REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.3585 OF 2008

Kurukshetra University        ….Appellant(s)

VERSUS

Prithvi Singh           …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1. This  appeal  is  directed  against  the  final

judgment  and  order  dated  22.09.2006  passed  by

the High Court of Punjab & Haryana at Chandigarh

in C.W.P.  No.13094 of  2006 whereby the Division

Bench of the High Court dismissed the petition filed

by  the  appellant  herein  and  affirmed  the  Award

dated 23.01.2006 passed by the Presiding Officer,

Labour Court, Ambala in Ref.No.25 of 2003.

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2. The controversy involved in the case is short as

it would be clear from the narration of the relevant

facts infra.

3. The  appellant  is  the  Kurukshetra  University

(hereinafter  referred  to  as  “the  University”).  The

respondent was working as Security Guard in the

University as daily rated employee.  

4. On 18.08.1999, the respondent while on duty

alleged to have misbehaved with one lady Research

Scholar,  who  was  working  in  the  University.  The

appellant  took  note  of  the  incident  and  held

departmental enquiry by appointing Enquiry Officer

to probe into the incident.  

5. The  Enquiry  Officer,  in  his  report  dated

20.09.1999,  found  the  respondent  guilty  for

committing  the  misconduct.  The  appellant

accordingly  decided to  discontinue the  services  of

the  respondent  and  treating  him  to  be  the  daily

rated worker dispensed with his services with effect

from 30.03.2000.  

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6. This  led  the  State  to  make  the  industrial

reference  to  the  Labour  Court,  Ambala  under

Section  10  of  the  Industrial  Disputes  Act,  1947

(hereinafter referred to as “ID Act”) for deciding the

legality  and  correctness  of  the  respondent's

termination  from  the  services  of  the

appellant-University  w.e.f. 30.03.2000.

7. Before  the  Labour  Court,  the  stand  of  the

appellant(University)  in the  written statement  was

two-fold.  First,  the  respondent  was  working  as  a

daily wager for a period of 89 days and, therefore,

he was not entitled to claim any benefit available to

any  workman under  the  ID  Act  and  Second,  the

respondent committed misconduct while on duty for

which a departmental  enquiry was held though it

was  not  required  because  the  respondent  was  a

daily rated employee and on being found guilty in

the  domestic  inquiry,  his  services  were  dispensed

with.       

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8. The Labour Court, by award dated 23.01.2006,

answered the reference in respondent's favour. The

Labour Court held that the respondent has worked

for more than 240 days in one calendar year. It was

further  held  that  since  the  appellant  had  leveled

charge of misconduct against the respondent, it was

necessary  for  the  appellant  to  have  held  regular

departmental enquiry by issuing a charge sheet etc.

and  then  depending  upon  the  outcome  of  the

enquiry,  appropriate  orders  should  have  been

passed.  It  was held  that  the  enquiry  held  by  the

appellant  was  not  legal  and  proper.  With  these

findings, the Labour Court held this to be a case of

illegal retrenchment and set aside the respondent’s

termination order as being illegal. The Labour Court

granted  liberty  to  the  appellant  to  hold  regular

departmental  enquiry  for  the  charges  leveled  by

them against the respondent, in case the appellant

so desires.

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9. The appellant (University), felt aggrieved of the

award of the Labour Court, filed writ petition before

the  High  Court.  By  impugned  judgment,  the

Division  Bench  of  the  High  Court  dismissed  the

appellant's  writ  petition  and  upheld  the  Award

passed by the Labour Court.  

10. Against this judgment of the High Court, the

appellant(University) felt aggrieved and has filed this

appeal by way of special leave before this Court.

11. Notice of the SLP was sent to the respondent.

Despite  service  and  repeated  notices  sent  to  the

respondent,  he  neither  appeared  nor  represented

through any counsel. We have, therefore, no option

but to decide the appeal by hearing the counsel for

the appellant.    

12. Having  heard  the  learned  counsel  for  the

appellant and on perusal of the record of the case,

we are constrained to allow the appeal  and while

setting aside the judgment of  the High Court and

the award of the Labour Court remand the case to

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the Labour Court for deciding the reference afresh

in the light of our observations made infra.

13. In our considered opinion, neither the Judge of

the Labour Court and nor the Judges of the High

Court applied their judicial mind while deciding the

issues arising in the case and completely  ignored

the settled legal principles which are applicable to

the case at hand and proceeded to decide the case

contrary to the principles laid down by this Court.

Due to this reason, we are compelled to interfere in

the impugned judgment and remand the case to the

Labour Court for deciding it afresh.

14. The question as to what are the powers of the

Labour Court and how it should proceed to decide

the legality and correctness of the termination order

of a workman under the Labour Laws in reference

proceedings and what are the rights of the employer

while defending the termination order in the Labour

Court remains no more res integra and is settled by

series of decisions of this Court beginning from AIR

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1958 SC 130 (Indian Iron & Steel Co. Ltd. & Anr.

Vs. Their Worken)  till AIR 1979 SC 1653 (Shankar

Chakravarti vs. Britannia Biscuit Co. Ltd. & Anr.)

and  also  thereafter  in  several  decisions  as

mentioned below.

15. In between this  period,  this  Court  in several

leading  cases  examined  the  aforesaid  questions.

However, in Shankar's case (supra), this Court took

note of entire case law laid down by this Court in all

previous cases and reiterated the legal position in

detail.

16. The legal  position,  in  our  view,  is  succinctly

explained by this  Court  (two-Judge Bench)  in  the

case of  Delhi Cloth & General Mills Co. vs. Ludh

Budh Singh,  1972(3) SCR 29=1972(Lab IC) 573 in

Propositions 4, 5 and 6 in the following words:

“(4) When a domestic enquiry has been held by  the  management  and  the  management relies on the same, it is open to the latter to request the Tribunal to try the validity of the domestic enquiry as a preliminary issue and also  ask  for  an  opportunity  to  adduce evidence before the Tribunal,  if  the  finding on  the  preliminary  issue  is  against  the

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management.  However  elaborate  and cumbersome  the  procedure  may  be,  under such  circumstances,  it  is  open  to  the Tribunal to deal,  in the first  instance,  as a preliminary issue the validity of the domestic enquiry.  If  its  finding  on  the  preliminary issue is in favour of  the management, then no additional evidence need be cited by the management.  But,  if  the  finding  on  the preliminary issue is against the management, the Tribunal will  have to give the employer an  opportunity  to  cite  additional  evidence and  also  give  a  similar  opportunity  to  the employee  to  lead  evidence  contra,  as  the request to adduce evidence had been made by the management to the Tribunal during the course of the proceedings and before the trial has come to an end.  When the preliminary issue is decided against the management and the latter leads evidence before the Tribunal, the position, under such circumstances, will be, that the management is deprived of the benefit of having the finding of the domestic Tribunal being accepted as prima facie proof of  the  alleged  misconduct.  On  the  other hand, the management will have to prove, by adducing proper evidence, that the workman is guilty of misconduct and that the action taken by it is proper. It will not be just and fair  either  to  the  management  or  to  the workman that the Tribunal should refuse to take  evidence  and  thereby  ask  the management to make a further  application, after  holding a proper  enquiry,  and deprive the workman of the benefit  of  the Tribunal itself  being  satisfied,  on  evidence  adduced before it, that he was or was not guilty of the alleged misconduct. (5)  The  management  has  got  a  right  to attempt  to  sustain  its  order  by  adducing independent  evidence  before  the  Tribunal. But the management should avail itself of the said opportunity by making a suitable request to  the  Tribunal  before  the  proceedings  are closed.  If  no  such  opportunity  has  been

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availed of, or asked for by the management, before  the  proceedings  are  closed,  the employer  can  make  no  grievance  that  the Tribunal did not provide such an opportunity. The  Tribunal  will  have  before  it  only  the enquiry  proceedings  and  it  has  to  decide whether  the  proceedings  have  been  held properly  and  the  findings  recorded  therein are also proper. (6)  If  the  employer  relies  only  on  the domestic  enquiry  and  does  not simultaneously  lead  additional  evidence  or ask for an opportunity during the pendency of the proceedings to adduce such evidence, the duty of the Tribunal is only to consider the validity of the domestic enquiry as well as  the  finding  recorded  therein  and  decide the matter. If the Tribunal decides that the domestic enquiry has not been held properly, it is not its function to invite suo motu the employer  to  adduce  evidence  before  it  to justify the action taken by it.”

17. The aforesaid principle of law was quoted with

approval in  Shankar's case  (supra) by a Bench of

three Judges in Para 23 observing,  

“…..After  an  exhaustive review  of  the decisions  bearing  on  the  question  and affirming the ratio in R.K. Jain’s case (1972 Lab IC 13) this Court extracted the emerging principles  from  the  review  of  decisions. Propositions 4, 5 and 6 would be relevant for the present discussion.”

18. The aforementioned decisions were extensively

discussed by the Constitution Bench in the case of

Karnataka  State  Road  Transport  Corpn.  vs.

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Lakshmidevamma(Smt.) & Anr., 2001 (5) SCC 433

wherein  the  law laid  down in the  aforementioned

two cases was approved.  

19. When we examine the facts of this case in the

light of the aforementioned principles of law, we find

that the termination of the respondent was by way

of punishment because it was based on the adverse

findings  recorded  against  the  respondent  in  the

domestic enquiry.

20.  So the question, which the Labour Court was

expected  to  decide  in  the  first  instance  as  a

“preliminary  issue”,  was  whether  the  domestic

enquiry held by the appellant (employer) was legal

and  proper.   In  other  words,  the  question  to  be

decided  by  the  Labour  Court  was   whether  the

domestic  enquiry  held  by  the  appellant  was

conducted following the principles of natural justice

or not.  

21. If  the  domestic  enquiry  was  held  legal  and

proper  then  the  next  question  which  arose  for

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consideration was whether the punishment imposed

on  the  respondent(delinquent  employee)  was

proportionate  to  the  gravity  of  the  charge  leveled

against him or it called for any interference to award

any  lesser  punishment  by  exercising  the  powers

under Section 11-A of the ID Act.  

22. If  the  domestic  inquiry  was  held  illegal  and

improper  then the  next  question,  which arose  for

consideration,  was whether  to  allow the appellant

(employer)  to  prove  the  misconduct/charge  before

the  Labour  Court  on  merits  by  adducing

independent  evidence  against  the  respondent

(employee). The appellant was entitled to do so after

praying  for  an  opportunity  to  allow  them to  lead

evidence and pleading the misconduct in the written

statement.  (see- also Para 33 at  page 1665/66 of

Shankar’s case(supra) ).

23. Once the appellant(employer) was able to prove

the  misconduct/charge  before  the  Labour  Court,

then it  was for  the  Labour Court  to  decide as to

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whether  the  termination  should  be  upheld  or

interfered by exercising  the  powers under  Section

11-A of  the ID Act by awarding lesser punishment

provided a case to that effect on facts is made out

by the respondent(employee).

24. We are constrained to observe that  first,  the

Labour Court committed an error in not framing a

“preliminary  issue”  for  deciding  the  legality  of

domestic enquiry and second, having found fault in

the domestic inquiry committed another error when

it did not allow the appellant to lead independent

evidence to prove the misconduct/charge on merits

and straightaway proceeded to hold that it  was a

case  of  illegal  retrenchment  and  hence  the

respondents’ termination is bad in law.

25. By no stretch of imagination, in our view, the

Labour  Court  could  treat  the  respondent's

termination as “retrenchment” much less an “illegal

retrenchment”.  The  Labour  Court  failed  to  notice

the definition of retrenchment in Section 2(oo) of the

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ID  Act  which,  in  clear  terms,  provides  that

retrenchment  does  not  include  termination of  the

service if it is imposed by way of punishment.  

26.  In this  case,  the respondent's  services were

terminated by the appellant by way of punishment

after holding a departmental enquiry and therefore,

the termination in question could never be regarded

as  “retrenchment”.  The  Labour  Court  was,

therefore, wholly wrong in treating the termination

of the respondent as “retrenchment”.

27. We notice that the Labour Court held on facts

that the respondent had worked for 240 days in one

calendar year. We do not consider it proper to set

aside this factual finding. Indeed, it is due to this

finding,  the  respondent  is  held  entitled  to  claim

protection of Labour Laws.

28. The High Court while deciding the appellant's

writ petition did not take note of  any legal issues

mentioned above and cursorily  dismissed the writ

petition.

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29. In  the  light  of  the  foregoing  discussion,  we

cannot countenance the approach and the manner

in which the Labour Court and the High Court dealt

with the issues arising in the case. The award of the

Labour Court and judgment of the High Court are,

therefore,  held  per  se without  jurisdiction  and

legally unsustainable.     

30. In view of the foregoing discussion,  we allow

the appeal, set aside the award of the Labour Court

to the extent indicated above and the judgment of

the High Court and remand the case to the Labour

Court.  

31. The Labour Court will now afford the appellant

(employer) an opportunity to lead evidence to prove

the  misconduct  alleged  by  them  in  the  written

statement  against  the  respondent  and  depending

upon the findings, which the Labour Court would

record  on  the  issue  of  misconduct,  the  issue  of

termination would be decided in the light of what we

have observed supra.

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32. The appellant shall appear before the Labour

Court on 05.03.2018 and will file the copy of this

judgment. Since the respondent has not appeared

in  this  Court  despite  service  on  him,  the  Labour

Court will issue fresh notice to the respondent for

his appearance before the Labour Court and then

decide  the  case  as  directed  above  within  three

months  from the  date  of  service  of  notice  to  the

respondent.     

                  ………...................................J.   [R. K. AGRAWAL]

                                    …...……..................................J.

        [ABHAY MANOHAR SAPRE]

New Delhi; February 15, 2018  

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