# } D. C. ROY v. 80 1 THE PRESIDING OFFICER, MADHYA PRADESH INDUSTRIAL COURT, INDORE AND OTHERS

- **Citation:** [1976] 3 S.C.R. 801
- **Court:** Supreme Court of India
- **Decided:** 1976-03-23
- **Bench:** Y. V. Chandrachud, V. R. Krishna Iyer
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/d-c-roy-v-80-1-the-presiding-officer-madhya-pradesh-industrial-court-indore-and-6836
- **Pages:** 7

## Headnote

Labour Law-Dismissal of employee after dotnestic enquiry-Enquiry found
by LaboW' Court to be vitiated but order of disn1issal held justified on evidence,
adduced before it-Whether order of dismissal relates back to the date of the
original order of dis1nissal.
The Madhya Pradesh Industrial Employn1ent (Standing Orders) Rules, 1963,
Standard Standing Order 12(b )-Major n1isconduct, what is.
When the flying squad checked a bus of the State Road Transport Corporation, it was found that the appellant, who was a ticket-examiner of the Corporation ;ind whose duty was to check whether all the passengers had paid the fare
and whether the conductor had i&sued ticket;s to the passengers, was on the
bus; and that. though all the passengers in the bus had paid their fares the
conductor had not issued 9t tickets.
If the appellant were so minded, he
could easily have detected the conductor's misconduct. The appellant \Vas
charged with the breach of Standard Standing Order 12 (b) under the Madhya
Pradesh Industrial Employment (Standing Orders) Rules, 1963, which governed
the matter, and he was dismissed after a domestic enquiry. On his application
t~nder s. 31, Madhya Pradesh Industrial Relations Act, the Labour Court held
that the enquiry was defective as it infringed principles of natural justice, but
C'1me to the conclusion, after considering the evidence adduced before it by
the parties, that the dismissal was justified.
The appellant's revision to the
industrial Court and writ petition in the High Court were dismissed.
In appeal to this Court, it was contended by the appellant that : ( 1) the
charge did not amount to a 'major misconduct' under the Standing Orders; and
(2) the Labour Court, having found that there \Vas no proper domestic enquiry,
should have ordered payment of \\'ages till the date of the decision by the
Labour Court.
Dismissing the appeal,
HELD : ( 1) Standard Standing Order 12(b) provides that "theft. fraud or
A
B
c
D
E
dishonesty in connection with the business or property of the undertaking" shall
F
amount tO a major misconduct on the part of the employee. The appellant
•Db\1iouSly colluded with the conductor in depriving the Corporation
of
its
legitimate earnings. The appellant, having thus acted dishonsetly in connection
v..·ith the business of the Corporation, was clearly guilty of a major mis~onduct.
[803G-804CJ
(2) In a case where the domestic enquiry does not suffer from any defect,
so serious or fundamental as to make it non est, the award of the Labour
CouJt, based on the evidente produced before it relates back to the date when
G
the order of dismissal was passed on the termination of the domesti-: enquiry;
and so, the appellant was not entitled to any back wages.
[807 B-C]
P.H. Kalya11i v. Mis. Air France Calcutta (1964] S.C.R. 104, followed.
The observation in the Hotel linperial case f1960j 1 S.C.R. 476, 487, that
in the Phulbari Tea Estate case [1960] 1 S.C.R. 32, it was held that in a case
where the employer makes good the defects in the domestic enquiry by producing·
necessary evidence before the Industrial Tribunal, the employer "will have to
H
pay the wages up to the date of the award of the Tribunal" even if the award
went in favour of the employer, is not correct.
Jn the Phulbari Tea Estate\
case, the employers made no aUempt to make good the defect in the domestic
enquiry by producing necessary evidence before the Tribunal with the result
A
B
c
D
E
F
G
H
802
SUPREME COURT REPORTS
[1976] 3 $,C.R.
that the Tribunal, which found that the enquiry was vitiated, had no evidence
before it. to examine the legality or propriety of the order of dismissal. It
was in that context that instead of ]!eing re-instated, the employee was given
the alternative relief of compensation by payment of wages. [805F-806C]
Mis. Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan [1959] 2 SCR 836
explained and distinguished.
•
An enauiry blatantly and consciously violating principles of natural justice
so as to amount to a pret

## Text

I
}
..
D. C. ROY
v.
80 1
THE PRESIDING OFFICER, MADHYA PRADESH INDUSTRIAL
COURT, INDORE AND OTHERS
March 23, 1976
[Y. V. CHANDRACHUD AND V. R. KRISHNA IYER, JJ.]
Labour Law-Dismissal of employee after dotnestic enquiry-Enquiry found
by LaboW' Court to be vitiated but order of disn1issal held justified on evidence,
adduced before it-Whether order of dismissal relates back to the date of the
original order of dis1nissal.
The Madhya Pradesh Industrial Employn1ent (Standing Orders) Rules, 1963,
Standard Standing Order 12(b )-Major n1isconduct, what is.
When the flying squad checked a bus of the State Road Transport Corporation, it was found that the appellant, who was a ticket-examiner of the Corporation ;ind whose duty was to check whether all the passengers had paid the fare
and whether the conductor had i&sued ticket;s to the passengers, was on the
bus; and that. though all the passengers in the bus had paid their fares the
conductor had not issued 9t tickets.
If the appellant were so minded, he
could easily have detected the conductor's misconduct. The appellant \Vas
charged with the breach of Standard Standing Order 12 (b) under the Madhya
Pradesh Industrial Employment (Standing Orders) Rules, 1963, which governed
the matter, and he was dismissed after a domestic enquiry. On his application
t~nder s. 31, Madhya Pradesh Industrial Relations Act, the Labour Court held
that the enquiry was defective as it infringed principles of natural justice, but
C'1me to the conclusion, after considering the evidence adduced before it by
the parties, that the dismissal was justified.
The appellant's revision to the
industrial Court and writ petition in the High Court were dismissed.
In appeal to this Court, it was contended by the appellant that : ( 1) the
charge did not amount to a 'major misconduct' under the Standing Orders; and
(2) the Labour Court, having found that there \Vas no proper domestic enquiry,
should have ordered payment of \\'ages till the date of the decision by the
Labour Court.
Dismissing the appeal,
HELD : ( 1) Standard Standing Order 12(b) provides that "theft. fraud or
A
B
c
D
E
dishonesty in connection with the business or property of the undertaking" shall
F
amount tO a major misconduct on the part of the employee. The appellant
•Db\1iouSly colluded with the conductor in depriving the Corporation
of
its
legitimate earnings. The appellant, having thus acted dishonsetly in connection
v..·ith the business of the Corporation, was clearly guilty of a major mis~onduct.
[803G-804CJ
(2) In a case where the domestic enquiry does not suffer from any defect,
so serious or fundamental as to make it non est, the award of the Labour
CouJt, based on the evidente produced before it relates back to the date when
G
the order of dismissal was passed on the termination of the domesti-: enquiry;
and so, the appellant was not entitled to any back wages.
[807 B-C]
P.H. Kalya11i v. Mis. Air France Calcutta (1964] S.C.R. 104, followed.
The observation in the Hotel linperial case f1960j 1 S.C.R. 476, 487, that
in the Phulbari Tea Estate case [1960] 1 S.C.R. 32, it was held that in a case
where the employer makes good the defects in the domestic enquiry by producing·
necessary evidence before the Industrial Tribunal, the employer "will have to
H
pay the wages up to the date of the award of the Tribunal" even if the award
went in favour of the employer, is not correct.
Jn the Phulbari Tea Estate\
case, the employers made no aUempt to make good the defect in the domestic
enquiry by producing necessary evidence before the Tribunal with the result
A
B
c
D
E
F
G
H
802
SUPREME COURT REPORTS
[1976] 3 $,C.R.
that the Tribunal, which found that the enquiry was vitiated, had no evidence
before it. to examine the legality or propriety of the order of dismissal. It
was in that context that instead of ]!eing re-instated, the employee was given
the alternative relief of compensation by payment of wages. [805F-806C]
Mis. Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan [1959] 2 SCR 836
explained and distinguished.
•
An enauiry blatantly and consciously violating principles of natural justice
so as to amount to a pretence J]lay, however, be equated with a total absence
of an enquiry so as to exclude the application of the 'relation back' doctrine. [807
C-DJ
ClVIL APPELLATE JURISDICTION: Civil Appeal No. 466 of 1970.
Appeal by Special Leave from the Judgment and Order dated the
6th March, 1968 of the Madhya Pradesh High Court in Misc. Petition
No. 75 of 1968.
M. K. Ramamurthi and Vineet Kumar for the Appellant.
Ram Punjwani and Rameshwar Nath for the Respondents.
The Judgment of the Court was delivered by
CHANDRACHUD, J.
The appellant was working as a Ticket Examiner in the Madhya Pradesh State Road Transport Corporation at its
Nagpur Depot.
On March 21, 1964 a bus belonging to the Corporation was checked by the Flying Squad when nine and half passengers
out of 26 were found travelling without tickets.
The appellant was
on the bus in the discharge of his duties as a Ticket Examiner.
The
Flying Squad prepared a Panchnama on the spot obtaining thereon the
signatures of the appellant, the driver and the ticked conductor. It
was found that the conductor had collected the fare from all the 26
passengers who were travelling in the bus but had not issued tickets to
9t passengers.
Since it was the duty of the appellant as
a Ticket
Examiner to check whether the conductor had collected fare from all
the passengers and in token thereof had issued tickets to them, a
chargesheet was served on the appellant for breach of clauses 12(b)
and ( d) of the Madhya Pradesh Standard Standing Orders which
govern the matter by reason of Rule 7 of the Madhya Pradesh Industrial Employment (Standing Orders)
Rules, 1963.
A Domestic
inquiry was thereafter held into the charges and the appellant having
been found guilty the Corporation, through its Depot Manager, dismissed him by an order dated August 14, 1964.
On December 9, 1964 the appellant filed an application in
the
Labour Court, J abalpur, under section 31 of the Madhya Pradesh
Industrial Relations Act challenging the validity of the inquiry on
various grounds and praying that the order of dismissal bp set aside
and that an order of reinstatement be passed with back wages.
By
a preliminary order dated December 7, 1966 the Labour Court held
that the Qomestic tribunal did not hold a proper inquiry into the
charges levelled against the appellant but that it was open to the parties
to lead evidence before it on the merits of the case and to satisfy it
whether the appellant was guilty of the charges and further whether
the conduct of the appellant was such as to call for an order of dismissal.
Parties thereafter led evidence before the Labour Court, on a
•
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D. c. ROY v. PRESIDING OFFICER IND. COURT (Chandrachud, J.) 803
consideration of which it held by an order dated August 18, 1967 that
A,
the appellant was guilty of the charges levelled against him and that in
the circumstances of the case the punishment of dismissal was neither
harsh nor unjust.
Feeling aggrieved by the aforesaid order of the Labour Court the
appellant preferred a revision application to the Industrial Court,
Indore, under section 66 of the Madhya Pradesh Industrial Relations
B·
Act.
The Industrial Court confirmed the findings of fact recorded by
the Labour Court and upheld the order of dismissal.
As regards back
wages, the Industrial Court held that the order of the Labour Court
dated August 18, 1967 would relate back to the date when the appellant was dismissed by the Corporation al\d therefore the appellant was
not entitled to back wages till the date when the Labour Court passed
1ts final order.
C
The appellant thereafter filed a petition in the High Court of
Madhya Pradesh under articles 226 and 227 of the Constitution challenging the order of the Industrial Court. The High Court by its order
dated March 6, 1968 dismissed the petition in limine, though with a
speaking order.
It held that the omission of the appellant to check
ticketless travellers in the bus which he had boarded as a Ticket Exa1)1
miner amounted to major misconduct under Standing Order 12(b).
The High Court further held that no interference was called for on the
question whether the order of dismissal was justified and since the
order of the Labour Court related back to the date when the order of
dismissal was passed by the Corporation, the
appellant was
not
entitled to wages until the date on which the Labour Court passed lhe
judgment,
The appellant has filed this appeal in forma pauperis by
E
special leave of this Courf.
Mr. M. K. Ramamurthi who appeared as an amicus for the appellant raised two points for our consideration in this appeal.
He
contended in the first place that the charge made against the appeUant
does not amount to a "major misconduct" under the Madhya Pradesh
Industrial Employment (Standing Orders) Rules, 1963 and secondly
F
that in any event, the Labour Court having found that the Domestic
tribunal had failed to hold a proper inquiry, the appellant was entitled
to back wages until the final decision of the Labour Court.
The Madhya Pradesh Industrial Employment (Standing Orders)
Rules, 1963 provide by Rule 7, to the extent material, that the Standard
Standing Orders for all undertakings to which the Madhya
Pradesh
G
Industrial Employment (Standing Orders) Act, 26 of 1961, applies
shall be those set out in the Annexures to the Rules. We are concerned in this case with Standard Standing Order 12 (b) which provides that "theft, fraud, or dishonesty in connection with the business
or property of the undertakings" shall amount to a major misconduct
on the part of an employee.
The appellant had evidently entered the
padrt~~t'1!iar bdJ!S intodrdehr
1
t<;>tcheckh.it din his cap
1
ac:ty abs ahTichket Examiner
K
an 1 1s un 1spn e t a 1 was is uty t•) c 1ec~ w et er t e passengers
travelling in the bus had paid the fare and whether tickets were issued
to them by the conductor on collecting the fare from them. The bus
804
SUPREME COURT REPORTS
[1976] 3 S.C.R.
.A
was carrying a complement of 26 passengers out of whom 9J passengers did not hold tickets.
The Panchnama which was drawn on the
spot shows that the conductor had collected the fare from the passengers but had not issued any tickets to them.
There cannot be
the
least doubt that if the appellant were so minded, he could have easily
detected the misconduct of the conductor.
Obviously, the appellaHt
had colluded with the conductor in depriving the Corporation of its
B
legitimate earnings.
The only explanation offered by the appellant
was that he was not travelling in the bus at the relevant time and that
explanation has been found to be false consistently by all the courts.
The appellant having acted dishonestly in connection with the business
of the Corporation, he was clearly guilty of a major misconduct..
On the second question as to whether the appellant is entitled
to
· C
back wages from the date of dismissal until the date on which
the
Labour Court delivered its judgment, learned counsel for the appellant
relies strongly. on the observations made by this Court in The Managen<ent oj Hotel Imperial, New Delhi &
Ors.
v.
Hotel
Workers'
Union (1), to the following effect :
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"In Phulbari Tea Estate v. Its Workmen('), the
rider
laid down in the case Messrs. Sasa Musa Sugar Works (P)
Ltd. ( 3) was further extended to a case of an adjudication
under s. 15 of the Act and it was pointed out that if there
was. any defect in the enquiry by the employer
he
could
make good that pefect by
producing
necessary
evidence
before the tribunal; but in that case he will have to pay the
wages up to the date of the award of the tribunal, even
if
the award went in his favour".
(p. 487)
We will consider the impact and implication of the
concluding
portion of this passage but before we do so, we must draw attention
to a 5-Judge Bench decision of this Court in P. fl. Kalya11i
v.
M /s.
Arr France Calcutta('), which is directly in point and concludes the
question under consideration.
In that case an inquiry was held against
an employee of M/s. Air France by the Station Manager, on whose
findings the employee was dismissed by the Regional Representative
of the Company on payment of one month's wages.
The
employee
challenged the order of dismissal by filing an application under section
33A of the Industrial Disputes Act, 1947 on the
ground that the
Station Manager was biased against him and therefore the inquiry was
vitiated as being contrary to the principles of natural justice.
The
Labour Court took the view that the employee's contention that the
Station Manager was biased against him could not be brushed aside
lightly but it went on to hold that even if there was some violation of
the principles of natural justice on account of the bias of the Inquiry
Officer, the Company was entitled to adduce, as it did, all the evidence
before it in support of its action and therefore it was open
to the
Labour Court to decide on that evidence whether the action
was
justified and whether the approval to the order of dismissal should be
granted.
On going into that evidence, the Labour Court held that the
(I) [1960) (!) S.C.R. 476
(2) [t9601 (I) S.C.R. 32.
(3) [t959] Supp. 2 S.C.R. 836.
(4) [1964] S.C.R. 104.
"
/
f
•
,
•
•
D. c. ROY v. PRESIDING OFFICER IND. ('.OURT (Chandrachud, J.) 805
breaches committed by the employee were of a serious nature and the
order of dismissal passed by the employer was therefore justified.
In
an appeal by special leave against the decision of the Labour Court,
it was contended in this Court on behalf of the employee that smce
the Domestic inquiry was found defective, the Labour Court, even if
it was of the opinion that the dismissal was
justified, should have
ordered the dismissal from the date of its award and not from the date
when the Regional Representative passed the
order
of
dismissal.
Rejecting this contention, this Court held :
"The present is a case where the employer has held an
inquiry though it was defective and has passed an order of
dismissal and seeks approval of that order. If the inquiry
is not defective, the Labour Court has only to see whether
there
was
a
prima
facie
case
for
dismissal
and
whether the employer bad come to the bona fide conclusion
that the employee was guilty
of
misconduct.
Thereafter
on coming to the conclusion that the employer had bona fide
come to the conclusion that the employee was
guilty i.e.
there was no unfair labour practice and no victimisation, the
Labour Court would grant the approval which would relate
back to the date from which the employer had ordered the
dismissal. If the inquiry is defective for any reason,
the
Labour Conrt would also have to consider for itself on the
evidence adduced before it whether the dismissal was justified.
However, on coming to the conclusion on its
own
appraisal of evidence adduced before it that the dismissal
was justified its approval of the order of dismissal made by
the employer in a defective inquiry would still relate back to
the date when the order was made."
These observations directly cover the case before us because though
the Labour Court, in the instant case, found that the inquiry was defective as it infringed the principles of natural justice, it came to the conclusion after considering the evidence adduced before it, that the dismissal was justified. The award of the Labour Court must therefore
relate back to the date when the order of dismissal was passed on the
termination of the Domestic inquiry.
The observations extracted earlier from the judgment of a 3-Judge
Bench in Hotel lmperial's case (p. 487 of the Report), on which the
appellant relied strongly prima facie support the appellant's contention
that if an inquiry is found to be defective, the employer can make good
the defect by producing the necessary evidence before the Labour
Court but that in such a case he will have to pay wages up to date of the
decision of the Labour Court even if that decision went in his favour.
The particular observations purport to summarize what was decided
by the same Bench a fortnight earlier in Phubari Tea Estate v. Its
Workmen(').
Learned counsel for the respondent took us
closely
through the judgment in Phulbari Tea Estate but we are unable to
find anything in that judgment showing that whenever
there
is
a
defect in a Domestic inquiry, the employer would have to pay wages
up to the date of the award of the Labour Court or the Industrial
1. (1960) (I) S.C.R. 32 .
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ff
806
SUPREME COURT REPORTS
[1976] 3 S.C.R.
Tribunal even if the order passed in the Domestic inquiry was ultimately upheld by the Labour Court or the Tribunal.
In Phulbari Tea
Estate (supra), the domestic inquiry was in gross violation of the
limdamental principles of natural justice and was therefore vitiated.
The employers did not lead proper evidence before the Tribunal to
justify the order of dismissal and weg content merely
to
produce
before the Tribunal the statements which were recorded during
the
inquiry.
The employee therefore had no opportunity to cross-examine
the witnesses before the Tribunal. Since the inquiry was bad and the
Tribunal had no evidence before it to sustain the order of dismissal
it set aside that order but held that in the ,peculiar circumstances of the
, case, the employee may be granted the alternative relief of compensa-
' tion instead of an order of reinstatement.
The Tribunal accordiugly
, granted to the employee pay and allowance from the date of his suspension till payment. The award of the Tribunal was upheld is appeal
by this Court.
It shall have been seen that in the case of Phulbari
Tea
Estate
(supra) the employers made no attempt to make good the defect in
the inquiry by producing necessary evidence before the Tribunal and
by affording an opportunity to the employee to cross-examine their
witnesses.
"This left the matters where they were'', a' observed by
Wanchoo J. who spoke on behalf of the Court, with the result that the
Tribunal which found that the inquiry was vitiated had no evidence
before it to examine the legality and propriety of the order of dismissal.
In the instant case, the Domestic inquiry was held to be in violation of
the principles of natural justice but the employer led evidence before
the Labour Court in support of the order of dismissal and on a fresh
appraisal of that evidence, the Labour Court found that the order of
dismissal was justified.
The ratio of P. H. Kalyani's case
would
therefore govern the case and the judgment of the Labour Court must
relate back to the date on which the order of dismissal was passed.
With great respect, the ratio of Phulbari Tea Estate is not stated
correctly in the particular passage at page 487 of the Report in the
case of Hotel l mperial.
That passage is partly a reproducti0n in
substance of what is said in Phulbari Tea Estate at page 38 of the
Report but the last clause of the passage following the semi-colon
is ml addition not borne out by the judgment in Phulbari Tea Estate.
Counsel for the appellant also relied on the decision of this Court
in M/s. Sasa Musa Sugar Works (P) Ltd. v. Shobrati Khan & Ors.( 1)
but that case is clearly distinguishable.
As pointed out by this Court
in P. H. Kalyani's case, Sasa Musa was a case where an application
had been made under section 33 (1) of the Industrial Disputes Act for
permission to dismiss the· employees and such permission was asked
for, though no inquiry whatsoever was held by the employer and no
decision was taken that the employees be dismissed. The case for
dismissal of the employees was made out for the first time in the proceedings under section 33 ( 1) and it was for that reason that it was
held that the employees were entitled to back wages until the decision
of the application filed under s~tion 3 3. Commenting on the decision in Sasa Musa, this Court observed in P. H. Kalyani's case that the
(I) [1959) Supp. 2. S.C.R. 836.
"
•
•
I
D. c. ROY v. PRESIDING OFFICER IND. COURT (Chandrachud, J.) 807
matter would have been different if in Sasa Musa, an inquiry had been
A
held, the employer had come to the conclusion that the dismissal was
the proper punishment and had then applied under section 33(1) for
permission to dismiss the employees.
"In those circumstances
the
permission would have related back to the date when the employer
came to the conclusion after an inquiry that dismissal was the proper
punishment and had applied for removal of the bim by an application
under section 33(1)." (page 113).
B
The second co~tention must also therefore fail.
We would, however, like to add that the decision in P. H. Kalyani's case is not to be
construed as a charter for employers to dismiss employees after the
pretence of an inquiry.
The inquiry in the instant case does not suffer
from defects so serious or fundamental as to make it non-est.
On on
appropriate occasion, it may become necessary to carve an exception c
to the ratio of Kalyani's case so as to exclude from its operation at
least that class of cases in which under the facade of a domestic inquiry,
the employer passes an order gravely detrimental to the employee's
interest like an order of dismissal.
An inquiry blatantly and
consciously violating principles of natural justice may well be equated with
the total absence of an inquiry so as to exclude the application of the
'relation-back' doctrine.
But we will not pursue the point beyond this
D
as the facts before us do not warrant a closer consideration thereof.
In the result, the appeal is dismissed but there will be no order as
to costs.
V.P.S.
Appeal dismissed.