JUDGMENT
Madan B. Lokur, J.
1. This writ petition challenges an Award dated 16th November, 1989 passed by the learned Labour Court in ID No.634/1986.
2. The question that was referred for adjudication is as follows: –
“Whether the dismissal of Sh. Daulat Ram from service is legal and/or justified and, if not, to what relief is he entitled and what directions are necessary in this regard?”
3. The case of the Respondent-Workman was that he was posted as a peon in the Terminal Tax post in Dilshad Garden, Delhi. His duty was to intercept trucks and other heavy vehicles carrying taxable goods and release them only after payment of tax.
4. On 22nd November, 1974, a truck carrying paddy was intercepted. However, since the terminal tax Moharrir was absent on that day, the Respondent-Workman prepared and issued the terminal tax receipt. Originally, the Respondent-Workman issued a receipt for Rs.784/- because he had heard the driver of the vehicle to say that he was transporting “desikhand”. However, when the driver explained that he was actually carrying “desi dhan”, he corrected the receipt and charged Rs.8/- from the importer. It was alleged against the Respondent-Workman that he had, by correcting and overwriting on the terminal tax receipt, caused a loss of Rs.776/- to the Petitioner. There was no allegation that the Respondent-Workman had received any consideration for this or that he had pocketed the amount of Rs.776/-.
5. The Respondent-Workman was issued a charge sheet and after a departmental inquiry he was dismissed from service. Under these circumstances, the Respondent-Workman raised an industrial dispute.
6. It appears that in the domestic inquiry, the Respondent-Workman admitted his guilt but explained the circumstances in which the overwriting had occurred. The guilt of the Respondent-Workman was, therefore, established only on the basis of his confessional statement.
7. When the industrial dispute was taken up for consideration by the learned Labour Court, one of the issues which engaged its attention was the quantum of punishment imposed upon the Respondent-Workman.
8. The learned Labour Court took into consideration the fact that the Respondent-Workman admitted his guilt and explained the circumstances under which the overwriting had occurred. It was noted by the learned Labour Court that the explanation given by the Respondent-Workman was not challenged or rebutted and yet it was not taken into consideration while awarding the penalty. The learned Labour Court also noted that the disciplinary authority had made the following endorsement on the back of the inquiry report: –
In view of the above endorsement, it was observed by the learned Labour Court that the disciplinary authority had proceeded on the basis that the Respondent-Workman had misappropriated and cheated the Petitioner. It was, however, noted that this assumption was erroneous because no allegation of misappropriation or cheating was ever levelled against the Respondent-Workman.
9. The learned Labour Court also took into consideration the fact that the terminal tax Moharrir was not present throughout the fateful day and that the disciplinary authority had ignored the provisions of Delhi Municipal Corporation Service (Control and Appeal) Regulations, 1959, which provides for a minor penalty of recovery of the pecuniary loss caused to the Petitioner.
10. Finally, the learned Labour Court took into account the fact that there was no previous misconduct alleged against the Respondent-Workman.
11. Taking all these factors into consideration, the learned Labour Court was of the view that the punishment of removal from service was unduly harsh. Accordingly, in apparent exercise of power conferred by Section 11A of the Industrial Disputes Act, 1947 (the Act) the learned Labour Court directed the reinstatement of the Respondent-workman and substituted the penalty of dismissal from service with that of withholding four increments.
12. The Petitioner has challenged the Award passed by the learned Labour Court. There was no stay of operation of the impugned Award with the result that the Petitioner deposited a sum of about Rs.1,28,000/-, towards back wages which has since been withdrawn by the Respondent-Workman on furnishing a security to the satisfaction of the learned Labour Court.
13. On 17th September, 2002, it was observed by this Court that the Respondent-Workman has been receiving his dues from the Petitioner without performing any duties. Learned counsel for the Petitioner stated that the Petitioner is willing to take back the Respondent-Workman on duty without prejudice to its rights and contentions in the writ petition. Accordingly, the Respondent-Workman was taken back in service with effect from 1st October, 2002 and is still working with the Petitioner. Learned counsel for the parties stated that since then there has been no complaint against the Respondent-Workman.
14. Learned counsel for the parties made their submissions on 17th, 18th and 19th August, 2004 when judgment was reserved.
15. The controversy in this case really relates to the extent to which, and the circumstances in which the learned Labour Court can invoke the power conferred by Section 11A of the Act.
16. Section 11A of the Act reads as follows:-
Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct re-instatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require:
17. The necessity of enacting Section 11A arose because of a recommendation (No.119) adopted in June, 1963 by the International Labour Organisation concerning termination of employment at the initiative of the employer.
18. As also been reproduced in Neeta Kaplish vs. Presiding Officer, Labour Court and another, . Consequently, it is not necessary to again reproduce the Statement of Objects and Reasons. Suffice it to say that as held in Firestone the Act is a beneficial piece of legislation enacted in the interest of employees and that in construing the provisions of a welfare legislation, the Court should adopt a beneficent rule of construction. If more than one construction is reasonably possible, the Court should prefer that construction which furthers the policy and object of the Act and is more beneficial to the employees. The Statement of Objects and Reasons is not to be taken into account for interpreting the plain words of Section 11A but it does give an indication of what the Legislature wanted to achieve.
19. Firestone concerned itself with the interpretation of Section 11A of the Act when a domestic enquiry is held, when the Court can interfere in the quantum of punishment awarded after a domestic enquiry and whether Section 11A of the Act is retrospective.
20. In so far as the present writ petition is concerned, there is no challenge to the domestic enquiry or to the conclusions arrived at by the learned Labour Court with regard to the merits of the enquiry. The only contention urged relates to the quantum of punishment imposed and to what extent Section 11A of the Act permits the learned Labour Court to interfere in the award of punishment.
21. As regards the retrospective operation of Section 11A (a question that has not arisen in the present case) the Supreme Court has held in Firestone that this section is not retrospective in operation. (See also The Gujarat Mineral Development Corporation vs. Shri P.H. Brahmbhatt and Bharat Singh vs. Management of New Delhi Tuberculosis Centre, New Delhi and Others ).
22. While dealing with the quantum of punishment and the scope of interference under Section 11A of the Act, the Supreme Court noted in Firestone that the section abridges the rights of employers when it comes to awarding a punishment based on the conclusion of a domestic enquiry. The Labour Court can alter the punishment imposed by the employer under Section 11A of the Act, even if the misconduct is proved. The Labour Court is entitled to hold the opinion that the order of discharge or dismissal for he said misconduct is not justified. It can then award to the workman a lesser punishment. It was held that the Labour Court has been given power for the first time to interfere with the punishment imposed by an employer but wide as this power may be, it is hedged in by the proviso to Section 11A of the Act which requires the Labour Court to take into consideration only the material on record.
23. The extent of interference by the Labour Court in the quantum of punishment and the interpretation of Section 11A of the Act also came up for consideration in Ram Avtar Sharma and Others vs. State of Haryana and Another, . It was held in that case that Section 11A confers power on the Tribunal/Labour Court to examine the case of a workman whose service has been terminated either by discharge or dismissal qualitatively with regard to the nature of the enquiry and quantitatively in the adequacy or otherwise of the punishment.
24. The interpretation of Section 11A was also discussed in Christian Medical College Hospital Employees Union and Another vs. Christian Medical College Vellore Association and Others, . It was held that although Section 11A confers power on an Industrial Tribunal or a Labour Court to substitute a lesser punishment in lieu of the order of discharge or dismissal passed by the management, yet it does not confer an arbitrary power on the Industrial Tribunal or the Labour Court. This power has to be exercised judicially and the Industrial Tribunal or Labour Court is expected to interfere only if it is satisfied that the punishment imposed is highly disproportionate to the degree of guilt of the workman concerned. The decision of the Industrial Tribunal or the Labour Court in respect of the quantum of punishment has to be supported by reasons and these reasons are subject to judicial review.
25. (sic)ke into consideration “surging circumstances” while arriving at a decision.
26. In Senapathy Whiteley Ltd. vs. Karadi Gowda and Another, the Supreme Court noted that it is well settled that the powers of the Labour Court under Section 11A of the Act are wide and that it would be open to the High Court in justifiable cases to modify the order of the Labour Court.
27. This was accepted by the Supreme Court in Jaswant Singh vs. Pepsu Roadways Transport Corpn. and Another, the Labour Court reduced the punishment of dismissal from service to a denial of back wages. The High Court set aside the decision of the Labour Court and confirmed the punishment of dismissal from service. The Supreme Court did not agree either with the Labour Court or with the High Court and while upholding the order setting aside the dismissal from service, it was directed by way of punishment that the appellant therein should not be given three increments in the time scale in which he would be reinstated for the next three years. One of the factors noted by the Supreme Court in coming to this conclusion was that it was the first offence of the appellant.
28. Another factor that may be considered is the nature of the offence as noted by the Supreme Court in Janatha Bazar (Sourth Kanara Central Cooperative Wholesale Stores Ltd.) and Others vs. Secretary, Sahakari Noukarara Sangha and Others, . In this case, even though the record of the employee was clean, yet since breach of trust and misappropriation had been proved against him, the Supreme Court felt that there was no question of showing any uncalled for sympathy and reinstating the employee in service.
29. The question of misplaced sympathy was again adverted to in Regional Manager, RSRTC vs. Ghanshyam Sharma, . It was also emphasised in this case that discretion under Section 11A of the Act is to be exercised by the Labour Court judiciously.
30. That the Labour Court has a wide discretion while exercising power under Section 11A of the Act was reiterated by the Supreme Court in Hindustan Motors Ltd. vs. Tapan Kumar Bhattacharya and Another, where the Supreme Court noted that Section 11A is couched in wide and comprehensive terms and vests a wide discretion in the Tribunal in the matter of awarding a proper punishment.
31. The concept of proportionality in this connection was first adverted to by the Supreme Court in Management of Hindustan Machine Tools Ltd. vs. Mohd. Usman and Another, in which it was held that if the punishment imposed is disproportionately heavy in relation to the misconduct, interference would be justified. This was reiterated in Ved Prakash Gupta vs. M/s Delton Cable India (P) Ltd., wherein the Supreme Court approved interference because the punishment was shockingly disproportionate in relation to the charge framed against a workman. Thereafter in Rama Kant Misra vs. State of Uttar Pradesh and Others, the Supreme Court reiterated that the extreme penalty of dismissal or discharge can be interfered with if it is found to be either disproportionately heavy or excessive.
32. There is an extremely helpful discussion on the common law doctrine of proportionality in B.C. Chaturvedi vs. Union of India and Others, but that is in the context of service law rather than in the context of labour law (which is what I am presently concerned with) the difference between the two being the exercise of power under Article 226 of the Constitution as contrasted with the exercise of power under Section 11A of the Industrial Disputes Act, as noticed in paragraph 25 of the Report.
33. An illuminating discussion on the proportionality principle can also be found in Union of India vs. Ganayutham, and in Om Kumar and Others vs. Union of India, (2001) 2 SCC 386. There again, the discussion is with reference to legislative action and administrative action. The concept of proportionality as a facet of reasonableness in our constitutional law is well-known. In Om Kumar, it was pointed out that in administrative action affecting fundamental freedoms, proportionality has always been applied as a test though that word has not been specifically used (paragraph 55 of the Report). However, in the context of punishment in service law, it was pointed out in paragraph 71 of the Report that the Wednesbury principles [Associate Provincial Picture Houses vs. Wednesbury Corporation, (1948) 1 KB 223] would still be applicable. Decided cases referred to, such as Ranjit Thakur vs. Union of India, and B.C. Chaturvedi legitimize interference in the quantum of punish P.C. Kakkar, .
34. In contrast, Section 11A of the Act requires a lower standard or test to be applied as a primary reviewing authority, even though no fundamental freedom is involved. This is apparent from the various decisions referred to above (although Ved Prakash Gupta uses the expression shockingly disproportionate) as well as the intendment of Section 11A of the Act as inferred from the Statement of Objects and Reasons and the recommendation of the International Laour Organization, to the effect that a worker aggrieved by the termination of his employment should be entitled to appeal against the termination, among others, to a neutral body such as an arbitrator, a Court, an arbitration committee or a similar body and that the neutral body concerned should be impowered to examine the reasons given in the termination of employment and the other circumstances relating to the case and to render a decision on the justification of the termination.
35. On the basis of the above discussion, the principles of law on the scope of interference by a Labour Court or Tribunal under Section 11A of the Act in regard to the quantum of punishment may now be summed up as follows:-
(i) The power conferred by Section 11A of the Act is wide and comprehensive, and yet only discretionary.
(ii) The Labour Court or Tribunal may alter the punishment imposed by the employer even if misconduct is proved.
(iii) Interference by the Labour Court or Tribunal is quantitative enabling it to determine the adequacy or otherwise of the punishment.
(iv)The power is to be exercised judicially, that is, in appropriate cases, as well as judiciously. The power cannot be exercised arbitrarily and interference may take place only if the Labour Court or Tribunal is satisfied about the necessity to interfere.
(v) Any satisfaction or interference by the Labour Court or Tribunal must be supported by reasons and the reasons are subject to judicial review.
(vi) Relevant circumstances such as past conduct may be considered while arriving at a decision, provided they are supported by material on record.
(vii) Interference in the quantum of punishment is not called for on grounds of misplaced or uncalled for sympathy.
(viii) The concept of proportionality and primary review is inherent in Section 11A of the Act.
36. Taking into account all the factors, as mentioned by the Supreme Court in various decisions, and on a perusal of the record of the case, I find that the learned Labour Court has taken into consideration the following facts while reducing the penalty imposed upon the Respondent-Workman: –
(a) The Respondent-Workman admitted his mistake, or confessed his guilt, whichever way one might look at it; the mistake having been caused (at least partly) due to the absence of the terminal tax Moharrir throughout the day;
(b) The Respondent-Workman gave an explanation for the error committed by him. This explanation was not challenged or rebutted and could be plausible;
(c)The Respondent-Workman did not gain anything for himself as a result of the mistake committed by him. It is only that a loss of Rs.776/- was caused to the Petitioner; and as per the Delhi Municipal Corporation Service (Control and Appeal) Regulations, 1959 such a misconduct is normally punishable with a minor penalty of recovery of the pecuniary loss caused;
(d) The Respondent-Workman had a clean record prior to the alleged misconduct; and
(e) The disciplinary authority had wrongly taken it to be a case of misappropriation or cheating, which allegations were not even made against the Respondent-Workman.
37. All the above factors are relevant factors and I think the learned Labour Court did not exceed its jurisdiction but used its discretion judiciously while reducing the penalty awarded to the Respondent-Workman. On the other hand, there is no irrelevant or extraneous factor that has been considered by the learned Labour Court. This being so, I do not think it necessary to judicially review the award of penalty by the learned Labour Court.
38. Some subsequent events that have occurred during the pendency of this writ petition are also important, namely, that the Respondent-Workman has received the amount of back wages due to him and he has also been reinstated in service with effect from 1st October, 2002. Almost two years have gone by but there does not seem to be any complaint against the Respondent-Workman during this period.
39. In view of the above, I do not find any reason to interfere with the impugned Award.
40. The writ petition is, accordingly dismissed. No costs.