# DCM Shriram Industrial Ltd v. Preseding Officer Labour Court-II and another

- **Citation:** (2005) 4 ILRA 1131
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2005-11-08
- **Case number:** Civil misc. Writ Petition No. 42735 of 2000
- **Bench:** Shishir Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/dcm-shriram-industrial-ltd-v-preseding-officer-labour-court-ii-and-another-40556
- **Pages:** 6

## Headnote

Constitution
of
India
Art-34
(2)
Dismissal order-copy of enquiry report
given much after the punishment-second
time no-enquiry conducted-Labour Court
being the last court of facts-recorded
specific finding that due sale of motor
cycle management suffered any financial
loss-substitution of order of punishment
with stoppage of two increments-heldproper.

Held: Para 9

The Labour Court being the last Court of
fact after consideration of the evidence
on the record has come to the conclusion
that
the
order
of
dismissal
is
disproportionate
to
the
offence
committed by the workman, as such has
substitute the punishment of dismissal
by stoppage of two increments. The
punishment of dismissal is a major
punishment; as such the disciplinary
authority
while
awarding
the
punishment; as such the disciplinary
authority
while
awarding
the
punishment of dismissal should have
stated
the
reasons.
The
basis
of
punishment
should
have
been
incorporated in the order of punishment.
As
the
same
has
not
been
done,
therefore, in view of the judgment
reported in 1997 (77) F.L.R. Page 863,
the
Labour
Court
was
justified
in
modifying the punishment of dismissal
into stoppage of two increments.
Case law discussed:
1990 (61) SLR-736
2004 (27) SCC-581
1993 (67) FLR-1230
2005 (3) SCC-254
2000 (9) SCC-521
2000 (7) SCC-517
1997 ALJ-88
2005 (L & S) SCC-631
2005 (SCC) L & S 270

## Text

4 All] DCM Shriram Industries Ltd. V. Presiding Officer, Labour Court and another
1131

25. The writ petition is, accordingly,
dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 08.11.2005

BEFORE
THE HON'BLE SHISHIR KUMAR, J.

Civil misc. Writ Petition No. 42735 of 2000

DCM Shriram Industrial Ltd. ...Petitioner
Versus
Preseding Officer Labour Court-II and
another

 ...Respondent

Counsel for the Petitioner:
Sri Vivek Saran

Counsel for the Respondent:
Sri Ashok Khare
Sri V.S.Chaudhary
Sri Vinod Kumar Singh
S.C.

Constitution
of
India
Art-34
(2)
Dismissal order-copy of enquiry report
given much after the punishment-second
time no-enquiry conducted-Labour Court
being the last court of facts-recorded
specific finding that due sale of motor
cycle management suffered any financial
loss-substitution of order of punishment
with stoppage of two increments-heldproper.

Held: Para 9

The Labour Court being the last Court of
fact after consideration of the evidence
on the record has come to the conclusion
that
the
order
of
dismissal
is
disproportionate
to
the
offence
committed by the workman, as such has
substitute the punishment of dismissal
by stoppage of two increments. The
punishment of dismissal is a major
punishment; as such the disciplinary
authority
while
awarding
the
punishment; as such the disciplinary
authority
while
awarding
the
punishment of dismissal should have
stated
the
reasons.
The
basis
of
punishment
should
have
been
incorporated in the order of punishment.
As
the
same
has
not
been
done,
therefore, in view of the judgment
reported in 1997 (77) F.L.R. Page 863,
the
Labour
Court
was
justified
in
modifying the punishment of dismissal
into stoppage of two increments.
Case law discussed:
1990 (61) SLR-736
2004 (27) SCC-581
1993 (67) FLR-1230
2005 (3) SCC-254
2000 (9) SCC-521
2000 (7) SCC-517
1997 ALJ-88
2005 (L & S) SCC-631
2005 (SCC) L & S 270

(Delivered by Hon'ble Shishir Kumar, J.)

1. The present writ petition has been
filed for quashing the Labour Court award
dated 23.2.2000 published on 24.8.2000,
Annexure-1 to the writ petition.

2. The facts arising out of the
present petition are that the petitioner is a
registered company under the Companies
Act having its registered office at 18,
Barahkhambha
Road,
kunchanjinga
Building, New Delhi and is having a
sugar unit known as Daurala Sugar works,
district Meerut. Respondent no. 2 was
appointed
on
2.12.1987
as
Cane
Development Supervisor. His service
conditions were governed by the Standing
Orders governing the conditions of
employment of workmen in vacuum Pan
Sugar Factories of Uttar Pradesh. The said
Standing Order were in force under the
government
Notification
dated
3rd
October, 1958. Respondent no. 2 was
charge-sheeted on 9.5.1990 for fraud,
1132 INDIAN LAW REPORTS ALLAHABAD SERIES [2005
dishonesty
in
connection
with
the
factory's business and property of the
Company. The charge against respondent
was that he claimed motorcycle allowance
for the month of December 1989 to
March 1990 totalling Rs.640/- when the
motorcycle was out of order and the same
was not used; as such the workman with
intention of cheating illegally claimed the
amount as motorcycle allowance. The
aforesaid act of the respondent amounts to
dishonesty under Paragraph M-1 (c) of the
Standing
Orders
relating
to
sugar
factories. The aforesaid Clause (c) of the
Standing Orders is reproduced below: -

"(c) Theft, fraud, or dishonesty in
connection with the factory's business or
property
or
property
belonging
to
workmen."

3. The reply was invited and an
enquiry was conducted by one Sri K.
Tiwari as Inquiry Officer and workman
was given full opportunity to defend to
himself and to cross examine the
witnesses of the Management. The
Inquiry Officer submitted his report on
14.1.1991. The Investigation Officer
found the workman guilty of the charges
leveled against him and has found that the
workman with dishonest intention has
committed dishonesty in connection with
the Company business and property by
illegally taking motorcycle allowance
when his motorcycle was out of order.
The Inquiry Officer has held that this act
of the workman amounts to misconduct.

4. The inquiry report was considered
by the disciplinary authority in detail and
it was found that the charged leveled
against the workman are proved and the
act of the workman is a grave misconduct,
as such he was of opinion that the
workman deserve to extreme penalty of
dismissal
from
service
as
the
Management has lost confidence is the
workman. The said order was passed by
the disciplinary authority on 28.3.1991.
Aggrieved by the order of dismissal, the
workman raised an industrial dispute
before the Conciliation Officer. The
conciliation failed and ultimately the
Deputy Labour Commissioner, Meerut
vide its order dated 29.9.1992 refered the
dispute for adjudication before the Labour
Court. The case was registered as Case
No. 90 of 1992. The reference was
"whether the employers were justified in
terminating the sevices of the workman
w.e.f. 28.3.1991, if not, to what relief is
workman entitled to? The workman filed
written statement before the Labour Court
and the petitioner has also filed the
written statement and the rejoinder
affidavit and various documents. On
behalf of the Management Sri K. Tiwari,
Inquiry Officer deposed and proved the
inquiry report and other documents. There
were various issues framed by the Labour
Court. Issue no.1 relates to the fairness of
domestic inquiry. The Labour Court has
decided bt order dated 7.1.2000 the
preliminary issue regarding domestic
inquiry to the effect that it was fair and
proper and full opportunity of hearing of
given to the workman. The Labour Court
has held that the charges leveled against
the workman has been duly proved. The
Labour Court has clearly erred in law
when it has been found that the workman
was guilty of charges leveled against him,
the Labour Court gave an award on
23.2.2000 with a relief to the workman
reinstatement with 50% back wages and
continuity of service.

5. It has been submitted on behalf of
the
petitioner
that
directing
the
4 All] DCM Shriram Industries Ltd. V. Presiding Officer, Labour Court and another
1133
reinstatement with 50% back wages and
continuity of service of wholly illegal and
are liable to be set aside when the Labour
Court has held that the domestic inquiry
was fair and proper in manner and the
workman was given opportunity during
the domestic inquiry. The award of the
Labour Court is liable to be set aside on
the ground alone that if the court holds
regarding the guilty if charges, the Labour
Court has got no jurisdiction to award
reinstatement and other reliefs. Regarding
finding of non-supply of inquiry report,
the petitioner submits that at no point of
time the copy of the inquiry report was
demanded, therefore, it was not furnished
as there is no provision in the Standing
Order of the Company to supply the copy
of the inquiry report. It has to be given
only on the demand of the workman. The
further submission of the petitioner that in
view of the case of Union of India and
others Vs. Mohd. Ramzan Khan (1990
(61) F.L.R. Page 736) of the Apex Court,
the principal laid down in the said case
will
be
applicable
prospectively,
therefore, the finding of the Labour Court
that when the disciplinary authority owas
of the opinion regarding awarding the
majer punishment to the workman as the
copy of the inquiry report was not given
prior to the order of dismissal, therefore,
as the workman has not been afforded an
opportunity by the disciplinary authority
the order of dismissal is bad is a finding
which is contrary to the judgment of the
Apex Court. The petitioner has placed
reliance upon a judgment reported in 2004
(27) S.C.C. Page 581 in the case of NTC
(WBAB & O) Ltd. and another Vs.
Anjan K. Saha and has referred to para 9
of the said judgment. Another judgment
relied upon by the counsel by the
petitioner is in the case of Managing
Director ECIL Hyderabad Vs. B.
Karunakar (1993 (67) F.L.R. Page 1230
and he has submitted that in the case of
non-furnishing of the inquiry report, order
of punishment should not mechanically be
set aside. Another judgement relied upon
by the counsel for the petitioner is 2005
(3) S.C.C. 254, Divisinol Controller,
KSRTC Vs. A.T. Mane and he has
referred to paras 12 and 13 of the said
judgment and has submitted that in the
case of misappropriation of the fund by
the delinquent employee, the punishment
which way be awarded is not open for
judicial review. If the Corporation or the
employer has lost the confidence or faith
in such an employee, the punishment of
dismissal is correct. Another judgment
relied upon by the counsel for the
petitioner is U.P. State Road Transport
Corporation Vs. Mohan Lal Gupta and
others (2000 (9) S.C.C.521) and has
submitted that in the case of loss of
employer's confidence the Court should
not substitute its own finding and direct
reinstatement. Further rileance has been
placed upon the case of Janata Bazar
(South Kanara Central Cooperative
Wholesale Stores Ltd.) and others. Vs.
Secretary, Sahkari Noukarara sangh
and others. (2000) 7 Supreme Court
Cases 517 and has submitted that where
the misappropriation of the goods was
established in the domestic enquiry and
the delinquent employee was dismissed,
the
Labour
Court
directing
his
reinstatement with25% back wages on the
ground that his past record was without
blemish,
the
Labour
Court
cannot
substitute its penalty. In such a way the
petitioner submits that the award of the
Labour Court is liable to be set-aside.

6. On the other hand learned counsel
for the respondent has submitted that as
the copy of the inquiry report admittedly
1134 INDIAN LAW REPORTS ALLAHABAD SERIES [2005
has not been furnished to the workman
and no second show cause notice, when
the disciplinary authority was of the
opinion to agree with the inquiry report,
has been given, the punishment which has
been awarded by the petitioner vitiates in
law. Further submission of the respondent
is as that from the perusal of the charges
leveled against the workman it is clear
that no charge was framed against the
workman taking into consideration, the
post conduct; therefore, while passing the
order dismissing the services of the
workman,
the
disciplinary
authority
cannot
take
into
consideration
the
previous performance of the workman. It
has been submitted on behalf of the
respondent that there is no charge against
the respondent that he had in any way
misappropriated
the
amount
of
the
motorcycle allowance. It is not the case of
Management that the workman had sold
the motorcycle and without having the
motorcycle, has charge the motorcycle
allowance. There is also no charge against
the workman respondent that due to nonfunctioning of the motorcycle from the
period mentioned in the charge sheet there
was any slackness no the part of the
workman and the performance of the
workman was not up to the mark. The
workman has clearly stated in his reply
that the motorcycle was under repairing
and in the month of March 1990 when the
workman had sold the motorcycle, he
immediately informed the said fact and
after that no motorcycle allowance was
paid to the respondent. The respondent
has also submitted that clause M (c) of the
Standing Orders is not applicable in the
case of the employee concerned because it
is not the case of the Management that
there is any charge of fraud or dishonesty
in connection with the factory's business
or property belonging to the workman.
There was a condition that the allowance
will be payable only when the workman
concerned will be in possession of the
motorcycle in his own name. It has also
not been proved or there was any charge
against the workman that due to nonworking of the said motorcycle for one or
two months, there was any affect in the
efficiency of the working of the workman
concerned.

7. The Labour Court considering all
the submissions made on behalf of the
parties has come to the conclusion that in
spite of the fact that the domestic inquiry
was held properly but as the copy of the
inquiry report was given to the workman
after the order or dismissal and no second
show cause notices was given, therefore,
the Labour Court has interfered and given
an award in favour of the workman. It is
well settle in law that if there was no
charge in the charge sheet regarding
previous conduct of an employee, the
same connot be considered for initiating
any action in spite of the fact that the
charges leveled against the delinquent
employee is proved. It has further been
submitted on behalf of the respondents
that the contention of the petitioner cannot
be accepted that there is no provision in
the Standing Orders for giving a second
show cause notice while awarding the
major punishment. It has been submitted
that the Apex Court has clearly held that
in spite of the fact that there is no rule
regarding the second show cause notice,
keeping in view the principal of nature
justice, the show cause notice should have
been given The principal of Ramzan 's
case have been made applicable to all
establishments. Reliance has been placed
by the respondent upon a judgment of
Madras High Court1997 LLJ Page 88, the
Management
of
Eswara
&
Sibs
4 All] DCM Shriram Industries Ltd. V. Presiding Officer, Labour Court and another
1135
Engineers (Pvt.) Ltd. Vs. III Addl.
Labour Court, Madras and others and
has submitted that the said judgment is
based on the Apex Court judgment that
punishment vitiated as no notice was
given to the workman before taking into
account othe past record of service.

8. It has further been submitted on
behalf of the workman-respondent that
the Labour Court was justified in the facts
and circumstances of the present case by
modifying the order dismissal in stopping
the two increments. Regarding awarding
the back wages it has been submitted that
though the workman has clearly proved
that he was not financially employed
anywhere, though it has been denied by
the
employer.
The
workman
has
established this fact that as he was not
employed anywhere during the period of
pendency of the dispute, but the Labour
Court has awarded only 50% of the back
wages, the finding the recorded by the
Labour Court is a finding of fact and need
no interference by this Court.

9. I have heard the learned counsel
for the parties and have perused the
record. It is not the case of the
establishment
that
the
workman
concerned after selling out the motorcycle
has charged the motorcycle allowance. It
was in his possession but it appear that
during this period it was not in a very
proper condition and was being repaired,
as such it cannot be said the workman has
misappropriated
or
charged
certain
amount from the employer without having
any vehicle. It is also not the case of the
establishment that due to non-functioning
of the said motorcycle there was any
deficiency in the work of the workman.
There is no charge against the delinquent
workman that due to non-operating with
the motorcycle, the factory had borne
some financial loss. In the month of
March 1990 when the motorcycle was
sold by the workman, he immediately
informed the said fact to the establishment
and no payment has been made after
march 1990, in my opinion, it cannot be
said to be a grave misconduct. If it would
have been the case by the establishment
that the delinquent workman without
having any motorcycle or the same has
been sold without informing this fact to
the establishment, was realizing the
motorcycle allowance, than it can be said
to be a misconduct on the part of the
workman. Regarding taking the previous
conduct of the workman, it is now well
settled that unless and until for past
conduct, there is a charge or person
concerned is given an opportunity, the
past conduct of a person cannot be for the
purpose of initiating an action which is
not know to the person concerned can be
taken. Admittedly the copy of the inquiry
report has been given to the workman
after the order of dismissal. In para 10 of
the writ petition the petitioner has
admitted this fact that the copy of the
inquiry report was supplied to the
workman after the orders dated 22.4.1991
and 4.5.1991. The Labour Court being the
last Court of fact after consideration of
the evidence on the record has come to
the conclusion that the order of dismissal
is
disproportionate
to
the
offence
committed by the workman, as such has
substitute the punishment of dismissal by
stoppage
of
two
increments.
The
punishment of dismissal is a major
punishment; as such the disciplinary
authority while awarding the punishment;
as such the disciplinary authority while
awarding the punishment of dismissal
should have stated the reasons. The basis
of
punishment
should
have
been
1136 INDIAN LAW REPORTS ALLAHABAD SERIES [2005
incorporated in the order of punishment.
As the same has not been done, therefore,
in view of the judgment reported in 1997
(77) F.L.R. Page 863, the Labour Court
was justified in modifying the punishment
of dismissal into stoppage of two
increments.

10. Regarding the contention raised
by the petitioner that the 50% back wages
which has been given to the petitioner is
not permissible in view of the Apex Court
judgment in the case of Hindustan
Motors
Ltd.
Vs.
Tapan
Kumar
Bhattachara 2002 Vol. (6) S.C.C. Page
41 and has submitted that the Apex Court
has clearly held that unless and until it is
proved by adducting the evidence that the
employee
concerned
remained
unemployed in interregnum between the
dismissal and reinstatement. I have
considered the submission made on behalf
of the petitioner regarding awarding 50%
back wages. The workman has submitted
an application that he was not financially
employed anywhere during the aforesaid
period and has proved it, though there was
denial by the employer and the Labour
Court has clearly considered the Apex
Court judgment and on that basis has only
awarded 50% back wages, therefore, it
cannot be said that the judgment and
order passed by the Labour Court suffers
from illegality in awarding back wages up
50%. In Apex Court judgment reported in
2005 S.C.C. (L & S) 631, Allahabad Jal
Sansthan Vs. Daya Shanker Rai and
others the Apex Court has observe that
"A law in absolute terms cannot be laid
down as to in which cases, and under
what circumstances, full back wages can
be granted or dinied. The Labour Court
and/or Industrial Tribunal, before which
the industrial dispute has been raised,
would be entitled to grant the relief
having
regard
to
the
facts
and
circumstances of each case. For the said
purpose, several factors are required to be
taken into consideration. Inter alia, a
pleading to the effect that he been sitting
idle or had not obtained any other
employment in the interregnum, must be
raised by the workman seeking back
wages."

11. In the Apex Court judgment
2005 SCC (L & R) 270 Kendriya
Vidyalaya Sansthan and others Vs. S.C.
Sharma, the Apex Court has held that for
determination of question of back wages,
burden of proof is on the employee. He
has to show that he was not gainfully
employed and if the same has been
proved, the employee is entitled for the
back wages.

12. In view of the aforesaid finding
recorded by the Labour Court, in my
opinion, it needs no interference under the
discretionary jurisdiction of this Court
under Article 226 of the Constitution of
India. The award given by the Labour
Court is just and proper; therefore the writ
petition is devoid of merit and is hereby
dismissed. There shall be no order as to
costs.
---------
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 11.07.2005

BEFORE
THE HON'BLE MRS. POONAM
SRIVASTAVA, J.

Criminal Misc. Application No. 5372 of
2000

Deena Nath Arora & others ...Applicants
Versus
State of U.P. and another
 ...Opposite Parties