Holding

The service rules confer only the right to a co‑representative, not an advocate, and the Labour Court's findings on both the lack of advocate assistance and the appointing authority were not sustainable.

Summary

Cipla Ltd. terminated medical representative Ripu Daman Bhanot after a departmental enquiry found him guilty of submitting a false daily report, a misconduct under Rule 14 of the company's service rules. The Labour Court held the termination illegal, reasoning that Bhanot was denied assistance of an advocate and that the termination order was not issued by the appointing authority. On appeal, the Supreme Court observed that the service rules only permit a co‑representative, not a practising advocate, and therefore the Labour Court was not justified in its finding on that ground. The Court also found the Labour Court’s conclusion on the appointing authority unsupported, as it failed to refer to the service rules. Consequently, the appeal was allowed, the interim award set aside, and the matter remanded to the Labour Court to decide all issues together.

Issues considered

Whether an employee is entitled to assistance of a practising advocate in a departmental enquiry when the service rules provide only for a co‑representative.
Whether a termination order is invalid if it is not passed by the appointing authority as defined in the service rules.
Whether the Labour Court may split the issues into preliminary and non‑preliminary matters or must decide them together.

Legislation cited

Industrial Disputes Act, 1947

Subjects

departmental enquiryco‑representativeadvocate assistancetermination of serviceappointing authorityservice ruleslabour courtindustrial disputemisconduct

Judgment

. -""-..

A MIS CIPLA LTD. AND ORS.
v.
-
RIPU DAMAN BHANOT AND ANR.

APRIL 12, 1999

B (S. SAGI-HR AHMAD AND S. RAJENDRA BABU, JJ.]

Service Law :

Departmental Enquiry-Assistance of an Advocate-Medical
C Representative-Misconduct-Departmental enquiry-Termination of
service-On challenge, Labour Court holding that termination illegal and·
void as assistance of Advocate not granted-On appeal, Held, service rules
only provide for assistance of a co-representative of choice in departmental
proceedings-Thus, Labour Court not justified in holding that employee
D entitled to assistance of an Advocate-Matter remanded to Labour Court
with a direction that' a11 the issues be decided together.

Termination from service-Order issued by General Manager
(Marketing) who was not the appointing authority-Labour Court holding
the termination order bad as it was npt issued by competent authority-
E Validity of-Held, Labour Court not justified in dismissing the submission of
the management that General Manger (Marketing) was an officer superior
in rank to the appointing authority without even referring to service rules
on the point-Thus, findings of the Labour Court not sustained

Respondent, a Medical Representative with the appellant Pharmaceutical
F company was charge-sheeted and terminated from service after holding a
departmental enquiry. On challenge, Labour Court held that the termination
order passed by the appellant was wholly illegal and void as the respondent
was not allowed the assistance of an Advocate. It further held that the order
of termination was not passed by the appointing authority and therefore, it
G was bad. The appellant-company's appeal before the High Court was dismissed
Hence the present appeal.

The contention of the appellant was that since the Service Rules
applicable to the respondent specifically provided that he can have the
assistance of a co-representative in the departmental enquiry, the Labour
H Court was wrong in holding that the respondent was entitled to the assistance
582
CIPLA LTD. v. RIPU DAMAN BRANOT 583

of an advocate. A
The contention of the respondent was that though the Service Rules
allow the assistance of a co-representative in the departmental enquiry, the
respondent, nevertheless, was entitled to be represented by a practising
Advocate in the departmental proceedings as the questions involved in those
proceedings were complicated which could not be tackled by the respondent B
as he was not aware of the basic principles of legal proceedings or their
implications, or, for that matter, the manner in which those proceedings were
to be conducted.

Allowing the appeal, thi~ Court
c
HELD : 1. The relevant Service Rules only indicate that a person
against whom the departmental proceedings have been initiated will be entitled
to avail of the assistance of a co-representative of his choice in those
proceedings. Thus, the Labour Court was not justified in holding that the
respondent-employee is entitled to the assistance of an Advocate. (587-D]
D
Kalindi and Ors. v. Tata locomotive & Engineering Company ltd.,
AIR (1960) SC 914 = (1960) 3 SCR 407; Dunlop Rubber Company v.
Workmen, (1965) 2 SCR 139 =AIR (1965) SC 1392 = (1965) 1 LLJ 426;
Crescent Dyes and Chemicals ltd. v. Ram Naresh Tripathi, (1993] 2 SCC 115
= [1992) Suppl. 3 SCR 559 and Bharat Petroleum Corporation Ltd. v. E
Maharashtra Genl. Kamgar Union & Ors., (1999) 1 SCC 626, relied on.

2. The findings of the Labour Court that the order of termination was
bad for the reasons that it was not issued by the Personnel Manager who was
the appointing authority of the respondent b'ut was issued by the General
Manager (Marketing) who was not competent cannot be sustained as in p
recording this finding, the Labour Court does not refer to Service Rules
which ought to have been done as it was pointed out to him that the General
Manager (Marketing) was an Officer superior in rank to the Personnel
Manager but the Labour Court brushed aside the submission on the ground
that nothing was brought on record to indicate that the General Manager
(Marketing) was superior in rank. (588-B] G
3. The matter is remanded to the Labour Court with a direction that
all the issues be decided together without spliting them into preliminary or
non-preliminary issues. (588-C]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2230 of H
584 SUPREME COURT REPORTS (1999) 2 S.C.R .

.A 1999.

From the Judgment and Order dated 28.5.98 of the Punjab & Haryana
High Court in C.W.P. No. 1010of1998.

Ashok H. Desai, Soli Cupoor, R. Singhvi and Ashok K. Singh for the
B Appellant.

Neeraj Jain, Manish Mohan, Aditya K. Choudhary and U.S. Prasad for
the Respondents.

The- Judgment of the Court was delivered by
c
S. SAGHIR AHMAD, J. Leave granted.

The appellant is a pharmaceutical company engaged in manufacturing
and marketing of various pharmaceutical products.

D The respondent was appointed as a Medical Representative of the
appellant with his headquarter at Ludhiana. Under the jobs assigned to the
respondent, he was to visit the doctors, hospitals and chemists to promote
the sale of medicines manufactured and marketed by the appellant. One of the
duties of the respondent was to submit a daily report of the visits made by
E him specifying the persons visited and the samples or promotional materials
distributed by him. In the daily report of 31st of August, 1989, the respondent
indicated that he had visited one Dr. K.R. Singla at Ropar. He also indicated
in his daily report that he had visited Mis Singla Medicos, Ropar to whom
he distributed various samples of the appellant's products. It was later
discovered by the appellant that Dr. Singla had already died on 7th of August,
F 1989, having been killed by the terrorists and that M/s Singla Medicos at
Ropar had been closed from 08.08.1989 onwards.

Rule 14 of the Service Rules applicable to the Medical Representatives
employed in the appellant's Company provides as under:-

G "14. MISCONDUCT

(d) Fraud or dishonesty in connection with the Company's business
or property.

( 1) Submission of false daily reports or irregularity in submission of
H daily reports."
CIPLA LTD. v. RIPU DAMAN BHAN OT [S. SAGHIR AHMAD, J.] 585
Since the respondent had submitted a report that he had visited Dr. A
Singla on 31.8.1989 which was obviously false as Dr. Singla had already been
killed by the terrorists on 7th of August, 1989, a charge-sheet for the
misconduct, specified in Rule 14, was issued to him on 23 .12.1989 on the basis
· of which a departmental enquiry was held against the respondent which was
completed on 18.5.1990 and the findings recorded by the Enquiry officer were B
that the charges levelled against him were fully proved. On the lmsis of the
above findings, the services of the respondent were terminated by order
dated 18.6.1990. This order was challenged by the respondent in the
departmental appeal on 26.6.1990 but the appeal was dismissed. The respondent
thereafter raised an industrial dispute which was referred to the Labour Court,
Ludhianaon 10.4.1991. C

While the matter was pending before the Labour Court, the appellant
moved an application on 10.3.1995 that since the respondent was only a
Medical Representative, he was not covered by the definition of "workman"
as laid. down in the Industrial Disputes Act, 1947 and consequently the
proceedings before the Labour Court were wholly without jurisdiction. The D
preliminary objection raised by the appellant was accepted by the Labour
Court which, by its Award dated 02.05.1995, held that the respondent was not
a "workman" and consequently dismissed the reference. The respondent
challenged this Award before the Punjab & Haryana High Court and by its
judgment dated 12.08.1996, the High Court set aside the Award and remanded E

-
the case back to the Labour Court for deciding the matter afresh.

On 22.12.1997, the Labour Court decided another preliminary issue which
was to the effect "whether a fair and proper enquiry was held" and it was held
that fair and proper enquiry was not held and the termination order passed
.. '
by the appellant was wholly illegal and void as it was found by the Labour F
Court that the respondent, in spite of his request, wa~ not allowed the
assistance of an advocate. It was further found that the terminatio". order was
passed by an authority who was not the appointing authority of the respondent ,
and, therefore, it was bad. The appellant, thereafter, filed Writ Petition No. IO I 0 ·
of 1998 in the Punjab & Haryana High Court but the High Court by its
judgment dated 25.05.1998 dismissed the Writ Petition. It is in these G
circumstances that the present appeal has been filed in this Court.

We have heard the learned counsel for the parties.

Mr. Ashok Desai, learned senior counsel appearing on behalf of the
appellant has contended that since the Service Rules applicable to the H
586 SUPREME. COURT REPORTS (1999] 2 S.C.R..

A respondent specifically provided that he can have the assistance of a co-
representative in the departmental enquiry, the Labour Court was wrong in
holding that the respondent was entitled to the assistance of an advocate.

Learned counsel appearing on behalf of the respondent has contended
that though the Service Rules allow the assistance of a co-representative in.
B the departmental enquiry, the respondent, nevertheless, was entitled to be
represented by a practising advocate in the departmental proceedings as the
questions involved in those proceedings were complicated which could not
be tackled by the respondent as he was not aware of the basic principles of
legal proceedings or their implications, or, for that matter, the manner in which.
C those proceedings were to be conducted.

The relevant Service Rules are quoted below:-

"16. (a) The Representative against whom an enquiry has to be
held shall be given a charge-sheet, clearly setting forth
the circumstances appearing against him and requiring
D
explanation. He shall be given an opportunity to answer
the charge and be permitted to be defended by a co-
Representative of his choice. Except for reasons to be
recorded in writing by an Officer holding the enquiry, the
Representative shall be permitted to produce witnesses in
E his defence and to cross-examine witnesses on whose
evidence the charge rests. A concise summary of the
evidence produced by either side and the Representative's
-
plea shall be recorded.

F
/ (b) A Representative against whom action is proposed to be
taken under Service Rule I 6 may be suspended pending -
enquiry. A Representative who is suspended shall be
paid a subsistence allowance during the period of
suspension at the rate of 50% of his salary. The order of
suspension shall take effect immediately on the receipt of
the communication to the Representative. If, as a result of
G
the enquiry held, or explanation tendered, it is decided
not to take any action against the Representative he shall
be deemed to have been on duty and shall be entitled to
-
full salary for the period of suspension.

H (c) In awarding punishment under the Service Rules, the
CIPLA LTD. v. RIPU DAMAN BHANOT [S. SAGHIR AHMAD, J.] 587
Manager shall take into account the gravity of the A
misconduct, the previous record, if any, of the
Representative, any other extenuating or aggravating
circumstances that may exist.

(d) If a Representative refuses to accept a charge-sheet, order
or any other communication issued in accordance with B
the Service Rules and provided that the same is sent by
registered post acknowledgement due and if he refuses to
acknowledge the receipt of the communication and if he
fails to attend the enquiry, the enquiry shall be conducted
ex-parte and the Representative shall be responsible for C
the consequences thereof."

These Rules indicate that a person against whom the departmental
proceedings haye been initiated will be entitled to avail of the assistance of
a co-representative of his choice in those proceedings.

-- Jn Kalindi and Ors. v. Tata Locomotive & Engineering Company Ltd., D
AIR{l260) SC 914 = [1960) 3 SCR 407, it was held that a workman against
whe»;-a departmental enquiry is held by th~ Management has no right to be
represented at such enquiry by an outsider, not even by a representative of
his Union though the Management may in its discretion allow the employee
to avail of such assistance. So also in Dunlop Rubber Company v. Workmen, E
[1965] 2 SCR 139 =AIR (1965) SC 1392 = (1965) l LLJ 426, it was laid down
an:
that employee has no right to be represented in the disciplinary proceedings -
by another person unless the Service Rules specifically provided for the
same. A Three-Judge Bench of this Court in Crescent Dyes and Chemicals
Ltd v. Ram Naresh Tripathi, [1993) 2 SCC 115 = [1992) Suppl. 3 SCR 559, laid
down that the right to be represented in the departmental proceedings initiated F
against a delinquent employee can be regulated or restricted by the
Management or by the Service Rules. It was held that the right to be
represented by an advocate in the departmental proceedings can be restricted
and regulated by statutes or by the Service Rules including the Standing
Orders, applicable to the employee concerned. The whole case law was G
reviewed by this Court in Bharat Petroleum Corporation Ltd. v. Maharashtra
Genl. Kamgar Union & Ors., [1999) I SCC 626, and it was held that a
delinquent employee has no right to be represented by an advocate in the
departmental proceedings and that if a right to be represented by a co-
workman is given to him, the departmental proceedings would not be bad
only for the reason that the assistance of an advocate was not provided to H
'>·
-,

588 SUPREME COURT REPORTS [1999] 2 S.C.R.

A him.
The find in~ of the Labour Court that the order of termination was baCf
for the reason that it was not issued by the Personnel Manager who was the
appointing authority of the respondent but was issued by the General Manager ,
,_
(Marketing) who was not competent cannot be sustained as in recording this
B finding, the Labour Court does not refer to Service Rules which ought to.have
beeri done as it was pointed out to him that the General Manager (Marketing)
_was an officer superior in rank to the Personnel Manager but the Labour
Court brushed aside the submission on the ground that nothing was brought
on record to indicate that the General Manager (Marketing) was superior in
C rank. We refrain ourselves from making any observation on the merit of this
question. as the whol~ matter is being reµianded for deciding these questions
I-

afresh. We would only say that the Labour Court ~hould decide all the Issues I-

together and shall no0plit the. issues into preliminary or non-preliminary
issues so that the proceedings may come to an end at the earliest.

D In view of the above, the Interim Award passed by the Labour Court
cannot be sustained nor can the judgment passed by the High Court be
upheld. The appeal is consequently allowed. The Interim Award passed by
the Labour Court as upheld by the High Court is set aside and the Labour
Court is directed to decide the whole matter afresh in the light of the
observations made above and in accordance with law.
E
S.V.K.I. Appeal allowed.