# RUSTOM & HORNSBY (I) LTD v. T.B.KADAM

- **Citation:** [1976] 1 S.C.R. 119
- **Court:** Supreme Court of India
- **Decided:** 1975-07-24
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rustom-hornsby-i-ltd-v-t-b-kadam-6470
- **Pages:** 7

## Headnote

i
I
..
\
• \
A
B
c
RUSTOM & HORNSBY (I) LTD.
v.
T.B.KADAM
July 24, 1975
119
(A. ALAGIRISWAMI, P. K. GOSWAMI AND N. L. UNTWALIA, JI.]
lndlLftrial Dispute1 Act (14 of 1947), S. 2A-Scope of-Domestic Enquiry
-Junsdiction of Labour Court in relarjon to,.
Section 2A of <he Industrial Dispute• Act, 1947, provide. that where any
employer discharges, dismisses, retrenches or otherwise termina1es the serv~
of an individual workman, any di'Spute or difference between that workman
and his employer connected with or arising out of such discharges etc., shall
be deemed to be an industrial dispute notwithstanding that no other workman
nor ttnion is a party to the dispute.
The respondent was a watchman in the factory of the appellant. He was
diamisscd from service on Jan. 7, 1964, after holding a domestic cnquirv with
respect to an incident on the night of December 15, 1963. In June 1967, the
dispute regarding the dismissal of the respondent was referred to the Labour
Court. Directing him to be rein•tated, the Labour Court, held that :
D
( 1) The charge against the respondent was vague;
E
F
G
H
(2) The suspected dishone•ty of the respondent in connection with the
appellant's property did not constitute any misconduct either under Standin,cOrders of the Company or otherwise; and
(3) The domestic 'enquiry held was defective because,
the
respondent
produced a police constable as his witness at the time of the enquiry who
expressed his inability to give evidence without the permission of his s.uperion
ud the Enquiry Officer took no steps for obtaining the necessary permission.
The Labour Court- summoned and examined the police constable and took. hil
evidence into account.
In api)eal to this Court, it was contended :
(I) That s. 2A came into force only on December I, 1965, aud ar the
dismissal took place before that date the reference of the dispute was bad;
and
'2) That the findin• of the Enquiry Officer was based upon a fair enquiry
1.nd the Labour Court should not have interfered with the finding.
Allowing the appeal to this Court on the second contention.
HELD: (1) The test for .the validity of a reference under '· 10 is whether
there WM in existence a dispute on the day the reference was maCl,e. [124B--C]
Jahiruddin v. Mod•l Mills, Nagpur [1966] I LL.J 430, applied.
National Productivity Council v. S. N. Kaul [1969] II LL.J 186 and Shru
Gopa/ Paper Mills Ltd. v. Stat< of Haryana, [1968] I Lab. !.<;:. 1259, approved.
P. Janardhana Sh<tty v. Union of India [1970] II L.L.J. 738, over-ruled .
(a) Section 2A provides in effect that what would not be an industrial
diapute as defined in s. 2(k), a!! interpreted by this Court, woo1d b" rl<>emed
to be an industrial dispute in certain circumstances. There is. no question of ·
living retrospective effect to that section in mai1dng the refe'"ence
Whe11 the
5ection uses the words "discharges, dismisses, retrenches etc." it does not deal
with the question a'S to when that was done but merely rc,ers to a situation
or st•te o! affairs. [123B-D]
120
SUPREME COURT REPORTS
[1976] 1 S.C.R.
(b) It is no objection to this to say tha~ such an interpretation would lead
A
to ~\ll old dispute being reopened after the lapse of many years. Every reference
would be made only sometime after the dispute has arisen.
Even in this case,
if a Jabour union or a group of workmen had sponsored the case of lhe
respondent, such a reference after lapse of some time would have been valid.
All that s. 2A bas done is that by legislative action such a dispute is deemed
to be an industrial dispute even where it is not sponsored by a labour union
or a group of workmen. The only consideration in such matters is whether
there was or apprehended an industrial dispute when the reference was made.
B
[123D-124B]
(2) The charge is not vague, [121H]
'fl.
(3) The facts set out show that the charge is one of an &!tempt to steal
~
the appellant's property and if proved, the respondent, being
a
watchman,
deserves dismissal. [121H-122A]
( 4) When a w

## Text

i
I
..
\
• \
A
B
c
RUSTOM & HORNSBY (I) LTD.
v.
T.B.KADAM
July 24, 1975
119
(A. ALAGIRISWAMI, P. K. GOSWAMI AND N. L. UNTWALIA, JI.]
lndlLftrial Dispute1 Act (14 of 1947), S. 2A-Scope of-Domestic Enquiry
-Junsdiction of Labour Court in relarjon to,.
Section 2A of <he Industrial Dispute• Act, 1947, provide. that where any
employer discharges, dismisses, retrenches or otherwise termina1es the serv~
of an individual workman, any di'Spute or difference between that workman
and his employer connected with or arising out of such discharges etc., shall
be deemed to be an industrial dispute notwithstanding that no other workman
nor ttnion is a party to the dispute.
The respondent was a watchman in the factory of the appellant. He was
diamisscd from service on Jan. 7, 1964, after holding a domestic cnquirv with
respect to an incident on the night of December 15, 1963. In June 1967, the
dispute regarding the dismissal of the respondent was referred to the Labour
Court. Directing him to be rein•tated, the Labour Court, held that :
D
( 1) The charge against the respondent was vague;
E
F
G
H
(2) The suspected dishone•ty of the respondent in connection with the
appellant's property did not constitute any misconduct either under Standin,cOrders of the Company or otherwise; and
(3) The domestic 'enquiry held was defective because,
the
respondent
produced a police constable as his witness at the time of the enquiry who
expressed his inability to give evidence without the permission of his s.uperion
ud the Enquiry Officer took no steps for obtaining the necessary permission.
The Labour Court- summoned and examined the police constable and took. hil
evidence into account.
In api)eal to this Court, it was contended :
(I) That s. 2A came into force only on December I, 1965, aud ar the
dismissal took place before that date the reference of the dispute was bad;
and
'2) That the findin• of the Enquiry Officer was based upon a fair enquiry
1.nd the Labour Court should not have interfered with the finding.
Allowing the appeal to this Court on the second contention.
HELD: (1) The test for .the validity of a reference under '· 10 is whether
there WM in existence a dispute on the day the reference was maCl,e. [124B--C]
Jahiruddin v. Mod•l Mills, Nagpur [1966] I LL.J 430, applied.
National Productivity Council v. S. N. Kaul [1969] II LL.J 186 and Shru
Gopa/ Paper Mills Ltd. v. Stat< of Haryana, [1968] I Lab. !.<;:. 1259, approved.
P. Janardhana Sh<tty v. Union of India [1970] II L.L.J. 738, over-ruled .
(a) Section 2A provides in effect that what would not be an industrial
diapute as defined in s. 2(k), a!! interpreted by this Court, woo1d b" rl<>emed
to be an industrial dispute in certain circumstances. There is. no question of ·
living retrospective effect to that section in mai1dng the refe'"ence
Whe11 the
5ection uses the words "discharges, dismisses, retrenches etc." it does not deal
with the question a'S to when that was done but merely rc,ers to a situation
or st•te o! affairs. [123B-D]
120
SUPREME COURT REPORTS
[1976] 1 S.C.R.
(b) It is no objection to this to say tha~ such an interpretation would lead
A
to ~\ll old dispute being reopened after the lapse of many years. Every reference
would be made only sometime after the dispute has arisen.
Even in this case,
if a Jabour union or a group of workmen had sponsored the case of lhe
respondent, such a reference after lapse of some time would have been valid.
All that s. 2A bas done is that by legislative action such a dispute is deemed
to be an industrial dispute even where it is not sponsored by a labour union
or a group of workmen. The only consideration in such matters is whether
there was or apprehended an industrial dispute when the reference was made.
B
[123D-124B]
(2) The charge is not vague, [121H]
'fl.
(3) The facts set out show that the charge is one of an &!tempt to steal
~
the appellant's property and if proved, the respondent, being
a
watchman,
deserves dismissal. [121H-122A]
( 4) When a workman is dismissed as a result of a domestic enquiry the
C
only power which the Labour Court has is to consider whether the enquiry was
proper and if it was so, no further question arises. Findings properly recorded
at an enquiry fairly conducted are bindine: on parties unless ·t is shown that
such findings were perverse.
It was not the duty of the Enquiry Officer tO seek
.permission of the constable's superiors and it was the respondent's· duty to have
his witnesses properly su.mmoned.
The enquiry was fair and the Labour Court
had no righ: to examine the witness on behalf of the workman and based on
that evidence to upset the finding arrived at the domestic enquiry. [124DD
125C)
D.C.M. v. Ludh Budh Singh [1972] 3 S.C.R. 29; Workmen v. Fi.restone
Tyre & Rubber Co, [1973] 3 S'.C.R. 587 and Tata Oil Mills Co. Ltd. v. Tis
Workmen [1964] 7 S.C.R. 555, referred to.
OVJL APPELLATE JURISDICTION: Civil Appeal No. 1142 of 1969.
Appeal by special leave from the award dated the 8th November
E
1968 of the Labour Court, Poona in Reference (IDA) No. 9 of 1967.
G. B. Pai, 0. C. Mathur, D. C. Shroff and 0. N. Mishra, for the
appellant.
S. C. Manchanda and A. G. Ratnaparkhi, for the respondents.
The Judgment of the Court was delivered by
ALAG!RISWAMI, J.-This is an appeal by special leave against the
award of the Labour Court, Poona directing the reinstatement of the
respondent in the service of the appellant company.
The respondent was a watchman in the factory of the appellant at
Cbinchwad, Poona.
A domestic enquiry was held against him in respect of an incident on the night of 15-16 December 1963 and following
the enquiry be was dismissed from service on the 7th January 1964.
His appeal was dismissed after a personal hearing by the appellate
authority.
Section 2A of the Industrial Disputes Act came into force
on !st December 1965 and on 23rd June 1967 a reference was made
by the Government of Maharashtra regarding the dismissal of the
respondent to t.'ie Labour Court, Poona and the Labour Court held that
the domestic enquiry held against the respondent was defective, that the
charges against the respondent had not been made out and directed him
to be reinstated.
F
G
H
)
t
I
' •
B
c
0
E
.F
G
H
RUSTOM & HORNSBY Lrn. v. T. B, KADAM (Alagiriswami, l.) 121
There were four charges framed against the respondent in the domestic enquiry.
They were :
( 1) Suspected dishonesty in connection with the company's
property.
(2) Gross negligence in performance of his duties.
(3) Disobedience of instrnctions given by the superiors.
( 4) Commission of an act subversive of discipline.
For the purposes of this appeal it is not necessary to consider other
charges than charge No. 1.
The char_gesheet is rather a bit confused
but the statement of facts regarding charge No. 1 is clear and there
cannot be any doubt or confusion about it.
The facts stated in the
chargesheet are as follows :
"It is reported that while you were on duty in the 2nd
shift on Sunday the 15th December, 1963 at about 10.30
P .M. you left the guard room and went into the factory.
While returning from the factory you are reported to have
brought out with you a new Fluroscent 1'ube and to have kept
it in the guard room. Immediately after this you are also
reported to have directed one of the two watchmen on duty
at that time to take a round with the tel-a-tel clock.
It is
further reported that at about 11.20 P.M. you removed the
Fluroscent Tnbe from the guard room and were carrying it
away out of the factory.
At this stage you were challenged
by the. watchman, Shri M. B. Shinde and consequently you
brought back the tube and left it in the guard room.
The
Company had, however, not received any report in the matter
from you.
You were, therefore, called up when you reported for duty
on 16th afternoon and were questioned in the matter.
When
you were asked to submit your written report about the mcident and about your failure to report immediately to your
superiors you stated that you will submit yonr report after
consulting your pleader.
The above mentioned facts and particularly your unwillingness to submit written report when called npon to do so
give rise to doubts about your integrity and faithfulness both
in regard to the security and property belonging to the Company for which you are responsible while on duty as a person
in charge of the security of the Company."
The Labour Court took the view that the charge of suspected dishonesty in connection with the company's property did not constitute
any misconduct either under Standing Order 24 or otherwise and therefore no action could be taken against the respondent on the basis of that
charge, and also that the chargesheet was vague.
We can see no vaguemiss in the chargesheet and on the basis of the facts set out above there
could be no doubt that the charge is one of an attempt to steal the
122
SUPREME COURT REPORTS
[1976] 1 S.C.R.
company's property.
The respondent being a watchman the charge is
A
a· serious one and if it was held proved he deserves nothing short of
dismissal.
The Labour Court was concerned only with the question whether
the domestic enquiry held against the respondent was a proper enquiry.
It held that the enquiry was not a proper one on the ground that the
re!p<>ndent had produced a police constable as his witness at the time
B
ot enquiry and this witness expressed his inability to give evidence without the permission of his superiors, that it was clearly the duty of the
Inquiry Officer to obtain the necessary permission and to help the respondent in .the matter of .his defence, that the reluctance on the part
ot the InqUiry Officer to pursue the matter further is indicative ot the
fact that he was not inclined to afford proper opportunity to the respondent to defend himself, that there was no necessity for the responC
dent to apply again to the Inquiry Officer for obtaining the necessary
permission, that the passive approach adopted by the Inquiry Officer
in the matter had undoubtedly resulted in an opportunity to defend himself being denied and the inquiry will therefore be defective in this
respect. It summoned and examined the police constable and taking
his evidence also into acconnt held as follows :
"Then there is evidence on the record of the inquiry to
show that the relations of the second party with the Security
Jamadar Shri David were strained.
As a matter of fact the
evidence shows that the reports from the watchmen started
coming in at his instance.
The proceedings against the second
party started on the report of Shri David.
The said report
and the reports made by the other watchman and the second
party are not forthcoming though referred to in the record
of the inquiry.
Then there is the glaring fact that very ambiguous allegations and charges which do not even constitute
any misconduct are made against the second party and in spite
ot the fact that the evidence in the inquiry is too conflicting
and vague the concerned authorities have without affording
proper opPortunity to defend f'?und the second party .guilty
of the charges levelled against him.
On a careful readmg of
the findings of the Inquiry Officer, the Works Manager and
the Aonellate Authoritv in the light of the recitals in the
charge-sheet it becomes absolutely clear that they have found
him guilty without applying their mind to the facts and circumstances of the case.
All these factors raise a strong presumption that the removal of the second party was predetermined by the first party and that ~is dismissal is bv way of
victimization.
For all the aforesaid reasons therefore
tho
dismissal of the second oarty must be held to be ill~gal a?d
immoner. There is nothing adverse in the past agamst h~m
and he is therefore entitled to the relief ot reinstatement with
back wages."
The first argument on behalf of the appellant is that the incident
took place .in December 1963 and the order of dismissal was made on
the 7th of January 1964 and as section 2A of the Industrial Disputes
D
E
F
G
H
'
j
•
A
Ir
ll
,,
c
D
E
..
F
G
H
RUSTOM & HORNSBY LTD. v. T. B, KADAM (Alagiriswami., !.) 123
Act came into force on 1-12-1965 the reference of this dispute under
section 10 of the Industrial Disputes Act read with section 2A is bad.
It is argued that this will amount to giving retrospective effect to the
provisions of section 2A.
We are not able to accept this contention.
Section 2A is in effect a definition section.
It provides in effect that
what would not be an industrial dispute as defined in section 2(k) as
interpreted by this Court would be deemed to be an industrial dispute
in certain circumstances. As was pointed out by this Court in Chemicals & Fibres of India Ltd. v. D. G. Bhoir & Ors.( 1) the definition
could as well have been made part of clause (k) of section 2 instead
of being put in as a separate section. There is therefore no question
of giving retrospective effect to that section in making the reference
which resulted in the award under consideration. When the section
uses the words "where any employer discharges, dismisses, retrenches
or otherwise terminates the services of an individual workman" it does
not deal with the question as to when that was done.
It refers to a
situation or a state of affairs. In other words where' there is a discharge,
dismissal, retrenchment or termination of service otherwise the dispute
relating to such discharge, dismissal, retrenchment or termination becomes an industrial dispute. It is no objection to this to say that this
interpretation would lead to a situation where the disputes would be
i:eopened after the lapse of many years and referred for adjudication
under section 10. The question of creation of new rights by section 2A
is also not very relevant.
Even before the introduction of section 2A
a dispute relating to an individual workman could become an industrial
dispute by its being sponsored by a labour union or a group of workmen.
Any reference under section 10 would be made only sometime
after the dispute itself has arisen.
The only relevant factor for consi•
deration in making a reference under section 10 is whether an industrial dispute exists or is apprehended. There cannot be any doubt
that on the day the reference was made in the present case an industrial dispute as defined under s. 2A did exist. Normally the dispute
regarding an individual workman is not an industrial dispute unless it
is sponsored by the union to which he belongs or a group of workmen.
The change made by section 2A i.S that in certain cases such a
dispute need not be so sponsored and it will still be deemed an industrial dispute.
Supposing in this very case a labour union or a group
of workmen had sponsored the case of the respondent before the reference was made, such a reference would have been valid. All that section 2A has done is that by legislative action such a dispute is deemed
to be an industrial dispute even where it is not sponsored by a labour
union or a group of workmen.
What a Jabour union or a l!fOUp of
workmen can do the law is competent to do.
The only question for
consideration in considering the validity of a reference is whether there
was or apprehended an industrial dispute when the reference was made.
If there was an industrial dispute or an industrial dispute was apprehended. even though tke facts giving rise to that dispute might have arisen
before the reference was made the reference would still be valid. It
is to be borne in mind that every reference would be made only some0 (I) C.A. Nos.1633-1644ofl973decidcd on 2-5-1975.
124
SUPREME COURT REPORTS
[1976] 1 S.C.R.
time after the dispute has arisen.
In Bir/a Brothers. Ltd. v. Modak ( 1)
it was pointed out that though the Industrial Disputes Act came into
force in 1947, reference of an industrial dispute based on the facts which
arose before that Act came into force is a valid reference.
The same
reasoning would apply to a reference of a dispute falling under section
2A even though the facts giving rise to that dispute arose before that
section came into force.
The decision in Bir/a Brothers' case (supra)
was approved by this Court iu its decision in Jahiruddin v. Model MiUs,
Nagpur(").
These two decisions clearly establish that the test for the
validity of a reference under section 10 is whether there was in existence
a dispute on the day the reference was made and there was no question
·of giving retrospective effect to the Act. We find that that is the view
taken by the Delhi High Court in National Productivity Council v. S. N.
Kaul(') by the Punjab & Haryana High Court in Shree Gopal Mills
Ltd. v. The State of Haryana('').
The view of the High Court of
Mysore in P. lanardhana Shetty v. Union of India(") to the contrary
is not correct.
Coming now to the other points in the case : the decisions of thi;
·Court establish clearly that when a workman is dismissed as a result·
of a domestic enquiry the only power which the Labour Court has is
to consider whether the enquiry was proper and if it was so no further
question arises. If the enquiry was not proper the employer and the
employee had to be given an opportnuity to examine their witnesses.
It is not the duty of the Enquiry Officer in this case to seek permission
of the police constable's superiors. It was the respondent's duty to
have him properly summoned.
He did not even apply to the Enquiry
Officer requesting him to seek the permission of the police constable's
superiors. It is therefore wrong on the part of the Labour Court to
have held that the enquiry against the respondent was not a proper
enquiry.
Once this conclusion is reached there was no room for the
summonin!l and examination of the police constable by the Labour
Court. The question regarding the jurisdiction exercised by an Industrial Tribunal in respect of a domestic enquiry held by the management
against a worker has been elaborately considered by this Court in its
decision in D.C.M. v. l,udh Budh Singh(') and the principles that
emerge out of the earlier decisions of this Court have been set out in
that decision.
The decision of this Court in Workmen v. Firestone
Tyre & Rubber Co.(1) also sets out the principles that emerge from
the earlier decisions.
In Tata Oil Mills Co. Ltd. v. Its Workmen(')
it was argued that where the employee is unable to lead his evidence
before the domestic Tribunal for no fault of his own, an opportunity
should be given to him to vrove his case in proceedings before the
Industrial Tribunal.
This Court held that this contention was not well
founded. It was pointed out that the Enquiry Officer gave the employee
amole oooortunitv to lead his evidence and the enquiry had been fair.
It was also pointed out that merely because the witnesses did not appear
(I) !. L. R. 1948 2 Cal 209.
(2) [1966] IL. L. J. 430.
(l) [1969] II L. L. J. 186.
(4) [1968] Lab.T.C. 1259.
'(5) [1970] Il L. L. J. 738.
(6) [19721 3 S.C.R. 29.
(7) [I 973] 3 S. C. R. 587.
(8) [19641 7 S. C. R. 5551.
A
..
ll
c
D
E
F
-
G
I
~
I
H
•
. ,,
••
-
RUSTOM & HORNSBY LTD. v. T. B. KADAM (Alagiriswami, !.)
125.
A
to give evidence in support of the employee's case it could not be held
that he should be allowed to lead such evidence before the Industrial
Tribunal and if such a plea was to be upheld no domestic enquiry
would be effective and in every case the matter would have to be tried
afresh by the Industrial Tribunal.
It was pointed out that findings
B
c
D
E
properly recorded at the enquiries fairly conducted were binding on the
parties, unless it was shown that the said findings were perverse, or
were not based on any evidence.
We are not not able to agree with
the Labour Court in this case that the findings of the domestic enquiry
are either perverse or not based on any evidence .
We therefore come to the conclusion that there was no failure on
the part of the Enquiry Officer to give a reasonable opportunity to the
respondent workman, that the enquiry was fair and the Labour Court
had, therefore, no right to examine the witness on behalf of the workman and based on that evidence to upset the finding arrived at the domestic enquiry.
We also hold that the punishment imposed in the circumstances is one in which the Labour Court cannot interfere.
The·
result is that the appeal will have to be allowed and the award of the
Labour Court set aside.
It, however, appears that the respondent had attained the age of
60 on 11-6-73 and even if he had been in service he would have retired on that dale.
Under an interim order made by this Court on
29-4-1969 the respondent has been paid Rs. 200/- per month as part
of the remuneration payable to him till the hearing and final disposal
of the appeal and such payment bas been made upto-date.
Even if
the respondent had succeeded in this appeal he would not have been
entitled to any payment after 11-6-73.
In view of this appeal being
allowed and the award of the Labour Court being set aside th" respondent will have to repay the money he had received in pursuance of the
order of this Court.
The appellant has agreed that it would not take
any steps to recover from the respondent the payments already made·to
him.
There will be no order as to costs.·
V.P.S.
Appeal allowed.