# COOPER ENGINEERING LIMITED v. SHRI P. P. MUNDHE Au11ust 20, 1975

- **Citation:** [1976] 1 S.C.R. 361
- **Court:** Supreme Court of India
- **Decided:** 1976
- **Case number:** Civil Appeal No. 1716 of 1969
- **Bench:** A. Alagjriswami, P. K. Goswami, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/cooper-engineering-limited-v-shri-p-p-mundhe-au11ust-20-1975-6607
- **Pages:** 8

## Headnote

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Industrial Dispute-Domestic enquiry-Violative of principles of
natural
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justice-If labour court should give opportunity to adduce evidence afresfzFaifure to do so--1.f vitiates the award .
On the question, whether when a domestic inquiry held by an employer was
found by the labour court as violative of the principles of natural justice there
was any duty cast upon that court to give an opportunity to the employer to
adduce eviderice afresh before it and whether failure to do so would vitiate its
riv.-ard,
HELO : When a case of d!.smissal or discharge of an employee is referred
for industrial adjudication the labour court should first decide as a preliminary
i~!'.Ue ·whether the domestic enquiry has violated the principles of natural justice.
\Vhen there was no domestic enquiry or defective enqui.ry is admitted by the
en1ployer. there will be no difficulty.
But when the n1atter is in controversy
between the parties that question must be decided as a preliminary issue. On that
decision being rironounced it w~ll be for the management to decide whether it
\\ill adduce any evidence before the labour court. If it chooses not to adduce
any eYidence, it will not be thereafter permissible in any proceeding to raise the
i<>Sue.
There will be no justi.fication for any party to stall the final adjudication
of the dispute by the labour court by questioning it'i decision with regard to the
p;eliminary issue when the matter~ if worthy, can be agitated even after the·
final award. It will be legitimate for the High Court to refuse to intervene at
th;-;; stage.
[368C.E]
"tVorknzen of Motipur Sugar Factory (Private) Limited v.
Motipur
Sugar
Factory [1962] 3 S.C.R. 588; Management· of Northern Railway Coaperative
Society Ltd. v. 1ndustrial Tribunal Rajasthan, Jaipur and Anr. [1967] 2 S.C.R.
-l.76; Ma11agen1ent ·of Ritz Theat,re (P) Ltd.
v.
l!s workmen [1963] 3 S.C.R.
461/469·470; State Bank of India v. R. K. loin & Ors. [1972] 1 S.C.R. 755/766,
777; Delhi Cloth & General Mills Co. v. Ludlz
Bud/I Singh (1972]
3 S.C.R.
29 /54-56 and Work1nen of Messrs Ffrestone Tyre & Rubber Co1npany of India
(P) Ltd. v. Management & Others, (1973] 3 S.C.R. 587/606-607, referred to.

## Text

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COOPER ENGINEERING LIMITED
v.
SHRI P. P. MUNDHE
Au11ust 20, 1975
361
(A. ALAGJRISWAMI, P. K. GOSWAMI AND N. L. UNTWALIA, JJ.j
B
Industrial Dispute-Domestic enquiry-Violative of principles of
natural
c
D
E
F
G
H
justice-If labour court should give opportunity to adduce evidence afresfzFaifure to do so--1.f vitiates the award .
On the question, whether when a domestic inquiry held by an employer was
found by the labour court as violative of the principles of natural justice there
was any duty cast upon that court to give an opportunity to the employer to
adduce eviderice afresh before it and whether failure to do so would vitiate its
riv.-ard,
HELO : When a case of d!.smissal or discharge of an employee is referred
for industrial adjudication the labour court should first decide as a preliminary
i~!'.Ue ·whether the domestic enquiry has violated the principles of natural justice.
\Vhen there was no domestic enquiry or defective enqui.ry is admitted by the
en1ployer. there will be no difficulty.
But when the n1atter is in controversy
between the parties that question must be decided as a preliminary issue. On that
decision being rironounced it w~ll be for the management to decide whether it
\\ill adduce any evidence before the labour court. If it chooses not to adduce
any eYidence, it will not be thereafter permissible in any proceeding to raise the
i<>Sue.
There will be no justi.fication for any party to stall the final adjudication
of the dispute by the labour court by questioning it'i decision with regard to the
p;eliminary issue when the matter~ if worthy, can be agitated even after the·
final award. It will be legitimate for the High Court to refuse to intervene at
th;-;; stage.
[368C.E]
"tVorknzen of Motipur Sugar Factory (Private) Limited v.
Motipur
Sugar
Factory [1962] 3 S.C.R. 588; Management· of Northern Railway Coaperative
Society Ltd. v. 1ndustrial Tribunal Rajasthan, Jaipur and Anr. [1967] 2 S.C.R.
-l.76; Ma11agen1ent ·of Ritz Theat,re (P) Ltd.
v.
l!s workmen [1963] 3 S.C.R.
461/469·470; State Bank of India v. R. K. loin & Ors. [1972] 1 S.C.R. 755/766,
777; Delhi Cloth & General Mills Co. v. Ludlz
Bud/I Singh (1972]
3 S.C.R.
29 /54-56 and Work1nen of Messrs Ffrestone Tyre & Rubber Co1npany of India
(P) Ltd. v. Management & Others, (1973] 3 S.C.R. 587/606-607, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1716 of 1969.
Appeal by special leave from the award dated the 31st March, 1969·
of ·the Labour Court, Kolhapur, Maharashtra in Reference (IDA) No.
5 of !968.
B. Sen and I. N. Shroff, for the appellant.
R. K. Gari?, S. C. A11arwal and V. J. Francis, for the re5pOi1dent.
The Judgment of the Court was delivered by
GOSWAMI, J.
The important question which has been pinpointed
in this appeal by special leave is whether when a domestic inquiry held'
by an employer is found by the labour court as violative of the principles
of natural justice there is any duty cast upon that court to give an opportunity to the employer to adduce evidence. afresh before it and whether
failure to do so would vitiate its award .
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362
SUPREME COURT REPORTS
[1976] 1 S.C.R.
In the present case the workman concerned was charged under the
A
standing orders of the company for soliciting or collecting from the
employees contributions for some purpose (allegedly purchase of microphone and loud-speaker arrangements) within the factory
premises.
The workman denied the charge of soliciting or collecting contribution
within the factory premises (for purchase of microphone and loudspeaker) but added that "for this purpose I collect the said contribution
outside the gate of the Company and this being so, such erroneous inforB
mation supplied to you by son1eone should not be considered acceptable".
After holding the domestic inquiry in which some witnesses were
examined by the employer. and cross-examined by the workman and
questioning the workman at the outset as well as at the end of the inquiry, the Enquiry Officer submitted a very brief report to the Works
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Manager (hereinafter the Manager) holding that the charges were established.
He did not give any detailed reasons for preferring the evidence of the six witnesses examined on behalf of the employer in the
inquiry to the version of the workman.
The Manager after perusal of
the report of the Enquiry Officer passed the order of dismissal without
adverting to the evidence in the inquiry. This was particularly neces-
$ary since the Enquiry Officer had not given his reasons for his finding.
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Another incident occurred during the inquiry before the Manager. The
workman after answering the first question of the Manager, when
another question was put, abruptly left the inquiry without paying any
lieed to the ord.ers of the Manager and to persuasion of other officers
present asking him to wait.
The dismissal order was passed the rnme
afternoon.
In this appeal we will proceed on the assumption that the domestic
inquiry was rightly found by the labonr court to be defective.
The
labour court is aware of ihe legal position that it was competent in this
case to take evidence of the parties and come to its own conclusion on
the merits of the case and to decide whether the .order of dismissal was
justified or not to enable it to consider about the relief, if any, to be
. awarded to the workman.
The labour court, however, observed in its
award that-
"in the instant case no evidence regarding ments is Jed by
the Opponent before this Court. ... It is open to the Labour
Court to hold an enquiry itself.
But the Opponent has chosen
not. to lead any evidence regarding the merits of the alleged
misconduct.
The natural result of vitiating the enquiry would
therefore be to set aside the order of dismissal and to direct
the reinstatement in service of the dismissed employee with all
back wages".
The question posed at the commencement of our judgment is thus
highlighted by the aforesaid observations of the labour court and we arc
required to consider whether after the labour court comes to a decision
abnut the inquiry being defective it has any duty to announce its decision
in that behalf to enable the employer an opportunity to adduce evidence
before it to justify the order on the charge levelled against a workman.
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COOPER ENGINEERING LTD. v. P. P. MUNDHE (Goswami,].) 363
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There is, however, no doubt that when the employer chooses to do so
the workman will have his opportunity to rebut such evidence.
There
is also no doubt, whatsoever, that if the employer declines to avail of
such an opportunity, it will be open to the labour court to make an
appropriate award and the employer will thereafter be able to make no
grievance on that score.
n
In dealing with a case of dismissal of an industrial employee, this
Court has time and again adverted to various principles and it is not
necessary to recount all those decisions.
Jt will be sufficient co concentrate our attention only on a few of the decisions so far as material for
our purpose and which are also rightly referred to at the bar.
The first case arising out of an award that has a material bearing on
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the question is that of Workmen of Motipur Sugar Factory
(Private)
Limited v. Motipur Sugar Factory(!) which is a decision of four learned
Judges.
Inter alia, the question that arose in that appeal was as - to
whether, since the management held no inquiry as required by the standing orders, it could not justify the discharge before the Tribunal. In
Motipur Su1w Factory's case (supra), the Court observed at page 597
of the report as follows :-
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"If it is- held that in cases where the employer dismisses
his employee without holding an enquiry, the dismissal must
be set aside by the industrial tribunal only on that ground, it
would inevitably mean that the employer will immediately
proceed to hold the enquiry and pass an order dismissing the
employee once again.
In that case, another industrial dispute would arise and the employer would be entitled to rely
_upon the enquiry which he had held fn the meantime.
This
course would mean delay and on the second occasion it will
entitle the employer to claim the benefit of the domestic
enquiry given.
On the other hand, if in such cases the employer is given an opportunity to justify the impugned dismissal on the merits of his case being considered by the tribunal
for itself and that clearly would be to the benefit of the
employee.
That is why this Court has consistently held that
if the domestic enquiry is irregular, iuvalid or improper, the
tribunal may give an opportunity to the employer to prove his
case and in doing so the tribunal tries the merits itself.
This
view is consistent with the approach which industrial adjudication·generally adopts with a view to do justice betweeu the
parties without relying too much on technical considerations
and with the object of avoiding delay in the disposal of industrial disputes".
The consequence that can ensue from a contrary view, as noticed by
the Court in Motipur Sugar Factory's case (supra), will appear from
what took place in the Manaiement of Northern Railway Cooperative
Society Ltd. v. Industrial Tribunal, Rajasthan, Jaipur and Anr.(2 ) where
• pursuant to the award after reinstating the employee the management
(I) [1965J 3 S. C.R. 588.
(2) [19671 2 S. C. R. 476.
364
SUPREME COURT REPORTS
[1976] 1 S.C.R.
drew a fresh proceeding and passed a fresh order of removal and the
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said order was again the subject matter of another reference to the in-
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dustrial tribunal.
The pertinent question that arises for consideration is whether it 1s
the duty of the tribunal to make known its decision to the parties on this
jurisdictional aspect of the case so that the employer can avail. of the
opportunity to justify the dismissal based on the charge.
In Mana11ement of Ritz Theatre (P) Ltd. v. Its workme11('), this
Court was required to de•l with a rather ingenious argument. It was
contended in that case by the workmen, in support of the tribunal's
decision, that since the management at the very commencement of the
trial before the Tribunal adduced evidence with regard to the merits of
the case it should be held that it had given up its claim to the propriety
or validity of the domestic enquiry.
While repelling this argument this
Court made some significant observations :
··In enquiries of this kind, the first question which the
Tribunal has to consider is whether a proper enquiry has been
held or not. Logically, it is only where the Tribunal is satisfied that a proper enquiry has not been held or that the enquiry
having been held properly the fin<!ing recorded at such an
enquiry are perverse, that the Tribunal derives jurisdiction to
deal with the merits of the dispute ...... If the view taken by
Tribunal was held to be correct, it would lead to this anamoly
that the employer would be precluded from justifying the dismissal of his employee·by leading additional evidence nnless
he takes the risk of inviting the Tribunal to deal with the.
merits for itself, because as soon as he asks for permission to
lead additional evidence, it would follow that he gives up his
stand based on the holding of the domestic enquiry.
Otherwise, it may have to he held that in all such cases no evidence
should be led on the merits unless the issue about the enquiry
is tried as a preliminary issue. If the finding on that preliminary issue is in favour of the employer, then, no additional
evidence need be cited by the employer; if the finding on the
said issue is against hlm, permission will have to be given to
the employer to cite additional evidence".
Although this Court in Ritz Theatre's case (supra) ob§erved that
such a procedure may be "elaborate and somewhat.cumberson1e" it was
not held to be illegal nor had h been rejected out of hand
In State Bank of India v. R. K. Jain & Ors.( 2), this Court had to
deal with a similar question.
The contention on behalf of the management in· that case was thatB
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"Even assuming that the domestic inguiry conducted by
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the Bank was in any manner vitiated, the Industrial Tribunal
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(1) [1963]3 S.C. R.461, 469-470.
(2) [1972]1 S.C.R. 755, 766, 777.
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COOPER ENGINEERING LTD, v, P, P. MUNDHE (Goswami, J.)365
erred in Jaw in aot giving an opportunity to the managemell.t
to adduce evidence before it to establish the validity of the
order of discharge",
. ,
.
In dealing with the above contention
this
Court
observed
as
follows:-
"If the management defends its action solely on the basis
that the domestic inquiry held by it is proper and valid and if
Tribunal holds against the management on that point, the
management will fail. , . , It is essentially a matter for
the
management to decide about the stand that it proposes to take
before the TribunaL It may be emphasised, that it is the
right 6f the management to sustain its order by adducing also
independent evidence before the Tribunal.
It is a right given
to the management and it is for the management lo avail itself of the said opportunity".
On the facts of that case this Court held that the management, having
made it clear to the Tribunal that it was resting its case solely on the
domestic enquiry, had no right to make a grievance that it should have
been given an opportunity to adduce evidence on facts before the Tribunal in justification of its order.
This Court further observed in that case that "no .such opportunity
was asked for by the appellant nor even availed of".
This Court in that
case took into account management's consistent stand throughout before
Tribunal as also that it made no grievance on the score of non-availability of opportunity to adduce evidence even in the special leave petition.
The claim of the Bank in that case was rejected on the peculiar
facts found by this Court.
'
Referring to the State Bank's case (supra) in Delhi Cloth & General
Mills Co. v, Ludh Budh Singh('), this Court observed that-
"the grievance of the management before this Court that ·
the Tribunal should have given such an opportunity suo moto
was not accepted in· the circumstances of that case".
fhere was a further ob:;ervation in the Delhi Cloth & 0encra! Mills'
case (supra) to the following effect :
"[t may be pointed out. that the Delhi and Madhya
Pradesh High Courts had held that it is the· duty of the Tribunal to decide, in the first instance, the propriety o! -the
domestic enquiry hcld by the management and if it records, a
finding against the management, it should suo moto provide
an opportunity to the management to adduce additional evidence, even though the management had made no such
request.
This view was held to be erroneous by this Court,.
in State Bank of India v. R. K. Jain & Others" (supra).
(I) [1972] 3 S. C.R. 29, 54-56.
J0-839Sup.C!j75
366
SUPREME COURT REPORTS
[1976] l .s.C.R.
We may now refer to the propositions (4), (5) and (6)
in the
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Delhi Cloth and General Mills' case (supra) ;
( 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 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 manageJ!!ent. But. if the finding on the preli·
minary 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 . ... "
(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 availed of, or askekl 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 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 tc:! invite suo moto the employer to adduce evidence before it to justify the action taken
by it".
In the Delhi Cloth and General Mills' case (supra) dealing with
the case of the management's application to adduce evidence
after
dose of arJmments, although on the same day after the Court reserved
judJ(lllent, this Court observed as follows :-
"The appellant did not ask for an opportnnity to adduce
evidence when the proceedings were pending nor did it avail
itself of the right given to it ill Jaw to adduce evidence before .
the Tribunal during the pendency of the proceedings".
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COOPER ENGINEERING LTD. v. P. p, MUNDHE (Goswami, J.)367
In Workmen of Messrs Firestone Tyre & Rubber Company of India
(P) Ltd. v. Management & Others, (1) this Court stated the Jaw laid
down by this Court as on December 15, 197!. For our purpose we
will extract from that decision only propositions 4, 6, 7 am! 8 :
( 4) "Even if no enquiry has been held by al\ employer
or if the enquiry held by him is found to be defective, the
Tribunal in order to satisfy itself about the legality and validity of the order, has to give an opportunity to the employer
and employee to adduce evidence before it. It is open to the
employer to adduce evidence for the first time justifying his
action".
( 6) "The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the
action taken only, if no enquiry h,as been held or after the
enquiry conducted by an employer is found to be defective".
(7) "It has never been recognised that the
Tribunal
should straightway, without anything more, direct reinstatement of a dismism:l or discharged employee, once it i! found
that no domestic enquiry has been held or the said enquiry
is found to be defective".
( 8) "An emp:toyer, who wants to avail himself of the
opportunity of adducing evidence for the first time before
the Tribunal to justify his action, should ask for it at the
appropriate stage. If such an opportunity is asked for, the
Tribunal has no power to refuse. The giving of an opportunity to an employer to adduce evidence for the first
time
before the Tribunal is in the interest of both the management and the employee and to enable the Tribunal itself to
be satisfied about the alleged misconduct".
We are particularly concerned with proposition (8).
What is
the appropriate stage was specifically adverted to in the Delhi Cloth
and General Mills' case (supra) which we are now required to seriously
consider whether this conclusion is correct and ensures justice to all
concerned in an industrial adjudication.
Propositions (4), (6) and (7) set out above are well-recognised.
It is, however, fair and in accordance with the principles of natural
justice for the labour court to withhold its decision on a jurisdictional
point at the appropriate. stage and visit a party with evil consequences
of a default on its partin not asking the court to give an opportunity
to adduce additional evidence at the commencement of the proceedings
or, at any rate, in advance of !he pronouncement of the order in that
behalf ? In our considered opinion it w]l be most unnatural and unpractical to expect a party to take a definite stand when a decision of a
jurisdictional fact has first to be reached by the Jabour court prior to
embarking upon an enquiry to decide the dispute on Its merits. The
reference involves determination of the larger issue of discharge or
(1) ]1973] J S. C. R. 587, 606-607.
368
SUPREME COURT REPORTS
(1976] 1 S.C.R.
dismissal and not merely whether a correct procedure had been followed by the management before passing the order of dismissal.
Besides, even if the order of dismissal is set aside on the ground of defect
of enauirv, a second enquiry after reinstatement is not ruled out nor
iu all ·probability a sceond reference.
Where will this lead to ?
This is neither going to achieve the paramount object of the Act namely
industrial peace, since the award in that case will not lead to a settlement of the dispute.
The dispute, being eclipsed, pro tempore, as a
result of such an award, Wl'll be revived and industrial
peace will
again be -ruptured.
Again another object of expeditious .disposal of
an industrial dispute (see section 15) will be clearly defeated resulting
in duplication of proceedings.
This position has to be avoided in the
interest of labour as well as of the employer and in furtherance of the
ultimate ail11 of the Act to foster industrial peace.
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We are, therefore, clearly of opinion that when a case of dismissal
or discharge of an employee is referred for industrial adjudication the
labour court should first decide as a preliminary issue whether the
domestic enquiry has violated the principles of natural justice.
When
there is no domestic enquiry or defective enquiry is admitted by the
employer, there will be no difficulty. But when the matter is in controversy between the parties that question must be decided as a preliminary issue.
On that decision being pronounced it will be for the
management to decide whether it will adduce any evidence before the
labour court. If it chooses not to adduce any evidence, it w,ill not be
thereafter permissible in any proceeding to raise the issue.
We should
also make it clear that there will be no justification for any party to
stall the final adjudication of the dispute by the labour court by questioning its decision with regard to the preliminary issue when the matter,
if worthy, can be agitated even after the final award.
It will
be
also legitimate for the High Court to refuse to intervene at this stage.
\V c arc making these observations in our anxiety that there is no undue
delay in industrial adjudication.
In the_ present case, however. besid·~s the long delay that has already
taken place, since the law laid down by this Court was not very clear
at the time of the award in casting a duty upon the labour court to
decide the preliminary issue and also in view of the submission of the
appellant that it is prepared to pay the entire salary of the workman
uplo-datc, it will me~t the intcre.st of justice if .the order of reinstatement is converted to one of compensation in terms of his entire salary
from the date of dismissal to the date of this decision except for what
has already been paid to him instead of remitting the matter to the .
labour court for disposal in the light of this judgment by setting .aside
the award.
In the result the app-~al is dismi&>cd with the above modification of
the relief.
There will be, however, no order as to costs.
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Appeal dismissed.