NON HOLDING OF ENQUIRY PRIOR TO THE TERMINATION OF A WORKMAN DOES NOT NEGATE THE TERMINATION ITSELF – VIEW OF THE APEX COURT

CASE DIARY
Name of the case	State of Uttarakhand & Ors.  v. Smt. Sureshwati
Application Ref.	Civil Appeal No. 142 Of 2021 (arising out of Special Leave Petition (Civil) No. 9864 of 2020)
Appellant	State of Uttarakhand & Ors.
Respondent	Smt. Sureshwati
Judiciary	Supreme Court of India
Bench	·         Justice L Nageswara Rao ·         Justice Navin Sinha ·         Justice Indu Malhotra
Date of judgment	Jan 20, 2021

PART - A: OVERVIEW

·    The Apex Court on 20^th day of January 2021 was considering a special leave petition filed by Appellant challenging the dictum passed by the Uttarakhand High Court dated 28.08.2019 involving substantial question of law viz. whether termination of a workman without holding any inquiry would invalidate the conduct of the employer.  

·     The Hon’ble Court expounded the position of the Labour Court in such a scenario and also opined the obligation of the employer as an appellate authority.

·     The case under consideration also involved whether the Labour Court has jurisdiction to interfere with the decision taken by the appellate authority viz. employer where the conduct of the employer is established prima facie in so far as the application of Section 10A and 11A of the Industrial Disputes Act, 1947 is concerned.

PART – B: FACTS OF THE CASE

·    Jai Bharat Junior High School, Haridwar (hereinafter “the School”) was characterized as a non-government / unaided private institution school till the year 2005.

·  The Respondent was employed as an assistant teacher in the School during the period July, 1993 to May, 1994. Subsequently the Respondent started working as a clerk in the School from July, 1994.  

·    The District basic education officer formally granted approval on 25.03.1996 for appointment of teachers, clerk and peon in the school (including the Respondent) on retrospective basis which took effect from 1^st day of July 1994.

·      The Respondent got married during the year 1997 and discontinued her service as a clerk thereon.

·    The School started to receive grant in aids commencing 2005, subsequent to which, the administration of the school was taken over by the State of Uttarakhand and was governed under the Uttaranchal School Education Act, 2006.

·     The Respondent on 15^th day of July 2006 (approx. 9 years later) instituted a complaint against the School wherein she deposed that she was ousted from her position in an arbitrary and illegal manner and was retrenched without granting her an opportunity to present her case which was against principles of natural justice. The Respondent also contended that she worked continuously until March, 2006 and no retrenchment compensation was paid to her.

·      After the receipt of the complaint, the School through a letter dated 21.08.2006 requested the Additional District Education Officer (Basic), Haridwar to conduct an inquiry on the complaint made by the Respondent.

B.1. REVELATIONS DURING THE INQUIRY

The inspecting officer who conducted the inquiry with respect to the allegations made by the Respondent, through this report dated 24.08.2006 inter alia revealed the following:

1.   The father of the respondent was a member of the Managing Committee and her mother was the Chairman employed by the School and the Respondent never possessed the requisite qualification (Bachelors in education) to be appointed as a teacher in the first place thereby her appointment in the School in the first place stands invalid.

2.  The records maintained by the School was perused in the presence of both the parties and the records prima facie established that the Respondent was not in employment since 1997. Further the Respondent did not submit any application or correspondence to the School for leave permission.

3.  Considering her continuous absence, the School appointed another clerk named Mrs. Sneh Lata in her place. The Respondent did not cast any allegation against the School until 2006. 

·    The Respondent filed a complaint before Labour Commissioner, Haridwar which subsequently was taken by the Labour Court to decide whether the conduct of the School was arbitrary or not. The Labour Court passed an ex-parte order in favor of the Respondent subsequent to which the award issued by the court was challenged through a writ petition before the Uttarakhand High Court.

·     The High Court allowed the writ petition and directed the Labour Court to undertake and decide the proceedings in the matter right from the beginning (de novo). The High Court felt that despite the availability of sufficient evidence against the Respondent, the Labour Court had erred by overlooking the matter in entirety.

·    The Labour Court instituted fresh proceedings and after considering both the parties with material evidences available on hand, postulated that the Respondent was not entitled any benefits as the evidences produced by the Management of the School well establishes that the Respondent was not in continuous service in the School since 1997 and ruled that the Respondent did not come to the Court with clean hands.

·     The Respondent being aggrieved by the order of Labour Court, filed a writ petition in the Uttarakhand High Court in 2016. The High Court ruled that the petition filed by the Respondent was admissible on a sole ground that the School did not hold any enquiry and no disciplinary actions were taken against the Respondent with respect to her abandonment of service in 1997 and went in favor of the Respondent.  

·    As a result of this, the Appellant has approached the Apex Court through filing a special leave petition against the order passed by the High Court.

PART - C: CONTENTION OF THE PARTIES

C.1. CONTENTIONS OF THE APPELLANT

The Appellant during the course of appeal to the Apex Court made the following submissions:

·     The Respondent post her marriage during 1997, had left service in the School and did not even make a leave application with respect to the same which clearly outlines the fact that the Respondent was continuously absent from service and not entitled to benefit under the provisions of the Industrial Disputes Act, 1947.

·      The conduct of the employer viz. the School by terminating the Respondent does not stand a footing to be termed as illegal or arbitrary and this claim of the Respondent was false and baseless.  

·     The Head master of the School contended that allegations made by Respondent are false as there are records maintained that clearly demonstrate that another clerk was appointed in place of the Respondent considering her absence.

·     Another assistant teacher of the School has deposed that the Respondent has made a false and incorrect allegation that she was retrenched in 2006, in fact wherein she has abandoned the service of clerk on her own motive in 1997. The School at the time of receiving grant in aid during 2005, has forwarded the list of all the staff members of the School wherein the name of the Respondent was not present. However, the list contained the name of the subsequent clerk appointed in the place of Respondent.

·      Peon of the School deposed that the Respondent was initially appointed as a teacher whereas she did not even possess the basic qualification to be appointed as a teacher.

C.2. CONTENTIONS OF THE RESPONDENT

The Respondent during the course of appeal to the Apex Court made the following submissions:

·      Relying upon the ex-parte order passed by the Labour Court in 2010, the block development officer issued a letter to the Chief Education Officer on 20.06.2013 requesting for re-instatement of the Respondent into the School and to comply with the ex-parte order issued by the Labour Court in 2010.

·     The aforesaid letter clearly established that the Respondent was on leave during the time when the Government took over the management and administration of the School.

·    The Respondent worked as a clerk for a continuous period till 07.03.2006 subsequent to which the School had illegally retrenched the Respondent from continuance as a staff of the School which was arbitrary exercise of power.

·     The Respondent worked for a continuous period of 240 days and more in the year prior to her termination.

PART – D: QUESTION OF LAW INVOLVED

The perusal of the case by different levels of judiciary in the case under consideration has raised the following questions of law involved:

a.     Is the employer viz. the School justified in terminating the services of the Respondent without holding an enquiry or undertaking a disciplinary action against the Respondent?

b.   Who in the present case, has onus to prove that the Respondent was / was not in the continuous service in the School as per the Industrial Disputes Act, 1947?

c.   In the absence of an enquiry, does the Labour Court / Tribunal become the Appellate Body for adjudging the conduct of the Appellant?

PART – E: RULING BY THE APEX COURT

·     When the employer fails to or does not undertake to initiate an enquiry prior to the dismissal of a workman, then the same does not invalidate the termination of workman provided that the employer demonstrates and justifies his conduct before the Tribunal / Labour Court as the case may be.

·     The Labour Court would be bestowed with the power instead of the employer, through the evidence placed before it, to understand and judge the conduct of the both the parties to a case.

·      Reliance was placed on the earlier ruling of the Supreme Court in Workmen of the Motipur Sugar Factory Private Ltd. v. Motipur Sugar Factory (AIR 1965 SC 1803) to substantiate that where an employer has failed to make an enquiry before dismissing or discharging a workman it is open to him to justify the action before the tribunal by leading all relevant evidence before it.

·     The Court placed emphasis on the ruling in Delhi Cloth and General Mills Co. v. Ludh Budh Singh ((1972) 1 SCC 595) wherein it was postulated that:

a.   When the management does not hold an enquiry with reference to a dismissal or a termination, then such employer is open to produce the evidences before the court directly and justify his actions.

b.    In such a position, the Tribunal becomes bound by the evidence produced by the employer and the Tribunal / Court is not to enquire upon the validity of the enquiry as the employer does not himself rely upon the same. 

·     The Apex Court also relied upon its earlier dictum in Workmen of Firestone Tyre & Rubber Co. of India (P) Ltd. v. The Management of Firestone Tyre & Rubber Co. of India (P) Ltd and Others ((1973) 1 SCC 813) wherein the following arose:

a.    The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but if a dispute is referred to a Tribunal, the latter has power to see if action of the employer is justified.

b.   Prior to the imposition of the penalty, the employer shall hold an enquiry and provide an opportunity to the employee dismissed / terminated considering the principles of natural justice.

c.     In case wherein no enquiry is held or if there is a defective enquiry held, then the Court / Tribunal is bestowed with the adjudicatory power to decide the validity of conduct of the employer. The parties at this stage are empowered to produce evidences but which shall not be fresh evidences that were not relied upon earlier by either parties.

·   The Labour Court through its award establishes the fact that equal opportunity was given to the Appellant and the Respondents to substantiate their cases with evidences. The Appellant has deployed sufficient evidences through the records maintained before the Labour Court to show cause that the Respondent was not in service since 1997.

·      On the contrary, the High Court has overlooked all these evidences and went in favor of the Respondent.

·       Since the Respondent did not possess the basic pre requisite qualification for being appointment as a teacher i.e. Bachelors in Education, her initial appointment as an assistant teacher is invalid and void.

·      The Respondent has failed to establish that she had worked under the School for a period of not less than 240 days in the year prior to her termination. The onus was on the part of the Respondent to demonstrate that she was employed and worked for 240 days or more. The Respondent was in the position to inspect the attendance register and the accounts of the School for proving this fact which she has failed to.

·     Further since the School was administered by the Government of Uttarakhand from 2005, the Respondent could have produced her salary slips to evince that she was indeed under service of the School which did not happen to substantiate her case.  

·     Reliance was placed by the court in its earlier ruling in Bhavnagar Municipal Corpn. v. Jadeja Govubha Chhanubha ((2014) 16 SCC 130) wherein it was held that “It is essential for the workman to establish that he was in continuous service of the employer within the meaning of Section 25-B of the Industrial Disputes Act, 1947. For the respondent to succeed in that attempt he was required to show that he was in service for 240 days in terms of Section 25-B(2)(a)(ii). The burden to prove that he was in actual and continuous service of the employer for the said period lay squarely on the workman.”

·      Since the ex-parte order passed by the Labour Court in 2010 was set aside by the High Court, the letter issued by the Block Development Officer on 20.06.2013 for re-instating the Respondent would not stand legally recognized in the eyes of law.

·      The award issued by the Labour Court is upheld and the order issued by the Bombay High Court is set aside.

PART – F: ANALYSIS

·    Upon the perusal of language couched and embedded in Section 2A of the Industrial Disputes Act, 1947, it becomes abundantly clear that the law imposes a limitation period of three years from the date of dismissal / termination within which the Respondent was required to approach the Labour Court. It is clear that after the expiry of three years, the Respondent does not hold a footing in the eyes of law to file a plea in Labour Court. There are a catena of judgments to supplement this:

a.      Smt. Swapna Adhhikari v. The State of West Bengal & Ors.

Ref.: (W.P. No. 22991(W) of 2013; Judgment dated 20^th March 2014)

The Appellate Bench of the Calcutta High Court expounded that “The period of limitation as prescribed requires the party to approach the Labour Court or Tribunal under Section 2A before the expiry of three years from the date of discharge, dismissal, retrenchment or otherwise termination of service.”

b.      M/s ITC Infotech India Ltd. v. Mr Venkataramana Uppada

Ref.: (W.P. No. 27510/2015; Judgment dated 3^rd March 2016)

The Karnataka High Court contemplated that “A bare reading of above provision would indicate that a dispute covered under sub-section (1) can be agitated or questioned by a workman by making an application directly to the Labour Court or Tribunal for adjudication of such dispute and such application should be filed before the expiry of three years from the date of discharge, dismissal, retrenchment or otherwise termination of service. In other words, the right conferred under Section 2A would lapse immediately preceding the date of expiry of three years of the date of dismissal, discharge etc.”

·   Now the question arises on whether the court is competent to entertain the plea filed by the Respondent beyond the statutory period of three considering the option of condoning the delay under Section 5 of the Limitation Act, 1963. Section 5 of the Limitation Act operates on a case to case basis. The section elucidates that: 

“Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.”

·      Interpretation can be carved out from the Limitation Period imposed in the State of Karnataka through the Amendment Act of 1988 (Section 10(4A)) wherein the same enables individual workman to challenge a termination order by directly applying to the Labour Court within six months from the date of communication of such order of termination. Now the question arises whether this is mandatory or directive in nature, that is to say whether the law gives the cushion to the applicant to apply beyond the period of six months. This was answered by the Karnataka High Court in Executive Engineer and Others v. Lokesh Reddy and Ors. (2003 (4) KarLJ 151) wherein it was contemplated that “In view of the discussion made so far, we respectfully disagree with the view taken by the learned single judge in the present matters in holding the period of limitation provided under Section 10(4-A) of the Act as directory and not mandatory and affirm the view taken in the case of Khaleel Ahmed (supra), which has already clarified the said position of law holding the period of limitation in Section 10(4-A) as mandatory.”

·      Further to supplement this, reliance is placed upon the ruling of Karnataka High Court in Smt. Rukminibai and Others v. The Divisional Controller, Bidar Division (ILR 2013 Kar 1024) wherein the court opined that “Section 3 of the Limitation Act, 1963, is peremptory in nature. It imposes a duty on the Court to dismiss the applications, which are barred by limitation even if the plea of limitation is not raised. If the claim petition is barred by time, the Court or an adjudicating authority has no power or authority to entertain such an application and decide it on merits.”

·   Therefore it is pertinent to understand that the limitation period of three years mandated under Section 2A(3) of the Industrial Disputes Act, 1947, being mandatory in nature cannot be condoned by undertaking a recourse or protection under Section 5 of the Limitation Act which per say does not have application over the provisions of Industrial Disputes Act, 1947. Therefore the plea filed by the Respondent is clearly above the limitation period of 3 years i.e. 9 years which in the first place indicates that the petition filed by the Respondent before the Labour Court is not tenable in itself.  

·      The Appellant in the present case has not held an enquiry prior to the dismissal / termination of the Respondent, however the same was justified before the tribunal which adjudicated the matter and based on the evidence placed ruled the case in favor of the Appellant. In the case, the Labour Court by the virtue of power vested under Section 11A of the Industrial Disputes Act, 1947 has undertaken to determine whether the conduct of the Appellant was justified in terminating the Respondent which was duly upheld by the Apex Court.

·      It is imperative to note that the evidence directly adduced by the Appellant before the Court would be considered as if it is being produced for the first time as the scope of enquiry does not arise. The court in this case would have a large task in hand to find out whether there had been a misconduct on the part of the Respondent and the evidences laid down by the Appellant in entirety.

·    Had the contrary been the situation wherein an enquiry is undertaken based on evidence, then the judiciary shall only understand the validity of the enquiry and pass an order rather than examining the evidences unless it is established on the face of law that the enquiry was arbitrary in nature.

·      Pursuant to Section 25F of the Industrial Disputes Act, 1947, the workman who is in the continuous service for a period of 240 days or more during the period of 12 months as defined under Section 25B of the said statute shall be entitled for compensation against the arbitrary conduct of the employer. In the present case, the Respondent has filed to demonstrate that she had worked for a continuous period of 240 days or more considering that there were material evidences produced by the Appellant viz. Attendance records etc. to show case that the Respondent was not in service under the School during the period under consideration. The Gujarat High Court in Geb and Anr. v. Maganbhai Chhaganbhai Patel (Order dated 07^th Sept. 2006; H Rathod J.) elucidated that “The initial burden is upon workman to prove continuous service Section 25(B)(1) or (2). If that is discharged then onus shifts upon the employer to disprove the facts.”

·      Here the Respondent has failed to discharge his obligation under Section 25(B) of the Act thereby holding no locus to term the conduct of the Appellant as bad in law.

The Judgment can be accessed at:

https://main.sci.gov.in/supremecourt/2020/13459/13459_2020_38_1501_25605_Judgement_20-Jan-2021.pdf

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