IMPORTANT POINT
1. Merely because the Enquiry Officer is an employee of Management if could not lead to assumption that he was biased and his finding were liable to be set aside on that score alone.
2. If enquiry is fair and proper, in absence of any allegations of victimization or unfair labour practice, Labour Court has no power to interfere with punishment imposed.

Headnote:(i) LABOUR LAW—Charges of misconduct against workman—Assistant Personnel Manager of respondent establishment conducted enquiry and found charges proved in enquiry—Management imposed punishment by reverting employee as factory clerk—Labour Court found that enquiry was fair and proper and findings were not perverse but still set aside enquiry report on ground that enquiry officer was biased as conducted by employee of corporation—High Court dismissed the writ upholding the order—Division Bench allowed the appeal—Appeal—Merely because Enquiry Officer was employee of Management it could not lead to assumption that he was bound to decide the case in favour of Management—Labour Court’s finding could not be sustained—Bias of enquiry officer has to be specifically pleaded and proved but no such plea was raised before Labour Court—Order of Labour Court setting aside enquiry was unsustainable.
       Held : In Delhi Cloth and General Mills Co. Ltd. V. Labour Court [(1970) 1 LLJ 23] this Court has held that merely because the Enquiry Officer is an employee of the Management it cannot lead to the assumption that he is bound to decide the case in favour of the Management.(Para 11)
       In Saran Motors (P) Ltd. v. Vishwanath [(1964) II LLJ 139] this Court held as follows:
       “It is well-known that enquiries of this type are generally conducted by officers of the employer companies and in the absence of any special bias attributable of a particular officer, it has never been held that the enquiry is bad just because it is conducted by an officer of the employer.” (Para 12)
       Therefore, finding of the Labour Court that enquiry was vitiated because it was conducted by an officer of the Management cannot be sustained.(Para 13)
       The only other ground found by the Labour Court against the enquiry officer is that he made some unnecessary observations and, therefore, he was biased. The plea that enquiry officer was biased was not raised during the enquiry or pleadings before the Labour Court or in earlier proceedings before the High Court. The bias of the enquiry officer has to be specifically pleaded and proved before the adjudicator. Such a plea was significantly absent before the Labour Court. We also note that the Labour Court itself found that the enquiry officer relied on the evidence adduced in the enquiry and its findings were not perverse. After such a finding, even if he has stated some unwarranted observations, it cannot be stated that report is biased.(Paras 14)
       In this case for finding the employee guilty, the enquiry officer relied on the evidence adduced in the enquiry and Labour Court itself found that the findings were not perverse. In such circumstances, the preliminary order of the Labour Court setting aside the enquiry on the ground that enquiry was conducted by an officer of the Management and he had made some observations in the enquiry report which were not warranted in the case is not a vitiating factor and these reasons are not sufficient to set aside the enquiry.(Para 15)
       (ii) Industrial Disputes Act, 1947—Section 11-A—Punishment of reversion—Workman employee working as Manager, Grade II was found guilty of misconduct of causing wilful loss to respondent corporation and reverted as factory clerk—Industrial dispute—If enquiry is fair and proper, in absence of any allegation of victimization or unfair labour practice, Labour Court had no power to interfere with punishment—Section 11-A of the Act was only applicable in case of dismissal or discharge of workman.
       Held : If enquiry is fair and proper, in the absence of any allegations of victimization or unfair labour practice, the Labour Court has no power to interfere with the punishment imposed. Section 11A of the Act gives ample power to the Labour Court to re-appraise the evidence adduced in the enquiry and also sit in appeal over the decision of the employer in imposing punishment. Section 11A of the Industrial Disputes Act is only applicable in the case of the dismissal or discharge of a workman as clearly mentioned in the Section itself. Before the introduction of Section 11A in Indian Iron and Steel Co. Ltd. v. Their Workmen [(1958) SCR 667] this Court held that the Tribunal does not act as a Court of appeal and substitute its own judgment for that of the Management and that the Tribunal will interfere only when there is want of good faith, victimisation, unfair labour practice, etc. on the part of the management. There is no allegation of unfair labour practice, victimisation etc. in this case. The powers of the Labour Court in the absence of Section 11A is illustrated by this Court in Workmen of Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. v. The Management [(1973) 1 SCC 813]. When enquiry was conducted fairly and properly, in the absence of any of the allegations of victimisation or malafides or unfair labour practice, Labour Court has no power to interfere with the punishment imposed by the management. Since Section 11A is not applicable, Labour Court has no power to re-appraise the evidence to find out whether the findings of the enquiry officer are correct or not or whether the punishment imposed is adequate or not. Of course, Labour Court can interfere with the findings if the findings are perverse. But, here there is a clear finding that the findings are not perverse and principles of natural justice were complied with while conducting enquiry.(Para 16)

JUDGMENT

Arijit Pasayat, J.—Challenge in this appeal is to the legality of judgment rendered by a Division Bench of the Kerala High Court setting aside the judgment of a learned Single Judge. By the impugned judgment it was held that the punishment of reversion passed by the disciplinary authority was proper. The concerned workman was in the employment of Kerala State Cashew Development Corporation Ltd. (hereinafter referred to as the Corporation) the respondent No. 1 in this appeal.

2. Background facts in a nutshell are as follows:

The appellant-Union raised an industrial dispute on behalf of one of its member questioning correctness of the order passed by respondent No. 1 reverting the concerned workman Sh. S. Sivasankara Pillai, Manager, Grade II. He was designed as Manager, Grade II in the respondent No.1’s establishment. He was charge-sheeted for misconduct of (1) causing willful loss to the Corporation; (2) habitual breach of rules; (3) making false allegations against superior officers; (4) gross negligence of duty. The essence of allegations raised against him was that by order dated 1.2.1975 he was put in charge of filling and packing section of that factory. On 8.9.1975 he did not arrange work in the filling section and that occasioned considerable loss to the factory. On 11.9.1975 the filling work suffered for about 1½ hours due to his indifferent attitude. On 16.9.1975 no work was done in the filling and packing sections, though the workmen were ready to work. Because of this non-cooperation and indifference, huge loss was caused to the Corporation. Dissatisfied with the explanation submitted by the employee, a domestic enquiry was conducted. The Assistant Personnel Manager of the respondent establishment conducted the enquiry. The enquiry officer submitted a report holding that the charges were proved in the enquiry. After considering the findings of the enquiry officer and seriousness of the charges leveled against the employee, the Management imposed a punishment by reverting the employee as factory clerk, but the salary he was drawing was protected. According to the Respondent-Management, he was not dismissed from service by taking a lenient view, even though the misconducts proved in the enquiry were serious.

3. The appellant-Union filed statement before the Labour Court questioning the enquiry as well as the punishment imposed. The respondent-management in its pleadings raised three preliminary points:

(1)Whether the order of reference is proper and valid.

(2)Whether the enquiry held is proper and valid.

(3)Whether the findings of the enquiry officer are based on legal evidence or whether the same are perverse?

4. The Labour Court at first held that the concerned employee was not a workman as defined under the Industrial Disputes Act, 1947 (in short the ‘Act’) and hence there is no valid industrial dispute. That order was set aside by the Kerala High Court and remanded for reconsideration. After remand the Labour Court in preliminary order found that the employee is a workman as defined under the Act and Industrial dispute is validly raised. With regard to the enquiry, it was found that enquiry was fair and proper and findings are not perverse. But the Labour Court set aside the enquiry report on the ground that the enquiry officer was biased as enquiry was conducted by an employee of the Corporation and he also made certain observations against the workman, which were not necessary for considering whether there was misconduct or not. The relevant portion of the preliminary order is as follows:

“.... The workman challenges the validity of the enquiry. The findings of the enquiry officers are also challenged by him. As such first of all I shall see whether the enquiry held is proper and valid. In the enquiry 4 witnesses are examined on the side of the management and 19 documents were marked. Three documents were marked on the side of the workman. A perusal of the enquiry report and connected papers shows that the w

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2006 Supreme(SC) 513

Cases Referred (3)