Ananda Bazar Patrika (P) Ltd vs Its Workmen

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 633 of 1962

Decision Date: 7 May 1963

Coram: P.B. Gajendragadkar, K.N. Wanchoo, K.C. Das Gupta

In this matter the petitioner was Ananda Bazar Patrika (P) Ltd and the respondents were the workmen of the newspaper. The judgment was delivered on 7 May 1963 by a three‑judge bench of the Supreme Court comprising P B Gajendragadkar, K N Wanchoo and K C Das Gupta. The decision is reported in 1964 AIR 339 and 1964 SCR (3) 601 and has been subsequently cited, for example in R 1972 SC 136. The case arose under the Industrial Disputes Act, 1947, specifically the provision dealing with the discharge of workmen and the requirement that a domestic enquiry be conducted in accordance with the principles of natural justice, as set out in section 10(1)(D). The factual background was that the respondent worked as a reporter for the newspaper. When the regular Chief Reporter went on leave, he temporarily appointed a journalist identified only as “M” to act as Chief Reporter. The respondent was dissatisfied with this temporary arrangement and began to disregard the assignments that the Acting Chief Reporter gave him. The Acting Chief Reporter complained to the Managing‑Director that the respondent was ignoring his directions. As a result, the management instituted a domestic enquiry against the respondent. The enquiry proceeded on a day‑to‑day basis and the respondent was permitted to cross‑examine the witnesses at length. However, the enquiry officer refused to allow the Editor to be examined on behalf of the respondent, reasoning that the Editor was not a material witness. After hearing the evidence, the enquiry officer concluded that the charge against the respondent was proved and the management accepted the report, consequently discharging the respondent from service. The dispute was referred to the Labour Court, which held that the domestic enquiry had not complied with the principles of natural justice because the respondent was not allowed to examine any witness. The Labour Court therefore directed the petitioner to reinstate the respondent. On appeal, the Supreme Court observed that the enquiry officer is authorized to decline to examine a witness or to disallow a question when, in good faith, he determines that the witness or the question is irrelevant to the enquiry. The Court further held that the enquiry officer did not act mala fide or contravene the principles of natural justice by refusing to call the Editor as a witness for the respondent or by disallowing certain questions on the ground of irrelevance. Finally, the Court stated that if a domestic enquiry is found to be fair, free of malice, and conducted in accordance with natural‑justice principles, and its conclusions are not perverse, the Labour Court has no jurisdiction to revisit the merits of the dispute or to re‑examine whether the findings of the domestic tribunal are correct.

In 1962 the appellant obtained special leave to appeal the award dated 8 December 1959 of the Second Labour Court, West Bengal, in case number VIII‑C‑226 of 1958. Counsel for the appellant were A. V. Viswanatha Sastri and K. Baldev Mehta, while counsel for the respondents were N. C. Chatterjee, M. K. Ramamurthi, R. K. Garg, S. C. Agarwala and D. P. Singh. The judgment was delivered on 7 May 1963 by Justice Gajendragadkar. The appeal concerned an industrial dispute between the appellant, Ananda Bazar Patrika (P) Ltd., a private limited company engaged in printing and publishing the Bengali daily Ananda Bazar Patrika, the Bengali weekly Desh and the English daily Hindustan Standard, and its workmen. Mr. Pulakesh De Sarkar had been appointed by the management as a journalist in March 1940 and had continued to work for the appellant until his discharge on 15 May 1958. The workers’ union challenged the discharge, contending that it was illegal and that Mr. Sarkar was entitled to reinstatement and/or compensation. The Government of West Bengal referred the dispute to the Second Labour Court on 25 September 1958. By its award on 8 December 1959 the Labour Court directed the appellant to reinstate Mr. Sarkar and to pay him his emoluments for the period of forced unemployment. It was noted that on 27 January 1959 the appellant had already made a payment to Mr. Sarkar, and the award therefore required that any further payment be adjusted against the amounts already paid. The appellant contested the award by seeking special leave to this Court.

The factual background of the dispute was brief. On 16 December 1957 the chief reporter of Ananda Bazar Patrika, Mr. Shibdas Bhattacharjee, went on leave. Before departing he appointed Mr. Madhusudan Chakravorty as temporary chief reporter and communicated this arrangement by a letter addressed to the managing director. Copies of the letter were sent to the editor, the news editor, the chief accountant and the reporting department, and a copy was displayed on the notice board of the reporting section. Mr. Sarkar, who was then one of the reporters, objected to the temporary appointment and interviewed the managing director to request cancellation of the arrangement. The managing director explained that the letter had been prepared at the request of the accounts department so that any temporary appointment could be documented for financial purposes. Unsatisfied, Mr. Sarkar wrote his own letter on 20 December 1957, expressing strong objection to the arrangement, stating that he would decide his own assignments until the chief reporter returned, and circulated copies of this letter to the editor, the news editor and the notice board.

In this case, the Court recorded that the letter announcing the temporary appointment of Mr. Madhusudan Chakravorty as Acting Chief Reporter had been prepared by Mr. Shibdas Bhattacharjee at the request of the Accounts Department. The Accounts Department required a written document for any arrangement made during a leave vacancy so that it could deal with the acting officer on matters of financial transactions. Mr. Sarkar, who was one of the reporters, was not satisfied with the explanation he received in his interview with the Managing Director and consequently wrote his own letter to the Managing Director, placing a copy of that letter on the Reporting Section’s notice board. In that letter he strongly objected to the arrangement made by Mr. Bhattacharjee and expressed his indignation toward the document that had been prepared to evidence the arrangement. He wrote, “I find no reason to honour that spurious letter and so, I would be standing on my own right and merit, decide my assignments myself and act accordingly till the Chief Reporter resumes his office.” The letter was dated 20 December 1957, and copies of it were sent by Mr. Sarkar to the Editor, the News Editor and the Reporting Department. Acting on the threat contained in his own letter, Mr. Sarkar proceeded to disregard the assignments that had been allotted to him by the Acting Chief Reporter, Mr. Madhusudan Chakravorty. When this conduct was brought to the attention of the Managing Director, the Managing Director wrote to Mr. Sarkar on 31 December 1957, asking him to show cause why disciplinary action should not be taken against him for what was described as gross misconduct and subversive conduct. In response, Mr. Sarkar indicated his willingness to remove his letter from the notice board and he furnished an account of the work he had assigned to himself during the period from 16 December to 31 December 1957. During the same period, the Acting Chief Reporter complained to the Managing Director that Mr. Sarkar was ignoring the assignments given to him. Consequently, on 11 January 1958 the Managing Director wrote to Mr. Sarkar, stating that because of the defiant attitude he had adopted, the Managing Director was compelled to require Mr. Sarkar to show cause why he should not be dismissed for insubordination. Mr. Sarkar submitted an elaborate explanation of his conduct on 12 January 1958, but the Managing Director found the explanation unsatisfactory. The Managing Director therefore informed Mr. Sarkar by a letter dated 29 January 1958 that an enquiry would be conducted and that he should appear before Mr. S.K. Basu, the Editor of the Hindustan Standard, in his office on 1 February 1958 at 1 p.m. Mr. Basu conducted the enquiry, during which Mr. Sarkar cross‑examined the witnesses who had testified against him and also gave his own evidence. The principal issue referred to the enquiry officer was whether Mr. Sarkar had willfully disobeyed the lawful orders issued to him by the Acting Chief Reporter. The enquiry officer considered the evidence and came to

The enquiry officer concluded that Mr. Sarkar had willfully disobeyed the lawful orders issued by the Acting Chief Reporter, who had been duly appointed. The officer recorded this finding in a report dated 14 April 1958. After receiving the report, the management of the appellant examined the material presented at the enquiry and determined that Mr. Sarkar’s conduct amounted to gross misconduct that warranted dismissal. However, the management also considered the length of Mr. Sarkar’s service with the newspaper and chose, instead of dismissal, to discharge him from service. Consequently, on 15 May 1958 the management dispatched a letter to Mr. Sarkar informing him that his employment would cease with effect from 16 May 1958. The letter specified that Mr. Sarkar would receive one month’s salary in lieu of notice and directed him to collect his outstanding dues, including wages earned, gratuity and the notice-pay, from the cash office on 19 May 1958 at one o’clock in the morning. The correspondence further advised Mr. Sarkar that the Provident Fund authorities had been notified of his termination and that the Provident Fund balance due to him would be paid in due course. In essence, these factual circumstances constitute the basis of the present dispute between the appellant and the Union, which intervened on behalf of Mr. Sarkar.

The Court noted that the scope of jurisdiction exercised by a Labour Court or an industrial Tribunal in such matters is well settled. When the termination of an industrial employee’s service follows a proper domestic enquiry conducted in accordance with the principles of natural justice, and when the conclusions of that enquiry are not perverse, the Tribunal is not empowered to question the propriety or correctness of those conclusions. Conversely, if the management, in terminating the employee, acts with malice, vindictiveness, or with the intention of punishing the employee for his trade‑union activities, the Tribunal may intervene to protect the employee, either by ordering reinstatement or by directing the payment of compensation. However, where the enquiry has been properly conducted and the management’s decision to dismiss the employee is not made in bad faith, the Tribunal lacks the authority to disturb the enquiry officer’s findings or the orders issued by the management upon acceptance of those findings. In the present case, the Labour Court appeared to hold that the enquiry was unfair and that it had not been conducted in compliance with the rules of natural justice. After adopting that view, the Tribunal proceeded to examine the substantive issues between the parties, assessed the evidence presented by both sides, and recorded its findings. It determined that Mr. Sarkar was not justified in posting his letter on the Notice Board, but it also concluded that the management should not

The Tribunal noted that the management had not taken any disciplinary action against Mr Sarkar because he promptly removed the letter from the notice board after learning that the management disapproved of his conduct. The Labour Court further observed that Mr Bhattacharjee lacked the authority to appoint Mr Chakravorty as Acting Chief Reporter while he was on leave, and consequently concluded that Mr Chakravorty did not possess lawful power to assign work to Mr Sarkar during that period. Regarding the allegation that Mr Sarkar had independently determined his own signposts, the Court was not persuaded by the testimony of the appellant’s witnesses and held that the explanation offered by Mr Sarkar was not unreasonable. Based on these findings, the Labour Court ordered the reinstatement of Mr Sarkar.

The first issue for determination was whether the Labour Court was correct in holding that the enquiry conducted by Mr Basu was not a fair enquiry. The Labour Court had supported its view by stating that Mr Basu did not permit Mr Sarkar to examine any witness on his own behalf and had prevented Mr Sarkar from asking several relevant questions during the cross‑examination of the appellant’s witnesses. The Court also remarked that the punishment imposed on Mr Sarkar was excessively harsh and that the appellant should have consulted the Editor before deciding the appropriate sanction. According to the Labour Court, these circumstances demonstrated mala‑fide intent on the part of the appellant, leading it to reject the findings of the domestic enquiry.

When examining the first contention—that Mr Basu denied Mr Sarkar the opportunity to examine even a single witness—the Tribunal found the Labour Court’s observation to be misleading. The Court had suggested that Mr Sarkar sought to examine a large number of witnesses, none of whom were allowed. In reality, the record shows that Mr Sarkar had requested to examine only one individual, namely the Editor of Ananda Bazar Patrika. This request is clearly reflected in the records maintained by Mr Basu during the enquiry and in Mr Sarkar’s own statement before the Labour Court, where he said, “The only witness I cited in the domestic enquiry was not allowed by the enquiry officer.” Hence, the Tribunal concluded that it was inaccurate to state that Mr Sarkar was denied the chance to examine a single witness, because he had intended to examine only that one person, and the enquiry officer had refused that request.

It was unreasonable for the Labour Court to state categorically that Mr Sarkar had been denied the opportunity to examine any witness. The record actually showed that Mr Sarkar had sought to examine only a single witness, namely the editor of the Ananda Bazar Patrika, and that Mr Basu, the officer conducting the domestic enquiry, had declined that request. The proceedings of the domestic enquiry indicated that Mr Basu had concluded, on the narrow issue before him, that the editor would be unable to provide any material assistance, and therefore he believed that allowing Mr Sarkar to examine the editor would be unwarranted. The law permitted an enquiry officer, at the domestic enquiry, to refuse the examination of a witness when the officer, acting in good faith, determined that the witness would be irrelevant or immaterial to the matter. A refusal that was motivated by an intention to deprive the accused of a chance to prove innocence would, of course, constitute a serious misconduct. However, in the present case, a review of the extensive enquiry record demonstrated that Mr Basu had conducted the enquiry meticulously and had granted Mr Sarkar the fullest possible latitude to cross‑examine the management’s witnesses. The enquiry proceeded on a day‑to‑day basis, and the record clearly reflected how extensively Mr Sarkar exercised his cross‑examination rights against the management witnesses. Consequently, the Court found no basis for characterising Mr Basu’s refusal to allow the editor’s examination as capricious or dishonest. The officer appeared to have honestly believed that the editor would not furnish material or relevant evidence, and that belief did not render the enquiry unfair. The Labour Court had also criticised the enquiry on the ground that Mr Basu had disallowed some questions that it considered highly relevant. The Court held that this criticism was entirely misplaced. After examining the enquiry proceedings, the Court was satisfied that the majority of the disallowed questions had been properly excluded, and that Mr Chatterjee had failed to demonstrate any justification for the Labour Court’s objection. Some of the questions posed by Mr Sarkar were not merely irrelevant but also wholly unfair, and it was therefore incumbent upon Mr Basu to prevent those questions from being asked. Moreover, the Court noted that the determination of relevance rested with Mr Basu, who was conducting the enquiry; even if the Labour Court were to hold that certain disallowed questions were relevant, such a view would not automatically render the enquiry unfair or improper unless, as a further condition, it could be shown that Mr Basu had acted dishonestly in rejecting those questions.

In the present case, it could not be demonstrated that Mr Basu acted with fraudulent intent; consequently, the criticism that he had acted mala fide was of no avail. The Labour Court had observed that the management was required to consult the Editor before deciding the punishment to be imposed on Mr Sarkar. The Court expressed surprise that the Labour Court had regarded this requirement as a legitimate ground for questioning the fairness of the enquiry. It was noted that there was no indication that it was necessary or obligatory for the management to obtain the Editor’s advice before taking any disciplinary action against Mr Sarkar. It was further observed that, although the management accepted Mr Basu’s finding that Mr Sarkar was guilty of gross misconduct, it claimed to have acted fairly toward Mr Sarkar by considering his long service with the newspaper and, instead of terminating his employment, merely discharging him from service. On this basis, the Court was unequivocal that the ground advanced by the Labour Court—that the failure to consult the Editor rendered the management’s conduct mala fide—was wholly unsustainable. An argument had been advanced before the Labour Court that, because the enquiry officer was an outsider, the enquiry was void from the outset; the Labour Court rejected this objection, and the Court agreed with that rejection. Another contention raised by the respondents before the Labour Court was that Mr Basu bore malice toward Mr Sarkar due to a prior incident involving the administration of the Provident Fund of the employees of Ananda Bazar Patrika. It appeared that Mr Basu and the Managing Director of the newspaper were trustees of that Fund, together with three other trustees, and that the trustees’ decision to permit a substantial loan of Fund monies to the management had been criticised by the Fund members. As a result of the agitation on this issue, Mr Basu, who had originally been a trustee, was not re‑elected at the subsequent elections. That dispute was later settled amicably, with the parties agreeing to the terms of settlement on 7‑9 March 1957. Mr Sarkar had argued that, because he had played a leading role in the agitation against the trustees’ loan to management, both Mr Basu and the Managing Director were hostile toward him. The Labour Court did not accept this argument, observing that Mr Sarkar had raised no such contention during the enquiry itself. Apart from this technical point, the Court was satisfied that there was no evidence showing that either Mr Basu or the Managing Director harboured ill‑will toward Mr Sarkar. On the contrary, the evidence indicated that Mr Sarkar was exaggerating the significance of his own role in the agitation.

In this case the Court observed that the Labour Court was correct in rejecting the allegation that the appellant acted with malice in dismissing Mr Sarkar, because the Labour Court’s conclusion that the enquiry was unfair and that the appellant acted mala fide could not be sustained. The Court emphasized that while industrial adjudication may protect employees from victimisation, a finding of mala fides or victimisation must be based on evidence that actually justifies such a conclusion; it cannot be reached merely by implication or casually. The Court noted that no material had been produced before the Labour Court in these proceedings to support either the claim that the enquiry was unfair or the assertion that the appellant’s conduct in dismissing Mr Sarkar was undertaken in bad faith. Consequently, the Court held that the Labour Court lacked jurisdiction to examine the merits of the dispute between the parties or to assess whether the findings of the domestic tribunal were correct. The Court then turned to the testimony of Mr Chatterjee regarding whether Mr Bhattacharjee possessed authority to appoint Mr Chakravorty as Acting Chief Reporter during his leave. The Court indicated that, had evidence clearly shown that Mr Bhattacharjee’s appointment contravened the institution’s rules or departed from established practice, this might have supported the grievance that Mr Basu should have permitted the Editor to be examined on the assumption that the Editor could explain the relevant rules or practice. Mr Sarkar contended that the Editor, who heads the entire Reporting Department, is responsible for appointing an Acting Chief Reporter whenever the Chief Reporter is absent on leave. The Court found it notable that, although Mr Sarkar raised this issue initially, he did not provide any sworn evidence to substantiate the practice on which he relied. While Mr Chatterjee cited several statements from his evidence, he fairly admitted that Mr Sarkar had now, on oath, made a categorical statement that during his long tenure with the newspaper the practice had always been for the Editor to appoint an Acting Chief Reporter when the Chief Reporter went on leave. The Court considered the failure of Mr Sarkar to make such a categorical statement earlier, or to refer to any specific incident supporting his claim, as significant. Moreover, the Court observed that abundant evidence presented before the Labour Court demonstrated that Mr Sarkar’s contention was not well founded. The Court also recalled that Mr Sarkar had met the Managing Director, and in a letter displayed on the notice board on 20 December 1957 he had clearly stated the Managing Director’s remarks.

In this case, the Court noted that the Managing Director had told Mr. Sarkar a specific requirement of the Accounts Department. The requirement was that a written authorization from the Chief Reporter be obtained before the Chief Reporter went on leave. Such a document would identify the person who would act as Acting Chief Reporter during the Chief Reporter’s absence. The Court explained that this demonstrates the Accounts Department’s desire for a written record signed by the Chief Reporter. The Court observed that the same wording appears in the letter written by Mr. Sarkar, reflecting precisely what the Managing Director had communicated. Accordingly, the authorization for any financial transaction had to be issued by the Chief Reporter and not by the Editor. The Court then examined a letter addressed to the Director’s Department by Mr. Chakravorty dated 3 January 1958. The letter showed that on several occasions when the Chief Reporter had taken leave, the duties of the Chief Reporter were assigned to Mr. Chakravorty. In that capacity he managed the department, allocated assignments to other reporters and performed the functions normally performed by the Chief Reporter. The Court recorded that Mr. A. K. Sarkar, Managing Director of Ananda Bazar Patrika, testified on oath that customary practice was for the incumbent to nominate a successor when absent. There had been controversy concerning the letter written by Mr. Bhattacharjee that nominated Mr. Chakravorty as Acting Chief Reporter. Mr. A. K. Sarkar fairly conceded that the letter was produced because the Accounts Department required a written instrument confirming the appointment. The Court observed that earlier the Chief Reporter had made only verbal arrangements for work during his leave. The Acting Chief Reporter possessed authority to draw cash from the Accounts Department and to make payments to reporters as needed. From these facts the Court concluded that the testimony of Mr. A. K. Sarkar supports the appellant’s position that Mr. Bhattacharjee was justified in appointing Mr. Chakravorty as Acting Chief Reporter during his absence. The Court added that the evidence of two other reporters, Mr. G. K. Ghosh and Mr. A. Chowdhary, corroborated the same conclusion. Thus, apart from the fact that Mr. Sarkar had not sworn an oath in support of his claim, the evidence presented by the appellant was clear. It showed that the action taken by Mr. Bhattacharjee on 16 December 1957 was consistent with the institution’s established practice. The Court described this as common sense, noting that when the Chief Reporter goes on leave, an arrangement should be made for another reporter to act in his place. The Court further said that such an arrangement should be communicated to the other heads of departments and to the Managing Director. Finally, the Court stated that while other institutions might follow different rules or practices, the evidence before it made it impossible to sustain Mr. Sarkar’s contention that Mr. Bhattacharjee acted beyond his authority.

In the Court’s view, the respondent was therefore justified in taking the aggressive stance that he expressed in the letter dated 20 December 1957, a letter that he later displayed publicly on the notice board. The Court observed that it was unnecessary to stress that, even if Mr Sarkar entertained a grievance concerning the appointment of Mr Chakravorty, he could not have resorted to such an extreme and confrontational posture by declaring that he would assume the duties for himself and would refuse to obey any orders from Mr Chakravorthy. Consequently, the Court held that, on the merits of the case, Mr Chatterjee’s contention that Mr Basu’s refusal to question the Editor of the newspaper was unjustified could not be sustained. Moreover, the Court found no basis to describe the enquiry conducted by the officer, which proceeded without hearing the Editor, as being perverse, malicious, unfair, or in violation of the principles of natural justice. The Court also noted that Mr Chatterjee had drawn the Court’s attention to the long and commendable service record of Mr Sarkar within the institution, emphasizing that Mr Sarkar had participated in the national movement and had chosen journalism as a profession out of patriotic and nationalistic motives. On this basis, Mr Chatterjee appealed for the Court to consider whether the appellant should be directed to reinstate Mr Sarkar in his former employment. When this point was put to counsel for the appellant, Mr Sastri, after conferring with his client, explained that owing to the nature of the misconduct that had been established against Mr Sarkar, the appellant was unwilling to take him back. Accordingly, the Court concluded that the appeal succeeded, that the order issued by the Labour Court was set aside, and that no order as to costs would be made. The appeal was therefore allowed.