2014 (5) TMI 1229 - HC - Indian Laws

Permanent stoppage of two increments - acts of misconducts alleged against the respondent - HELD THAT - It is crystallised that when the right to conduct a de-novo enquiry is reserved in the written statement and the Labour Court or Tribunal has framed the two issues referred above in relation to the enquiry the said issues are to be decided as preliminary issues before taking up other issues. It is an anathema to decide the first two issues together with the other issues. Whenever in proceedings under the MRTU PULP Act 1971 or the IDA 1947 a domestic/departmental enquiry is under challenge with pleadings and substantive prayers seeking the quashing of the domestic enquiry on the ground of either non-observance of the principles of natural justice or findings being perverse the Court or Tribunal has to frame a preliminary issue and try the same peremptorily. In the instant case the respondent-workman had challenged the findings of the EO and an issue to that extent was cast by the Industrial Court. Eventually the Industrial Court relying upon evidence adduced before it as well as the evidence recorded in the enquiry came to a conclusion that the findings of the EO are perverse - In fact the Industrial Court concluded that the charges levelled upon the respondent are fictitious and they are not proved in the enquiry. By doing so the Industrial Court has ventured into the realm of questioning the quality of evidence recorded in the domestic enquiry and the conclusions drawn by the EO. By doing so it has branded the findings to be perverse and thus the enquiry stood watered down. When the Industrial Court was called upon to brand the findings as perverse the procedure that is required to be followed by the Labour Court/Tribunal in dealing with the cases of dismissal post domestic enquiry applies mutatis mutandis to the Industrial Court/Tribunal as well. By setting aside the finding of the EO by the Industrial Court in effect has resulted in the quashing and setting aside of the domestic enquiry. Procedure as laid down in the Judgment of the Hon ble Apex Court referred here in above was equally applicable to the Industrial Court in the present case since its conclusion on the findings of the EO has resulted in the setting aside of the enquiry - the Industrial Court could not have set aside the enquiry by branding the findings as being perverse without trying the said issue as a preliminary issue and by depriving the employer an opportunity to conduct a de-novo enquiry in the Court. The impugned judgment of the Industrial Court is quashed and set aside - the petitioner be granted the liberty to conduct a de-novo enquiry in which the evidence already recorded before the Industrial Court can be utilised as well as the parties are at liberty to lead additional evidence - Petition allowed in part.

Summary

Issues Involved:
1. Whether the findings of the Enquiry Officer (EO) can be held to be perverse based on evidence freshly adduced before the Industrial Court.
2. Whether the issue of perversity in the findings of the EO has to be decided as a preliminary issue, even when punishment of dismissal has not been awarded.
3. Whether the procedure of testing the fairness and validity of the enquiry and the findings of the EO by framing preliminary issues and trying them peremptorily before causing any interference, as applicable to the Labour Court in case of dismissal, would mutatis mutandis, be applicable to the Industrial Court as well.

Detailed Analysis:

1. Whether the findings of the Enquiry Officer (EO) can be held to be perverse based on evidence freshly adduced before the Industrial Court:
The court examined whether the Industrial Court could declare the findings of the EO perverse based on new evidence presented before it. The judgment referred to the case of Maharashtra State Co-operative Cotton Growers Marketing Federation Ltd. & another Vs. Vasant Ambadas Deshpande, which established that the findings of an EO could only be branded as perverse based on the evidence placed before him. The court concluded that the Industrial Court erred by relying on fresh evidence to set aside the EO's findings, which is impermissible in law. The findings of the EO must be scrutinized based on the evidence before him, and any new evidence cannot be used to declare the findings perverse.

2. Whether the issue of perversity in the findings of the EO has to be decided as a preliminary issue, even when punishment of dismissal has not been awarded:
The court determined that the issue of perversity must be decided as a preliminary issue regardless of the nature of the punishment. The court cited several precedents, including the case of Permanent Magnets Vs. Vinod Vishnu Wani, which held that the issues regarding the fairness of the enquiry and the findings of the EO must be framed and tried as preliminary issues. This procedure ensures that if the enquiry is set aside, the employer is given the opportunity to conduct a de-novo enquiry. The court emphasized that this procedure applies not only in cases of dismissal but also when lesser punishments are awarded.

3. Whether the procedure of testing the fairness and validity of the enquiry and the findings of the EO by framing preliminary issues and trying them peremptorily before causing any interference, as applicable to the Labour Court in case of dismissal, would mutatis mutandis, be applicable to the Industrial Court as well:
The court extended the procedure applicable in Labour Court cases of dismissal to the Industrial Court. It held that the Industrial Court must follow the same procedure for deciding the preliminary issues related to the enquiry's fairness and the EO's findings. This includes framing and trying these issues before addressing other matters. The court ruled that the Industrial Court's failure to follow this procedure and its reliance on fresh evidence to declare the EO's findings perverse was incorrect.

Conclusion:
The court set aside the Industrial Court's judgment and directed it to try the issue of perversity as a preliminary issue. If the findings are upheld, the Industrial Court can then address the proportionality of the punishment. If the findings are declared perverse, the petitioner must be allowed to conduct a de-novo enquiry. The evidence already recorded before the Industrial Court can be utilized in the de-novo enquiry, and additional evidence may be led if necessary. The Industrial Court was instructed to expedite the proceedings and decide the case on its merits by a specified date.