# G.E.C. (P) LTD. NAINI, ALLAHABAD v. THE LABOUR COURT, ALLAHABAD

- **Citation:** [1969] 1 S.C.R. 543
- **Court:** Supreme Court of India
- **Decided:** 1968-08-05
- **Case number:** Civil Appeal No. 958 of 1966
- **Bench:** J. M. Shelat, V. Bhargava, C. A. Vaidialingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/g-e-c-p-ltd-naini-allahabad-v-the-labour-court-allahabad-4440
- **Pages:** 7

## Headnote

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Misconduct-Illegal strike-:--Dismissal of workmen
who had
been
given warning about an earlier stfike-Warning held
wrongly
givenPunishn1ent after taking into account such warning cannot be upheld.
There was a strike in the establishment of the appellant company between 18th and 30th March, 1964, and again a token strike on 10th April,
1964 .. For the misconduct of going on the first strike some of the workmen were charged and given a warning. The second strike was held to
be illegal by an enquiry officer and six of the workmen who had been
given a warning in respect of the first strike were dismissed fo-r taking
part in the second strike also.
The Labour Court held that in the compromise that had ended the first strike the company had given the undertalcing that it would not take any action by way of punishment against the
workmen, and therefore the watning in respect of the first strike which was
given only a1fter the enquiry report relating to the second strike had been
already received, was not only not bona fide but illegal.
Because this
warning was taken into account against the six workmen who .were dismissed, the Labour Court set aside the order of dismissal, although holding that the second strike was illegal because of want of notice under
sub--s. 4 of s. 6-S. of the U.P·. Industrial Disputes Act, 1947. The company appealed to this Court.
HELD: (i) The Labour Court rightly held on the facts that the
warning given to the workmen in respect of the· first strike was not only
not bona fide but also against the terms of the settlement by which the
first strike was ended. [548 G]
(ii) The second strike was, as held by the Labour Court, illegal and
therefore 'misconduct' under sub-cl. (2) df cl. 21 of the Standing Orders
of the company. Any punishment imposed under cl. 22 of the said Orders
in respect of an illegal strike after a fair enquiry, being a managerial
function would not riormally be interfered with.
But in the present case
the management was not entitled to take into account the warning given
in respect of the first strike in view df the. settlement it had entered into
with the workers to end that strike.
The Labour Court was therefore
again right in holding the punishment of dismissal df the six respondents
as vindictive and unjustified. [548 H-549 E]

## Text

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G.E.C. (P) LTD. NAINI, ALLAHABAD
v.
THE LABOUR COURT, ALLAHABAD
August 5, 1968
543
,fi
[J. M. SHELAT, V. BHARGAVA AND C. A. VAIDIALINGAM, JJ.]
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G
H
Misconduct-Illegal strike-:--Dismissal of workmen
who had
been
given warning about an earlier stfike-Warning held
wrongly
givenPunishn1ent after taking into account such warning cannot be upheld.
There was a strike in the establishment of the appellant company between 18th and 30th March, 1964, and again a token strike on 10th April,
1964 .. For the misconduct of going on the first strike some of the workmen were charged and given a warning. The second strike was held to
be illegal by an enquiry officer and six of the workmen who had been
given a warning in respect of the first strike were dismissed fo-r taking
part in the second strike also.
The Labour Court held that in the compromise that had ended the first strike the company had given the undertalcing that it would not take any action by way of punishment against the
workmen, and therefore the watning in respect of the first strike which was
given only a1fter the enquiry report relating to the second strike had been
already received, was not only not bona fide but illegal.
Because this
warning was taken into account against the six workmen who .were dismissed, the Labour Court set aside the order of dismissal, although holding that the second strike was illegal because of want of notice under
sub--s. 4 of s. 6-S. of the U.P·. Industrial Disputes Act, 1947. The company appealed to this Court.
HELD: (i) The Labour Court rightly held on the facts that the
warning given to the workmen in respect of the· first strike was not only
not bona fide but also against the terms of the settlement by which the
first strike was ended. [548 G]
(ii) The second strike was, as held by the Labour Court, illegal and
therefore 'misconduct' under sub-cl. (2) df cl. 21 of the Standing Orders
of the company. Any punishment imposed under cl. 22 of the said Orders
in respect of an illegal strike after a fair enquiry, being a managerial
function would not riormally be interfered with.
But in the present case
the management was not entitled to take into account the warning given
in respect of the first strike in view df the. settlement it had entered into
with the workers to end that strike.
The Labour Court was therefore
again right in holding the punishment of dismissal df the six respondents
as vindictive and unjustified. [548 H-549 E]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 958 of
1966.
Appeal by special leave from the Award dated September 16,
1965 of the Labour Court, Allahabad in Adjudication Case No.
78 of 1965.
G. R. Gokhale, 0. P. Malhotra and J.B. Dadachanji, for the
appellant.
R. V asudev Pillai and Subodh Markandeya, for re..§Jlondents
Nos. 2(a) to 2(k).
544
SUPREME COURT REPORTS
[1969] I S C.R.
The Judgment of the Court was delivered by
Vaidialingam, J. In this appeal, by special leave, the question, that arises for consideration, is as to whether the award of
the Labour Court, AJlahabad, dated September 16, 1965;dirccting the reinstatement of six workmen, referred to in the order of
reference, is justified.
The facts leading up to the award may be referred :o. There
was a strike, in the establishment of the appellant company, from
March 18, 1964. There was a meeting, of the District Industrial
Relations Advisory Committee, on March 29, I 964, presided over
by the District Magistrate of the area.
Representatives of the
management and the workmen, attended the said meeting.
The
proceedings of the meeting show that the Advisory Committee,
decided to appeal to the appellant not to take any action, against
the workers, on the ground that they had on strike, from March I 8
1964. There was an appeal, to the District Magistrate, Allahabad.
to release, as a gesture of goodwill, the arrested employees of the
company, who were not involved in violence.
The Union, representing the workers of the appellant, in turn, decided to call off the
strike and directed the workmen to resume work with effect from
the morning of March 30, I 964.
There is no controversy that
the strike was called off, and certain workers,
who had
been
arrested in connection with the strike, were also released
from
jail, on March 29, 1964 itself. This strike will be referred to, as
the first strike, in the course of this judgment.
On March 20, I 964, the respondent-Union had given to the
appellant, another notice, stating that the workmen of the appellant company would be going on· a token strike. for one day, after
fourteen days of the receipt of the notice, in sympathy with the
workers of the Swadcshi Cotton Mills, Naini.
The exact date,
on which the strike was to take place, was not given in the notice,
as required under sub-s. ( 4) of s. 6S of the U.P. Industrial Disputes Act, 1947 (hereinafter referred to as the Act). On April
9, I 964, the respondent Union again intimated to the management
about the workmen's intention to go on strike on April 10, I 964.
and offered to work on a Sunday, so that there would be no loss
of production; but the management intimated the Union that the
factory would work on April I 0, I 964.
A token strike actually
took place, on April 10, 1964. This strike will be termed as the
second strike, in these proceedings.
In respect of the first strike, the Management had. on March
28, 1964, charge-sheeted. for going on an illegal strike, some of
the workmen, including the workmen. whose dismissal had been
set a'ide by the present award.
A joint reply was sent, hy the
concerned workmen. on April 9, I 964, to the management, drawing their attention to the decision of the District Industrial RelaA
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54&
tions Advisory Committee, dated March 29, 1964, and the settlement arrived at, therein, between the management and the Union.
The ~orkmen also requested the management, not to disobey the.
decision of the Committee. The appellant sent a communication,
on April 10, 1964, to the workmen, stating that they had not made
any commitment, at the meeting on March 29, 1964, that the
management would not proceed with the taking of disciplinary
action, against an employee, who committed a mis-conduct,
according to the Standing Orders of the Company.
The workmen were again directed to furnish, within 24 hours, their reply,
if any, to the charge-sheet, dated March 28, 1964.
On May 8, 1964, the Acting Works Manager, of the appellant
company, passed orders, warning the concerned workmen, for
having mis-conducted themselves, as stated in the charge-sheet,
dated March 28, 1964. It is further stated, in this order, that,
after hearing the explanation, furnished
by the workmen,
the
management holds the workmen guilty of mis-conduct, for which
they could have been dismissed; but the management has taken
a lenient view and, hoping that the mis-con,duc.t will not be repeated, administers an earnest warning.
·
In respect of the second strike, which took place on April 10,
1964, the management charge-sheeted, on April 16, 1964, thirteen workmen, for going on illegal strike which is a mis-conduct,
under sub-cl. (2) of cl. 21, of the Certified Standing Orders of
the company, and as the strike was in violation of s11b-s. ( 4) of
s. 6-S of the Act. There was a further charge that the workmen,
concerned, had intimidated and prevented other willing workers,
from going to work.
The workmen were directed to offer their
explanation, as to why disciplinary action need not be taken for
their conduct.
On Aμril 17, 1964, the thirteen workmen, jointly sent a reply
saying that the strike, on April 10, 1964, was legal, and due notice
had been given, under the provisions of the Act.
They also
denied having intimidated, or restrained, any wiJ!ing worker from
going to work. They further stated that they had not committed
any mis-conduct.
The management proceeded to conduct an
inquiry, against the thirteen workmen, and Sri K. D. Gupta, an
officer of the company, wa~ entrusted with the conduct of the said
inquiry.
Shri Gupta accordingly conducted an enquiry on April
20, 1964, and sent his report to the Acting Works Manager, on
April 24, 1964. After referring to the conduct of the inq.iiry
proceedings, Shri Gnpta has stated that the thirteen workmen are
guilty of participation in an illegal strike, on April 10, 1964, and,
as participation in an illegal strike, is a mis-conduct under cl.
21 (2) of the Certfied Standing Orders of the Company, the workmen, concerned, are guilty of mis-conduct,
but, regarding the
.54 6
SCPRDIE COURT REPORTS
[1969] I S.CR.
charge of intimidation and incitement. the inquiry otiiccr found
that the said charge was not established.
On May 22, 1964, the Acting Works Manager of the appellant accepted the report of Shri Gupta and passed orders, administering a warning. to seven, out of the thirteen, workmen, but,
regarding the remaining six workmen. the Works Manager, after
taking into account the warning that had been administered to
them, on May 8, 1964, for going on an illegal strike (referring to
.the first strike), passed orders dismissing them from service.
The Union raised a dispute, regarding the dismissal of the six
workmen and, accordingly, the said dispute was referred to the
Labour Court,· Allahabad, for adjudication.
The case of the workmen was that the strike, on April 10.
1964, was legal, and that the domestic inquiry, conducted by Shri
Gupta, was neither bona fide, not fair. They also contended that
in view of the settlement, arrived at on March 29, 1964, in respect of the first strike, the management had no right to take any
action, by way of warning the workmen. as it purported to do, on
May 8, 1964. Taking the said warning into account,
for
the
purpose of imposing the punishment of dismissal, amounicd to a
vindictive conduct, on the part of the management, and, therefore,
the order of dismissal was illegal.
The management, on the other hand, contended that the strike,
that took place on April JO, 1964. was illegal, as it was not in
. accordance with the provisions of the Act and participation, in
such illegal strike, was a mis-conduct, under cl. 21 (2)
of the
Standing Orders of the Company and, such mis-conduct could be
punished by dismissal, under cl. 22.
According to the management, the inquiry proceedings, conducted by Shri Gupta,
were
quite fair," and bona fide, and the workmen were given full opportunity to participate in the inquiry proceedings. They also pleaded that the management was entitled, to impose punishment for
mis-conduct, by taking into account the previous conduct of the
workmen, concerned; and, in this case, the
warning,
recorded
against them on May 8, 1964, was legitimately and properly taken
into account, inasmuch as the management had not agreed to
withdraw the proceedings, against the workmen ..
The Labour Court has upheld the plea of the management.
that the second strike, on April 10, 1964, being contrary to sub-s.
( 4) of s. 6-S, was illegal under s. 6-T of the Act; but it has further
held that, notwithstanding the infirmity in the notice, issued by the
workmen regarding the second strike. all the managements in the
area, including 1he appellant, were fully aware of the fact of the
intended token strike on April 10, 1964. The Labour Court has
further held that the inquiry proceedings,
conducted by
Shri
·Gupta, were bona fide and. fair, and they suffered from no infirmity,
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whatsoever. The Labour Court further holds that, though normally imposing of a punishment, for mis-conduct, under the
Standing Orders, is a managerial function, in this ca~e, the appellant was not justified in taking into account the warmng, recorded
on May 8, 1964, in respect of the first strike. It is the further
view, of the Labour Court, that the continuance of disciplinary
proceedings, and n;cording of warnings, on May 8, 1964, by the
appellant, against the six concerned workmen, in respect of the
first strike, was with a view to create a ground for punishment
and dismissal, in the subsequent proceedings, relating to the second
strike, and, as such, the action of the management was not bona
fide.
The Labour Court, in this connection, refers to the proceedings of the District Industrial Relations Advisory Committee,
that took place on March 29, 1964, in the presence of the representatives of the appellant, and the Union, and the Labour Court
is of the view that a settlement had been arrived at, by which the
management has agreed, not to take any disciplinary action,
against the workers, in connection with the first strike. Ultimately,
the Labour Court holds that the punishment of dismissal, inflicted
on the six workmen, by the appellant, on May 22, 1964, is unconscionable and unjustified, and not recorded in a bona fide manner. In consequence, the order of dismissal, passed against the
six concerned workmen, named in the annexure to the order of
reference, was set aside and the workmen were directed to be reinstated, with 50% back wages.
We have fairly elaborately referred to the various circumstances, leading to the passing of the order of dismissal, by the
management, in order to appreciate the contentions, urged on
behalf of the management, that the Labour Court had committed
a serious illegality, in interfering with an order, passed by the
management, for mis-conduct, as provided under the standing
orders of the company.
Mr. H. ~· Gokhale, learn~ counsel, for the appellant, ·raised
two contentions before us :
( 1) that the finding of the Labour
Court, that at the meeting of the District Industrial Relations
Committee, held· on March 29, 1964, the appellant agreed not to
take disciplinary action, against its workmen in respect of the
first strike, is erroneous; and (ii) that having' held that the second
strike was illegal as being contrary to sub-s. ( 4) of s. 6-S of the·
Act, the Labour Court has committed an error in interfering with
the act of the management, when it imposed a punishment for
mis-conduct, under the standing orders of the company.
'
Mr. R. Vasudeva Pillai, learned counsel for the Union has
supported, in full, the award of the Labour Court.
'
We are not impressed with either of the contentions, Of the
learned counsel for the appellant.
We have already referred to
Ll3Sup.CJ/68-4
.
.....
548
SUPREME COURT REPORTS
(1969] I S.CR.
.the proceedings, of the District Industrial Relations Committee.
of March 29, 1964. No doubt, a day prior to that, the appellant
had issued notices to the workmen, asking them to show cause
.as to why disciplinary action should not be taken against them,
for going on strike from March 18, 1964.
There was a joint
reply given by the workmen, on April 9, J 964, to the effect that,
.at the meeting held on March 29, 1964, 1he management had
agreed, not to take any disciplinary action, against the workmen,
and that, it was on that basis that the '"trike itself was called off,
and the workmen, arrested, were also released by the Government.
There was no doubt an attempt, by the management, in their reply
of April 10, 1964, to make it appear that they had not committed
themselves, at the meeting of March 29, 1964, as memioned by
the workmen.
But it is rather surprising that, when the President
of the Union, WWI, gave evidence to the effect tha1 there was a
settlement, on March 29, 1964, whereby the management
had
agreed not to take any disciplinary action, against the workmen,
there was absolutely no cross-examination,
by the appellant, of
that witness.
There is no dispute that Mr. Wright represented
the management, at the said meeting, and no suggestion even has
been made to WWI that the evidence, given by him, is not correct.
No doubt, the appellant, in their letter of April 10, 1964,
had taken the stand that the company had not commil'led itself.
not to take any action against the workmen, in respect
of the
first strike.
The inquiry report of Shri Gupta, in respect of the
·second strike, was already in the hands of the management, on
April 24, 1964. It is really after the receipt of this report, that the
Acting Works Manager of the apPellant-company recorded warnings, as against the concerned workmen, on May 8, 1964, in respect of the first strike. This warning has been taken into account.
by the Works Manager, when he passed the order of dismissal, in
respect of the second strike, on May 23, 1964. Having due regard
to these circumstances, the finding of the Labour Court, that the
rontinuance of the disciplinary proceedings,
and recording
of
punishments of warnings, as against the six concerned workmen.
on May 8, 1964, in respect of the first strike, by the management
was to create a ground for punishment and dis11Jissal, in respect
-of the second strike, is perfectly justified.
The further finding of
the Labour Court, that the action of the management, in recording warnings in respect of the first strike, is not only not bona fide,
but also against the settlement, arrived at, on March 29, 1964, is
also correct. The first contention, on behalf of the management,
therefore fails.
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There is the finding of the Labour Court, that the second
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strike, on April 10, 1964 is illegal. Going on illegal strike, is certainly 'mis-conduct' under sub-cl. (2) of cl. 21, of the Standing
Orders of the company. Under cl. 22 of the Standing Orders, the
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G.E.C. (P) LTD. v. LABOUR COURT (Vaidialingam, J.)
549
punishment for mis-conduct is dismissal, or, in the alternative,
suspension, for a period not exceeding four days. If the management had, without any regard to what happened, in respect of the
first strike, imposed punishment under cl. 22, in respect of an illegal strike, which is 'mis-conduct' under cl. 21 (2) of the Standing
Orders, after a fair inquiry, the punishment, meted out being a
managerial function, would not be normally interfered with. But
in this case, even the order of dismissal clearly shows that the
management has taken into account the previous conduct of the
workmen, in having gone on the first strike, and the punishment
of warning, administered on May 8, 1964. It is because of this
past conduct, it is further stated in the order, that the six workmen
were being dismissed from service.
The finding of the Labour
Court is that the management was not entitled to take into account
the warning, given on May 8, 1964, in respect of the first strike,
in view of the settlement, on March 29, 1964. In view of the fact
that the warning has been taken into account, by the management,
which it is not entitled to, the punishment of dismissal has been
rightly considered, by the Labour Court, to be not bona fide, and
vindictive. In fact, the Labour Court is also of the view that the
punishment is unconscionable, and unjustified.
It is on these
grounds, that the Labour Court has interfered with the order of
dismissal, passed by the management.
The second contention,
of learned counsel for the appellant, also fails, as we are in agreement with the reasons, given by the Labour Court, on this aspect
of the matter.
The result is that this appeal fails, and is dismissed.
There
will be no order as to costs.
G.C.
Appeal dismissed.