Holding

A domestic enquiry declared defective by the Labour Court cannot be treated as material on record or fresh evidence under Section 11-A, and the management must adduce fresh evidence to justify dismissal; failure to do so warrants remand for fresh adjudication.

Summary

The appellant, a clerk at Dayanand Medical College and Hospital, was dismissed after a domestic enquiry that she alleged was biased and violated natural justice. The Labour Court found the enquiry to be unfair and ordered the management to lead fresh evidence on the merits, but the management relied only on the enquiry record and produced no fresh evidence; the appellant also presented no evidence. The Labour Court dismissed her claim, and the High Court upheld that dismissal. On appeal, the Supreme Court held that the enquiry record, having been declared defective, could not constitute "fresh evidence" or "material on record" under Section 11-A of the Industrial Disputes Act, 1947, and therefore the management was required to adduce fresh evidence, which it failed to do. Consequently, the appellant's claim could not be rejected, and the case was remanded to the Labour Court to be reheard with fresh evidence. The appeal was allowed, setting aside the lower courts' judgments.

Issues considered

The domestic enquiry was fair and proper under principles of natural justice.
Whether the record of a defective domestic enquiry constitutes "material on record" or "fresh evidence" under Section 11-A of the Industrial Disputes Act, 1947.
Whether the Labour Court was justified in directing the management to lead fresh evidence and in dismissing the appellant's claim when no fresh evidence was led.

Legislation cited

Industrial Disputes Act, 1947s. 10, s. 11-A, s. 33

Subjects

Industrial Disputes ActSection 11-ADomestic enquiryFresh evidenceNatural justiceLabour CourtDismissalRemand

Judgment

NEETA KAPLISH A
v.
PRESIDING OFFICER LABOUR COURT AND ANR.

DECEMBER 4, 1998

[S. SAGHIR AHMAD ANDS. RAJENDRA BABU, JJ.] B

Labour Law:

Industrial Disputes Act, 1947-Sec. I I-A-Dismissal-Domestic
enquiry-Labour Court holding the enquiry not fair and proper-Direction C
to management to lead fresh evidence-Management without leading fresh
evidence, relying on "evidence on record"-Emp/oyee also not leading any
evidence-Labour Court dismissing employee's claim-Validity of-Held,
domestic enquiry declared by Labour Court to be defective would neither
constitute "fresh evidence" nor "material on record"-Labour Court justified D
in calling upon the management to lead fresh evidence-Since management
did not lead any evidence, employee has right to lead no evidence-Claim
of employee wrongly rejected-However, on facts matter remanded to Labour
. Court to decide the case afresh after leading evidence.

Appellant was dismissed from service after domestic enquiry. Shi: E
raised a dispute in the Labour Court that the enquiry was conducted in a
biased manner without giving proper opportunity to her. The Labour Court
came to the conclusion that the enquiry was not fair and proper and directed
the management to lead fresh evidence. The management instead of leading
any evidence, relied upon the evidence already on record. Consequently,
appellant-employee also did not lead any evidence. The Labour Court dismissed F
the claim of appellant holding that there was no evidence on her behalf. Writ
petition before the High Court was also dismissed. Hence the present appeal.

The contention of the appellant-employee was that once it was held by
the Labour Court that the domestic enquiry, conducted by the management
was not fair and not in consonance with the principles of natural justice and G
it called upon the management to lead evidence on merits, the evidence
already recorded during domestic enquiry could not have been legally relied
upon and it ought to have been held by the Labour Court that since the
management had not led any evidence on merits, the claim of the appellant
was liable to be allowed.
H
379
380 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A The contention of the respondent-management was that in view of the
proviso to Sec. 11-A of the Act, the Labour Court had to decide the case on
the basis of "the materials on record" and the evidence already recorded
during domestic enquiry would constitute "material on record" which could
not be ignored.

B Allowing the appeal and setting aside the judgment of High Court, this
Court

HELD : I.I. The record pertaining to the domestic enquiry would not
constitute "fresh evidence" as those proceedings have already been found by
C the Labour Court to be defective. Such record would also not constitute
"material on record", within the meaning of Section 11-A of the Industrial
Disputes Act, 1947as the enquiry proceedings, on being found to be bad, have
to be ignored altogether. (392-F-G)

1.2. In all cases where enquiry has not been held or the enquiry has r
D been found to be defective, the Tribunal can call upon the management or the
employer to justify the action taken against the workman and to show by
fresh evidence, that the termination or dismissal order was proper. If the
management does not lead any evidence by availing of this opportunity, it
.
cannot raise any ground at any subsequent stage that it should have been
E given that opportunity, as the Tribunal, in those circumstances, would be
justified in passing an award in favour of the workman. If, however, the
opportunity is availed of and the evidence is adduced by the management, the
validity of the action taken by it has to be scrutinised and adjudicated upon
on the basis of such fresh evidence. [391-F-G-H; 392-A)

F Ritz Theatre (Pvt.) Ltd. Delhi v. Its Workmen, (1962) 2 LLJ 498 =AIR
(1963) SC 295 = [19631 3 SCR 461; State Bank of India v. R.K. Jain and
Ors., (1971) 2 LLJ 599 =AIR (1972) SC 136 = (197211 SCR 755 =(19721
4 SCC 304; Delhi Cloth & General Mills Co. Ltd. v. Ludh Budh Singh,
(1972) I LLJ 180 =AIR (1972) SC 1631 = [197213 SCR 29 = [197211 sec
G 595; The Workmen of Mis. firestone Tyre & Rubber Co. of India Pvt. Ltd.
v. The Management and Ors., (1973) I LLJ 278 =AIR (1973) SC 1227 =
[1973) 3 SCR 587 = (19731 I SCC 813; The East India Hotels v. Their
Workmen and Ors., AIR (1974) SC 696 = [19741 3 SCC 712; Ruston &
Hornsby Ltd. v. T.B. Kadam, AIR (1975) SC 2025 = [1976) I SCR 119
=(1976) 3 SCC 71; Shankar Chakravarti v. Britannia Biscuit Co. and Anr.,
H (1979) 2 LLJ 194 = AIR (1979) SC 1652 =[1979) 3 SCR 1165 = [19791
NEETA KA PUSH v. PRESIDING OFFICER LABOUR COURT [S. SAGHIR AHMAD, J.] 381

3 SCC 371; Bharat Forge Co. Ltd v. A.B. Zodge and Anr., AIR (1996) SC A
1556 = 11996) 4 SCC 374; The United Planters Association of Southern
India v. K.G. Sangame Swaran and Anr., AIR (1997) SC 1800 = [1997) 4
SCC 741 = JT (1997) 3 SC 379 and Cooper Engineering Ltd v. P.P. Mundhe,
AIR (1975) SC 1900 = [1976) 1 SCR 361, relied on.

1.3. The proceedings of the domestic enquiry could be relied upon by B
the management for the limited purpose of showing at the preliminary stage
that the action taken against the appellant was just and proper and that full
opportunity of hearing was given in consonance with the principles of natural
justice. However, in the instant case, appellant-employee had questioned the
domestic enquiry on the grounds of illegality an irregularity. The Labour C
Court found that the enquiry was not fairly and properly held. Thereafter,
it rightly called upon management to lead fresh evidence to justify its action
which it did not do. Sine:! the management did not lead any fresh evidence
on merits, the appellant has right to say that she too, would not lead any fresh
evidence. But, for that reason, her claim could not be rejected. Rather she
was entitled to be granted relief then and there. (392-C, G; 393-B-CJ D
2. Having regard to the circumstances of the case particularly when
.
the Labour Court had found the enquiry not fairly and properly held, the
matter is remanded back to the Labour Court to decide the case afresh by
leading evidence on merits. (393-C-D)
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6079 of
1998.

From the Judgment and Order dated 17.2.97 of the Punjab and Haryana
High Court in CWP No. 14301 of 1996.
F
Neeraj Kr. Jain, Manish Mohan and U.S. Prasad for the Appellant.

V.N. Ganpule, Sanjay Bansal and Mr. G.K. Bansal for the Respondents.

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

The appellant was working as a clerk in the Dayanand Medical College
and Hospital, Ludhiana. Disciplinary proceedings were initiated against her
on the basis of a charge-sheet which was issued to her on 07.10.1986. The
charges were denied by the appellant and consequently an enquiry was H
382 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A initiated. One Shri L.C. Doctor, who was an advocate and legal advisor of the
Hospital, was appointed as the Enquiry Officer. He submitted his enquiry
report on the basis of which the appellant was dismissed from service.

The appellant raised an industrial dispute in respect of the order of
dismissal which was referred to the Labour Court by the State Government
B by its order dated 17.4.1987. The parties filed their written statements before
the Labour Court which came to the conclusion that the enquiry conducted
by the Management was not fair and proper and, therefore, by its order dated
21.11.1995, it called upon the Management to produce its evidence on merits.
The Management did not lead evidence as directed by the Labour Court but
C produce only one witness, namely, T.S. Saroj, its Law Officer, and informed
the Labour Court that it would rely upon the evidence already recorded
during enquiry proceedings. Since the Management did not produce any
evidence on merits, the appellant also did not produce any evidence on
merits, the appellant also did not produce any evidence with the result that
the Labour Court, by its order dated 1st March, 1996, dismissed the claim of
D the appellant. A Writ Petition filed thereafter in the Punjab and Haryana High
Court by the appellant was also dismissed on 17.2.1997. It is in these
circumstances that the appellant has approached this Court.

Learned counsel for the appellant has contended that once it was held
E by the Labour Court that the domestic enquiry, conducted by respondent No.
2, was not fair and was not in consonance with the principles of natural
justice and it called upon the Management to lead evidence on merits, the
evidence already recorded during domestic enquiry could not have been
legally relied upon and it ought to have been held by the Labour Court that
since the Management had not led any evidence on merits, the claim of the
F appellant was liable to be allowed.

Learned counsel for the respondents, on the contrary, contended that
since the Management had indicated to the Labour Court that it would rely
upon the evidence already adduced during domestic enquiry, it was under no
G obligation to lead any fresh evidence but the appellant who had been
contending from the beginning that proper opportunity of hearing was not
given to her ought to have led her evidence once she was called upon to do
so by the Labour Court. Since she had not done it, her claim was rightly
dismissed. He further contended that in view of the Proviso to Section I I-
A of the Act, the Labour Court had to decide the case on the basis of "the
H materials on record" and not on the basis of any fresh evidence. In any case,
NEET A KAPLISH v. PRESIDING OFFICER LABOUR COURT [S. SAGHIR AHMAD, J.] 383

even if it is held that the Labour Court could take fresh evidence, the evidence A
already recorded during domestic enquiry would constitute " materials on
record" and the same could not be ignored.

The case of the appellant before the Labour Court, so far as illegalities
and irregularities in the departmental proceedings are concerned, was set out
in Para IO of the claim (Written Statement), filed befor1: the Labour Court, B
which is reproduced below:-

"10. That Mr. Boctor held the so called domestic enquiry against me
against the principles of natural justice on account of the following
amongst other reasons:-
c
(a) That I requested vide my application dated 18.1.87 that my
witness Sh. Om Prakash Samai be examined, but the enquiry
officer refused to do so.

(b) That I also requested that my other witnesses Sh. Dr. LS.
Chawla, Principal, Dr. Kundan Singh, Dr. Rama Sofar, Dr. Ram D
Kumar Mittal, who were the employees of the DMC and H
should be connected as my witnesses, but the Enquiry Officer
refused to do so.

(c) That I requested for an adjournment of proceedings for the
evidence of Vaid Kundan Lal, who was ill, but my request was E
not allowed in spite of his Medical Certificate.

(d) That my answers given to the questions of the Presiding
Officer, were not recorded correctly and completely in spite of
my protests and submitted an application dated 7 .2.1987 to the
Enquiry Officer, in detail about the same. F
(e) That the Enquiry Officer was not at all impartial and was
biased against me and he acted in accordance with the direction
of the management during the so called enquiry. He acted both
as prosecutor as well as judge. Mrs. Khurana, Head of the
Microbiology Department of D.M.C. also interfered in the said G
enquiry in spite of my request and protest, but the Enquiry
Officer acted in accordance with her wishes.

(f) That the enquiry file during the enquiry proceedings did not
remain in the custody of the enquiry officer, but it remained in
the custody of the management and the presenting officer. H
384 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A (g) That the Enquiry Officer refused to give a copy of the written
statement of the Management to enable me to furnish reply.

(h) That the said enquiry was just an eye wash and was illegal."

The Management, in its written statement, denied the claim of the
B appellant by stating in their written statement as under:-

" I 0. In reply to para no. I 0 of the statement of claim, it is to be stated
that domestic enquiry by Shri L.C. Boctor was held in accordance with
the principles ofnatural justice and rules and regulations. Sub parawise
reply is as under:-
c In reply to sub-para (a)to (b) of para no. IO of statement of claim, it
is to be pointed out that the enquiry officer has acted within the
aurhority as per principles of natural justice and management has
nothing to do with that. Whatever evidence she has brought before
the enquiry officer, the same was recorded. Presiding Officer in a
D domestic enquiry has no authority in law to summon any witness. It
is for the parties concerned to bring their own witnesses. Her allegation
that her statement made in her cross-examination was not correctly
recorded is false and wrong. The enquiry officer has remained impartial
and was not biased against her. The management have not issued any
directions to the said enquiry. The allegation that he held enquiry as
E per wishes of Mrs. Khurana is also wrong. The allegations that the
enquiry file did not remain in the custody of the Enquiry Officer and
inquiry was an eye-wash are wrong. The allegations that Enquiry
Officer refused to give a copy of any written arguments of the
respondent are false. Moreover, Enquiry Officer has not taken
cognizance of any alleged written arguments of the management. So
F
no prejudice has been caused to her."

In view of the pleadings of the parties as to the validity of proceedings,
the Labour Court framed a specific issue on the question as follows:-

G "Whether a fair and proper enquiry has been held?"

The Labour Court ultimately recorded the following findings:-

"............. .!have carefully considered the arguments advanced by both
the parties and have considered the evidence on the file and I find
H that the enquiry in this case was not conducted in accordance with
NEETA KA PUSH 1•. PRESIDING OFFICER LABOUR COURT [S. SAGHIR AHMAD, J.] 385

the rules of natural justice. The claimant made a request for the A
examination of Mr. Passi, but he was not allowed to be examined on
the ground that he was not the scribe of the documents and he had
not signed the documents. There is another mode of proof regarding
the proof of documents by proving writing and signatures of a person.
This witness might have proved the document by proving these
writing of the scribe and signatures thereon. So, the request of the B
claimant to examine Mr. Passi was wrongly turned down. She made a
request for the exam.ination of Dr. L.S. Chawla and other witnesses,
but her request was not allowed. It was argued on Behalf of the
management that in an enquiry, a delinquent official cannot ask the
management for the summoning of the witnesses as the management C
has no such authority. This contention is again not correct because
Dr. L.S. Chawla and other for whose summoning, request was made
by the claimant were all employees of the respondent management
and the management could very well direct its employees to appear
as witnesses in this case. So, the observations made in case 1993 LLR
9 Padmanabhan v. Kerala State Handloom Development Corporation D
Ltd. on the facts of the case in hand, because in this case, the
management had the authority to direct its witnesses to appear in this
case.

7. The enquiry officer had granted last adjournment to the claimant to
produce her evidence. She wanted to examine Vaid Kundan Lal but the E
said witnesses could not be produced due to his illness. Medical
Certificate was conducted along with the application, but the request
was declined. In such a case, the Enquiry Officer should have granted
one more opportunity for a smaller period and the same would not
have affected the management in any manner. From all these facts, I p
have come to the conclusion that a fair and proper enquiry was not
conducted by the Enquiry Officer.

After recording the above findings to the effect that a fair and proper
enquiry was not conducted. The Labour Court, on 21.11.1995, passed the
following order:, G
"Present: Authorised representative of the parties.

Vide my separate order the enquiry conducted in this case was not
held to be fair and proper and as such the management is directed to
produce its evidence on merits on 5.12.1995.
Sd/- Presiding Officer. 21.11.95" H

II
386 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A The Management, in spite of the above order, did not produce any
evidence on merits, except formally examining T.R. Saroj. Law Officer, who
only produced the termination order along with postal receipt Ext, MX/l and
closed its evidence. Since the Management did not produce any evidence on
merits, the appellant also stated that it would not examine any witness in
B defence. The Labour Court dismissed the claim of the appellant on the ground
that while on behalf o the Management whole enquiry file containing the
enquiry proceedings had been produced, there was no evidence on behalf of
the appellant.

In order to appreciate the controversy raised in this case, it would be
C necessary to consider the past history with regard to the introduction of
Section 11-A by Act No. 45of1971 in the Industrial Disputes Act, 1947 with
effect from 15.12.1971.

Statement of Objects and Reasons appended to the amending Act 45
of 1971 reads as under:-
D
"In Indian Iron and Steel Co. Limited v. Their Workmen, (1958) t
L.L.J. 260, the Supreme Court, while considering the Tribunal's power
to interfere with the management's decision to dismiss, discharge or
terminate the services of a workman, has observed that in cases of
dismissal for misconduct the, Tribunal does not act as a Court of
E appeal and substitute its own judgment for that of the management
and that the Tribunal will interfere only when there is want of good
faith, victimisation, unfair labour practice, etc., on the part of the
management.

2. The International Labour Organisation, in its recommendation (No.
F 119) concerning "Termination of employment at the initiative of the
employer" adopted in June 1968, has recommended 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 empowered to examine the
G
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. The International Labour Organis11tion
has further recommended that the natural body should be emp9wered
(if it finds that the termination of employment was unjustified) to order
H that the worker concerned, unless reinstated with unpaid wages should
NEETA KAPLISH v. PRESIDING OFFICER LABOUR COURT [S. SAGHIR AHMAD, J.] 387

be paid adequate compensation or afforded some other relief. A
3. In accordance with these recommendations, it is considered that the
Tribunal's power in an adjudication proceeding relating to discharge
or dismissal of a workman should not be limited and that the Tribunal
should have the power, in cases wherever necessary to set aside the
order of discharge or dismissal and direct reinstatement of the workmen B
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. For this purpose, a new S. I IA is proposed to
be inserted in the Industrial Disputes Act, 1947".
c
Provisions of the Industrial Disputes Act were thus amended on the
recommendation of the International Labour Organization and Section 11-A
was introduced in the Act by the Parliament, wherein it was provided that the
Tribunal had not only the power to set aside the order of dismissal and direct
reinstatement of the workman, it had also the power to award lesser D
punishment. The Proviso to Section 11-A, however, provided that the Tribunal
would rely only on the material already on record and shall not take fresh
evidence.

The provisions of Section 11-A, specially the prohibition contained in
the Proviso that the Labour Court would not take any fresh evidence, came E
to be considered by this Court in several cases which we shall shortly notice
but even before the introduction of Section 11-A, this Court in Ritz Theatre
(Pvt.) Ltd. Delhiv. Its Workmen, (1962) 2 LLJ 498 =AIR 1963 SC 285 = [1063]
3 SCR 461, laid down that where the Management relied upon the domestic
enquiry in defending its action, it would be the duty of the Tribunal to first
consider the validity of the domestic enquiry and only when it came to the F
conclusion that the enquiry was improper or invalid, it would itself go into
the merits of the case and call upon the parties to lead evidence.

Even after the introduction of Section 11-A, the legal position as to the
jurisdiction of the Labour Court of Tribunal to itself decide the merits of
charges on fresh evidence remained unaltered. G
In State Bank ofIndia v. R.K. Jain & Ors. (1971) 2 LLJ 599 = AIR(l972)
SC 136 = [1972] I SCR 755 = [1972] 4 SCC 304, the domestic enquiry was found
to be defective by the Tribunal and, therefore, the order of dismissal was set
aside. The employer in that case had not asked for permission of the Tribunal
for adducing fresh evidence to justify its action. The grievance raised by the H
388 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A employer before this Court was that such opportunity should have been
given suo motu by the Tribunal but this was not accepted.

In Delhi Cloth & General Mills Co. Ltd v. Ludh Budh Singh, (1972)
1 LLJ 180 =AIR (I 972) SC 1031 = [1972) 3 SCR 29 = [1972] 1 sec 595, the
Court held that where no enquiry was found to be defective, the employer
B shall have to be given a chance to adduce evidence before the Tribunal for
justifying his action provided the employer asks for the permission of the
Tribunal to adduce fresh evidence to justify its action. Such request has to
be made "while the proceedings are pending" and not after the proceedings
had come to an end. The following propositions were laid down :- ·
c "(I) If no domestic enquiry had been held by the management, or if
the management makes it clear that it does not rely upon any domestic
enquiry that may have been held by it, it is entitled to straight away
adduce evidence before the Tribunal justifying its action. The Tribunal
is bound to consider that evidence so adduced before it on merits,
D and give a decision thereon. In such a case, it is not necessary for
the Tribunal to consider the validity of the domestic enquiry as the
employer himself does not rely on it.

(2) If a domestic enquiry had been held, it is open to thr. management
to rely upon the domestic enquiry held by it in the first instance, and
E alternatively and without prejudice to its plea that the enquiry is
proper and binding, simultaneously adduce additional evidence before
the Tribunal justifying its action. In such a case no inference can be
drawn, without anything more, that the management has given up the
enquiry conducted by it.

F (3) When the management relies on the enquiry conducted by it, and
also simultaneously adduces evidence before the Tribunal, without
prejudice to its plea that the enquiry proceedings are proper, it is the
duty of the Tribunal, in the first instance, to consider whether the
enquiry proceedings conducted by the management are valid and
proper. If the Tribunal is satisfied that the enquiry proceedings have
G
been held properly and are valid, the question of considering the
evidence adduced before it on merits no longer survives. It is only
when the Tribunal holds that the enquiry proceedings have not been
properly held, that it derives jurisdiction to deal with the merits of the
dispute and in such a case it has to consider the evidence adduced
H before it by t.he management and decide the matter on the basis of
NEETA KAPLISH v. PRESIDING OFFICER LABOUR COURT [S. SAGHIR AHMAD, J.] 389

such evidence. A
(4) When a domestic enquiry has been held by the management and
the management relies on the same, it is open to the latter to request
,.... the Tribunal to try the validity of the domestic enquiry as a preliminary
issue and also ask for an opportunity to adduce evidence before the
Tribunal, if the finding on the preliminary issue is against the B
management. However elaborate and cumbersome the procedure may
be under such circumstances, it is open to the Tribunal to deal with,
in the first instance, as a preliminary issue, the validity of the domestic
enquiry. If its finding on the preliminary issue is in favour of the
management, then no additional evidence need be cited by the
management. But if the finding on the preliminary issue is against the
c
management, the Tribunal will have to give the employer an opportunity
to cite additional evidence and also give a similar opportunity to the
employee to lead evidence contra, as the request to adduce evidence
had been made by the management to the Tribunal during the course
of the proceedings and before the trial has come to an end. When the D
preliminary issue is decided against the management and the latter
leads evidence before the Tribunal, the position, under such
circumstances, will be that the management is deprived of the benefit
of having the finding of the domestic Tribunal being accepted as
prima facie proof of the alleged misconduct. On the other hand, the E
management will have to prove, by adducing proper evidence, that the
workman is guilty of misconduct and that the action taken by it is
proper. It will not be just and fair either to the management or to the
workman that the Tribunal should refuse to take evidence and thereby
ask the management to make a further application, after holding a
proper enquiry, and deprive the workman of the benefit of the Tribunal F
itself being satisfied, on evidence adduced before it, that he was not
guilty of the alleged misconduct.

(5) The management has got a right to attempt to sustain its order by
adducing independent evidence before the Tribunal. But the
management should avail itself of the said opportunity by making a
G
• suitable request to the Tribunal before the proceedings are closed. If
no such opportunity has been availed of, or asked for by the
management, before the proceedings are closed, the emp}oyer can
make no grievance that the Tribunal did both provide such an
opportunity. The Tribunal will have before it only the enquiry H
390 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A proceedings and it has to decide whether the proceedings have been
held properly and the findings recorded therein are also proper.

(6) If the employer relies only on the domestic enquiry and does not
simultaneously lead additional evidence or ask for an opportunity
during the pendency of the proceedings to adduce such evidence, the
B duty of the Tribunal is only to consider the validity of the domestic
enquiry as well as the finding recorded there in and decide the matter.
If the Tribunal decides that the domestic enquiry has not been held
properly, it is not its function to invite suo motu the employer to
adduce evidence before it to justify the action taken by it.

c (7) The above principles apply to the proceedings before the Tribunal,
which have come before it either on a reference under S. 10 or by way
of an application under S. 33 of the Act."

These principles were adopted in The Workmen of Mis Firestone Tyre
& Rubber Co. of India Pvt. Ltd v. The Management & Ors., (1973)
D 1 LLJ278=AIR(l973) SC 1227=[1973] 3 SCR587 = (1973] l sec
813, which was decided after the introduction of Section 11-A in the
Act. In Cooper Engineering Ltd v. P.P. Mundhe AIR (1975) SC 1900
= (1976] SCR 361=(1975]2 SCC 661, in which Mis Firestone Tyre &
Rubber Co. of India Pvt. Ltd v. The Management & Ors., (Supra) was
followed, the court observed:
E
"In our considered opinion it will be most unnatural and unpractical
to expect a party to take a definite stand when a decision of
jurisdictional fact has first to be reached by the Labour Court prior to
embarking upon an enquiry to decide the dispute on its merits. The
F reference involves determination of the larger issue of discharge or
dismissal and not merely whether a correct procedure had been followed
by the management before passing the order of dismissal."

The Court further observed :

"We are, therefore, clearly of opinion that when a case of dismissal
G or discharge of an employee is referred for industrial adjudication, the
Labour Court should first decide as preliminary issue: whether the
domestic enquiry has violated the principles of natural justice. When
there is no domestic enquiry or defective enquiry is admitted by the
employer, there will be no difficulty. But when the matter is in
H controversy between the parties, that question must be decided as
NEETA KAPLISH v. PRESIDING OFFICER LABOUR COURT [S. SAGHIR AHMAD, J.) 391

a preliminary issue. On that decision being pronounced, it will be for A
the management to decide whether it will adduce any evidence before
that Labour Court. If it chooses not to adduce any evidence, it will
not be thereafter permissible, in any proceeding to raise the issue."

This decision makes it clear that the 'stage' at which the employer has
to ask for an opportunity to adduce evidence for justifying its action is the B
stage when the Tribunal finally comes to the conclusion that domestic enquiry
was invalid.

The subsequent decisions in The East India Hotels v. Their Workmen
and Ors., AIR (1974) SC 696 = [1974] 3 SCC 712 and Ruston & Hornsby Ltd.
v. T.B. Kadam, AIR(l975)SC2025 =[1976] l SCRl19=[1976]3 SCC71 have C
followed this view.

In Shankar Chakravarti v. Britannia Biscuit Co. & Anr., 1979 (2) LLJ
194 =AIR [1979] SC 1652 = [1979] 3 SCR 1165 = [1979] 3)\ sec 371, d!is Court
observed that the right of the Management to adduce additional evidence D
must be availed of by it by making proper request for that purpose which may
even be contained in the pleadings or may be made at any time before the
proceedings are closed. The Court observed that if such a request is made
in the pleadings itself, the Tribunal has to give an opportunity to the
Management to lead fresh evidence.
E
In Bharat Forge Co. Ltd. v. A.B. Zodge & Anr. AIR 1996 SC 1556 =
(1996) 4 SCC 374, as also in The United Planters Association of Southern
India v. K.G. Sangameswaran and Anr., AIR 1997 SC 1800 = [1997] 4 SCC 741
= JT (1997) 3 SC 379, it was laid down that the Labour Court or the Tribunal
can take fresh evidence on merits of the charge if it comes to the conclusion
that the domestic enquiry was not properly held and principles of natural F
justice were violated.

In view of the above, the legal position as emerges out is that in all
cases where enquiry has not been held or the enquiry has been found to be
defective, the Tribunal can call upon the Management or the employer to G
justify the action taken against the workman and to show by fresh evidence,
that the termination or dismissal order was proper. If the Management does
not lead any evidence by availing of this opportunity, it cannot raise any
ground at any subsequent stage that it should have been given that
opportunity, as the Tribunal, in those circumstances, would be justified in
passing an award in favour of the workman. If, however, the opportunity is H
392 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A availed of and the evidence is adduced by the Management, the validity of
the action taken by it has to be scrutinised and adjudicated upon on the basis
of such fresh evidence.

In the instant case, the appellant had questioned the domestic enquiry
on a number of grounds including that her 0wn answers, in reply to the
B questions of the Presiding Officer, were not correctly and completely recorded
and that the Enquiry Officer was not impartial and was biased in favour of
the respondent. It was further contended that her own witnesses were not
called and she was not given the opportunity to lead evidence. The Labour
Court has discussed a few of these grounds but has not given any finding
C on the bias of Enquiry Officer or the ground relating to incorrectly recording
the statement of the appellant. The Labour Court, however, found that the
enquiry was not fairly and properly held. It was after recording this finding
that the Labour Court called upon the Management to lead evidence on merits
which it did not do.

D Learned counsel for the appellant contended that in spite of the direction
by the Labour Court to the respondent-management to lead evidence, it was
open to the Management to rely upon the domestic enquiry proceedings
already held by the Enquiry Officer, including the evidence recorded by him,
and it was under no obligation to lead further evidence, particularly as the
E Management was of the view that the charges, on the basis of the evidence
already led before the Enquiry Officer, stood proved. It was also contended
that under Section 1 I-A, the Labour Court had to rely on the "materials on
record" and since that enquiry proceedings constituted "material on record",
the same could not be ignored. The argument is fallacious.

F The record pertaining to the domestic enquiry would not constitute
"fresh evidence" as those proceedings have already been found by the
Labour Court to be defective. Such record would also not constitute "material
on record", as contended by the couns((l for the respondent, within the
meaning of Section I I-A as the enquiry proceedings, on being found to be
G bad, have to be ignored altogether. The proceedings of the domestic enquiry
could be, and, were, in fact, relied upon by the Management for the limited
purpose of showing at the preliminary stage that the action taken against the
appellant was just and proper and that full opportunity of hearing was given
to her in consonance with the principles of natural justice. This contention
has not been accepted by the Labour Court and the enquiry has been held
H to be bad. In view of the nature of objections raised by the appellant, the
NEETA KAPLISH v. PRESIDING OFFICER LABOUR COURT [S. SAGHIR AHMAD, l.) 393

record of enquiry held by the Management ceased to be "material on record' A
within the meaning of Section 11-A of the Act and the only course open to
the Management was to justify its action by leading fresh evidence as required
by the Labour Court. If such evidence has not been led, the Management has
to suffer the consequences.

Having regard to the findings recorded by the Labour Court that the B
domestic enquiry was not properly and fairly held and an effective opportunity
of hearing was not given to the appellant, the Labour Court was right in
calling upon the Management to lead fresh evidence. Since the Management
did not lead any fresh evidence on merits, the appellant was well within her
right to say that she, too, would not lead any fresh evidence. But, for that C
reason, her claim could not be rejected. Rather, she was entitled to be granted
relief then and there. However, having regard to the entire circumstances of
the case particularly when the Labour Court had itself found that the enquiry
was not fairly and properly held, we allow the appeal, set aside the judgement
of the High Court and that of the Labour Court and remand the case back
to the Labour Court to decide the case afresh after requiring the parties to D
lead fresh evidence on merits in pursuance of its order dated 21.11.1995.
Having regard to the fact that the appellant was removed from service on
04.04.1987, we direct that the Labour Court shall dispose of the whole matter
within three months from the date on which the certified copy of this
Judgment is produced before it. There will be no order as to costs.
E
S.V.K. Appeal allowed.