{"id":119889,"date":"1963-02-15T00:00:00","date_gmt":"1963-02-14T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-tata-oil-mills-co-ltd-vs-workmen-anr-on-15-february-1963"},"modified":"2016-05-04T08:32:54","modified_gmt":"2016-05-04T03:02:54","slug":"the-tata-oil-mills-co-ltd-vs-workmen-anr-on-15-february-1963","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-tata-oil-mills-co-ltd-vs-workmen-anr-on-15-february-1963","title":{"rendered":"The Tata Oil Mills Co., Ltd vs Workmen & Anr on 15 February, 1963"},"content":{"rendered":"
Supreme Court of India<\/div>\n
The Tata Oil Mills Co., Ltd vs Workmen & Anr on 15 February, 1963<\/div>\n
Equivalent citations: 1966 AIR 1672, \t\t 1964 SCR (2) 125<\/div>\n
Author: P Gajendragadkar<\/div>\n
Bench: Gajendragadkar, P.B.<\/div>\n
           PETITIONER:\nTHE TATA OIL MILLS CO., LTD.\n\n\tVs.\n\nRESPONDENT:\nWORKMEN & ANR.\n\nDATE OF JUDGMENT:\n15\/02\/1963\n\nBENCH:\nGAJENDRAGADKAR, P.B.\nBENCH:\nGAJENDRAGADKAR, P.B.\nHIDAYATULLAH, M.\nSHAH, J.C.\n\nCITATION:\n 1966 AIR 1672\t\t  1964 SCR  (2) 125\n CITATOR INFO :\n R\t    1972 SC 136\t (22)\n D\t    1991 SC 101\t (15,156,179,225)\n\n\nACT:\nIndustrial Dispute--Termination of service of an employee on\npayment\t of one month's salary in lieu of  notice--order  of\ntermination  purported\tto be discharge under R. 40  (1)  of\nService\t Rules--Jurisdiction  of  the  Tribunal\t to  examine\nwhether it amounts to a discharge or dismissal.\n\n\n\nHEADNOTE:\nMr. Banerjee was an employee of the appellant.\tHis services\nwere  terminated on the ground that the appellant  had\tlost\nconfidence  in\thim and in lieu of notice he  was  paid\t one\nmonth's\t salary.  The union to which Mr.  Banerjee  belonged\ntook up his cause and on the failure of the parties to reach\na  settlement  the  matter was referred\t to  the  Industrial\nTribunal by the Government.\nThe  appellant contended before the Tribunal that the  order\nof  termination of service of Mr. Banerjee was an  order  of\ndischarge which it was competent to make under R., 40 (1)\n126\nof  the\t Service Rules. it was contended by  the  respondent\nthat the termination was not a discharge simpliciter but was\nin substance dismissal and that the Tribunal was entitled to\nconsider the propriety of the appellant's action.\nThe Tribunal held that it had jurisdiction to look into\t the\nreasons\t behind the discharge of an employee.  On  the\texa-\nmination  of  the  evidence  the  Tribunal  found  that\t  no\nmalafides  on the part of the employer had been\t proved\t and\nthat   the  termination\t of  service  did  not\t amount\t  to\nvictimisation  or unfair labour practice.  Even so  it\theld\nthat  the  discharge  was not  justified  and  directed\t the\nreinstatement of Mr. Banerjee.\tThe present appeal is by way\nof special leave.\nBefore\tthis Court, in addition to the above contention\t the\nappellants  contented  that  in the light  of  the  evidence\nbefore\tthe Tribunal its finding that the discharge was\t not\njustified, was wrong.\nHeld,  that  in the matter of an order of  discharge  of  an\nemployee  the  form  of\t the  order  is\t not  decisive.\t  An\nIndustrial   Tribunal  has  jurisdiction  to   examine\t the\nsubstance  of the matter and decide whether the\t termination\nis in fact discharge simpliciter or it amounts to  dismissal\nwhich  has put on the cloak of discharge  simpliciter.\t The\ntest  always  has to be whether the act of the\temployer  is\nbona  fide  or\twhether\t it is\ta  malafide  and  colourable\nexercise of the powers conferred by the terms of contract or\nby the standing orders.\nBuckingham & Carnatic Co. Ltd. v. Workmen of the Company  95\n(1951) II L. L. J. 314, chartered Bank, Bombay v.  Chartered\nBank Employees Union<\/a> (1960) II L. L..T. 222 and U. B. Dutt &\nCo.  (Private) Ltd. v. Its Workmen,<\/a> (1962) II\tL.L.J.\t374,\nreferred to.\nSince  the reasons given by the Tribunal in support  of\t its\nconclusion were wholly unsatisfactory its order must be\t set\naside.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 322 of 1962.
\nAppeal\tby special leave from the Award dated September\t 13,
\n1961,  of the Second Labour Court, West Bengal, in Case\t No.
\nVIII-C-40 of 1960.\n<\/p>\n
M  .C\t Setalvad, J. B. Dadachanji, O. C.\n<\/p>\n
Mathur and Ravinder Narain, for the appellant.\n<\/p>\n
 127<\/span><\/p>\n
C.   K.\t Daphtary, Solicitor General of India and  Janardhan
\nSharma, for the respondent No. 1<\/span>
\n1963.  February 15.  The judgment of the Court was delivered
\nby
\nGAJENDRAGADKAR\tJ.–Mr. R. K. Banerjee had been employed  by
\nthe  appellant, the Tata Oil Mills Co. Ltd.as a Salesman  on
\nApril  3,  1956, as a probationer and he  was  confirmed  on
\nNovember  5, 1956.  On December 5, 1959, his  services\twere
\nterminated  and he was informed that the appellant had\tlost
\nconfidence in him, and so, it bad decided to discharge\thim.
\nAccordingly, in lieu of notice, he was paid a month’s salary
\nand was told that he ceased to be the employee of the  appe-
\nllant as from the date next after he received the order from
\nthe  appellant.\t The discharge of Mr. Banerjee was  resented
\nby the Union to which he belonged and the Union took up\t his
\ncase.  Since the dispute could not be settled amicably,\t the
\nUnion succeeded in persuading the Government of West  Bengal
\nto  refer the dispute for adjudication to the Second  Labour
\nCourt  on  the\tground\tthat  the  said\t discharge  was\t not
\njustified.  That is how the discharge of Mr. Banerjee became
\nan   industrial\t dispute  between  the\tappellant  and\t the
\nrespondents,  its workmen represented by their\tUnion.\t The
\nLabour Court which tried the dispute came to the  conclusion
\nthat  the appellant had failed to justify the  discharge  of
\nMr.  Banerjee  and  so, it has\tdirected  the  appellant  to
\nreinstate  him and pay him full emoluments from the date  of
\nhis  discharge up to the date of his reinstatement.   It  is
\nthis  order  which  is challenged by the  appellant  by\t its
\npresent appeal brought to this Court by special leave.
\nThe  material  facts  leading  to  the\ttermination  of\t Mr.
\nBanerjee’s  services  lie within a very narrow\tcompass.  in
\nNovember,  1959 Mr. Banerjee was working in the\t Assam\tarea
\nand as such, had to work
\n128<\/span>
\nas a Salesman at Dhubri, Bongaigoan, Rangia and Tejpur.\t The
\nappellant expected that as its Salesman Mr. Banerjee  should
\nvisit  dealers\tin  his area and carry\ton  intelligent\t and
\nintensive   propaganda\tto  popularise\tthe  sale   of\t the
\nappellant’s  products.\tThe  appellant has a  Sales  ice  in
\nCalcutta  and the manager of the said ice visits  the  areas
\nwithin\this  jurisdiction to inspect the work  of  Salesmen.
\nAccordingly  Mr.  Gupta\t who was then  the  manager  of\t the
\nCalcutta  ice visited the area assigned to Mr. Banerjee,  in
\nthe  last week of October.  He found that Mr.  Banerjee\t was
\nnetworking satisfactorily as a Salesman.  In particular,  he
\nnoticed\t that whereas Mr. Banerjee had reported to  the\t ice
\nthat  the Bongaigoan Stockists had 20 boxes of dried up\t and
\ndeshaped 501 Special Soap which could not be distributed  in
\nthe  market he had in fact not opened a single box  and\t had
\nnot cared to satisfy himself that the soaps had either dried
\nup or had been deshaped.  In fact, Mr. Gupta found that\t the
\nboxes  were  intact and he opened them and  discovered\tthat
\nfive boxes contained soap which had dried up and had  become
\ndeshaped, whereas the 15 other boxes were in good condition.
\nThereupon, Mr. Gupta made a   report to the zonal Manager on
\nNovember  2,  1959, adversely commenting on  Mr.  Banerjee’s
\nwork.\tThe said report was in due course forwarded  to\t the
\nHead  ice  in  Bombay.\tThe Head  ice  then  instructed\t the
\nCalcutta Sales ice by telephone to send for Mr. Banerjee and
\ncall  for  his explanation.  Accordingly, Mr.  Banerjee\t was
\nsent  for  and his explanation taken; Mr.  Gupta  then\tmade
\nanother\t report\t expressing  his  dissatisfaction  with\t the
\nexplanation given by Mr. Banerjee.  This report was sent  on
\nNovember 24, 1959.  The Head ice accepted this report and on
\nDecember   5,  1959,  issued  to  Mr,  Banerjee\t the   order
\nterminating  his services.  That, in brief, is the case\t set
\nout  by the appellant in support of the action taken  by  it
\nagainst Mr. Banerjee.\n<\/p>\n
 129<\/span><\/p>\n
The  appellant\thad  alleged that  the\ttermination  of\t Mr.
\nBanerjee’s  services was not dismissal but was\ta  discharge
\nsimpliciter,   and  according  to  it,\tthe  discharge\t was
\njustified by the terms of contract between the appellant and
\nMr. Banerjee as embodied in Rule 40 (1) of the Service Rules
\nof -the appellant.  The appellant, therefore, urged that the
\nLabour\tCourt had no jurisdiction to consider the  propriety
\nof the appellant’s action in discharging Mr. Banerjee.
\nThe  respondents,  on  the other hand,\tcontended  that\t the
\ndischarge   was\t not  discharge\t simpliciter  but  was,\t  in
\nsubstance,  dismissal, and so, it was urged that the  Labour
\nCourt  was  entitled  to  consider  the\t propriety  of\t the
\nappellant’s action.  Basing themselves on the plea that\t the
\ndischarge  amounted  to dismissal, the\trespondents  pleaded
\nthat the failure of the appellant to hold an enquiry against
\nMr.  Banerjee  introduced a serious infirmity in  the  order
\npassed against him; and they argued that the conduct of\t the
\nappellant  was\tmalafide and the dismissal of  Mr.  Banerjee
\namounted to victimisation.\n<\/p>\n
The  Labour Court has found that according to the  terms  of
\ncontract  under\t which\tMr. Banerjee  was  employed  by\t the
\nappellant,  the\t appellant  was entitled  to  discharge\t Mr.
\nBanerjee  from\tits  employment under Rule  40\t(1)  of\t the
\nService\t Rules;\t but it held that merely because  the  order
\nserved\ton  Mr.\t Banerjee  purported  to  be  an  order\t  of
\ndischarge,  that would not exclude the jurisdiction  of\t the
\nLabour\tCourt  to examine the substance of the\tmatter.\t  In
\nfact,  Mr.  joshi who appeared for  the\t appellant  conceded
\nbefore the Labour Court that an adjudicating Court can\tlook
\ninto the reasons behind the discharge of an employee.\tThat
\nis  why\t evidence was led by- both the\tparties\t before\t the
\nLabour\tCourt.\tHaving considered that evidence, the  Labour
\nCourt  has found that the respondents’ plea about  the\tmala
\nfides of the
\n130<\/span>
\nappellant was not proved and it held that the termination of
\nMr.  Banerjee’s services could not be said to amount  to  an
\nact of victimisation or an unfair labour practice.  Even so,
\nit held that the discharge was not justified, and so, it,has
\ndirected the appellant to reinstate Mr. Banerjee.  It is the
\nvalidity  of this order that is challenged before us by\t Mi.
\nSetalvad on behalf of the appellant.\n<\/p>\n
The   true  legal  position  about  the\t Industrial   Courts
\njurisdiction  and  authority in dealing with cases  of\tthis
\nkind  is  no longer in doubt.  It is true  that\t in  several
\ncases,\tcontract  of employment or  provisions\tin  Standing
\nOrders\tauthorise  an industrial employer to  terminate\t the
\nservice, of his employees. after giving notice for one month
\nor  paying  salary  for one month in  lieu  of\tnotice,\t and
\nnormally, an employer may, in a proper case, -be entitled to
\nexercise  the said power.  But where an order  of  discharge
\npassed\tby an employer gives rise to an industrial  dispute.
\nthe  form of the order by which the employee’s services\t are
\nterminated, would not be decisive ; industrial\tadjudication
\nwould be entitled to examine the substance of the matter and
\ndecide whether the termination is in fact discharge  simpli-
\nciter or it amounts to dismissal which has put on the  cloak
\nof  a  discharge simpliciter.  If the  Industrial  Court  is
\nsatisfied  that the order of discharge is punitive, that  it
\nis  malafide, or that it amounts to victimisation or  unfair
\nlabour practice, it is competent to the Industrial Court  to
\nset  aside  the\t order\tand in a  proper  case,\t direct\t the
\nreinstatement\tof  the\t employee.   In\t some\tcases,\t the
\ntermination  of\t the employee’s services may appear  to\t the
\nIndustrial Court to be capricious or so unreasonably  severe
\nthat  an inherence may legitimately and reasonably be  drawn
\nthat  in  terminating  the services, the  employer  was\t not
\nacting bonafide.  The test always has to be whether the\t act
\nof the employer is bonafide or not.  If the act is malafide,
\nor appears to be a colourable
\n 131<\/span>
\nexercise  of the powers conferred on the employer either  by
\nthe  terms  of\tcontract or by\tthe  standing  orders,\tthen
\nnotwithstanding\t  the\tform  of   the\t order,\t  industrial
\nadjudication  would examine the substance and  would  direct
\nreinstatement  in a fit case.  This position was  recognised
\nby  the\t Labour\t Appellate  Tribunal as\t early\tas  1951  in
\nBuckingham and Carnatic Co. Ltd., v. Workers of the Company,<\/a>
\n(1), and since then, it has been consistently followed\tvide
\nChartered  Bank, Bombay, v. Chartered Bank Employee’s  Union<\/a>
\n(2)  ,\tand U. B. Dutt & Co. (Private) Ltd. v.\tIts  Workmen<\/a>
\n(3).\n<\/p>\n
In  the present case, the Labour Court has made\t a  definite
\nfinding\t in  favour  of -the appellant that  its  action  in
\nterminating  the services of Mr. Banerjee was  not  malafide
\nand did not amount to victimisation.  Even so, it  proceeded
\nto examine the propriety of the said action and came to\t the
\nconclusion that Mr. Banerjee’s discharge from employment did
\nnot  appear  to\t it  to be justified.\tIn  coming  to\tthis
\nconclusion,  the Labour Court has given some  reasons  which
\nare  clearly unsupportable.  It has observed, for  instance,
\nthat the appellant has not produced any documentary evidence
\nin  support of its allegation against the efficiency of\t Mr.
\nBanerjee.   This  is clearly wrong because the\ttwo  reports
\nmade  by Mr. Gupta in respect of Mr. Banerjee’s\t conduct  do
\namount\tto  documentary\t evidence which\t cannot\t be  lightly
\nbrushed\t aside.\t It has then commented on the fact that\t the
\nallegations  made by Mr. Gupta against Mr. Banerjee  on\t six
\ncounts\tare  of\t a general character.\tThis  comment  again
\ncannot be justified because Mr. Gupta stated in clear  terms
\nthe  defects  in Mr. Banerjee’s work which had come  to\t his
\nnotice.\t These defects are specific and it is idle to refuse
\nto  give  importance to this evidence merely on\t the  ground
\nthat  no specific instances had been cited.  In\t regard\t .to
\nthe  question as to whether the 20 boxes had been opened  by
\nMr. Banerjee before he made his report
\n(1) (1951) 11 L.L J. 314.   (2) (1960) 11 L.L.J. 221.
\n(3) (1962)1 L.L J. 374.\n<\/p>\n
132<\/span><\/p>\n
to the Zonal ice, the Labour Court has observed that on this
\npoint..\t there is the evidence of Mr. Banerjee against\tthat
\nof  Mr. Gupta and there was no particular reason to  believe
\none in preference to the other.\t Now, it is clear that\tsuch
\nan  -observation  is  hardly  of any  help  because  it\t was
\nnecessary for the Labour Court to express its conclusion  on
\nthis  point ; it might have believed either Mr. Banerjee  or
\nMr.  Gupta,  but by saying that there is no reason  why\t one
\nshould\tbe believed rather than the other, the Labour  Court
\nleft   this   part  of\tthe  dispute   entirely\t  undecided.
\nSimilarly,  the Labour Court has accepted the fact that\t Mr.
\nGupta\tthat   called  for  and\t received   Mr.\t  Banerjee’s
\nexplanation and to that extent it has rejected Mr. Banerjee’
\nsuggestion that he had not given any explanation a all ; but
\neven  so, the Labour Court has not considered the effect  of
\nthis conclusion on the main controversy between the parties.
\nIn  our opinion, therefore, the-reasons given by the  Labour
\nCourt in support of its conclusion that the discharge of Mr.
\nBanerjee was not justified are wholly unsatisfactory and so,
\nit  has\t become\t necessary for us to  examine  the  evidence
\nourselves.\n<\/p>\n
The  first  report made by Mr. Gupta  expressly\t states\t six
\ngrounds\t on  which  Mr.\t Banerjee’s work  was  found  to  be
\nunsatisfactory.\t  Mr. Gupta took the view that Mr.  Banerjee
\nwas  very  slow in his work as a Salesman, that he  was\t not
\nable  to judge the capacity of the dealers and to give\tthem
\nsufficient stocks in time, that he took no steps to put\t the
\nproducts of the appellant on prominent view in the  dealers’
\nshops,\tthat  he wag not looking after the  pasting  of\t the
\nposters,  in fact in one place the poster was pasted  upside
\ndown, that he was not educating the stockists and dealers as
\nhe could have done and that he was reluctant to put hard and
\nintelligent  work.  It is remarkable that when Mr.  Banerjee
\nwas asked about this report in cross-examination, he frankly
\nstated that
\n 133<\/span>
\nMr.  Gupta was not unfriendly towards him and he was  really
\nunable\tto say why Mr. Gupta should have made these  adverse
\ncomments against his work.  In fact, the Labour Court itself
\nhas  found  that  the  appellant was  not  actuated  by\t any
\nulterior  considerations in discharging Mr. Banerjee.\tThis
\nreport\twas  made by Mr. Gupta soon after he  inspected\t Mc.
\nBanerjee’s  work and there is no reason, whatever,  why\t the
\nLabour\tCourt  should  have been reluctant  to\taccept\tthis
\nreport.\n<\/p>\n
Confining  ourselves  to  the  main  complaint\tagainst\t Mr.
\nBanerjee  that he had not examined even a single box  before
\nhe  reported  that the contents of the said boxes  were\t not
\nmarketable, Mr. Gupta expressly stated that he had seen\t the
\n20 boxes and found that none of them had been opened at all.
\nThey were intact in the company’s packing with the straps on
\nthem.  Mr Gupta got them opened and found that the  contents
\nto  the extent of 5 cases were really damaged and  that\t the
\nremaining contents were alright and could be marketed at the
\ncompany’s prices.  Mr. Banerjee stated in his evidence\tthat
\nhe  had\t all the cases opened and he added, as he.  had\t to,
\nthat  the  said\t cases were repacked  for  avoiding  further
\ndeterioration.\tWhen he was asked how that could be done, he
\nagreed\tthat the metal straps had to be removed for  opening
\nof the boxes, but he added that he had arranged to have them
\nrestrapped  and nailed.\t It is clear that the  strapping  is
\ndone  in  a  factory by machines.   Mr.\t Banerjee,  however,
\nsuggested  that\t he could manage to get the straps  put\t and
\nnailed\twith hands.  This evidence is  patently\t unreliable.
\nBesides, it is significant that when he gave his explanation
\nto Mr. Gupta Mr. Banerjee admitted that he had opened only 5
\nor  6  out  of the 20 boxes in question\t though\t his  report
\nsuggested  that he had opened all the 20 boxes.\t  Therefore,
\nthere  can  be\tno  doubt that\tMr.  Gupta’s  statetment  is
\nabsolutely  true and that Mr. Banerjee had made\t his  report
\nabout the
\n134<\/span>
\nunsatisfactory\tcondition  of the contents of the  20  boxes
\nwithout as much as opening any one of them.’ That being\t so,
\nit  is\tdifficult to understand how the Labour\tCourt  could\n<\/p>\n
-have come to the conclusion that the order of discharge was
\nnot justified.\n<\/p>\n
The  learned Solicitor-General, however, attempted     to
\nargue that there was nothing on the record to\t  show\tthat
\nthe 20 boxes which Mr. Gupta got opened were the same  boxes
\nin respect of which Mr. Banerjee had made his report.  We do
\nnot  think that having regard to the evidence given  by\t Mr.
\nGupta  and Mr. Banerjee and the explanation’ offered by\t the
\nlatter when he was called to Calcutta by Mr. Gupta, there is
\nany  room  for such an ingenious suggestion.   Both  parties
\nknew that they were talking about the same 20 boxes and so,,
\nit  is\tfutile now to suggest that the 20  boxes  which\t Mr.
\nGupta  examined were different from the boxes in respect  of
\nwhich  Mr.  Banerjee  had  made his  report.   It  was\talso
\nsuggested  on behalf of the respondents that Mr.  Gupta\t did
\nnot  admit  that  he  had received  some  letters  from\t Mr.
\nBanerjee  in  which he had complained that  owing  to  heavy
\nrains, conditions were not favourable for effective work  in
\nthe  area entrusted to him.  It is true that when Mr.  Gupta
\nwas  asked about these letters, he said he did not  remember
\nif  he had received them.  We do not think that the  answers
\ngiven by Mr. Gupta in respect of these letters can be of any
\nassistance  to the respondents in discrediting\tMr.  Gupta’s
\nevidence in any manner.\t On the whole, we have no hesitation
\nin holding that the appellant acted bonafide in\t discharging
\nMr. Banerjee’s services when it accepted Mr. Gupta’s  report
\nand  concurred\twith his conclusions  that  the\t explanation
\ngiven by Mr. Banerjee was not satisfactory.
\nThe result is, the appeal is allowed and the order passed by
\nthe Labour Court directing the
\n 135<\/span>
\nappellant  to reinstate Mr. Banerjee is set aside.   In\t the
\ncircumstances  of  the case, there would be no order  as  to
\ncosts.\n<\/p>\n
Appeal allowed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India The Tata Oil Mills Co., Ltd vs Workmen & Anr on 15 February, 1963 Equivalent citations: 1966 AIR 1672, 1964 SCR (2) 125 Author: P Gajendragadkar Bench: Gajendragadkar, P.B. PETITIONER: THE TATA OIL MILLS CO., LTD. Vs. RESPONDENT: WORKMEN & ANR. DATE OF JUDGMENT: 15\/02\/1963 BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-119889","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nThe Tata Oil Mills Co., Ltd vs Workmen & Anr on 15 February, 1963 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-tata-oil-mills-co-ltd-vs-workmen-anr-on-15-february-1963\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Tata Oil Mills Co., Ltd vs Workmen & Anr on 15 February, 1963 - 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