Very Important point
(Per Majority of 4 : 1)
There is no conflict of decisions of Supreme Court in Shambhu Nath Goyal v. Bank of Baroda and Ors., (1984(1) SCR 85) and Rajendra Jha v. Labour Court, 1985(1) SCR 544 and law laid down in Shambhu Nath Goyal case is correct law on the point of right of the management to lead evidence/additional evidence before Labour Court or Industrial Tribunal in reference under Section 10 or proceeding under Section 33(2)(b) of Industrial Disputes Act, 1947 i.e. the management has to seek leave of the Court/Tribunal in the written statement itself to lead additional evidence to support its action in the alternative and without prejudice to its rights and contentions.

Headnote:(i) Industrial Disputes Act, 1947-Sections 10 and 33-Two decisions of Supreme Court (1) Shambhu Nath Goyal v. Bank of Baroda & Ors. and (2) Rajendra Jha v. Labour Court-Whether there is conflict in these decisions? (No) (By Majority of 4 : 1).
       (Per Santosh Hegde and S.P. Bharucha, JJ.)
       Thus it is seen from the above observations of the Court in Rajendra Jha s case that same is decided on the facts of the said case without laying down any principle of law nor has the Court taken any view opposed to Shambu Nath Goyal s case. Therefore, having considered the two judgments, we are of the opinion that there is no conflict in the judgments of this Court in the cases of Shambu Nath Goyal and Rajendra Jha. (Para 4)
       (Per Shivaraj V. Patil and V.N. Khare, JJ.)
       After going through the draft judgment prepared by N.Santosh Hedge J., we respectfully agreed with the same. Having gone through the draft judgment prepared by Y.K. Sabharwal, J., received later, we felt the necessity of adding the following few lines. (Para 18)
       (Dissenting opinion of Y.K. Sabharwal, J.)
       Held : In view of above, I am of the opinion that the Shambu Nath Goyal s case (supra) does not lay down correct law. The law has been correctly laid in Shankar Chakravarti s case and Rajendra Jha s case. The correct procedure is as stated in Shankar Chakravarti s case subject to further safeguards for workman as already indicated above. (Para 41)
       (ii) Industrial Disputes Act, 1947 -Sections 10 and 33(2)(b)-Right of a managment to lead evidence/additional evidence before Labour Court/Industrial Tribunal in Justification of its decision (on the basis of domestic enquiry) by them-Differences of opinion in regard to timings of making such applicatiotn-Shambhu Nath Gopal s case holding that it must be availed of by the employer by making a proper request at the time whne it files its statement of claim or written statement or makes on application seeking either permission to take certain action or seeking approval of action taken by it-Shankar Chakravarti s case and Rajendra Jha case holding it could be taken before the proceedings are closed-Which view is correct? (As per majority former).
       (Per Santosh Hege, J.) :
       Held : Keeping in mind the object of providing an opportunity to the management to adduce evidence before the Tribunal/Labour Court, we are of the opinion that the directions issued by this Court in Shambu Nath Goyal s case need not be varied, being just and fair. There can be no complaint from the management side for this procedure because this opportunity of leading evidence is being sought by the management only as an alternative plea and not as an admission of illegality in its domestic enquiry. At the same time, it is also of advantage to the workmen inasmuch as they will be put to notice of the fact that the management is likely to adduce fresh evidence, hence, they can keep their rebuttal or other evidence ready. This procedure also eliminates the likely delay in permitting the management to make belated application whereby the proceedings before the Labour Court/Tribunal could get prolonged. In our opinion, the procedure laid down in Shambu Nath Goyal s case is just and fair. There is one other reason why we should accept the procedure laid down by this Court in Shambu Nath Goval s case. It is to be noted that this judgment was delivered on 27th of September, 1983. It has taken note of almost all the earlier judgments of this Court and has laid down the procedure for exercising the right of leading evidence by the management which we have held is neither oppressive nor contrary to the object and scheme of the Act. This judgment having held the field for nearly 18 years, in our opinion, the doctrine of stare decisis require us to approve the said judgment to see that a long standing decision is not unsettled without strong cause. For the reasons stated above, we are of the opinion that the law laid down by this Court in the case of Shambu Nath Goyal v. Bank of Baroda & Others (supra) is the correct law on the point. (Paras 14, 15 and 16)
       Held : In various decisions rendered by this Court, it has been held that such a request can be made before the proceedings are closed the Labour Court/Tribunal. There is no compelling reason to limit the exercise of discretion by the Labour Court/Industrial Tribunal to examine such a prayer on its own merit and decline it if not considered to be bona fide and made to delay the proceedings and to wreck the morale of the workman and compel him to surrender, to use the language of, Shambu Nath Goya1 s case (supra). Ordinarily such a request when made immediately after the decision of the preliminary issue deserves to be allowed as held in Shankar Chakrpvarti s case prior to its elaboration by Justice Desai in Shambu Nath Goyal s case. If such a request is made soon after the enquiry is held to be invalid and the Labour Court holds it to be bona fide and further holds that no prejudice would be caused to the workman, there is no reason sti1l to shut the employer when it has been rightly held, time and again, that the employer has a right to adduce evidence before the Labour Court in case of no enquiry or invalid enquiry. In such proceedings, pleadings do not deserve to be strictly construed. For the foregoing reasons, it. is not possible to hold that if the employer does not express his desire to lead additional evidence in reply to statement of claim in proceedings under Section 10 or when an application is filed for approval under Section 33 (2) b) of the Act, the employer cannot be allowed to exercise option at a later stage of the proceedings by making an application for the purpose. The employer s request, when made before close of proceedings, deserves to be examined by the Labour Court/Tribunal on its own merits and it goes without saying that the Labour Court/Tribunal will exercise discretion on we11 settted judicial principles and would examine the bona fides of the employer in making such an application. The doctrine of stare decisis has also no applicability. In decisions earlier to Shambu Nath Goyal s case (supra), the consistent view was that the prayer for adducing evidence could be made before the close of proceedings. Soon after Shambu Natb Goyal s case, in Rajenidra Jha s case, similar view was expressed. The procedure laid down in Shambu Nath Goyal s case would not be just, fair and reasonable both to the employer and the workman. The said decision has not acquired the status attracting the doctrine of stare decisis. Shambhu Nath Goyal represents highly technical view. Considering that we are considering the rule of convenience, expediency and prudence and there is no statutory prohibition, the procedure which promotes the cause of both employer and workman deserves to be laid down. In view of above, I am of the opinion that the Shambu Nath Goyal s case (supra) does not lay down correct law. The law has been correctly laid in Shankar Chakravarti s case and Rajendra Jha s case. The correct procedure is as stated in Shankar Chakravarti s case subject to further safeguards for workman as already indicated above. (Paras 38, 39, 40 and 41)
       (Per Shivaraj V. Patil, J. agreeing with Santosh Hegde, J.)
       Held : After going through the draft judgment prepared by N.Santosh Hedge J., we respectfully agreed with the same. Having gone through the draft judgment prepared by Y.K. Sabharwal, J., received later, we felt the necessity of adding the following few lines. The question as to at what stage the management should seek leave of the labour court / tribunal to lead evidence /additional evidence justifying its action is considered in the draft judgment of Hegde J. and not the power of the court / tribunal requiring or directing the parties to produce evidence if deemed fit in a given case having regard to the facts and circumstances of that case. As per Section 11(1) of the Industrial Disputes Act, 1947 (for short, the Act ) a court / tribunal can follow the procedure which it thinks fit in the circumstances of the case subject to the provisions of the Act and the Rules framed thereunder and in accordance with the principles of natural justice. Under Section 11(3), labour court / tribunal and other authorities mentioned therein have the same powers as are vested in a civil court under the Code of Civil Procedure when trying a suit in respect of certain matters which include enforcing the attendance of any person and examining him on oath and compelling the production of documents and material objects. It is consistently held and accepted that strict rules of evidence are not applicable to the proceedings before Labour Court/Tribunal but essentially the rules of natural justice are to be observed in such proceedings. Labour Courts/Tribunals have power to call for any evidence at any stage of the proceedings if the facts and circumstances of the case demand the same to meet the ends of justice in a given situation. We reiterate that in order to avoid unnecessary delay and multiplicity of proceedings, the management has to seek leave of the Court/Tribunal in the written-statement itself to lead additional evidence to support its action in the alternative and without prejudice to its rights and contentions. But this should not be understood as placing fetters on the powers of the Court/Tribunal requiring or directing parties to lead additional evidence including production of documents at any stage of the proceedings before they are concluded if on facts and circumstances of the case it is deemed just and necessary in the interest of justice. (Paras 18, 19 and 20)
       (iii) Industrial Disputes Act, 1947 —Section 10—Respondent charge sheeted for misconduct—Domestic enquiry—Dismissal—Reference under Section 10—Preliminary issue about validity of domestic enquiry—Labour Court held domestic enquiry was not fair—Application filed by management to adduce evidence to prove charge of misconduct—Refused because of Shambhu Nath Goyal’s case—Order of dismissal set aside—Writ to High Court—Also dismissed—SLP to Supreme Court—Appeal whether be allowed? (Yes, for different reasons).
       (Per Santosh Hegde, J.) (Shivaraj V. Patil, J. agreeing) :
       Held : In the present case, the appellant employer did not seek permission to lead evidence until after the Labour Court had held that its domestic enquiry was vitiated. Applying the aforestated principles to these facts, we are of the opinion that the High Court has rightly dismissed the writ petition of the appellant, hence, this appeal has to fail. The same is dismissed with costs. (Para 17)
       (Per Y.K. Sabharwal, J.)
       Held : Despite above conclusions, in so far as the present appeal is concerned, considering that the award was made by the Labour Court more than 16 years back and also that the employee has already retired as we are informed, it would not be appropriate to interfere in exercise of power under Article 136 of the Constitution. In this view, I would dismiss the appeal leaving the parties to bear their own costs. (Para 42)

JUDGMENT

Santosh Hegde, J.—(On his own behalf and also on behalf of S.P. Bharucha, J.)

This appeal is referred to a Bench of Five Judges based on the following order made by a Bench of two Judges of this Court.

“In view of the conflict of decisions of this Court in Shambhu Nath Goyal v. Bank of Baroda & Others, (1984(1) SCR 85) and Rajendra Jha v. Labour Court, (1985(1) SCR 544), we are referring this matter to a larger Bench which has to be a Bench of more than three Judges. Mr. Rao, learned counsel appearing for the respondents, states that there is no conflict in the decisions. According to us, that submission is not correct. Hence, we are referring this to a larger Bench.”

2. It is seen from the above order that the learned counsel appearing for the respondents had contended that there is no conflict between the two judgments referred to in the said order. However, the Bench thought otherwise. Since it is again contended now before us on behalf of the respondents that there is no conflict between the said judgments, we will first examine that aspect of the case.

3. In Shambu Nath Goyal v. Bank of Baroda & Others1 this Court held :

“The rights which the employer has in law to adduce additional evidence in a proceeding before the Labour Court or Industrial Tribunal either under Section 10 or Section 33 of the Industrial Disputes Act questioning the legality of the order terminating the service must be availed of by the employer by making a proper request at the time when it files its statement of claim or written statement or makes an application seeking either permission to take certain action or seeking approval of the action taken by it.”

(emphasis supplied)

This decision was rendered by the Court while deciding the stage at which the management is entitled to seek permission to adduce evidence in justification of its decision taken on the basis of a domestic enquiry.

4. In Rajendra Jha v. Presiding Officer, Labour Court, Bokaro Steel City, Distt. Dhanbad & Anr.2, though this Court was considering a similar question, we find the Court did not lay down any law contrary to the judgment in Shambu Nath Goyal’s case. A perusal of the judgment of this Court in Rajendra Jha’s case shows that the Court decided the said case on the facts of that case only. This is clear from the following observations of the Court in Rajendra Jha’s case :

“Thus, the order passed by the Labour Court allowing the employers to lead evidence has been accepted and acted upon by the appellant. He has already given a list of his own witnesses and has cross-examined the witnesses whose evidence was led by the employers. It would be wrong, at this stage, to undo what has been done in pursuance of the order of the Labour Court. Besides, the challenge made by the appellant to the order of the Labour Court has failed and the order of the Patna High Court dismissing the appellant’s writ petition has become final”.

Thus it is seen from the above observations of the Court in Rajendra Jha’s case that same is decided on the facts of the said case without laying down any principle of law nor has the Court taken any view opposed to Shambu Nath Goyal’s case. Therefore, having considered the two judgments, we are of the opinion that there is no conflict in the judgments of this Court in the cases of Shambu Nath Goyal and Rajendra Jha.

5. This, however, does not conclude our consideration of this appeal, because on behalf of the appellant reliance is placed on some other earlier judgments of this Court which, according to the appellant, have taken a view contrary to that of Shambu Nath Goyal’s case. Therefore, we consider it appropriate to decide this question with a hope of putting a quietus to the same.

6. Before we proceed to examine this question any further, it will be useful to bear in mind that the right of a management to lead evidence before the Labour Court or the Industrial Tribunal in justification of its decision under consideration by such tribunal or Court

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2001 Supreme(SC) 828

Cases Referred (9)