M/S. Bengal Bhatdee Coal Co vs Shri Ram Prabesh Singh and Ors

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 24 of 1962

Decision Date: 23 January 1963

Coram: K.N. Wanchoo, Bhuvneshwar P. Sinha, P.B. Gajendragadkar, M. Hidayatullah, J.C. Shah

In this matter the petitioner was M/S Bengal Bhatdee Coal Co., which brought an appeal before the Supreme Court of India against the respondents identified as Shri Ram Prabesh Singh and others. The judgment was delivered on 23 January 1963 by a Bench consisting of Justices K.N. Wanchoo, Bhuvneshwar Prasad Sinha, P.B. Gajendragadkar, M. Hidayatullah and J.C. Shah. The citation for this decision appears in the 1964 All India Reporter at page 486 and also in the 1964 Supplementary Court Report at page 709, with further references in later reports. The dispute arose under the Industrial Disputes Act, 1947 (the Act), specifically invoking sections 10 and 33(2)(b). The respondents were employed by the petitioner and, during a strike affecting the petitioner’s colliery, they physically blocked the work of loyal trammers who were willing to continue operations. The respondents also urged other workmen to join them in this obstruction. In response to these actions the management prepared a charge sheet and served a show‑cause notice on the respondents, requiring them to explain why disciplinary action should not be taken. The respondents submitted their explanations, and an inquiry was conducted by the welfare officer. The welfare officer concluded that the respondents were guilty of the alleged misconduct and recommended their dismissal. The petitioner then filed an application before the Industrial Tribunal under section 33(2)(b) of the Act, seeking confirmation of the dismissals. The Tribunal approved the dismissals, after which a reference was made to the Central Government Industrial Tribunal under section 10 of the Act. The present appeal is by special leave against the order of that Tribunal, challenging the finding that the dismissals constituted victimisation.

The Tribunal held that while the management‑led inquiry was procedurally proper, the dismissal amounted to victimisation. The principal issue before the Supreme Court was whether the Tribunal was correct in characterising the dismissal as victimisation. The Court reiterated that when a domestic inquiry is conducted in accordance with established rules, the Tribunal does not have authority to re‑examine the factual findings of that inquiry; its jurisdiction is limited to reviewing the punishment imposed. Interference is permissible only in limited situations, such as when there is an absence of good faith, a fundamental error, a breach of natural justice, findings that are perverse or unsupported by evidence, or when the case falls within the category of victimisation. The Court observed that even where misconduct is proven, the management’s discretion to impose a penalty, including dismissal, is generally respected. However, the Court noted that dismissal may be struck down if it is so unconscionable or grossly disproportionate to the nature of the offence that it suggests an intention to punish for reasons unrelated to the misconduct, thereby indicating victimisation. In the present case the Court found that the punishment was not so extreme as to justify a finding of victimisation. The Court referred to the earlier decision in National Tobacco Co. of India Ltd. v. Fourth Industrial Tribunal (1960) 2 L.L.J. 175 for guidance on the standards for assessing whether a dismissal is unconscionable. Accordingly, the Court concluded that the Tribunal had exceeded its jurisdiction by holding that the dismissal was victimisation, and it set aside that part of the Tribunal’s order. The appeal proceeded under Civil Appeal No. 24 of 1962, filed by special leave against the award dated 23 November 1960 of the Central Government Industrial Tribunal, Dhanbad, which had originally considered the dismissals of the thirteen workmen involved.

In 1962 an appeal by special leave was filed against the award dated 23 November 1960 of the Central Government Industrial Tribunal, Dhanbad, reference number 31 of 1960. The appellant was represented by counsel M. C. Setalvad, Nonicoomar Chakravarty and B. P. Maheshwari, while the respondents, comprising Dipat Datta Choudhri and workmen numbered one through thirteen, were represented by counsel M. K. Ramamurthi. The judgment on the appeal was delivered on 23 January 1963 by Justice Wanchoo. The appeal concerned the order of the Central Government Industrial Tribunal, Dhanbad, and was taken up as a special leave petition. The essential facts relevant to the appeal are as follows. The Central Government, invoking section 10 of the Industrial Disputes Act, No. 14 of 1947 (hereinafter referred to as “the Act”), referred a dispute to the tribunal concerning the dismissal of thirteen workmen employed at Bhatdee Colliery. The tribunal was asked to determine whether the dismissals of those thirteen workmen were justified and, if not, what relief they were entitled to and from which date such relief should be granted. It emerged that the thirteen workmen had physically obstructed the surface trammers working in the colliery on three separate occasions: 20 October 1959, 27 October 1959 and 3 November 1959. In addition, several of the workmen had allegedly encouraged other employees to join the obstruction, thereby preventing the trammers, who were described as loyal and willing, from performing their duties. This conduct occurred during a strike that had been initiated on 20 October 1959 by the Colliery Mazdoor Sangh, an organisation to which all thirteen workmen belonged. In response to those alleged actions, the appellant served charge‑sheets on the thirteen workmen on 9 November 1959. The charge‑sheets alleged that the workmen had physically obstructed the surface trammers on duty at the No. 1 and No. 2 inclines, had sat on the tramline track, and had incited others to do likewise, thereby violating regulation 38(1)(b) of the Coal Mines Regulations. The workmen were directed to furnish explanations within forty‑eight hours, the requirement being anchored in rules 27(19) and 27(20) of the Coal Mines Standing Order. The workmen complied and submitted their explanations, after which an inquiry was conducted by the Welfare Officer of the appellant. The Welfare Officer concluded that all thirteen workmen were guilty of the charges and recommended their dismissal. While another reference was pending before the same tribunal in November 1959, the appellant filed thirteen separate applications under section 33(2)(b) of the Act seeking the tribunal’s approval of the dismissals. The workmen answered those applications but did not raise any further objection, and the tribunal granted approval of the action taken. Subsequently, a fresh reference was made under section 10 of the Act. In the present reference the workmen contended that the inquiry had not been proper because they had not been afforded a genuine opportunity to defend themselves. They further asserted that the dismissals amounted to pure victimisation for engaging in trade‑union activities. The tribunal, although it did not express this in explicit terms in its award, appeared to hold that the inquiry had been proper.

In its award, the tribunal could scarcely have acted otherwise, because it had previously approved the action taken on applications filed under section 33 (2)(b) of the Act. The tribunal reasoned that, had the domestic inquiry not been proper, it would not have endorsed the dismissals. Nevertheless, the tribunal concluded that the dismissals amounted to victimisation. Accordingly, it set aside the dismissal orders and directed that the thirteen workmen be reinstated within one month of the order becoming operative. The reinstatement was to be on the condition that the workmen be treated as being on leave without pay for the period of forced unemployment. The tribunal did not award back‑wages, observing that the workmen had themselves contributed in part to their forced unemployment. In the present appeal, the appellant argued that no evidence existed to support the tribunal’s finding that the dismissals constituted an unfair labour practice or victimisation. The Court held that the appellant’s contention must prevail. The Court noted that the tribunal was aware that when a domestic inquiry is properly conducted, the appellate tribunal does not re‑examine the findings of that inquiry; it may interfere with the punishment only where there is lack of good faith, a fundamental error, a breach of natural‑justice principles, perverse or baseless findings, or where the case involves victimisation or an unfair labour practice. The Court observed that the tribunal had not found any fundamental error or breach of natural‑justice principles in the conduct of the inquiry, nor had it found the inquiry officer’s findings to be perverse or baseless. This stance was reinforced by the tribunal’s earlier approval of the action taken on applications under section 33 (2)(b) of the Act; had the tribunal concluded that the inquiry was improper, it would not have sanctioned the dismissals when approached under that provision. Consequently, the Court proceeded on the assumption that the domestic inquiry had been properly held and that the inquiry officer was justified, based on the evidence before him, in concluding that the charges were proved. Nevertheless, the tribunal raised a separate question of victimisation, phrasing it as follows: “But even if assume that these men were guilty of the offence complained of, let me pause and consider if there is victimisation.” The tribunal then indicated that the workmen had each rendered ten years or more of service, possessed a good prior service record, held important union offices, and that some were protected workmen. It also referred to earlier disputes between the appellant and the union to which these workmen belonged, and expressed the view that…

In this case, the tribunal observed that the union and its leaders were regarded as an “eye‑sore” to the appellant. The tribunal also noted that although certain workmen were protected under the law, this status did not grant them complete immunity from disciplinary action, even where their conduct might amount to misconduct warranting dismissal. The tribunal further explained that the misconduct alleged in the present matter could have been dealt with by imposing a fine, a suspension, or a dismissal, and that the appellant had elected to impose dismissal, which represented the most severe of those sanctions. In support of its reasoning, the tribunal referred to a decision of the Calcutta High Court in National Tobacco Company of India Ltd. v. Fourth Industrial Tribunal, where the court held that a punishment of dismissal that is unconscionable or grossly disproportionate to the nature of the offence may itself constitute a ground for finding victimisation. The tribunal appeared to adopt that principle, concluding that the dismissal in the present case was unconscionable or at least grossly disproportionate and therefore amounted to victimisation.

However, the Court expressed a different view. It held that the present circumstances did not fall within the category where dismissal would be regarded as unconscionable or grossly disproportionate. Accordingly, the Court declined to infer victimisation merely because the appellant chose dismissal rather than a fine or suspension. The Court observed that there was no dispute that a strike was in progress at the time the alleged misconduct occurred. The appellant maintained that the strike was unauthorised and illegal, a position that was apparently endorsed by the Regional Labour Commissioner, Central, Dhanbad. During that illegal strike, the thirteen workmen in question were said to have physically obstructed other employees who were willing to work, by sitting down between the tramlines. The Court characterised this conduct as serious misconduct and, noting that the tribunal had already found the misconduct proved, concluded that dismissal was a perfectly justified response. Consequently, the Court could not accept that the dismissal was grossly disproportionate or unconscionable, and it held that the tribunal was not justified in finding victimisation simply because the appellant opted for dismissal instead of a lesser penalty.

The Court further observed that there was essentially no other evidence to support the tribunal’s finding of victimisation. While it was acknowledged that relations between the appellant and the union to which the workmen belonged were strained, and that another union existed within the same concern, the Court warned that strained employer‑union relations, even where the workmen were union office‑bearers or active members, did not by themselves prove victimisation. To permit such an inference would effectively give union officials a carte blanche to commit misconduct without consequence whenever the employer’s relationship with the union was poor. Accordingly, the Court concluded that the tribunal’s finding of victimisation was based on conjecture and speculation, not on concrete evidence.

In this case, the Court observed that the relationship between the employer and the union to which the thirteen workmen belonged was unsatisfactory. It was also established that another union existed within the same concern. The Court considered that the existence of two unions might explain why the employer’s relations with one of those unions were strained. However, the Court emphasized that a strained relationship between an employer and a union, even where the affected workmen were office‑bearers or active members of that union, did not by itself constitute proof of victimisation. The Court explained that accepting such an inference would allow office‑bearers and active union workers of a union hostile to the employer to commit any misconduct and escape liability on the ground that employer‑union relations were poor. Consequently, the Court held that the tribunal’s finding of victimisation was based merely on conjecture and speculation.

The Court reiterated that it had already examined the tribunal’s primary justification for the finding, namely that the punishment of dismissal was alleged to be unconscionable or grossly disproportionate to the offence. The Court reaffirmed its view that the punishment was neither unconscionable nor grossly out of proportion to the misconduct. The Court then turned to a second ground relied upon by the tribunal, which it described as patently wrong. The tribunal had claimed that police reports of the misconduct on 27 October 1959 identified certain persons, while the appellant’s written statement before the tribunal named two additional individuals, Ratan Gope and Sohan Gope, as participants in the same incident despite their absence from the police report. On that basis, the tribunal concluded that Ratan Gope and Sohan Gope had been falsely implicated.

While noting that the tribunal admitted the possibility of a mistake, the Court observed that the tribunal nevertheless characterised the error as perversely leading to dismissal, a conclusion the Court found erroneous. The Court found that paragraph 5 of the appellant’s written statement mistakenly listed Ratan Gope and Sohan Gope as participants in the 27 October incident, whereas the charge‑sheets served to them related only to the 20 October incident, and the domestic inquiry’s findings concerned that same 20 October incident. Accordingly, there was no basis for the tribunal to hold that its finding was perverse, because there was no finding that these two individuals had taken part in the 27 October event. The Court concluded that a clear mistake existed in the appellant’s written statement, as no charge or finding concerning Ratan Gope and Sohan Gope for the 27 October incident had been made by the Welfare Officer. Therefore, the Court held that the tribunal was plainly wrong in using this mistake as evidence of victimisation and dismissed the tribunal’s finding on that ground.

The Court was of the opinion that the record did not contain any material that could be described as evidence capable of supporting the tribunal’s conclusion that the action taken was motivated by victimisation and that such a conclusion therefore demonstrated a lack of good faith on the part of the tribunal. Because the evidentiary foundation was lacking, the Court concluded that the award rendered by the tribunal could not stand and must be set aside. Accordingly, the Court allowed the appeal that had been filed against the tribunal’s decision. In doing so, the Court expressly set aside the award that had been granted by the tribunal and affirmed the earlier decision to dismiss the thirteen workmen who had been the subject of the dispute. The Court observed that the absence of any documentary or testimonial proof linking the workmen to the alleged victimisation meant that the tribunal’s finding could not be sustained on any reasonable basis, and therefore the judicial review required reversal of the award. The Court further noted that, given the circumstances, no order regarding the allocation of costs was necessary or appropriate. For these reasons, the appeal was allowed.