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Indian CasesSupreme Court of India

Ashok Leyland Ltd. Represented By … vs The Presiding Officer, Labour … on 3 December, 1987

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Madras High Court

Ashok Leyland Ltd. Represented By … vs The Presiding Officer, Labour … on 3 December, 1987

Equivalent citations: (1989) 1 MLJ 109

Author: M Chandurkar

JUDGMENT M.N. Chandurkar, C.J.

1. The above writ petitions which have been referred to the Division Bench, were directed against an interim award made by the Presiding Officer, Labour Court, Coimbatore, in a dispute which has been referred to the Labour Court. The disputes are: (1) whether non-employment of the concerned workman is justified, if not to what relief he (sic) is entitled and (2) to compute the relief if any awarded in terms of money, if it can be so computed. We are not concerned with the merits of the dismissal at this stage. But it would suffice to state that so far as the three employees in these petitions are concerned, the management has not issued any show cause notice, but straightaway dismissed then by an order dated 18th August, 1981 alleging certain misconduct. Before the Labour Court it was contended on behalf of the workmen that until the charges against them are proved by evidence let in before the Labour Court, the dismissal order must be treated as illegal and invalid and the workmen were, therefore, entitled to wages till such adjudication at the rate at which they were paid wages during employment. A prayer for an interim award was therefore made for the period between the date of dismissal and the date of the petitions on the ground that the workmen were kept unjustly and illegally out of employment.

2. It was the case of the employer that the workmen were dismissed for serious misconduct of rioting and causing bodily harm to other persons within the establishment during the working hours. The employer opposed the prayer for any interim award and was willing to let in evidence, so that the dispute can be finally decided. The Labour Court, however, took the view that it is a case where no enquiry has been made by the employer and the order of dismissal would take effect only from the date on which the Labour Court passes an order justifying the dismissal and that in such a case the order of the Court will not relate back to the order of dismissal. For this view, the Labour Court drew support from the decision of the Supreme Court in D.C. Roy v. Presiding Officer, Industrial Court . The Labour Court also referred to the decision of the Karnataka High Court in Sujatha Textiles Limited Nanjangud v. Industrial Tribunal Bangalore (1985) ILIN 455. Having thus reached the conclusion that the orders of dismissal were illegal and invalid and hence the petitioners were entitled to wages till the charges against them were proved by the employer by letting in evidence, the Labour Court made separate interim awards directing the employer to pay lumpsums of money to the three workmen.

3. Normally this Court would not have interfered with the interim award. But in the instant case the Labour Court seems to have concluded the controversy as to whether in a case no enquiry was made, and if on evidence let in before the Labour Court, the dismissal if found to be justified, the order of the Labour Court will relate back to the date of dismissal or not? This question, therefore, is not left open. Therefore, the employer has come to this Court contending that the decision that even where a dismissal is held to be justified before the Labour Court, that order will not relate back to the date of dismissal, is contrary to several decisions of the Supreme Court.

4. The limited question which has been argued before us is restricted only to this controversy. The question is whether, where admittedly no enquiry has been conducted for the misconduct of the workmen and an employer makes an order of dismissal and later on the dismissal is found to be justified by the Labour Court on evidence tendered before it, the workmen should be treated as having been dismissed the date on which the order of dismissal was made or from the date on which the Labour Court found that the dismissal order was proper and justified by the evidence.

5. The learned Counsel appearing on behalf of the employer has placed before us several decisions of the Supreme Court and according to him the settled law is that in the case of a defective enquiry, or of no enquiry which is to be treated on the same footing, when in a reference made under Section 10 of the Industrial Disputes Act, 1947, the validity of an order of dismissal for misconduct is to be adjudicated upon, if the dismissal is found to be justified by the Labour Court on evidence tendered before the Labour Court the employee must be treated as having been dismissed from the date on which the order of dismissal was made. This conclusion follows, according to the learned Counsel, from a combined reading of two decisions of the Supreme Court in P.H. Kalyani v. Air France, Calcutta FJR 464 and Workmen of Motipur Sugar Factory (Private) Limited v. Motipur Sugar Factory ( The learned Counsel for the petitioner has very vehemently argued that the decisions of the Supreme Court rendered earlier to the decision in Gujarat Steel Tubes Ltd. v. Its Mazdoor Sabha A.I.R. 1980 S.C. 18% should have been followed by the Labour Court in preference to the decison in the Gujarat Steel Tubes Ltd. ‘s case .

6. It is argued on behalf of the workmen by Mr. Dolia that the theory of relation-back cannot be invoked in a case where the workman has been dismissed without any enquiry whatsoever and having regard to the decision of the Supreme Court in Sasa Musa Sugar Works (P) Ltd v. Shobrati Khan and Ors. . 1 and the decision in the Gujarat Steel Tubes’s case the dismissal without any enquiry must be treated as void and illegal. The argument is that the decision in Gujarat Steel Tubes’ case is binding on this Court as that decision considers the effect of the earlier decision in the case M/S. Susa Musa Sugar Works P. Ltd. v. Shobrati Khan and D.C. Roy v. The Presiding Officer, Madhya Pradesh Industrial Court, Indore . Reliance is also placed on the decision in Workmen of Sujatha Textiles Ltd v. Industrial Tribunal, Bangalore (1985)1 LIN 455 of the Karnataka High Court. The argument advanced is that a case of complete absence of a domestic enquiry cannot be equated with a case of defective enquiry and no premium should be put on the conduct of the employer in proceeding to dismiss the employee without making any enquiry whatsoever. The manner in which the argument that we should follow particular decisions of the Supreme Court in preference to the other decisions of the Supreme Court has been elaborately advanced before us necessitates a careful consideration of the decisions of the Supreme Court.

7. Before we deal with the question as to whether in a case where the dismissal of an employee ordered by the employer without holding a domestic enquiry is found to be justified, the employee is entitled to wages upto the date of the order of the Labour Court or not, we must point out that it is now well established that when a dispute is referred to the Labour Court under Section 10(1) of the Industrial Disputes Act, 1947, it is open to the employer to justify the order of dismissal by tendering evidence before the Labour Court to prove the misconduct alleged against the employee. This proposition squarely follows from the several decisions of the Supreme Court as set out by the learned author O.P. Malhotra in The Law of Industrial Disputes, Fourth Edition-Volume 2, at page 825 and 826. The passage reproduced seems to us to give a correct summary of a catena of decisions of the Supreme Court commencing from Sasamusa Sugar Works Ltd. v. Shobrati Khan (1959)2 L.L.J. 388 to the decision in D.C. Roy v. The Presiding Officer, Madhya Pradesh Industrial Court, In-dore. The relevant paragraph which begins at page 825 is as following:

On the other hand, in a parallel line of case, the Supreme Court has stated that in cases where the enquiry has been found to be invalid or where no enquiry at all was held the tribunal may give an opportunity to the employer to prove his case and in doing so the Tribunal tries the merits of the case itself. The ratio of these cases is that where the domestic enquiry held by the employer is found to be invalid by he Industrial Tribunal or no enquiry at all has been held by the employer the action of dismissal may still be sustained by the employer by justifying it before the Tribunal by adducing relevant evidence. In Workman of Motipur Sugar Factory (P) Ltd. v. Motipur Sugar Factory P. Ltd. (1965)2 L.L.J. 126(SC) the defective enquiry-cases were equated with no-enquiry-cases. In such cases the Tribunal would have jurisdiction to go into the facts and the employer would have to satisfy it that on facts the order of dismissal was proper. In State Bank of India v. R.K. Jain (1971)2 L.L.J. 599 (SC) Vaidialingam. J elaborated that it is open to the management to rely on the domestic enquiry conducted by it and satisfy the Tribunal that there is no infirmity attached to the same and the management has also got a right to justify on facts as well that its order of dismissal was proper. This principle was reaffirmed in Delhi Cloth And General Mills Co.Ltd v. Ludh Budh Singh .

The first part of the proposition that a case of no enquiry is to be equated with a case of an invalid enquiry for the purpose of the course to be adopted by the Labour Court while dealing with the question of validity of the dismissal order clearly flows from the following decision: Sasamusa Sugar Works Ltd v. Shobrati Khan ; Punjab National Bank Ltd. v. Their Workmen (1959)2 LLJ 668; Orissa Cement Ltd v. Adikanda Sahu (1960)1 L.LJ. 518 (SC); C.A. Rodrick v. Karam Chand Ttiapar & Bros (P)Ltd. (1963)1 LLJ 248 (SC); Khardah & Co. Ltd v. Its Workmen (1963)2 L.L.J. 452 (SC); Delhi Cloth & General Mills Co., Ltd v. Kalu Ram (C.A. No. 195 of 1962 decided by the Supreme Court on 9-4-1965 (unreported): Samnuggur Jute Factory Co., Ltd v. Their Workmen (1964)1 L.LJ. 634 (SC); Tata Oil Mills Co., Ltd v. Its Workmen. (1964)2 L.LJ.113(S.C.) : Powari Tea Estate v. Barkataki, MK (1965)2 L.LJ. 102 (S.C); Workmen of Motipur Sugar Factory (P)Ltd. v. Motipur Sugar Factor; (P) Ltd. (1965)2 L.LJ. 162; Hindustan General Electrical Corporation Ltd v. Bishwanth Prasad (1971)2 L.LJ 340 (SC); A.I.R. 1974 S.C. 2417; State Bank of India v. R.K. Jain and Delhi Cloth and General Mills Co., Ltd v. Ludh Budh Singh (1972) 1 LLJ 180 (SC).

8. It is now too late in the day to entertain an argument that a case where no enquiry has been made at all should not be equated with a case where an enquiry has been found to be irregular. In the Motipur Sugar Factory (P) Ltd. Co. (1965)2 L.L.J. 162, the matter has been elaborately dealt with by the Supreme Court and it was pointed out in the judgment that no distinction to be made between cases where the domestic enquiry is invalid and those where no enquiry in fact has been held. The Supreme Court has observed that Court has consistently held that if the domestic enquiry is irregular, invalid or improper, the Tribunal may give an opportunity to the employer to prove his case and in doing so the Tribunal tries the merits itself. In Motipur Sugar Factory case (1965)2 LLJ 192, apart from observing that it was well settled by a number of decisions of the Supreme Court that where an employer has failed to make an enquiry before dismissing or discharging a workman it is open to him to justify the action before the tribunal by leading all relevant evidence before it and that in such a case the entire matter would be open before the tribunal which will have jurisdiction not only to go into the limited questions open to a tribunal where domestic enquiry has been properly held but also to satisfy itself on the facts adduced before it by the employer where the dismissal or discharge was justified. The Supreme Court further pointed out that on principle there was no difference whether the matter comes before the tribunal for approval under Section 33 or on a reference under Section 10 of the Industrial Disputes Act, 1947. Referring to the fact that the cases which fell for consideration before the Supreme Court i.e., Indian Iron & Steel Co. v. Their Workmen (1958)1 L.L.J. 260; Sasa Musa Sugar Works (P) Limited Dhobrati Khan (1959)2 LLJ 388 (SC) and Punjab National Bank Limited v. Its Workman . were cases which came to the tribunal for approval under Section 33 of the Industrial Disputes Act, 1947, the Supreme Court observed as follows:

But in principle we see no difference whether the matter comes before the tribunal for approval under Section 33 or on a reference under Section 10 of the Industrial Disputes Act, 1947. In either case if the enquiry is defective or if no enquiry has been held as required by Standing Orders, the entire case would be open before the tribunal and the employer would have to justify on facts as well that its order of dismissal or discharge was proper. Phulbari Tea Estate case was on a reference under Section 10, and the same principle was applied there also, the only difference being that in that case, there was an enquiry though it was defective. A defective enquiry in our opinion stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal -was proper.

Section 11-A of the Industrial Disputes Act, 1947 came into force with effect from 15-12-1971. The question as to whether the enactment of Section 11-A made any difference to the settled law that it was open to the employer to justify the dismissal of the employee by adducing evidence before the Labour Court was considered by the Supreme Court in Workmen of Messrs Firestone Tyre and Rubber Company of India (P) Ltd v. Management and Ors. . It was argued in that case that the enquiry by the employer being illegal the tribunal had under Section 11-A no alternative but to order reinstatement. This contention was rejected. It is observed at page 610 as follows:

This right in the management to sustain its order by adducing independent evidence before the Tribunal, if no enquiry has been held or if the enquiry is held to be defective, has been given judicial recognition over a long period of years.

All parties are agreed that even after Section 11A, the employer and employee and adduce evidence regarding the legality or validity of the domestic enquiry, if one had been held by an employer.

Having held that the right of the employer to adduce evidence continues even under the new section, it is needless to state that, when such evidence is adduced for the first time, it is the Tribunal which has to be satisfied on such evidence about the guilt or otherwise of the workman concerned. The law, as laid down by this Court that under such circumstances the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and that it has to decide for itself whether the misconduct alleged is proved, continues to have full effect. In such a case, as laid down by this Court, the exercise managerial functions does not arise at all.

The position that the law with regard to the right of the employer to adduce evidence before the Labour Court even where no domestic enquiry has been made the same even after the enactment of Section 11A, is reiterated in the following passage at page 611:

Therefore, it will be seen that both in respect of cases where a domestic enquiry has been held as also in cases where the Tribunal considers the matter on the evidence adduced before it for the first time, the satisfaction under Section 11A, about the guilt or otherwise of the workman concerned, is that of the Tribunal. It has to consider the evidence and come to a conclusion one way or other. Even in cases where an enquiry has been held by an employer and a finding of misconduct arrived at, the Tribunal can now differ from that finding in a proper case and hold that no misconduct is proved.

Repelling the contention that if no enquiry is held the order of dismissal will have to be set aside, the Supreme Court observed at page 515 as follows:

The contention of Mr. Deshmukh that if no enquiry is held, the order of dismissal will have to be set aside, if accepted, will lead to very incongruous result. The Tribunal would have allowed an employer to adduce evidence before it in proceedings under Section 33 for the first time, even though no domestic enquiry had been held. If it is held that another Tribunal, which adjudicates the main disputes has to ignore those proceedings and straightaway order reinstatement on the ground that no domestic enquiry had been held by an employer, it will lead to very startling result. Therefore, an attempt must be made to construe Section 11A in a reasonable manner. This is another reason for holding that the right to adduce evidence for the first time recognised in an employer, has not been disturbed by Section 11A.

We may, at this stage, reproduce two of the ten propositions laid down by the Supreme Court on a review of all the earlier decisions. In so far as the contention with regard to the right to claim wages till the tribunal holds that the misconduct is proved and the dismissal is proper is concerned, it would be relevant to refer to the following two propositions laid down by the Supreme Court:

… (4) Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, has to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action; and it is open to the employee to adduce evidence contra:

(5)…

(6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective….

The propositions referred to above would indicate that the purpose of adducing evidence before the Tribunal or the Labour Court is to justify the action taken by the employer even though no domestic enquiry was initially made.

9. The real question which arises in this case is whether the view taken by the Industrial Tribunal that as no domestic enquiry has been made by the employer in the instant case the doctrine of ‘relation back’ cannot apply, can be sustained. The correctness of this view is challenged on behalf of the employer, whole according to the learned Counsel appearing for the employees having regard to the decision in Sasa Musa’s case (1952)2 LLJ 388 (SC) and the decision in Gujarat Steel Tubes Ltd v. Gujarat Steel Tubes Mazdoor Sabha (1980)1 LLJ 13 the dismissal will become effective only from the date of the order of the Tribunal if the Tribunal finds that misconduct is proved and that the order of dismissal was called for. This contention needs a careful consideration of the decisions on which reliance has been placed by both the learned Counsel. It is necessary to refer in some detail to the decision in Sasa Musa’s case (1959)2 L.L.J. 388 (S.C.). The decision in Sasa Musa’ case (1959)2 L.L.J.388 did not arise on a reference under Section 10. That was a case which arose out of applications under Section 33 and Section 33A of the Industrial Disputes Act, 1947. The Management has first applied to the Industrial Tribunal for permission to dismiss thirty-three workmen initially and then for permission to dismiss fifteen other workmen. The workmen has resorted to go-slow tactics pending conciliation proceedings and the Labour Officer informed the Management that it could take disciplinary action against the workmen concerned with the permission of the Industrial Tribunal. The Management therefore suspended certain number of workers and applied for permission under Section 33 to dismiss them. The workmen in their turn applied under Section 33A and their case was that they had been suspended as a measure of punishment and that as this was done without the sanction of the Industrial Tribunal the Management had committed a breach of Section 33. The Industrial Tribunal found that no enquiry has been held by the Management before applications under Section 33 were made and that all the evidence which could have been taken in the enquiry by the Management had been led before it and it was in full possession of the facts and no question of any prejudice to the workmen arose as it would be open to it on a review of the entire evidence before it to decide whether the applications for permission to dismiss should be granted or not. It held that the order of suspension not as a measure of punishment and that it was an order pending enquiry by the Management and proceedings under Section 33 before the Tribunal and that as there were no Standing Orders as to suspension in the factory the Management liability to pay the workmen their wages during the period of suspension remained. The go-slow was held to be deliberate and unjustified. Out of the forty-eight workmen the Industrial Tribunal refused the application with respect sixteen workmen as there was nothing to show that they had taken part in the go-slow or instigated it. With regard to thirty-two workmen the Tribunal held that as some Standing Orders were under contemplation and under those proposed Standing Orders the workmen could either be dismissed or suspended for seven days in case of misconduct, the Management could be granted leave to suspend the workmen for seven days. Therefore the prayer for dismissal was rejected. Consequently, the workmen’s application under Section 33A was also rejected. The matter was taken in appeal to the Labour Appellate Tribunal by the management as will as the workmen. The Labour Appellate Tribunal confirmed the finding at the workmen resorted to go-slow and that it could not be countenanced and this was a serious misconduct for which the normal punishment was dismissal. However, instead of granting permission to dismiss, the Tribunal held that the suspension of the workmen was a substantive punishment. This it did in spite of the withdrawal of the appeal by the workmen against the order dismissing the application under Section 33A, which the Supreme Court pointed out, amounted to confirming the order of the Tribunal that the suspension was not a punishment. The appeal of the Management was dismissed by the Labour Appellate Tribunal and that order was challenged before the Supreme Court. Allowing the appeal the Supreme Court held that the Management was entitled to permission to dismiss the forty-eight workmen, but that after suspending the workmen as no enquiry was conducted and proceeding under Section 33 were practically converted into the enquiry, the Management was bound to pay the wages of the workmen till a case for dismissal was made out in the proceedings under Section 33. The relevant observations are as follows:

It follows, therefore, that all the forty-eight workmen (two of whom are since said to have died) are exactly in the same position. As held by the Appellate Tribunal, go-slow is serious misconduct which is insidious in its nature and cannot be countenanced. In these circumstances as these forty-eight workmen were taking part in the go-slow and were thus guilty of serious misconduct, the management was entitled to get permission to dismiss them. But as the management held no enquiry after suspending the workmen and proceedings under Section 33 were practically converted into the enquiry which normally the management should have held before applying to the Industrial Tribunal, the management is bound to pay the wages of the workmen till a case for dismissal was made out in the proceedings under Section 33 (see the decision of this Court in the Management of Ranipur Colliery v. Bhuban Singh (59) CA. No. 768 of 1957, . As already pointed out, this is the view taken by the Industrial Tribunal while dealing with the application under Section 33-A which stood confirmed by the dismissal of the appeal by the workmen in that behalf. The management will therefore have to pay the wages during the period of suspension till the award of the Industrial Tribunal.

This decision must already be read in the context of the facts which were proved in that case. The facts will clearly indicate that the Management had approached the Industrial Tribunal even before an order of dismissal was made. When the application under Section 33 was made there was in fact no order of dismissal at all. The relevant portion of Section 33 reads as follows:

33(1) During the pendency of any conciliation proceeding before a conciliation officer or a Board or of any proceeding before an arbitrator or a Labour Court or tribunal or national tribunal in respect of an industrial dispute, no employer shall:

(a)

(b) for any misconduct connected with the dispute, discharge or punish, whether by dismissal or otherwise, any workmen concerned in such dispute.

Save with the express permission in writing of the authority before which the proceeding is pending.

The Management had considered that before they made the enquiry and passed an order of dismissal they must obtain the permission of the Industrial Tribunal. That was therefore considered as a case of suspension during the pendency of the enquiry and since the misconduct was held to be proved, in as much as the proceeding under Section 33 was itself converted into an enquiry, the workmen continued to be in the employment of the Management till the order of dismissal was made. The relationship of master and servant continued till permission was granted to dismiss the employees. That is why the employees were held entitled to wages till the date of the order of the Tribunal. Sasa Musa’s case (1959)2 LLJ 388 (SC) cannot therefore be treated as an authority for the proposition that where an order of dismissal has been made and that order of dismissal is sought to be justified by adducing evidence before the Labour Court, even though no enquiry was made, the employee will be entitled to wages even for the period after the order of dismissal. As is pointed out in the decision in Firestone case , the evidence is intended to justify the order of dismissal. Mr. Dolia is therefore not right in his contention that the decision in Sasa Musa’s case (1959)2 LLJ 388 (SC) lays down the law that where ever there is no enquiry proceeding an order of dismissal the employee will be entitled to wages till the order of the Labour Court.

10. A useful reference may be made to the decision of the Supreme Court in D.C. Roy’s case . In D.C. Roy’s case, the Labour Court found that the enquiry held by the domestic tribunal was not proper but on evidence adduced before it held that the employee was guilty of the charges levelled against him and in the circumstances of the case the punishment of dismissal was neither harsh nor unjust. In a revision petition filed against the order of the Labour Court under Section 66 of the Madhya Pradesh Industrial Relations Act, the Industrial Court confirmed the finding of fact and upheld the order of dismissal. As regards back wages, the Industrial Court held that the order of the Labour Court would relate back to the date when the employee was dismissed and therefore he was not entitled to back wages till the date when the Labour Court passed the final order. A writ petition against this order was dismissed in limine. In the Supreme Court the contention raised by the employee was that he was entitled to back wages from the date of dismissal until the date on which the Labour Court delivered the judgment, relying on the decision of the Supreme Court in The Management of Hotel Imperial, New Delhi 7 Ors v. Hotel Workers’ Union . In that decision the Supreme Court has observed as follows:

In Phulbari Tea Estate v. Its Workmen , the rider laid down in the case Messrs Sasa Musa Sugar Works (P) Ltd (1959)2 S.C.R. (Supp.) 836 was further extended to a case of an adjudication under Section 15 of the Act and it was pointed out that if there was and defect in the enquiry by the employer he could make good that defect by producing necessary evidence before the tribunal; but in that case he will have to pay the wages up to the date of the award of the tribunal, even if the award went in his favour.

The Supreme Court, however, following a Five-Judge Bench decision in P.H. Kalyani v. Air France Calcutta (1964) SCR 104 took the view that decision concluded the question under consideration. Referring to P.H. Kalyani’s case (1964) S.C.R. 104, the Supreme Court observed as follows:

These observations directly cover the case before us because though the Labour Court in the instant case, found that the inquiry was defective as it infringed the principles of natural justice, it came to the conclusion after considering the evidence adduced before it, that the dismissal was justified. The award of the Labour Court must therefore relate back to the date when the order of dismissal was passed on the termination of the domestic enquiry.

In D.C. Roy’s case , the Supreme Court found that there is nothing in the decision in Phulbsri’s case ” showing that whenever there is a defect in the domestic inquiry, the employer would have to pay wages up to the date of the award of the Labour Court or the Industrial Tribunal even if the order passed in the domestic inquiry was ultimately upheld by the Labour Court or the Tribunal”. It was then observed follows:

In Phulbari Tea Estate , the domestic inquiry was in gross violation of the fundamental principles of natural justice and was therefore vitiated. The employers did not lead proper evidence before the Tribunal to justify the order of dismissal and were content merely to produce before the Tribunal the statements which were recorded during the inquiry. The employee therefore had no opportunity to cross-examine the witnesses before the Tribunal. Since the inquiry was bad and the Tribunal had no evidence before it to sustain the order but held that in the peculiar circumstances of the case, the employee may be granted the alternative relief of compensation instead of an order of reinstatement. The Tribunal accordingly granted to the employee pay and allowance from the date of his suspension till payment, The award of the Tribunal was upheld in appeal by this Court.

Thus, the decision in Phulbari’s case was distinguished in D.C. Roy’s case (1976)3 S.C.R.801.

Then, in referring to the case before them, the Supreme Court observed as follows:

In the instant case, the domestic inquiry was held to be in violation of the principles of natural justice but the employer led evidence before the Labour Court in support of the order of dismissal and on a fresh appraisal of that evidence, the Labour Court found that the order of dismissal was justified. The ratio of P.H. Kalyani’s case (1964) SCR 104 would therefore govern the case and the judgment of the Labour Court must relate back to the date on which the order of dismissal was passed.

D.C. Roy’s case is therefore pear authority for the proposition that even where an enquiry is vitigated by breach of the principles of natural justice, if the dismissal has been found to be justified, then the order of the Labour Court relates back to the date on which he order of dismissal was passed. Sasa Musa’s case (1959)2L.L.J.388(SC)was distinguished on the ground that it was a case under Section 33(1) and the Court referred to the observations in P.H. Kalyani’s case (1964) SCR104 made with reference to Sasa Musa’s case as follows:

Commenting on the decision in Sasa Musa, this Court observed in P.H. Kafyani’s case that the matter would have been different if in Sasa Musa, an inquiry had been held, the employer had come to the conclusion that the dismissal was the proper punishment and had then applied under Section 33(1) for permission to dismiss the employees.’ In those circumstances the permission would have related back to the date when the employer came to the conclusion after an inquiry that dismissal was the proper punishment and had applied for removal of the ban by an application under Section 33(1) In D.C. Roy’s case , the Supreme Court was conscious of the fact that the same position of law with regard to the order of the Industrial Tribunal relating back to the date of the original order of dismissal would also apply in a case where no enquiry has been held, and the Supreme Court observed:

… the decision in P.H. Kafyani’s case is not to be construed as a charter for employers to dismiss employers after the pretence of an inquiry.

It was pointed out that:

An inquiry blatantly and consciously violating principles of natural justice may well be equated with the total absence of an inquiry so as to exclude the application of the ‘relation-back’ doctrine. But we will not pursue the point beyond this as the facts before us do not warrant a closer consideration thereof.

The Supreme Court, therefore, did not decide the question as to whether the doctrine of ‘relation-back’ will not apply to a case of a total absence of ‘an enquiry’. In view of the express observations leaving the question open, the decision in D.C. Roy’s case (1976) SCR 801 cannot be invoked in support of the proposition that in a case where no enquiry has been made but the order of dismissal is found to be justified on evidence tendered before the Labour Court the Management will still have to pay the wages until the date of the order of the Tribunal.

Mr. Dolia has heavily relied on the observations of the Supreme Court in Gujarat Steel Tube Lid v. Gujarat Steel Tubes Mazdoor Sabha (1980)1 LLJ 137 : 1980 SC 1986 in paragraphs 151 and 152 of the judgment. It appears from paragraph 151 that the contention on behalf of the Mazdoor Sabha advanced was that the decision in D.C. Roy’s case takes the view that where no enquiry has proceeded a punitive discharge and the tribunal, for the first time, upholds the punishment, full wages must be paid until the date of the award and that there cannot be any relation back of the date of dismissal to when the Management passed the void order. In Gujarat Steel Tube’s case the decision in Kalyani’s case was cited on behalf of the Management to support the view of relation back of the award to the date of the employer’s termination orders. This contention was rejected with the following observations:

We do not agree that the ratio of Kalyani corroborates the proposition propounded. Jurisprudentially, approval is not creative but confirmatory and therefore relates back. A void dismissal is just void and does not exist. If the Tribunal, for the first time, passes an order recording a finding of misconduct and thus breathes life into the dead shell of the Management’s order, pre-dating of the nativity docs not arise. The reference to Sasa Musa in Kalyani enlightens this position. The later case of D.C. Roy v. Presiding Officer, Madhya Pradesh Industrial Conns, Indore specifically refers to Kalyani’s case and Sasa Musa’s case and holds that where the Management discharges a workman by an order which is void for want of an enquiry or for blatent violation of rules of natural justice, the relation-back doctrine cannot be invoked. The jurisprudential difference between a void order, which by a subsequent judicial resuscitation comes into being de novo, arid an order, which may suffer from some defects but is not still-born or void and all that is needed in the law to make it good is a subsequent approval by a tribunal which is granted, cannot be obfuscated.

Then, in paragraph 153, the Supreme Court observed:

We agree that the law stated in D.C. Roy is correct but now that the termination orders are being set aside, the problem does not present itself directly….

Mr. Dolia has vehemently contended that the Supreme Court, in Gujarat Steel Tubes’ case , has construed the effect of the decision in D.C. Roy’s case and has construed D.C. Roy’s Case as laying down the law that when an order of dismissal was made without an enquiry it is a void order and no question of the decision of Industrial Tribunal or the Labour Court relating back to the date of the order of dismissal can arise in such a case. Mr. Dolia, therefore, agrued that so far as the present case is concerned admittedly there has been no enquiry at all and therefore the orders of termination be treated as void and irrespective of any decision which may be given by the Labour Court the employees will be entitled to wages for the period during which the disput remains pending.

11. It has been vehemently argued by Mr. Ramasubramaniam that the decision in D.C. Roy’s case does not at all decide that in a case where no enquiry has been conducted the dismissal of the employee must be regarded as void and that in such a case the order of the Labour Court cannot relate back to the date of the order of dismissal. He has argued that Sasa Musa’s case was a case of ‘approval’ under Section 33(1) and that is how the case has been distinguished by the Supreme Court in Kalyani’s case. 1964 SCR 104 ( and also in D.C. Roy’s case . An argument was therefore vehemently advanced that Kalyani’s case is a decision given by Five Judges of the Supreme Court and that we must follow the decision in Kalyani’s case in preference to the decision in Gujarat Steel Tubes’ case . He also invited our attention to a Three Judge Bench decision of the Supreme Court in Punjab Beverages v. Suresh Chand (1978)2 LLJ 1 in which the Supreme Court has taken the view that contravention of Section 33(2)(b) did not have the effect of rendering the decision of dismissal void and inoperative. That was only a case in which the employee was dismissed when a dispute was pending adjudication. The Management had filed an application under Section 33(2) for approval of the Tribunal. That application was however withdrawn. Thereafter the workman filed an application under Section 33(c)(2) for payment of wages on the ground that he continued to be in service as the Management had withdrawn the approval petition. The Tribunal awarded the wages. In appeal before the Supreme Court the question was:

What is the effect of contravention of Section 33(2)(b) on an order of dismissal passed by an employer in breach of it. Does it render the order of dismissal void and inoperative so that the aggrieved workman can say that he continues to be in service and is entitled to receive wages from the employer?

After stating the settled position that a proceeding under Section 33C(2) of the Industrial Disputes Act was a proceeding in the nature of an executive proceeding in which the Labour Court calculates the amount of money due to a workman from his employer, or if the workman is entitled to any benefit which is capable of being computed in terms of money, proceeds to compute the benefit in terms of money and that the right to the money which is sought to be calculated or to the benefit which is sought to be computed must be an existing one, that is to stay, already adjudicated upon, or presided for and must arise in the context of and in relation to the relationship between the industrial workman and his employer, the Supreme Court proceeded to determine whether the contravention of Section 33(2)(b) introduced a fatal infirmity in the order of dismissal passed in violation of it so as to render it wholly without force or effect or despite such contravention, the order of dismissal may still be sustained as valid. In paragraph 7 of the judgment it was pointed out that Section 33 in both its limbs undoubtedly uses language which is mandatory terms and Section 31(1) makes it penal for the employer to commit a breach of the provisions of Section 33 and therefore if Section 33 stood alone it might end itself to the construction that any action by way of discharge or dismissal taken against the workman would be void if it is in contravention of Section 33. But it was pointed out that Section 33 cannot be read in isolation and the intention of Legislature has to be, gathered not from one provision of the statute or another, but from the whole of the statute. Then, referring to Section 33A it was pointed out by the Supreme Court that when an aggrieved workman files a complaint under Section 33A even where a contravention of Section 33 is established, the next question would be whether the order of discharge or dismissal passed by the employer is justified on merits. Then, it is observed in paragraph 11 of the judgment as follows:

The Tribunal would have to go into this question and decide whether, on the merits, the order of discharge or dismissal passed by the employer is justified and if it is, the Tribunal would sustain the order, treating the breach of Section 33 as a mere technical breach. Since, in such a case the original order of discharge or dismissal would stand justified, it would not be open to the Tribunal, unless there are compelling circumstances, to make any substantial order of compensation in favour of the workman.

In paragraph 12 it was pointed out that:

The very effect that even after the contravention of Section 33 is proved, the Tribunal is required to go into the further question whether the order of discharge or dismissal passed by the employer is justified on the merits, clearly indicates that the order of discharge is not rendered void and inoperative by such contravention.

Thus it was held that if the contravention of Section 33 were construed as having an invalidating effect on the order of discharge of dismissal, Section 33A would be rendered meaningless and futile, because, in that event, the workman would invariably prefer to make an application under Section 33C(2) for determination and payment of the wages due to him on the basis that he continues to be in service. Another consequence of such an interpretation was stated to be that if the work-man files a complaint under Section 33A, the employer would have an opportunity of justifying the order of discharge or dismissal on merits but if the workman proceeds under Section 33C(2) the employer would have no such opportunity, and whether the employer should be able to justify the order of discharge dismissal on merits, would depend upon what remedy is pursued by the workman, whether under Section 33A or under Section 33C(2). It was pointed out that such a highly anomalous result could never have been intended by the Legislature. The order of the Tribunal was set aside with the observation that the workman was not precluded from pursuing a remedy under Section 33A or Section 10 of the Act. Mr. Ramasubramaniam has vehemently contended, on the authority of this decision, that even non-compliance with the mandatory provision in Section 33(2)(b) has not been held to be fatal to the validity of the dismissal order and the jurisdiction of the Labour Court; in a case of no-enquiry to go into the merits of the order of dismissal the same ratio must apply in such a case also and the dismissal cannot be held to be void because in view of the earlier decision of larger Benches what the employer is required to do is to justify the order of the dismisal order.

12. Decisions have been cited before us in support of the proposition that in case there are two decisions of the Supreme Court which take contrary views, the High Court must follow the decision of the larger Bench and it must always follow the earlier decision in preference to later decision. In Union of India v. K.S. Subramaniam the Supreme Court observed as follows:

…But, we do not think that the High Court acted correctly in skirting the views expressed by larger benches of this Court in the manner in which it has done this. The proper course for a High Court, in such a case is to try to find out and follow the opinions expressed by larger benches of this Court in preference to those expressed by smaller benches of the Court.

That is the practice followed by this Court itself. The practice has now crystallized into a rule of law declared by this Court. If, however, the High Court was of opinion that the views expressed by larger benches of this Court were not applicable to the facts of the instant case it should have said so giving reasons supporting its point of view.

In Mamleshwar v. Kanahaiya Lal in paragraph 7 it has been observed as follows:

Certainty of the law, consistency of rulings and comity of courts-all flowering from the same principle–converge to the conclusion that a decision once rendered must later bind like cases. We do not intend to detract from the rule that, in exceptional instances, where by obvious inadvertence or oversight a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, it may not have the sway of binding precedents. It should be a glaring case an obtrusive omission….

It was argued by Mr. Ramasubramaniam, on the authority of these decision, that the decision in Gujarat Steel Tubes case proceeds on an erroneous assumption that in D.G. Roy’s case it was decided by the Supreme Court that where a dismissal order is made without enquiry the order must be treated as a void order and the employee will be entitled to wages till the date of the order of the Labour Court or the Tribunal even if the Labour Court or the Tribunal finds the order to be justified. When an argument like the one that is advanced in the instant case that the High Court should follow one decision of the Supreme Court in preference to the other is advanced, the Court is faced with a delicate task. In the instant case, we have referred to the argument advanced on behalf of the petitioner that though in D.C. Roy’s case the question as to whether in the case of an absence of enquiry, the doctrine of relation back will not apply was not finally adjudicated upon because the facts in that case did not warrant a closer consideration thereof, according to the judgment. The Gujarat Steel Tubes’ case proceeded on the assumption that in D.C. Roy’s case it has been held that where a workman is discharged by an order which is void for want of any enquiry or for blatant violation of the rules of natural justice, the relation back doctrine cannot be invoked. Where such an argument is advanced what is the course to be adopted by the High Court is to be found in Union of India v. K.S. Subramanian in paragraph 12 of the judgment, a part of which has been extracted earlier. The observations quoted earlier will make it clear that not-withstanding contrary decisions of the Supreme Court of different benches the proper course for the High Court is to ascertain and follow the opinion expressed by larger benches of the Supreme Court in preference to those expressed by smaller benches of the Court. The logical corollary of these observations would be that it would be open to the High Court to give reasons why the opinion of a particular bench of the Supreme Court was not applicable tod the facts of the case before it. We are therefore inclined to accept the contention of the learned Counsel for the petitioner that having regard to the decision of the Five Judges of the Supreme Court in Kalyani’s case, that what is open before the Tribunal is the propriety of an order of dismissal in the case of a defective enquiry and that the Labour Court was entitled to go into the question whether the dismisssal was justified or not. If on evidence it is found that the dismissal was justified then it would operate from the date of the order of dismissal. In Katyani’s case it has been expressly held that if on coming to the conclusion of its own on the appraisal of the evidence before it, the Labour Court finds that the dismissal was justified, its approval of the order of dismissal made by the employer in a defective enquiry would still relate back to the date when the order was made. Strictly speaking, it appears to us, that to a certain extent the doctrine of relation back may not be really relevant because the Labour Court in the reference made to it merely goes into the question as to whether the dismissal was justified or not. In a case where a dismissal is held to be justified it declines to interfere with the order of dismissal which means that the order of dismissal is held to be good. But its own force, it operates from the day on which it was made. The scope of the enquiry before the Labour Court is really whether the employer has given evidence in justification of the order of dismissal. We have earlier reproduced propositions 4 and 6 culled out by the Supreme Court in Fire-stone Tyre and Rubber Company’s case . The propositions themselves clearly laid down that the jurisdiction of the Tribunal is to consider the evidence placed before it for the first time in justification of the action taken where no enquiry has been held or after an enquiry conducted by an employer is found to be defective. Therefore, the evidence which is tendered by the employer is in justification of the action taken. Once the action of dismissal is found to be justified that order stands and will therefore take effect from the date of the order itself. In view of the decision in Motipur Sugar Factory case the same will he the position even in a case where no enquiry is held by the employer before termination of employment but the misconduct is held to be proved on evidence tendered before the Labour Court. That is the only conclusion which follows from the decision in Kafyani’s case, and from the later decisions of the Supreme Court read with the decision in Motipur Sugar Factory case rendered before Gujarat Steel Tubes’ case. In the face of this overwhelming authority in favour of the contention raised by the petitioner, we must therefore hold that the view taken by the Trinunal that in a case where no enquiry is held, the dismissal would not be effective from the date of the order on which it was made, is contrary to the series of the decisions of the Supreme Court. We may refer, with advantage, to the decision of the Division Bench of the Kerala High Court in Workmen of Premier Tyres Ltd v. Premier Tyres Ltd (1976) 33 Indian Factories and Labour Reports. 7. That was a case in which the services of a workman were terminated for misconduct without any enquiry whatsoever. On evidence tendered before the Labour Court the termination was found to be justified and bona fide. The Division Bench held that since the action taken to terminate the services of the employee was bona fide the termination took effect from the date on which the order was passed and communicated. The Kerala High Court was called upon to consider the question whether the Labour Court was right in directing the Management to pay the wages for the period from the date of termination of the service to the date of the award. The Labour Court had relied on the decisions in Sasa Musa’s case and Phulbari Tea Estate’s case . The Kerala High Court explained that Sasa Musa’s case was a case in which there was neither an order of termination nor a domestic enquiry and the proceedings under Section 33 were practically converted into an enquiry which normally the Management should have held before applying to the Industrial Tribunal. “It was pointed out that in Pkulhari Tea Estate’s case the dismissal was found to be unjustifiable and that is why the Tribunal ordered the Management to pay the wages. The Division Bench of the Kerala High Court referred to the decision in Kalyani’s case in which Sasa Musa’s case was distinguished on the ground that the relationship of employer and employee continued till the date of the award, and observed that no authority was cited to show that even in a case where the action of the Management justified before the Labour Court the wages must be paid till the date of the award. It was then observed as follows:

The order of termination became effective from the date of the order. Therefore, there is no question of payment of any compensation for the period up to the date of the award. The learned Single Judge was therefore right in distinguishing on facts the above two Supreme Court cases and holding that the management is not bound to pay any wages to the employee.

With respect we agree with the view of the Division Bench of the Kerala High Court, which, in our opinion, is the only conclusion possible in the light of the several decisions of the Supreme Court referred to earlier.

13. Mr. Doha has relied on a decision of a learned Single Judge of the Kerala High Court in Go-vindan Unnithan v. Industrial tribunal, Alleppy 1981 K.L.T.342 in which the learned Judge has held, following the decision in Gujarat Steel Tubes’ case , that since no enquiry has been held the employee would be entitled to wages till the date of the order of the Labour Court even though the Labour Court found that the dismissal was justified. He has also relied on a decision of a learned Single Judge of the Karnataka high Court in Workmen of Sujatha Textiles, I Nunjangud v. Industrial Tribunal, Banglore (1985)1. L.L.N. 455. The learned Judge in that case seems to have taken the view that the decision in Motipur Sugar Company’s case should not be lifted out of context and understood as having laid down the law that there is no difference between a defective enquiry and a total lack of it. The learned Judge declined to treat the case of a total absence of enquiry with a case where the enquiry was defective. Having regard to the analysis of the several cases which was made earlier, we are not inclined to agree with the observations of the learned Single Judge of the Karnataka High Court.

14. Having regard to the view which we have taken, the order of the Tribunal holding that the orders of dismissal not having been preceded by an enquiry are illegal and invalid, is liable to be quashed. Consequently, the interim awards of wages are also liable to be quashed.

15. It is rather unusual that the disputes in this case have been pending now for almost more than five years. We have been informed that in order to facilitate a proper disposal of these disputes the disputes were transferred to the Labour Court at Coimbatore on the employer paying the costs of each hearing of representatives of the workmen. It is astonishing that, as stated before us, the matter has been adjourned 36 times so far without any further progress. It may not be necessary to apportion the blame for this procrastination, but it is necessary to direct the Labour Court to dispose of the references pending before it on or before 31st March. With these observations, the writ petitions are allowed and the interim awards of the Labour Court are set aside. However there will be no order as to costs.