1997 JTR(SC) 1455
1998 AIR(SC) 185 ; 1997 AIR(SCW) 4148 ; 1999 95 FJR 42 ; 1997 77 FLR 871 ; 1997 9 JT 94 ; 1998 1 LLJ 929 ; 1997 3 LLN 752 ; 1998 1 RSJ 69 ; 1997 7 Scale 11 ; 1997 8 SCC 713 ; 1998 SCC(L&S) 4 ; 1997 Supp5 SCR 119 ; 1998 1 SCT 440 ; 1998 1 SLR 13 ; 1997 KHC 1118 ; 1997 2 KLT(Online) 1146 ; 1997 9 Supreme 383
1997(9) Supreme 383
SUPREME COURT OF INDIA
(From Karnataka High Court)
S.B. Majmudar & M. Jagannadha Rao, JJ.
Vishweshwaraiah Iron & Steel Ltd. -Appellant
versus
Abdul Gani & Ors. -Respondents
Civil Appeal Nos. 7671-72 of 1997
(Arising out of SLP (Civil) Nos. 20332-20333 of 1997)
Decided on 11-11-1997
Counsel for the Parties :
For the Appellant, Dhruv Mehta, G.M. Misra, Fazlin Anam, Ms. Sofia Verma, S.K. Mehta Advocates.
Act
Referred
:INDUSTRIAL DISPUTES ACT : S.33, S.10, S.10(a)
LABOUR LAW : .
(A) The Industrial Disputes Act, 1947, Sections 33, 10, and 10A, along with associated labour law principles, govern the procedural validity of termination orders and the permissibility of leading fresh evidence before adjudicatory bodies. Section 33(2) addresses management's obligation to obtain government approval after conducting a domestic inquiry, whereas Section 10 and Section 10A empower Labour Courts and Industrial Tribunals to adjudicate disputes concerning termination, including reviewing evidence and ensuring procedural fairness. The interplay between these provisions becomes critical where an inquiry is wholly absent, as the court must determine whether subsequent judicial intervention can retrospectively validate the termination or effect a relation back of orders.
(B) Key legal principles include the necessity of a domestic inquiry before termination, the scope of judicial review under Sections 10 and 10A, the doctrine of relation back of orders, and the distinction between proceedings under Sections 33(1), 33(2), 10, and 10A. The court emphasized that precedents from Section 33 proceedings do not automatically extend to proceedings under Sections 10 or 10A, especially where no initial inquiry was held.
Facts of the case:
The petitioner was terminated without any domestic inquiry by the management. A dispute was referred to the appropriate authority under Section 10 of the Industrial Disputes Act, and the management subsequently led evidence to justify the termination. The central question was whether the authority could retrospectively validate the termination based on this evidence and whether the order could relate back to the date of the original termination.
Findings of Court:
The court observed that cases where management holds a defective inquiry and seek to cure the defect through fresh evidence before a Labour Court or Tribunal cannot be treated the same as cases where no inquiry was held at all. It held that the reasoning in earlier Constitution Bench decisions, particularly those under Section 33, cannot be automatically applied to proceedings under Sections 10 or 10A where no domestic inquiry occurred.
Issues:
Whether the doctrine of relation back applies when no domestic inquiry was conducted; whether evidence led after the termination can validate the order; and whether precedents from Section 33 proceedings are applicable to proceedings under Sections 10 or 10A.
Ratio Decidendi:
In the absence of any domestic inquiry, the management cannot cure the defect by leading evidence before the adjudicatory forum, and the principles laid down in Section 33(2) and related precedents do not extend to justify termination orders under Sections 10 or 10A, necessitating stricter adherence to procedural fairness.
Result:
The appeals were permitted to be placed before a Constitution Bench for a definitive ruling, and an ad interim stay was imposed, restricting the back wages to 50% of the amount claimed.
(A) The Industrial Disputes Act, 1947, Sections 33, 10, and 10A, along with associated labour law principles, govern the procedural validity of termination orders and the permissibility of leading fresh evidence before adjudicatory bodies. Section 33(2) addresses management's obligation to obtain government approval after conducting a domestic inquiry, whereas Section 10 and Section 10A empower Labour Courts and Industrial Tribunals to adjudicate disputes concerning termination, including reviewing evidence and ensuring procedural fairness. The interplay between these provisions becomes critical where an inquiry is wholly absent, as the court must determine whether subsequent judicial intervention can retrospectively validate the termination or effect a relation back of orders.
(B) Key legal principles include the necessity of a domestic inquiry before termination, the scope of judicial review under Sections 10 and 10A, the doctrine of relation back of orders, and the distinction between proceedings under Sections 33(1), 33(2), 10, and 10A. The court emphasized that precedents from Section 33 proceedings do not automatically extend to proceedings under Sections 10 or 10A, especially where no initial inquiry was held.
Facts of the case:
The petitioner was terminated without any domestic inquiry by the management. A dispute was referred to the appropriate authority under Section 10 of the Industrial Disputes Act, and the management subsequently led evidence to justify the termination. The central question was whether the authority could retrospectively validate the termination based on this evidence and whether the order could relate back to the date of the original termination.
Findings of Court:
The court observed that cases where management holds a defective inquiry and seek to cure the defect through fresh evidence before a Labour Court or Tribunal cannot be treated the same as cases where no inquiry was held at all. It held that the reasoning in earlier Constitution Bench decisions, particularly those under Section 33, cannot be automatically applied to proceedings under Sections 10 or 10A where no domestic inquiry occurred.
Issues:
Whether the doctrine of relation back applies when no domestic inquiry was conducted; whether evidence led after the termination can validate the order; and whether precedents from Section 33 proceedings are applicable to proceedings under Sections 10 or 10A.
Ratio Decidendi:
In the absence of any domestic inquiry, the management cannot cure the defect by leading evidence before the adjudicatory forum, and the principles laid down in Section 33(2) and related precedents do not extend to justify termination orders under Sections 10 or 10A, necessitating stricter adherence to procedural fairness.
Result:
The appeals were permitted to be placed before a Constitution Bench for a definitive ruling, and an ad interim stay was imposed, restricting the back wages to 50% of the amount claimed.
ORDER
Learned counsel for the petitioner referred us to a decision of a Bench of two learned Judges of this Court in the case of R. Thiruvirkolam v. Presiding Officer & Anr.1 which has been later followed by a Bench of three learned Judges in the case of Punjab Dairy Development Corporation Ltd. & Anr. v. Kala Singh & Ors.2. In our view, these are the cases where the management held defective inquiry and before the Labour Court or the Industrial Tribunal the defect was sought to be removed by leading evidence and ultimately if the Court seized of a reference under Section 10 of the Industrial Disputes Act agreed with the management on the new evidence led before it, the question of relation back of the order of the Labour Court or Industrial Tribunal to the original order of termination would assume importance. But in cases where no domestic inquiry is held at all, as in the present case, in our view the aforesaid decisions would not apply.
2. Learned counsel is very sanguine when he contends that the decision of the Constitution Bench in the case of P.H. Kalyani v. M/s. Air France Calcutta3 squarely applies to the facts of the present case also and for that purpose he submits that the observation in the Constitution Bench judgment regarding M/s. Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan & Ors.4 would not apply in connection with the termination orders passed without domestic inquiry and that ratio of the Constitution Bench judgment in Kalyani s case would squarely apply, where admittedly no enquiry was held by the management before terminating the services of the employee. In our view, these observations in Kalyani s case were rendered in connection with proceeding for approval of the management s action under Section 33(2) of the Industrial Disputes Act, 1947. Even Sasa Musa Sugar Works case also pertains to a proceedings under Section 33(1) of the I.D. Act for permission. Therefore, the observations of the Constitution Bench in Kalyani s case in connection with Sasa Musa Sugar Works case which is under Section 33(1) of the Act will require a closer scrutiny in so far as they are to be applied to a proceeding arising out of a reference under Section 10 or 10A of the Industrial Disputes Act which would stand on a different footing.
3. The moot question would arise whether the ratio of the Constitution Bench judgment in Kalyani s case would almost automatically apply to such cases apart from the cases arising under Section 33 of the I.D. Act. We may, in this connection, mention that the decision of the three Judge Bench of this Court in Gujarat Steel Tubes Ltd. & Ors. v. Gujarat Steel Tubes Mazdoor Sabha & Ors.5 wherein Krishna Iyer, J., spoke for the majority, was an authority on the question of leading evidence before the Industrial Court in proceedings under Section 10A of the Act and on the question of relation back of ultimate penalty order passed by the arbitrator on the basis of evidence led by the management for justification of its action before such tribunal. Therefore, the question would arise whether the ratio of this decision would still apply to a case where the proceedings relate to Section 10 or 10A of the Act apart from Section 33 of the Act. The latter decisions of this Court have applied the ratio of the decision in Kalyani s case to matters arising under Sections 10 and 10A of the Act. In our view, therefore, the dispute in the present proceedings could be better resolved by a Constitution Bench of this Court which can consider the scope and ambit of the decision of the earlier Constitution Bench judgment in Kalyani s case which has been the sheet-anchor of the subsequent cases referred to earlier on which a strong reliance has been placed by learned counsel for the petitioner and which had nothing to do with proceedings under Section 33 of the Act. The latter decisions of this Court will also, therefore, require a re-look.
4. Leave granted.
5. The appeals will now be placed for final disposal before a Constitution Bench of this Court pursuant to the present order.
6. Printing dispensed with. All the relevant documents are permitted to be filed by the parties concerned.
7. Notice to issue on the prayer for interim relief. There will be ad interim stay of the order of the Division Bench of the High Court to the extent of 50% of the back wages.
Ordered accordingly.
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Parallel Citations of other Journals :
Vishweshwraiah Iron & Steel Ltd. v. Abdul Gani & Ors., 1997(9) Supreme 383 : 1997(7) Scale 11 (SC)
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