M/s. Kesoram Cotton Mills Ltd vs Gangadhar and Others

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 425 and 426 of 1962

Decision Date: 03/04/1963

Coram: K.N. Wanchoo, K.C. Das Gupta

In this case, the Supreme Court noted that the petitioner was M/s. Kesoram Cotton Mills Ltd and the respondents were Gangadhar and others, with the judgment delivered on 3 April 1963. The matter was heard by a bench consisting of K.N. Wanchoo and K.C. Das Gupta, and the decision was cited as 1964 AIR 708 and 1964 SCR (2) 809, with subsequent citations including R 1964 SC 719, R 1969 SC 983, and D 1972 SC 1579. The dispute arose under the provisions of the Industrial Disputes Act concerning go‑slow and illegal strikes, a suspension agreement, and the entitlement of workmen to wages during a period of suspension pending inquiry. The factual backdrop revealed that the appellant had suspended 1,600 workmen in response to the workers’ go‑slow and illegal strike actions. On 23 December 1957, the parties concluded an agreement—referred to as clause 7 and clause 9—between the workers’ union and the management, under which work resumed. Clause 7 stipulated that the suspended workmen would not be entitled to any wages or compensation for the period of suspension, while clause 9 specified that twenty‑nine of the workmen would remain suspended pending inquiry and disciplinary action by management. The management, however, did not conduct any inquiry for these twenty‑nine workmen and instead referred the matter to adjudication. In addition, the management held an inquiry concerning five other workmen on various charges and dismissed them; during that inquiry the management read the workmen’s prior statements without examining the witnesses in chief and did not provide copies of those statements to the workmen, instructing them only to cross‑examine the witnesses. The dispute arising from the dismissal of those five workmen was likewise referred to adjudication. The Tribunal, in dealing with the twenty‑nine workmen, dismissed nine of them, ordered reinstatement of the remaining twenty, and awarded twelve months’ wages to the dismissed workmen and fifteen months’ wages to the reinstated workmen for the period they had been suspended. Regarding the five workmen who had been dismissed, the Tribunal held that the inquiry had not complied with the principles of natural justice but found that the evidence presented before the Tribunal justified the dismissal of four of the workmen. The appellant argued that, on the basis of clause 7 of the agreement, none of the twenty‑nine workmen were entitled to any compensation or wages for the suspension period and further contended that the inquiry concerning the five workmen had been conducted in accordance with natural justice. Conversely, the workmen asserted that all twenty‑nine of them were entitled to full wages for the period of suspension. The Court held that clause 7 of the agreement referred only to the period of suspension that existed up to the date of the agreement and did not extend to suspensions occurring thereafter. The Court further explained that the ordinary rule of law provides that a workman may be suspended pending inquiry and disciplinary action; if, after the inquiry, the workman is dismissed, he is not entitled to wages for the suspension period, but if he is reinstated, he is entitled to full wages for the suspension period.

In this case the Court observed that when a workman is reinstated he becomes entitled to receive his full wages for the entire period during which he was suspended. Clause 9 of the agreement was interpreted as providing for suspension of a workman while an inquiry is pending and also as specifying the legal consequences of such suspension. Accordingly the Tribunal was justified in ordering payment of wages for the suspension period that fell after the date of the agreement. The Court referred to the decision in Straw Board Mfg. Co. v. Govind, [1962] Supp. 3 S.C.R. 618, in support of this view. The Court further held that all of the twenty‑nine workmen who had been suspended were entitled to receive full wages from the date of the agreement up to the 811 date of the award. The Court noted that neither the standing orders nor any term of service gave the management authority to suspend a workman without paying his wages. In the circumstances there was no justification for depriving the workmen who had been ordered to be reinstated and to whom the Tribunal had awarded fifteen months’ wages of any portion of the wages due for their period of suspension. The nine workmen who had been permitted to be dismissed were likewise entitled to full wages for the whole period of their suspension. Under clause 9 of the agreement those workmen were required to remain suspended pending an inquiry and any disciplinary action, but the management neither held an inquiry nor took disciplinary action and instead applied for the dispute to be referred to adjudication. Because the management sought to dismiss these workmen without conducting an inquiry, the Court held that they were entitled to their full wages up to the date on which the award was enforced. The Court relied on the authorities in Management of Hotel Imperial New Delhi v. Hotel Workers’ Union, [1960] 1 S.C.R. 476 and M/s. Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan, [1959] Supp. 2 S.C.R. 836. The Court further held that the inquiry with respect to the five workmen had violated the principles of natural justice. It was observed that the rules of natural justice do not vary from one tribunal to another; their purpose is to protect the position of the person against whom an inquiry is being conducted so that he may meet the charges laid against him. Accordingly the nature of the inquiry and the status of the person charged affect the minimum requirements of natural justice. In a domestic industrial inquiry the proper procedure requires the management to examine witnesses from beginning to end in the presence of the workman at the inquiry itself. In exceptional circumstances a witness may be asked merely to confirm a previously recorded statement and then be subject to cross‑examination by the workman, but in such cases the prior statement must be furnished to the workman at least two days before the inquiry commences. The Court referred to Union of India v. T. R. Verma, [1958] S.C.R. 499; State of Mysore v. S. S. Makapur, [1963] 2 S.C.R. 943; and New Prakash Transport Co. v. New Suwarna Transport Co., [1957] S.C.R. 98. The judgment then proceeded to the formal heading of the civil appellate jurisdiction for Civil Appeals Nos. 425 and 426.

Counsel for the appellant in Civil Appeal No. 425 of 1962 and counsel for the respondents in Civil Appeal No. 426 of 1962 were present, as were counsel for the respondents in Civil Appeal No. 425 of 1962 and counsel for the appellant in Civil Appeal No. 426 of 1962. The judgment was delivered on April 4, 1963 by Justice Wanchoo. The matter before the Court comprised two special‑leave appeals that challenged the same award rendered by the First Industrial Tribunal of West Bengal; consequently the Court considered both appeals together. Appeal No. 425 was filed by the employers and Appeal No. 426 by the workmen. Throughout the judgment the Court referred to the employers as the appellant and to the workmen as the respondents. The central dispute involved two distinct questions that had been referred by the Government of West Bengal to the tribunal for determination. The first question asked what relief, if any, the suspended workmen listed in ‘List A’ were entitled to receive. The second question concerned whether the termination of employment of the workmen listed in ‘List B’ was justified and whether those workmen were entitled to reinstatement and/or compensation. List A comprised twenty‑nine workmen, whereas List B comprised twelve workmen. According to the appellant, the controversy over the suspended workmen arose from a series of labour disturbances that began in the weaving department on October 28, 1957, when workmen initiated a slow‑down despite a prior warning from management. On November 3, 1957, the doffers in the carding section refused to operate newly installed machines. Simultaneously, workmen in the loose‑godown and folding sections commenced slow‑downs on October 27 and November 4, 1957, respectively. On November 23, 1957, the spinning‑department workmen adopted further slow‑down tactics, engaged in subversive activities, and abandoned their machines in organized groups, causing both backward‑process and forward‑process operations to become idle. As a consequence of this sustained conduct over approximately four weeks, the appellant was compelled to lay off a large number of employees without providing compensation. The situation escalated on December 3, 1957, when workmen in the dye‑house and printing department staged an illegal stay‑in‑strike. During the first week of December 1957, the blow‑room and carding workmen also entered into a strike. On December 9, 1957, the strike spread to the engineering department, cotton godown, bale godown, canteen, high‑speed winding, and old‑stores departments. In response to these widespread industrial actions, the appellant suspended sixteen hundred workmen on allegations of slow‑down and various other misconduct. Subsequent negotiations between the workers’ union and management led to an agreement dated December 23, 1957. Although certain terms of that agreement later became subjects of interpretation, the essential effect of the agreement was that the workmen returned to their duties and expressly undertook not to engage in any further go‑slow activities, whether individually or collectively, and to refrain from employing illegal methods to advance their demands or resolve grievances.

The settlement reached on 23 December 1957 required the workmen to refrain from any collective or individual slow‑down actions, to avoid illegal tactics for pursuing their demands, and to cooperate fully with management in maintaining factory discipline; the agreement further stipulated that the union and the workers would assist the management in taking appropriate disciplinary measures whenever necessary. An important provision of the agreement was that thirty employees listed in annexure “A” would remain suspended while inquiries and disciplinary proceedings were pending before the appellant. The first term of reference therefore concerned those suspended workers named in annexure “A”. A second term of reference dealt with twelve other employees whom the appellant asserted had committed various acts of misconduct that, under the standing orders, warranted dismissal. The appellant had formally charge‑sheets for those twelve and had conducted inquiries before dismissing them in accordance with the law. Because the dismissals occurred while a dispute involving the appellant was still before the first industrial tribunal, the appellant filed applications under section 33(2)(b) of the Industrial Disputes Act, 1947, seeking the tribunal’s approval of the dismissals. Before the tribunal could rule on those applications, it resolved the underlying dispute and issued no orders regarding the applications themselves. The appellant maintained that the dismissals were lawful and therefore no right to reinstatement or compensation existed, whereas the respondents contested that view, and consequently the matter was referred for adjudication under the second term of reference. Turning now to the first term, it should be noted that although annexure “A” listed thirty workers, only twenty‑nine were the subject of the reference because one of the thirty had died before the reference was made. The respondents withdrew their claims concerning five of those twenty‑nine, leaving twenty‑four workers for the tribunal to consider. The tribunal grouped those twenty‑four into five categories: the first group comprised two workers, the second group five workers, the third group thirteen workers, the fourth group two workers, and the fifth group two workers. Counsel for the appellant did not pursue an appeal concerning the six workers in groups I, IV and V, and consequently the Court need not examine the tribunal’s orders relating to those six individuals.

The Court noted that the tribunal’s order concerning six workmen – namely Govindo (No 1), Bholanath (No 8), Khageswar (No 7), Ramjatan (No 27), Rampujan (No 26) and Khetrabasi (No 28) listed in annexure ‘A’ to the order of reference – was not under consideration because the appellant had not pressed the appeal with respect to those individuals. Regarding the five workmen classified in group II – Gangadhar (No 2), Ramchandra (No 3), Babaji Nayak (No 4), Pahraj (No 5) and Shankdardas (No 6) from the same list – the tribunal had ordered that each of them be reinstated in his former position effective from the date the award became operative, and that they receive compensation equal to fifteen months’ wages for the period they had remained suspended. The appellant challenged this particular order. Turning to group III, the tribunal resolved that nine of the thirteen workmen in that group should be dismissed, while the remaining four were to be reinstated. The Court explained that the tribunal was compelled to consider dismissals because the appellant had filed an application under section 33(1)(b) of the Act seeking permission to dismiss all twenty‑nine workmen. The reinstatement order for the four workmen – Gulzarali (No 18), Farid (No 16), Din Mohd. (No 17) and Mohd. Islam (No 24) – also faced challenge from the appellant, who argued that there was no rational basis for treating these four differently from the nine dismissed, since the evidence against all thirteen was identical. In addition, the tribunal interpreted the agreement dated 23 December 1957 to direct that each of the twenty‑four workmen who remained under consideration should be paid twelve months’ wages for the period of their suspension, regardless of whether the suspension ultimately led to dismissal. This interpretation and the resulting payment order were likewise contested by the appellant. The Court then turned to examine the specific case of the five workmen in group II. The appellant advanced a two‑fold contention. First, it asserted that the workmen had been charged with deliberately adopting “go‑slow” tactics by causing unnecessary spindle stoppages, and that clear documentary evidence supported this charge; consequently, the tribunal’s finding that no proof of such tactics existed was described as perverse. Second, the appellant maintained that the same five workmen faced additional misconduct allegations, yet the tribunal had failed to consider the evidence relating to those other charges and had made no findings on them. Accordingly, the appellant argued that the matter should be remitted to the tribunal for a fresh examination of the evidence on the ancillary charges. To substantiate its position, the appellant relied upon an extract taken from two registers, identified as Exhibits AA and AA‑1, which had been produced before the tribunal in connection with the proceedings.

In this matter the appellant had placed before the Court an extract that it said was taken from the registers marked AA and AA‑1, which had earlier been produced before the tribunal and which the appellant reproduced in its special leave petition. The respondents objected to the authenticity of that document, contending that the paper reproduced in the petition was not an extract at all from the registers AA and AA‑1. They further characterized the document as a spurious creation intended to mislead the Court at the stage of admitting the appeal and therefore urged that the special leave that had been granted should be set aside. The extract in question concerned four workmen—Paharaj, Shankdardas, Gangadhar and Babaji—and related to spindle stoppages that occurred between 10 November and 23 November 1957. In response to the respondents’ challenge, the original registers were directed to be produced and were examined by the Court. After that examination the Court concluded that the paper reproduced in the special leave petition was not a true copy of the entries in registers AA and AA‑1, as it would have been if it were merely an extract. While the numerical figures for spindle stoppage shown in the extract corresponded exactly with the figures recorded in the two registers, the registers did not identify the names of the individuals who were operating the four machines whose stoppages were listed in the extract. The respondents argued that the names appearing in the extract were nevertheless correct because the four workmen had actually been on duty on the dates specified and that some evidence supported that claim. Assuming, for the sake of argument, that those workmen did man the machines, the Court found another serious misrepresentation in the extract. The workman identified as Paharaj had been charge‑sheeted on 17 November and suspended immediately thereafter; consequently he could not have worked after 17 November, yet the extract portrayed him as continuing to work up to 23 November. Moreover, a serious spindle stoppage was recorded on the machine that the extract said Paharaj was manning after 17 November, a stoppage that could only have been caused by someone else. In the same way, Shankdardas had also been charge‑sheeted on 17 November and suspended at once, but the extract indicated that he remained on the machine from 18 November to 23 November, during which the more serious stoppage occurred, making his alleged presence impossible. Babaji had been charge‑sheeted on 18 November and suspended immediately, yet the extract showed his name on the machine for the period from 19 November to 23 November, again coinciding with a serious stoppage that must have been caused by another person. Finally, Gangadhar had been charge‑sheeted on 22 November and suspended forthwith, but the extract suggested that he worked on 23 November. The Court strongly deplored the manner in which the extract had been employed in the special leave petition to convey a false impression.

The Court observed that the impression created in the special‑leave petition was misleading, yet it concluded that the special leave could not be withdrawn solely on that basis. In reviewing the extract previously set out, the Court found that the appellant’s claim that the tribunal had plainly misinterpreted Exhibits AA and AA‑1 could not be sustained. The Court considered that the tribunal’s reasons for holding that the alleged “go‑slow” by the five workmen had not been proved were not insufficient to support its conclusion.

The Court noted one particular reason given by the tribunal that indicated the appellant company was not fully accurate in its own case. Although charge‑sheets for the five workmen of the spinning department were issued on 17 November, 18 November and 22 November, the appellant’s written statement before the tribunal alleged that the spinning‑department workmen had resorted to slow‑down tactics and other subversive acts beginning on 23 November 1957. This allegation appeared surprising in view of the earlier charges and suggested that the appellant did not possess the correct facts. The same allegation was repeated in an application under section 33(1)(b) filed four months after the written statement, again stating that the workers had adopted “go‑slow” tactics on 23 November and engaged in other subversive activities.

The Court acknowledged that the appellant attempted to prove that the slow‑down began earlier, but held that if the tribunal chose not to accept that evidence, it could not be said to have erred. Consequently, the appellant’s contention that the tribunal’s view was perverse and contrary to the two registers cited by the Court was rejected.

Regarding the appellant’s further claim that the tribunal failed to consider evidence relating to other charges, the Court observed that the tribunal’s final paragraph addressed only the lack of proof of “go‑slow” tactics and omitted any mention of the other charges. Nonetheless, a full reading of the tribunal’s discussion revealed that it had examined oral testimony concerning all the other charges and had found that testimony unworthy of acceptance, even though it did not expressly state this conclusion. Overall, the Court found that the tribunal had duly considered the entire evidence, including that related to the other charges.

In this matter, the Court observed that the tribunal had examined all of the evidence, including the testimony relating to charges other than the alleged go‑slow tactics, and had concluded that such evidence was not worthy of acceptance. The Court noted that the tribunal made an error in the wording of its final paragraph concerning this group of workmen, because it limited its conclusion solely to the statement that the go‑slow tactics had not been proved and it failed to mention the other charges. Nevertheless, the Court held that a review of the entire award showed clearly that the tribunal had also considered the evidence pertaining to the other charges and had found that evidence to be unconvincing as well. The Court added that the reason for the tribunal’s narrow focus on go‑slow in its concluding remarks was that all parties before the tribunal were concentrating on that particular allegation and had not taken care to examine the other charges. This point was illustrated by reference to the situation of certain workmen in group III, where the tribunal considered evidence of go‑slow even though those workmen were not charged with that offence, and still concluded that they were guilty of go‑slow. Consequently, the Court inferred that neither the tribunal nor the parties before it had given attention to any charges other than go‑slow, which explained why the tribunal’s final paragraph referred only to that single charge, even in cases where no formal charge‑sheet for go‑slow had been presented. On the whole, the Court found that there was no basis for remanding the matter for a fresh consideration of the other charges against the five workmen in group II, because the tribunal had already evaluated all of the evidence and had rejected it as unworthy of reliance. In view of these findings, the Court held that the appeal relating to these five workmen must be dismissed.

The Court then turned to the four workmen who were placed in group III, whose names had previously been recorded. These workmen were alleged to have, on various dates in October 1957, encouraged their co‑workers to reduce the pace of work. The tribunal examined the entire body of evidence submitted against these individuals but chose not to rely on it, giving a single principal reason for this decision. In the case of the workman identified as Gulzarali, the tribunal observed that there was no written report filed against him, a circumstance that differed from the situation of the other accused. Regarding the remaining three workmen, the tribunal found that the written report produced was presented very late and, more importantly, it lacked the required endorsement of the weaving master, a deficiency that the tribunal noted as essential for the report’s validity, similar to the endorsement expected on reports prepared by the Assistant weaving master. Because of these procedural and evidentiary shortcomings, the tribunal placed no reliance on the evidence against the four workmen. The Court further expressed that, given the tribunal’s own reasons for discounting the evidence, it could not be said that the tribunal erred in its decision not to rely on that evidence. Accordingly, the Court concluded that the appeal filed by the appellant concerning these four workmen of group III must also fail. The Court then indicated that it would proceed to consider the next matter.

The Court considered the broad challenge to the tribunal’s order that awarded twelve months’ wages to the twenty‑four workmen who had been suspended and whose cases had been processed by the respondents. To resolve the issue, the Court examined four specific clauses of the agreement that had been executed on 23 December 1957. Clause I(b) provided that the parties agreed the charge‑sheets against any workman who was permitted to resume duties under paragraph 1 would not be withdrawn, and it further stipulated that the suspension of the workmen whose names appeared in Annexure A would continue, with the suspension orders remaining operative pending the enquiry described later in the agreement. Clause 7 declared that any workman who was suspended would not be entitled to wages or any form of compensation for the period of suspension, and it expressly barred such workmen from raising any dispute or making any claim in respect of the suspension or lay‑off period in any shape or form. Clause 8 stated that, without prejudice to any other provision of the agreement or to claims relating to the suspension order served on the workmen, and to the lay‑off order issued by the company, all claims or issues concerning the period of reduced production and the disciplinary action taken by the company were finally settled; consequently, every workman bound himself by the agreement and no worker could make any demand or claim on that basis. Clause 9 provided that the workers listed in Annexure A would remain suspended pending an enquiry and disciplinary action by management, that management would endeavour to reach an amicable settlement with the Union regarding any disciplinary action taken or to be taken against those workmen, and that, failing such settlement, the matter would be referred to the tribunal for dispute resolution. The tribunal had held that clause 7, which denied any wages or compensation for the suspension period, did not apply to the workmen who remained suspended under clause 9, reasoning that clause 7 applied only to those workmen who were allowed to resume duty under the first clause of the agreement. The appellant contested this view, contending that clause 7 should also apply to the workmen who remained suspended under clause 9, thereby rendering them without any entitlement to compensation for the entire suspension period, whether before or after 23 December 1957. The Court agreed with the appellant’s contention that clause 7 applied to all suspended workmen, irrespective of whether they returned to work pursuant to the first clause or remained suspended pursuant to clause 1(b). However, after reading the agreement, the Court was of the opinion that clause 7, when read together with clause 8, referred only to suspension up to the date of the agreement and was not intended to govern suspensions occurring thereafter.

Clause 7 provides that any workman who is suspended may not dispute or claim any relief with respect to the period of suspension or any lay‑off, in any form or manner. The Court observed that this wording can only be understood to refer to suspensions or lay‑offs that have already occurred; it cannot be read as intending to apply to any future lay‑off that might arise, because the agreement does not expressly extend the prohibition to later events. Although Clause 9 records that the suspension of thirty workmen continued, that suspension was pending an inquiry and disciplinary action. The Court held that Clause 7 and Clause 9 cannot be read together to cover future suspensions unless the agreement contains clear language to that effect. Under ordinary labour law, a workman may be suspended while an enquiry is underway. If the enquiry proves misconduct, the workman is dismissed and is not entitled to wages for the period of suspension. Conversely, if the enquiry results in reinstatement, the workman is entitled to full wages for the suspension period together with reinstatement, unless the employer imposes a lesser penalty by withholding part of those wages. The Court referred to the decision in The Straw Board Mfg. Co. v. Govind, where it was observed that when a tribunal does not approve an employer’s action, that action is deemed to have never taken effect and the workman remains in service. Consequently, a workman who is fully cleared by the enquiry remains employed and is entitled to his full wages for the suspension period. Accordingly, when Clause 9 envisions suspension pending inquiry and disciplinary action, it also contemplates the resulting consequences: if the enquiry leads to dismissal, the workman receives no wages for the suspension period; if the enquiry leads to reinstatement, the workman receives full wages for that period, or a reduced amount only if the employer imposes a lesser punishment short of dismissal. The Court found no language in Clause 7 that negates these legal consequences after an enquiry and disciplinary action. It therefore concluded that Clause 7 must be limited to suspensions that occurred up to the date of the agreement and does not extend to future suspensions. For future cases, Clause 9 alone governs, and it contains the necessary provisions for enquiry, disciplinary action, and the corresponding wage entitlements.

In this case, the Court observed that clause (9) contemplated a suspension pending an inquiry and that the consequences of the inquiry, whether it led to dismissal or reinstatement, had to be envisaged by the clause even though the agreement contained no explicit provision dealing with future situations. The Court said that if the parties had intended that workmen remaining suspended under clause (9) would receive no wages in the future even after a full exoneration following an inquiry, the agreement would have needed to contain a specific wording to that effect within clause (9) itself. Consequently, the Court formed the opinion that clause (7) applied only to the period up to the date of the agreement, including the grace period granted in clause (1) for workmen to resume their duties, and did not extend to future periods. On that construction, the tribunal was not unjustified in ordering payment of wages for the suspension period that fell after the date of the agreement to those workmen whom it reinstated. Therefore, the appellant’s contention that the tribunal erred in granting such wages to reinstated workmen could not succeed. The Court then turned to the second term of reference and noted that inquiries had been conducted with respect to five of the workmen whose cases were before it. The respondents argued that the inquiries violated the principles of natural justice because the witnesses had not been examined in chief before the inquiry officer. The Court described the procedure that actually took place: when witnesses were produced, the officer read to them their previously prepared signed statements, asked them to confirm the correctness of those statements, and recorded their signatures. The statements were also read to the accused workmen, who were then invited to cross‑examine the witnesses, although no copies of the statements were ever furnished to the workmen. The tribunal held that this procedure was open to objection and contravened the principles of natural justice, holding that witnesses should have been examined in chief in the presence of the workmen whose cases were being investigated. The Court recalled the requirements of natural justice as laid down in Union of India v. T. R. Verma, quoting that a party must be allowed to adduce all relevant evidence, to have the opponent’s evidence taken in his presence, to cross‑examine the opponent’s witnesses, and to be given an opportunity to explain any material relied upon against him. The Court further noted that when these rules are satisfied, an enquiry cannot be attacked on the ground that the Evidence Act’s procedural form was not strictly observed. The Court then referred to the later decision of State of Mysore v. S. S. Makapur, where similar principles were discussed (1) [1958] S.C.R. 499. (2)

The Court referred to the decision reported in [1963] 2 S.C.R. 943 and recorded the following observations. The Court explained that when evidence is oral, the complete examination of the witness ordinarily occurs before the party who is charged, and that party is thereby given a full opportunity to cross‑examine the witness. The Court observed that the same principle applies when a witness is called after having previously given a statement taken behind the back of the charged party. In such a case, the statement must be put to the witness, admitted as evidence, and a copy must be given to the charged party. The charged party must also be allowed to cross‑examine the witness on that statement in order to test its reliability. The Court held that requiring the witness to repeat the contents of the prior statement word for word and sentence for sentence would amount to insisting on bare technicalities. The Court further stated that the rules of natural justice concern substance rather than form, focusing on the fairness of the process. According to the Court, the rules are fulfilled when prior statements are read to the witness, marked on admission, copies are given to the charged person, and the charged person is allowed to cross‑examine. The appellant argued that the rules of natural justice should apply equally to inquiries under Article 311 and to domestic inquiries conducted by management concerning workmen’s misconduct. The Court accepted that the rules of natural justice do not vary from one tribunal to another in principle. Nevertheless, the Court emphasized that the purpose of these rules is to protect the person against whom an inquiry is being held, enabling him to meet the charges properly. Consequently, the Court observed that the nature of the inquiry and the status of the person subject to it influence the minimum requirements of natural justice. The Court illustrated that where lawyers are permitted before a tribunal and the party facing the inquiry is represented by counsel, a mere reading of the material may sometimes suffice. This principle was referenced in New Prakash Transport Co. v. New Suwarna Transport Co. (1) as an earlier authority. However, the Court noted that in a domestic inquiry concerning industrial matters, lawyers are generally not allowed, and therefore something more than a simple reading of statements is required to protect the industrial worker’s interests. The Court also took judicial notice of the fact that many industrial workers are illiterate and that sometimes even labour union representatives may be absent to defend them. In such circumstances, the Court held that merely reading a prepared statement in a few minutes would be insufficient. Furthermore, asking the workman to cross‑examine after such a brief reading would defeat the opportunity that natural justice requires for the workman to defend himself. Consequently, the Court concluded that in domestic inquiries involving industrial matters, management should examine the witnesses from the beginning to the end in the presence of the workman.

In this case, the Court observed that the workman should be present at the enquiry itself. It noted that an oral examination invariably requires more time than a simple reading of a prepared statement of comparable length, and that an oral hearing conveys the evidence more effectively to the person against whom the inquiry is directed. Accordingly, the Court expected that a domestic inquiry conducted by the management should ordinarily be carried out in this manner. Nonetheless, the Court recognised the force of the appellant’s argument that the fundamental principles of natural justice cannot vary from one tribunal to another, and therefore a different method of conducting a domestic inquiry might be permissible, although such a method should be regarded as an exception rather than the rule. The Court referred to the procedure laid down in Shibavasappa’s case (2) as an example of an alternative approach. The Court further held that, where witnesses are not examined from the outset in the presence of the person charged, the minimum requirement is that the person charged must receive a copy of the statements made by the witnesses well before the inquiry begins. The Court clarified that “well in advance” means that the copy must be supplied at least two days prior to the commencement of the inquiry. If this requirement is not fulfilled and the witnesses are not examined in‑chief at the enquiry, the Court concluded that the principles of natural justice, which demand that the accused have an adequate opportunity to defend himself, have not been satisfied in a domestic industrial inquiry. The Court found that, in the present case, the tribunal had merely read the prepared statements to the workmen and then asked them to cross‑examine the witnesses on the spot. Naturally, the workmen were unable to do so, and the Court agreed with the tribunal—though for different reasons—that the enquiry failed to observe the principles of natural justice. Consequently, the Court affirmed the tribunal’s order that the enquiries were vitiated by the disregard of natural justice. The Court also noted that, despite this finding, the tribunal had terminated the services of four of the five workmen and reinstated only one, and that this aspect would be examined further when the appeal of the workmen was considered.

Turning to the appeal filed by the workmen respondents, the Court identified the first contention raised on their behalf. The workmen argued that the tribunal had erred in permitting the dismissal of nine workmen listed in “list A” of the order of reference—namely Hanif (No. 10), Narayan (No. 11), Khalil (No. 12), Abdul Subhan (No. 13), Bhagwan Singh (No. 15), Ram Ekbal (No. 19), Mangroo (No. 20), Satish (No. 21), and Raja Ram (No. 22). The workmen contended that these nine individuals, who belonged to group III, were charged only with inciting other workers to slow down work and that no charge of participating in a go‑slow was made against them. They asserted that the tribunal allowed evidence suggesting that the nine workmen were themselves guilty of a go‑slow, reached a finding to that effect, and consequently dismissed them. The workmen further maintained that the tribunal had not found any evidence that they had incited others to slow down work, and therefore the charge against them had never been proved. As a result, they argued, the dismissals were based on an unproven charge, ignoring the specific charge that had actually been made. The Court indicated that it would examine the case of each workman individually to determine whether this contention was correct, beginning with Hanif, the first workman in the group of nine.

In this part of the appeal the Court examined the nine workmen listed in group III who had been charged only with inciting other employees to slow down work. The charge of personally participating in a go‑slow had not been framed against any of them. Nevertheless the tribunal admitted evidence it said showed that each of the nine had actually engaged in a go‑slow, and on that basis the tribunal recorded a finding of guilt and authorised their dismissal. The respondents argued that the tribunal had neither found nor produced any evidence that the nine workmen had incited others, and therefore the charge of incitement was unproven. They submitted that a dismissal on a charge that was never established could not be sustained, because the tribunal had ignored the only charge that had been formally made. The Court therefore had to consider, individually, whether the contention of the respondents was correct for each workman. The first workman considered was Hanif. The award indicated that, although the tribunal’s findings hinted that Hanif might have participated in a go‑slow, the tribunal was aware that the formal accusation against him concerned incitement of co‑workers. Evidence was placed before the tribunal showing that Hanif moved around the department urging other workers to reduce their output. The tribunal evaluated that evidence, accepted it, and concluded that the appellant had properly chargesheeted Hanif and was entitled to dismiss him. Consequently, the Court could not say that there was no evidence supporting the charge framed against Hanif, nor could it say that the tribunal had failed to find the charge proved, even though a suggestion of personal go‑slow appeared in the discussion. The tribunal’s finding that Hanif had incited other workers fell squarely under misconduct as defined in standing order 22(k), which permits dismissal. Accordingly, the Court saw no basis for interfering with the tribunal’s order concerning Hanif.

The next workman whose case was examined was Narayan, who likewise faced the charge of inciting other employees to slow down work. The tribunal’s award began by stating that Narayan was charged with incitement and then referred to evidence that Narayan had walked through the department urging workers to operate only two looms instead of four, thereby reducing production. The tribunal appeared to accept this evidence and, in its conclusion, described Narayan as having taken part in a deliberate go‑slow. Although the final finding suggested personal participation in a go‑slow, the discussion in the award showed that the tribunal was satisfied that Narayan had also encouraged his co‑workers to reduce their work pace. That finding corresponded with the original charge of incitement and satisfied the requirement of misconduct under the applicable standing order. Accordingly, the Court found no error in the tribunal’s reasoning and saw no reason to overturn the order of dismissal in Narayan’s case.

In the matter of Narayan, the tribunal received evidence that he had moved through the department urging other workmen to operate only two looms instead of the required four, an action that would inevitably result in reduced production. The tribunal appeared to accept this evidence, and at the conclusion of its discussion it stated that Narayan had taken part in deliberate go‑slow tactics. Although the final conclusion seems to indicate that Narayan was dismissed for personally engaging in go‑slow, the narrative of the award also shows that the tribunal was satisfied that he had incited his colleagues to reduce their output. Accordingly, the tribunal’s finding rests on the fact that Narayan both encouraged other workmen to slow down and, in the tribunal’s view, participated in the slowdown himself. In this context, the Court saw no basis for interfering with the tribunal’s order against Narayan, because the essential finding—that he had incited a slowdown and therefore warranted dismissal—remained unaltered despite the phrasing used by the tribunal.

The cases of Khalil, Abdul Subhan and Bhagwan Singh were examined in a similar manner. Each of these workmen was charged with inciting other employees to work at a reduced pace, specifically by persuading them to handle only two looms rather than four. The tribunal accepted the evidence presented in each instance that the accused had indeed urged their co‑workers to adopt this reduced workload. In Khalil’s case, the award’s discussion focused on the incitement, yet the tribunal ultimately concluded that Khalil had succeeded in proving that he himself had engaged in go‑slow tactics, which caused a fall in production, and therefore authorized his dismissal on the ground of misconduct as set out in the charge‑sheet. The tribunal’s wording, however, seemed to treat the act of inciting others as equivalent to the workman’s own participation in a go‑slow, an expression the Court regarded as imprecise. Nevertheless, because the tribunal had accepted the evidence of incitement and had found that this led to a slowdown, the Court found no reason to overturn the dismissal. The same reasoning applied to Abdul Subhan, where the evidence showed that he had urged other workers to handle only two looms, and the tribunal, after accepting this proof, declared that Abdul Subhan had engaged in go‑slow tactics and ordered his dismissal. Although the tribunal’s language again appeared inappropriate, the essential finding that he had incited a slowdown was clear, and thus the Court saw no justification for interference. Finally, regarding Bhagwan Singh, the evidence demonstrated that he went around the weaving shed instigating weavers not to exceed two looms, contrary to the expectation of four looms. This evidence was likewise accepted by the tribunal, although the tribunal’s conclusion was phrased as if Bhagwan Singh had committed the misconduct of deliberate go‑slow tactics. The Court considered this wording to be a mischaracterisation of the actual finding, which was that Bhagwan Singh had incited other workers to reduce their output. In view of this, the Court concluded that there was no ground to disturb the tribunal’s order against Bhagwan Singh.

In the matter of Bhagwan Singh, the tribunal had recorded a finding that he had engaged in the misconduct of deliberate go‑slow tactics. The Court observed that the tribunal’s language was inappropriate because it described the conduct as the adoption of go‑slow tactics, whereas the actual finding was that Bhagwan Singh had incited other workers to reduce their output. The Court therefore concluded that, despite the unsuitable phrasing, the substantive determination was that Bhagwan Singh was guilty of incitement, and consequently saw no basis for interfering with the tribunal’s order in his case.

Similarly, in the case of Ram Ekbal, the evidence mirrored that of Bhagwan Singh, showing that Ram Ekbal had urged weavers to operate only two looms rather than the required four. The tribunal’s conclusion was again expressed in the same inappropriate terms, yet the underlying finding was identical – that Ram Ekbal had incited others to go‑slow. The Court found no reason to disturb the tribunal’s decision. The same pattern applied to Mangroo, who was charged with encouraging weavers to work two looms instead of four. The tribunal had stated that Mangroo had adopted go‑slow tactics as set out in the charge‑sheet, a formulation deemed improper by the Court. Nevertheless, the factual determination was that Mangroo had incited his fellow workers to slow down, and the Court therefore upheld the tribunal’s finding and dismissal. In the case of Satish, the tribunal accepted evidence that Satish had incited other weavers to slow their work and expressed its conclusion using the phrase that Satish had indulged in go‑slow tactics. The Court, after reviewing the award, held that the essence of the finding was Satish’s incitement of others, and again found no ground to interfere. Finally, the case of Raja Ram was identical to that of Satish, with evidence showing that he, together with others, had gone around urging fellow workers to slow down. The Court saw no reason to disturb the tribunal’s order in this matter either. The respondents then contended that the tribunal should have allowed full wages to the workmen in

In this case, the Court considered the respondents’ claim that the workers identified in list “A” should receive reinstatement together with full back wages rather than only fifteen months’ wages as the tribunal had ordered. The Court noted that under the ordinary law of master and servant, the power to suspend a servant without pay cannot be inferred as a term in a standard contract of service; it must arise from an express clause in the contract itself or from a statutory provision governing that contract, as explained in The Management of Hotel Imperial New Delhi v. Hotel Workers’ Union (1). The Court further observed that no provision in the standing orders was brought to its attention that would enable the appellant in the present case to suspend a workman without payment of wages. However, relying on the same Hotel Imperial decision, the Court held that where section 33 of the Act removes the employer’s unrestricted right to dismiss an employee without tribunal permission, the employer may be permitted to suspend the workman pending inquiry and the tribunal’s permission. In such a situation, the Court explained that a term allowing suspension may be implied into the employment contract, and if the tribunal grants permission, the suspension ends and the employer ceases any obligation to pay wages after the suspension date. Conversely, if the tribunal refuses permission, the workmen become entitled to receive their wages from the date of suspension. Applying this principle, the Court concluded that for any workmen ordered to be reinstated, there can be no justification for denying their wages from the suspension date, which for the workers in list “A” must be computed from December 24, 1957, based on the agreement dated December 23, 1957. Accordingly, the Court observed that fifteen of the twenty‑nine workmen in list “A” had been ordered reinstated, and it saw no reason to withhold their full wages for the entire period beginning December 24, 1957. Consequently, the Court allowed the respondents’ appeal with respect to those fifteen workmen, varied the tribunal’s order, and directed that they be paid full wages from December 24, 1957.

Turning to the workers placed in list “B,” the Court noted that one workman, Hiralal Bhomick, had been ordered reinstated by the tribunal and was awarded compensation equal to fifteen months’ wages. The Court held that his situation was comparable to that of the fifteen workmen in list “A” already considered, and therefore he too was entitled to receive his full wages from the date of his suspension rather than only the fifteen months’ compensation previously granted. The Court reiterated that when reinstatement is ordered, the employer’s obligation to pay wages runs from the suspension date until the employee returns to work, and any partial compensation awarded without full wages is inconsistent with the legal principle derived from section 33 of the Act. Accordingly, the Court directed that Hiralal Bhomick’s entitlement be adjusted to reflect full back wages from his suspension date, thereby placing him on equal footing with the other reinstated workers. The Court then indicated that it would proceed to examine the case of nine workmen from list, signalling that further analysis of those workmen’s entitlement would follow in the subsequent part of the judgment.

In this part of the case the Court considered the nine workmen listed in category A, whose cases had already been examined and who had been allowed to be dismissed. In addition, the Court noted four workmen listed in category B – namely Misra (No 1), Abdullah (No 2), Narayan Tewari (No 5) and Din Mohammed (No 6) – whose employment was permitted to be terminated with effect from the date on which the award was enforced. The Tribunal had awarded the nine workmen twelve months’ wages, whereas the four workmen in category B received only one month’s wages together with compensation calculated as fifteen days’ average pay for each completed year of service, or any part thereof exceeding six months. The respondents argued that, despite the Tribunal’s eventual permission to dismiss these employees or to terminate their services, the workmen should have received full wages for the entire period up to the date the award became enforceable.

The Court observed that the situation of the nine workmen in list A fell squarely within the precedent set by the Supreme Court in Messrs Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan. Clause (9) of the industrial agreement allowed the suspension of the workmen to continue, stipulating that they would remain suspended pending an inquiry and any disciplinary action undertaken by management. The same clause further required the management to attempt an amicable settlement with the union concerning any disciplinary measures; if such a settlement could not be reached, the matter would then be referred for adjudication. Respondents contended that this clause clearly envisioned a management‑led inquiry followed by disciplinary action, and that the appellant had failed to conduct any inquiry before seeking adjudication for dismissal, thereby entitling the workmen to full wages until the award’s enforcement date. Conversely, the appellant maintained that while clause (9) indeed foresaw an inquiry, it also mandated an attempt at settlement with the union; because no settlement was achieved, the management proceeded directly to adjudication without holding an inquiry. The factory manager, who testified as the last witness, recounted that he had discussed the matter with the union secretary, who insisted that holding an inquiry would be futile because any final decision required prior consultation with the union. The manager affirmed his desire to hold inquiries, but the union secretary opposed them. The union secretary had earlier appeared as the first witness, yet the Court noted that he was not questioned on the issue of the purported lack of inquiry.

All of the material before the Court showed that the appellant had not established any case, even in the application for permission to dismiss filed on 29 June 1959, that the reason for not conducting the inquiries was a suggestion by the union secretary that such inquiries would be useless. The appellant’s written statement also contained no allegation of this kind. Consequently, it was difficult to accept the proposition that the respondents themselves had refused the inquiry. The Court therefore concluded that the management had intended to dismiss the workmen without first holding an inquiry, and that the decision in the Sasa Musa case was fully applicable to the nine workmen who had been permitted to be dismissed. Those nine workmen were therefore entitled to receive full wages from 23 December 1957 up to the date on which the tribunal’s award authorising their dismissal became enforceable.

The Court then turned to the matter of the four workmen whose services had been allowed to be terminated. No submission had been made to the Court concerning the order that permitted termination of their service, as quoted in the Sasa Musa case citation. The Court did not consider the tribunal’s order in that regard to be incorrect. The tribunal had observed that, had the inquiry proceedings not been defective, the four individuals would have been liable to dismissal as ordered by the appellant. Because the inquiry proceedings were defective, the tribunal held that the dismissal was unjustified. Accordingly, the tribunal permitted termination of the four workmen’s services under one of the standing orders and ordered that they be paid wages for a period of one month, together with compensation calculated at fifteen days’ average wages for every completed year of service, or any part thereof in excess of six months.

The Court noted that the factual circumstances of this case were not exactly the same as those in the Sasa Musa case, and therefore the principle laid down in that case would not necessarily apply here. In view of those differences, the Court saw no reason to interfere with the tribunal’s order. Accordingly, the tribunal’s award was affirmed, subject to the modifications described above. The management’s appeal was dismissed, while the workmen’s appeal was allowed only to the extent that it granted them wages in the manner specified. Each party was ordered to bear its own costs in both appeals. The appeal numbered C A 425 of 1962 was dismissed, and the appeal numbered C A 426 of 1962 was allowed in part, with the citation to the 1959 Supreme Court Reports reporting the Sasa Musa decision.