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1961 Supreme(All) 67
IN THE HIGH COURT OF ALLAHABAD
V. G. Oak and K. Prasad, JJ.
BRITISH INDIA CORPORATION LTD. - Appellant
Versus
LABOUR APPELLATE TRIBUNAL - Respondents
. . Of .
Decided On : 04/28/1961
Industrial adjudicators cannot interfere with private contracts between employers and employees unless it is necessary to prevent unfair practice or victimization, or to protect legitimate trade union activities.
Headnote:
INDUSTRIAL DISPUTE - TERMINATION OF SERVICE - WRONGFUL DISCHARGE - AWARD OF ADJUDICATOR QUASHED - INDUSTRIAL DISPUTES ACT, 1947, SECTION 10(1)(D).
Fact of the Case:
The petitioner, British India Corporation Limited, terminated the services of respondent 5, M. A. Khan, on the ground of suspicion of dishonest action. The State Government referred the industrial dispute to an adjudicator, who held that the discharge was unjustified and directed the petitioner to pay Khan salary for sixteen months. The Labour Appellate Tribunal dismissed the petitioner's appeal.
Finding of the Court:
The court held that the adjudicator erred in interfering with the order terminating Khan's services, as the agreement between the parties provided for termination of employment with one month's notice or payment of one month's salary in lieu of notice. The court found that the order of discharge was in accordance with the agreement and did not cast any slur on Khan's character or competence.
Issues: Whether the adjudicator was justified in interfering with the order terminating Khan's services, given the agreement between the parties.
Ratio Decidendi: The court held that the adjudicator exceeded his powers by interfering with the private contract between the parties, as the Industrial Disputes Act, 1947, Section 10(1)(d), only empowers adjudicators to modify contracts in the interest of industrial peace, to protect legitimate trade union activities, and to prevent unfair practice or victimization. In this case, there was no evidence of any unfair practice or victimization, and the agreement between the parties was lawfully executed.
Final Decision: The court quashed the adjudicator's award and allowed the petition, holding that the termination of Khan's services was not wrongful.
( 1 ) THIS writ petition arises out of an industrial dispute. The British India Corporation Limited, kanpur, are the petitioner.
( 2 ) M. A. Khan, who is respondent 5 in this writ petition, was an employee of the petitioner. On 26 april 1954, the general manager of the petitioner-company issued a notice to M. A. Khan terminating his services with effect from 27 April 1954. The employee was to he given salary for one month in lieu of notice. M. A. Khan complained that the termination of his services was wrongful. The State Government referred the industrial dispute to Sri S. N. Saxena, adjudicator for arbitration. He gave an award on 10 June 1955 holding that M. A. Khans discharge was unjustified. The adjudicator, therefore, directed the petitioner to pay M. A. Khan salary for sixteen months. An appeal filed by the petitioner was dismissed by the Labour Appellate tribunal of India, Lucknow. The present writ petition is directed against the appellate order of the Labour Appellate Tribunal and against Sri Saxenas award.
( 3 ) WE heard Sri R. S. Pathak for the petitioner. M. A. Khan filed a counter-affidavit sometime back. But today he is not represented before us. The learned standing counsel stated that he did not wish to oppose the writ petition.
( 4 ) WE understand that the Labour Appellate Tribunal no longer sits at Lucknow. The question, therefore, arose whether we can Issue a writ to the Labour Appellate Tribunal. Sri Pathak stated that he did not now wish to get the Labour Appellate Tribunals order quashed. The petitioner would be satisfied, if the adjudicators award is quashed. We, therefore, considered the question whether it is possible to quash the adjudicators award without quashing the Labour Appellate tribunals order passed in appeal. As explained by a Special Bench of the Calcutta High Court in east India Commercial Limited v. Collector of Customs and Anr. , AIR 1960 Cal 1, 64 CWN 256, It is possible to quash the adjudicators award without quashing the Labour Appellate Tribunals order. We shall, therefore, confine ourselves to the validity of sri Saxenas award.
( 5 ) THE question referred for arbitration was whether termination of service of M. A. Khan was wrongful or unjustified. There was a contract of service between the parties. Annexure A to the petition is a copy of that contract. Clause (4) of the agreement between the parties provided that the employee would be liable to be discharged forthwith without notice, if the branch has any suspicion of any dishonest action, etc. , against the employee. Clause (5) of the agreement runs thus: (5) that your employment may be terminated by the branch at any time by one months notice in writing, or by the payment of one months salary in lieu of notice. . . . Annexure B to the petition is a copy of the order of discharge, dated 26 April 1954. It appears that the order of discharge was passed as provided by Clause (5) of the agreement between the parties. Prima facie the order of discharge, dated 26 April 1954 is lawful.
( 6 ) THE adjudicator considered whether the order of discharge could be held unjustified, in spite of the agreement between the parties. In support of his view that the discharge was wrongful, the adjudicator relied upon two circumstances. The first circumstance was that, the management entered into the agreement with Khan about ten months after he joined the service. Khan could not refuse to sign the agreement, for fear of loss of employment. The second ground given by the adjudicator was that Khan was discharged without any charge or enquiry. The question is whether for, the reasons given by the adjudicator, the order of discharge can be said to be wrongful.
( 7 ) THE question how far industrial authorities can interfere with private contracts was discussed by their lordships of the Supreme Court in Rohtas Industries, Ltd. v Brijnandan Pandey and Ors. 1956--II L. L. J. 444 their lordships observed on p. 419: the Courts reach their limit o
