misconduct punishable under Standing Order No. 14(c)(i) of the appellant’s standing orders. The standing order reads: “14(c) – The following acts and omissions shall be treated as misconduct: (i) wilful insubordination, or disobedience, whether alone or in combination with others, of any lawful or reasonable order of a superior.”

In accordance with the charge‑sheets, the appellant’s Labour Officer conducted an enquiry and arrived at the following findings: “Both Sitaram and Ramdhani accepted the statement of Jagabandhu, the sole witness to the incident. Jagabandhu’s statement clearly proves the offence of insubordination charged against Sitaram and Ramdhani. These two workmen could not produce any witness or evidence that would satisfy the requirement of establishing their non‑guilt. The refusal to accept the charge‑sheet is also another misconduct on the part of both these two workmen. Moreover, they not only refused to accept the charge‑sheet to explain their conduct but committed another very serious offence of”

It was found that Ramdhani and Sitaram had actively incited other Sardars to organize a two‑day strike on 24 and 25 March 1958, an action that caused a serious disruption of work and created a level of tension that threatened the continuation of operations throughout the mill and even raised the possibility of the mill’s closure. Relying on the statement of the sole witness, Jagabandhu, which the two workmen had accepted, and considering their subsequent behaviour, the enquiry officer concluded that they were guilty of both insubordination and conduct that was subversive to discipline. Following this finding, the appellant issued an order dated after the charge sheet of 26‑3‑58 stating that the two workmen had been found guilty of misconduct under Rule 14‑C(I) of the certified standing orders and that, as a result, they were dismissed from the service of the company. The trade union, which was the respondent in the present appeal, challenged the dismissal by raising an industrial dispute. The dispute was referred by the Government to the industrial tribunal, which rendered the award previously mentioned. During the tribunal proceedings the appellant conceded that Ghosh was not the supervisor of the Spinning Department where Ramdhani and Sitaram were employed and therefore was not their direct superior. In light of this admission, the tribunal observed that any alleged disobedience of Ghosh’s orders could not constitute insubordination or disobedience under the applicable standing order, because Ghosh did not occupy a supervisory position over the two workmen. Consequently, the tribunal held that the enquiry officer’s decision that the workmen were guilty of misconduct under Standing Order No. 14(c)(i) was fundamentally erroneous and could not be sustained. The tribunal therefore directed that the dismissed workmen be reinstated. It also noted that the appellant had been influenced by the enquiry officer’s finding that the workmen had refused to accept the charge sheets and had orchestrated the strike, matters which were not specified in the charge sheets and therefore could not be taken into account when deciding upon dismissal. Further, the tribunal observed that the workmen’s conduct was improper and, accordingly, refused to order payment of wages for the period of their forced unemployment, treating that period instead as leave without pay. The present appeal challenges that award. Although the tribunal did not expressly comment on the factual findings of the enquiry officer, it is clear that it accepted those findings, for otherwise it would not have denied the workmen’s wages on the ground that their conduct was improper. Having examined the evidence on record, the Court expressed no doubt that the appellant’s version of events was correct, and it affirmed that the two

The Court observed that the evidence showed that the workmen had indeed committed the misconduct that had been alleged against them. The next issue to be decided was whether that misconduct fell within the scope of Standing Order No. (14)(c)(i). The Court could not concur with the tribunal’s view that the conduct of the workmen did not constitute wilful insubordination. It held that the Standing Order contemplated two distinct forms of misconduct: the first form being wilful insubordination and the second form being disobedience of any lawful and reasonable order issued by a superior. The Court pointed out that these two forms were clearly separate categories. If, as the tribunal had suggested, insubordination were merely the disobedience of an order given by an officer who was directly above the workmen, then the two categories described in the Standing Order would merge into a single description of misconduct, a result that the Court considered to be an incorrect interpretation of the provision. In the Court’s opinion, insubordination covered not only defiance of a person who was the immediate supervisor but also defiance of any person exercising authority, irrespective of whether that person was the direct superior of the workmen concerned. The Court added that insubordination also embraced riotous behaviour which rendered it impossible for senior officers to perform their duties properly. The Union counsel, Mr Ramamurthi, submitted that insubordination meant disobedience of a prescribed rule. The Court found that even on that construction the workmen’s actions amounted to insubordination. The Court explained that an implied rule of the factory required that higher officers should not be obstructed or prevented from notifying management about wasteful practices of the workmen that caused loss to the employer. The Court noted that this principle was the subject of the Ghosh case and that it had provoked the anger of the workmen. Mr Ramamurthi further contended that the episode could not be described as wilful insubordination because the workman Ramdhani was allegedly entitled to discard roves he deemed unworkable, arguing that his remuneration depended on his output. The Court rejected that argument as wholly unfounded, observing that Ramdhani had admitted in his evidence that he received a weekly wage and therefore his pay was not linked to his output. Moreover, the Court stressed that the charge against Ramdhani was not the disposal of roves but the adoption of a threatening attitude toward a senior officer of the appellant. Mr Ramamurthi also submitted that the dismissal was not based on a finding of insubordination and that the tribunal was correct in holding that the dismissal was prompted by the enquiry officer’s finding that the workmen had refused to accept the charge‑sheets, thereby causing a strike, and that no separate charges had been laid against them, depriving them of an opportunity to defend themselves. The Court referred to the previously recorded order of dismissal and observed that the order made no reference to any ground other than the finding on the charge brought against the workmen. Accordingly, the Court held that a dismissal order could properly be upheld when it is grounded on a finding on a charge for which the workmen had been given a reasonable chance to meet the charge.

The Court noted that a dismissal order may be sustained on the basis of a finding on a charge even though, during the enquiry, other incidental matters may have arisen. It warned against adopting an overly legalistic approach in such situations. The Court further observed that the two matters identified in the enquiry officer’s report were in fact connected with the charge itself and had been mentioned solely to reinforce the officer’s finding on that charge. The misconduct set out in the charge‑sheets had prompted the workmen to refuse to accept those charge‑sheets, which in turn led to the stay‑in‑strike. Consequently, the enquiry inevitably raised questions concerning those matters, and the enquiry officer was entitled to refer to them. The Court explained that such issues were also relevant for the employer when determining the appropriate punishment for the breach of the Standing Order. In any event, there was no basis to conclude that the dismissal order was predicated on any consideration other than the findings articulated in the charge‑sheets. The Court cited N. Kalindi v. M/s. Tata Locomotive & Engineering Co. Ltd. (1) in support of this view. Mr. Ramamurthy contended that the dismissal amounted to victimisation and that the tribunal had essentially reached that conclusion. The Court could not accept this argument, noting that the workmen’s evidence did not allege victimisation and that the tribunal had not made any finding of victimisation. Accordingly, the Court held that the tribunal’s order could not be upheld. It set aside the tribunal’s decision and affirmed that the dismissal of Ramdhani and Sitaram had been properly effected by the appellant, thereby allowing the appeal.