# SUPREME COUI~T REPORTS [1960(1)] PHULBARI TEA ESTATE v. ITS WORKMEN

- **Citation:** [1960] 1 S.C.R. 32
- **Court:** Supreme Court of India
- **Decided:** 1960
- **Case number:** Civil Appeal No. 205of1958
- **Bench:** B. P. Sinha, P. B. Gajendragadkar, K. N. w ANCHOO
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/supreme-coui-t-reports-1960-1-phulbari-tea-estate-v-its-workmen-1760
- **Pages:** 8

## Headnote

Industrial Dispute-Tribunal-Question of competency-When
can be raised-Dismissal of u1orkmen on enqu£ry-Rule of natural
justice-Defect in procedure, if curable -Industrial Disputes Act
(I4 of r947), s. 7.
Two workmen Das and another were arrested by the police
on the complaint of the appellant company for an alleged theft.
The manager held an enquiry and dismissed Das from service for
gross misconduct.
At the enquiry, Das stated that he had nothing to say and
knew nothing about the theft. Certain persons whose statements
had been recorded by the manager at the investigation stage in
the absence of Das, were present at the said enquiry. Das was
told to ask those persons what they had to say, though he was
neither supplied with the copies of the statements made by them
nor the statements were read over to him at the time of the
enquiry. Das replied that he would not put any questions to
them. Thereupon these witnesses were asked whether the evidence they had given before the manager was correct, and if not,
they were at liberty to amend it, to which they replied that the
evidence they had given was correct.
Some time later, the Magistrate on the final report of the
police discharged Das. Thereafter the Union had the matter
referred to the Tribunal.
Before the Tribunal the company produced only the statements of the witnesses but did not produce
the witnesses themselves. The Tribunal found in favour of the
workman.
The co1npany came up in appeal by special leave to
the Supreme Court, where, for the first time it raised the question of the qualification and competency of the one member
Tribunal under s. 7 of the Act.
Held, that the question whether the Tribunal was a competent one under s. 7 of the Industrial Disputes Act, 1947, prior to
the amending Act 36 of 1956, must be raised before the Tribunal
itself as it was a matter of investigation and could not be raised
for the first time before the Supreme Court.
Held further, that the basic principle of natural justice in an
enquiry was that the opponent must be given the opportunity of
questjoning the witnesses after knowing in full what they had to
state against him.
The witnesses on whom the party relied
should generally be examined in the presence of the opponent
and he must also be informed about the material sought to be
used against him, and given an opportunity to explain it.
. '
...
-
S.C.R.
SUPREME COURT REPORT8
33
Union of India v. T. R. Varma r1958l S.C.R. 499, followed.
x959
New Prakash Transport Co. Ltd. ,.. ).'cir- S1110arna Transport Phulbari Tea Estate
Co. Ltd. [1957] S.C.R. 98. referred to.
v.
Held, further, that if there was defect in the conduct of thC'
Its Workn,.n
enquiry by the employer it could be cured if all the relevant
evidence including the witnesses who were not examined in the
presence of the workman were produced before the Tribunal.
thereby giving the party an opportunity to cross-examine them,
and leaving it to the Tribnnal to consider tlw evidence and
decide the case on merits.
M/s. Sasa M-usa Sugar Worlls (P) Ltd.''· ShobratiKhan C.As.
~os. 746 & 747 of r957 decided on zg-4-1959, followed.

## Text

I959
May6.
32
SUPREME COUI~T REPORTS
[1960(1)]
PHULBARI TEA ESTATE
v.
ITS WORKMEN
(B. P. SINHA, P. B. GAJENDRAGADKAR and
K. N. w ANCHOO, JJ.)
Industrial Dispute-Tribunal-Question of competency-When
can be raised-Dismissal of u1orkmen on enqu£ry-Rule of natural
justice-Defect in procedure, if curable -Industrial Disputes Act
(I4 of r947), s. 7.
Two workmen Das and another were arrested by the police
on the complaint of the appellant company for an alleged theft.
The manager held an enquiry and dismissed Das from service for
gross misconduct.
At the enquiry, Das stated that he had nothing to say and
knew nothing about the theft. Certain persons whose statements
had been recorded by the manager at the investigation stage in
the absence of Das, were present at the said enquiry. Das was
told to ask those persons what they had to say, though he was
neither supplied with the copies of the statements made by them
nor the statements were read over to him at the time of the
enquiry. Das replied that he would not put any questions to
them. Thereupon these witnesses were asked whether the evidence they had given before the manager was correct, and if not,
they were at liberty to amend it, to which they replied that the
evidence they had given was correct.
Some time later, the Magistrate on the final report of the
police discharged Das. Thereafter the Union had the matter
referred to the Tribunal.
Before the Tribunal the company produced only the statements of the witnesses but did not produce
the witnesses themselves. The Tribunal found in favour of the
workman.
The co1npany came up in appeal by special leave to
the Supreme Court, where, for the first time it raised the question of the qualification and competency of the one member
Tribunal under s. 7 of the Act.
Held, that the question whether the Tribunal was a competent one under s. 7 of the Industrial Disputes Act, 1947, prior to
the amending Act 36 of 1956, must be raised before the Tribunal
itself as it was a matter of investigation and could not be raised
for the first time before the Supreme Court.
Held further, that the basic principle of natural justice in an
enquiry was that the opponent must be given the opportunity of
questjoning the witnesses after knowing in full what they had to
state against him.
The witnesses on whom the party relied
should generally be examined in the presence of the opponent
and he must also be informed about the material sought to be
used against him, and given an opportunity to explain it.
. '
...
-
S.C.R.
SUPREME COURT REPORT8
33
Union of India v. T. R. Varma r1958l S.C.R. 499, followed.
x959
New Prakash Transport Co. Ltd. ,.. ).'cir- S1110arna Transport Phulbari Tea Estate
Co. Ltd. [1957] S.C.R. 98. referred to.
v.
Held, further, that if there was defect in the conduct of thC'
Its Workn,.n
enquiry by the employer it could be cured if all the relevant
evidence including the witnesses who were not examined in the
presence of the workman were produced before the Tribunal.
thereby giving the party an opportunity to cross-examine them,
and leaving it to the Tribnnal to consider tlw evidence and
decide the case on merits.
M/s. Sasa M-usa Sugar Worlls (P) Ltd.''· ShobratiKhan C.As.
~os. 746 & 747 of r957 decided on zg-4-1959, followed.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
205of1958.
Appeal by special leave from the judgment and
order dated October 23, 1956, of the Industrial Tribunal, Assam in Reference No. 16 of 1956.
M. 0. 8etalvad, Attorney-General for Indio., S. N .
.Zl!ukherjee and B. N. Ghosh, for the appellant.
0. B. A.garwala and K. P. G~tpta., for the respondents.
1959. l.\fay 6.
The Judgment of the Court was
delivered by
WANCHOO J.-This is an appeal by special leave in
an .industrial matt.er. The appellant is the Phulbari
Tea Estate (hereinafter called the company). The
case relates to the dismissal of one workman namely,
B. N. Das (hereinafter called Das), which had been
taken up by the Assam Chah Karmchari Sangh, which
is a registered trade union. A reference was made by
the Government of Assam on March 8, 1956, to the
Industrial Tribunal on the question whether the dismissal of Das was justified; and if not, whether he
was entitled to reinstatement with or without compensation or any other relief in lieu thereof. Das was
dismissed by the company on March 12, 1955. The
charge against him was that on the night of February
6/7, 1955, he along with one Samson, also an employee
of the company, committed theft of two wheels complete with tyres and tubes from the company's lorry,
5
W anchoo .f.
34
SUPREME COURT REPORTS [1960(1)]
'959
which amounted to gross misconduct under the Stand-
-. -
ing Orders. The case was reported to the police and
Phulbari Tea Estate Das as well as Samson were arrested. Das remained
Its w;;knien
in jail up to February 25, 1955, when he was released
on bail.
He reported for duty on February 28 ; but
Wanchoo J.
the manager suspended him for ten days from March 1.
Thereafter, he was served with a charge-sheet on
March 10, 1955, asking him to show cause why he
should not be dismissed for gross misconduct as mentioned above. He gave a reply on March 11, that as
the case was sub judice in the criminal court, the
question of dismissal did not arise at that stage and
the allegations against him would have to be proved
in the court. On March 12, the manager held an
enquiry, which was followed by dismissal, on that very
day. We shall mention later in detail what happened
at the enquiry, as that is the main point which requires
consideration in this appeal. To continue the narrative, however, the police submitted a final report and
the magistrate discharged Das on March 23, 1955.
Thereafter, his case was taken up by the union and
eventually reference was made to the Tribunal on
March 8, 1956. The Tribunal came to the conclusion
that the dismissal of Das was not justified on the
ground of proper procedure not having been followed
and also for want of legal evidence. It went on to
say that normally Das would have been entitled to
reinstatement but in the peculiar circumstances of this
case it was of opinion that he should be granted the
alternative relief for compensation. Consequently, it
ordered that Das would be entitled to his pay and
allowances from February 28, to March 11, 1955 and
full pay and allowances from March 12, till the date of
payment. It also ordered that he would be entitled
to fifteen day's pay for every completed year of service
along with all benefits that accrued to him till the date
of final payment. This award was given on October
23, 1956, and was in due course published and came
into force.
Thereupon, there was an application to
this Court for special leave to appeal, which was
granted; and that is how the matter has come up
before us.
,
....
....
, .
S.C.R.
SUPREME COURT REPORTS
35
Two points have been urged before us on behalf of
z959
the company, namelyPh lb
· T
E 1 1
h T 'b
l
t t 'b
l
u an ea
s a e
(1) t e
r1 una was not a competen
r1 una
v.
under s. 7 of the Industrial Disputes Act, No. XIV of
Its Workmen
1947 (hereinafter called the Act) as it then stood; and
(2) the award of the Tribunal is not sustainable
wa .. choo J.
in law as it shows as if the Tribunal was sitting in
appeal on the enquiry held by the company, an<l this
it was not entitled to do.
Re. (1) •
Reference in this case was made on March 8, 1956,
before the amending Act No. XXXVI of 1956 came
into force.
At the relevant time, therefore, s. 7
of the Act, which provided the qualifications of a
tribunal, required that where it was one member tribunal, he (a) should be or should have been a Judge
of a High Court, or (b) should be or should have been
a district judge, or (c) should be qualified for appointment as a Judge of a High Court. The contention is
that Shri Hazarika who wa.s the tribunal in this case,
was not qualified under this provision. This contention was not raised before the Tribunal and therefore
the facts necessary to establish whether Shri Hazarika
was qualified to be appointed as a tribunal or not were
not gone into.
Shri Hazarika, was an Additional
District & Sessions Judge, Lower Assam Division, at
the time the reference waa made. Assuming that he was
not qualified under clause (a) above, he might well
have bPen qualified under clause (b}, if he had been
a District Judge elsewhere before he became an Additional District Judge in this particular division.
Further even if he had never been a District Judge,
he might be qualified for appointment as Judge of a
High Court. These matters needed investigation and
were not investigated because this question was not
raised before the Tribunal. In the circumstance, we
are not prepared to allow the company to raise this
question before us for the first time and so we reject
the contention under this head.
Re. (2).
The Tribunal gave two reasons for holding that
the dismissal was unjustified;
namely-(1) that
36
SUPREME COURT ltEPORTS
[1960(1))
z959
proper procedure had not been followed, and (2) that
Ph Iba -:--T E 1 1 legal evidence was wanting. So far as the second
•
"
ea sae
•
d h
. "
.
h
...
v.
reason IS concerne , t ere IS .orce m t e critJCism on
Its Workmen
behalf of the company that the Tribunal had proceeded as if it was sitting in appeal on the enquiry held
Wamhoo J.
by the company. But considering that the Tribunal
was also of opinion that proper procedure had not
been followed we have still to see whether that finding of the Tribunal justifies the conclusion at which
it arrived. We may in this connection set out in
detail what happened at the enquiry on March 12,
as appears from the testimony of the manager
and the documents produced by him before the Tribunal. They show that when the enquiry was held
on March 12, certain persons, whose statements
had been recorded by the manager in the absence of
Das during the course of what may be called investigation by the company were present. The first question that Das was asked on that day was whether he
had anything to say in connection with the disappearance of two lorry wheels and tyres from the garage.
He replied that he had not.hing to say, adtling that
he knew nothing about the theft. He was then told
that the people who hatl given evidence aga.inst him
were present a.nd he should ask them what they had
to say.
He replied that he would put no questions to
them. Then the witnesses present were asked whether the evidence they had given before the managei:
was correct or not ; and if that was not correct, they
were at liberty to amend it. They all replied that the
evidence they had given before the manager was
correct. This was all that had happened at the enquiry ou March 12,
11nd thereafter the orcler of
dismissal was passed by the manager. The manager's
testimony shows that the wit.nesses who were present
at the enquiry were not examined in the presence of
Das. It also does not. show that copies of the statements made by the witnesses were supplied to Das
before he was asked to question them. Further his
evidence does not show that t.he statements which had
been recorded were read over to Das at the enquiry
before he was asked to question the witnesses. It is
-
..
..
, ..
S.C.R.
SUPREME COURT REPORTS
37
true that the statements which were recorded were
x959
Produced on behalf of the company before the Tri- Ph lb -:-T E
.
d
d
h
u ari ea
stat•
bunal; but the witnesses were not pro uce
so t at
v.
they might be cross-examined even at that stage on
Its Workmen
behalf of Das.
The question is whether in these
circumstances it can be said that an enquiry as
Wamhoo J.
required by principles of natural justice was made in
this case.
We may in this connection refer to Union of India
v. T. R. Varma (1).
That was a case relating to the
dismissal of a public ;;ervant and the question was
whether the enquiry held under Art. 311 of the
Constitution of India was in accordance with the principles of natural justice. This Court, speaking through
Venkatarama Ayyar J. observed as follows in that
connection at p. 507 :-
" Stating it broadly and without intending it to
be exhaustive, it mav be observed that rules of natural justice require th.~t a party should have the opportunity •>f a<ldueing all relevant evidence on which he
relies, that the evidence of the opponent should bC'
taken in his presence, and tha.t he should be given the
opportunity of cro::;s,examining the witnesses exa.mined by that party, and that no materials should be
relied on agairnit him without his being given an
opportunity of explaining them."
It will he immediately clear that these principles
were not followed in the enquiry which took place
on March 12, inasmuch as the witnesses on which
the company relied were not examined in the presence
of Das. It is true that the principles laid down in
that case are not meant to be exhaustive. In another
case New Prakf:tsh Transport Co. Ltd. v. New S'uwarna
Transport Co. Ltd. ("), this Court held that " rule;; of
natural justice vary \vith the varying con;;titutions of
statutory bodies and the rules prescribed by the legislature under which they have to act, and the question whether in a particular case they have been
contravened must be judged not by any preconceived notion of what they may be but in the light of
the provisions of the relevant Act". In that case, it
(I) (1958) S.C.R. 499,
(~) (1957) S.C.R. 98.
38
SUPREME COURT REPORTS
[1960(1)]
z959
was held that "the reading out of the contents of the
P
-:--T E
police report bv the Chairman at the hearing of the
hulbari ea
state
J
.
.
,
v.
appeal was enough comphance with the rules of natuIts workmen
ral justice as there was nothing in the rules requiring
a copy of it to be furnished to any of the parties."
Wanehoo J.
That was, however, a case in which the police officer
making the report was not required to be crossexamined; on the other hand, the party concerned was
informed about the material sought to be used against
him and was given an opportunity to explain it. The
narration of facts as to what happened on March 12,
which we have given above, shows that oven this was
not done in this case, for there is no evidence that.
copies of the statements of witnesses who had given
evidence against Das were supplied to him or even
that the statements made by the witnesses to the
manager were read out, in extenso to Das before he
was asked to question them. In-these circumstances
one of the basic principles of natural justice in an
enquiry of this nature was not observed, and, therefore, the finding of the Tribunal that proper procedure
had not been followed is justified and is not open to
challenge.
The defect in the conduct of the enquiry could have
been cured if the company had produced the witnesses
before the Tribunal and given an opportunity to Das
to cross-examine them there. In Messrs. Basa Musa
Sugar Works (Private) Ltd. v. Shobrati Khan (1), we had
occasion to point out that even where the employer
did not hold an enquiry before applying under s. 33 of
the Act for permission to dismiss an employee, he
could make good the defect by producing all relevant
evidence which would hare been examined at the
enquiry, before the tribunal, in which case the tribunal
would consider the evidence and decide whether permission should be granted or not. The same principle
would apply in case of adjudication under s. 15 of the
Act, and if there was defect in the enquiry by the
employer he could make good that <:J.efect by producing
necessary evidence before the tribunal. But even that
was not done in this case, for all that the company did
(I) c. As. Nos. 746 & 74'1of1957 decided on 29-4-1959.
..
'
-
.. ..
I
•
S.C.R.
SUPREME COURT REPORTS
39
before the Tribunal was to produce the statements
x959
recorded by the manager during what we have called Phulbari Tea Estati
investigation. This left the matters where they were
v.
and Das had never an opport.unity of questioning the
Its Workmen
witneRRes after knowing in full what they had stated
against, him. In these circumstances we are of opinion
that the fiw.ling of t.he •rrilmnal that the enquiry i11
this case was uot proper is correct and must Htand.
'Ve therefore dismiss tlw appeal.
We should,
howeYer, like to make it elear tlrnt the order of tlw
Tribunal fixing grant of compcnsa,tion till the date of
payment must be taken to be limited to the sum of
Rs. 11,125, which has been deposited in this Court in
pursuance of this Court's order of April 22, 1957 and
Das will not be entitled t.o anything more, as further
stay of payment was pursuant to the order of this
Court. In the circumstances we are of opinion that
the parties should hear their own eosts of thits Court.
Appeal dismis8ed.
THE I.ORD KRISHNA SUGAR MILV3 LTD.,
AND ANOTHER
v.
THE UNION OF INDIA AND ANOTH"ll~R
(and connected petition)
(B. l:'. SINHA, .J AFER IMAM, ,J. L. KAP(TR, A. K. SARKAR,
SUH"HA RAO AND M. HIDAYATULLAH, ,TJ.)
Constitution--Fundami:ntal Rights-Rcsirictions on-Reasonableness, relei·anf. considerations for fudging-Enactment obliging
sugar manufacturers to s11.pply sugar for export ,,f loss-Notijicat-ion
tinder another enactment increasing price of sugar for internal sale
for recouping loss--Whether can
be tulwn into considerationDiscrimination-Sitgar Export Promotion Act, I958 (30 of I958),
ss. 5, 6, 7, 8, and 9-Constifation of India, Arts. I4 and I9Essential Commodities Act, I955 (IO of I955), s. 3--Sugar (Control)
Wanchoo J.
1959
May 6.
, •
Order, I955. cl. 5·
The petitioners challenged the constitutionality of the Sugar
Export Promotion Act, 1958, which was enacted for the purpose
of exporting sugar with a view to earning foreign exchange. The
impugned Act imposed the following restrictions on the owners of