Supreme Court Clarifies Scope of Enquiry Under Section 33(2)(b) of Industrial Disputes Act in Dismissal Cases: John D’Souza vs. Karnataka State Road Transport Corporation (2019) INSC 980 (16 October 2019)

Date of the Judgment: 16 October 2019
Citation: (2019) INSC 980
Judges: Sanjay Kishan Kaul, J., Surya Kant, J.
Can a Labour Court, while considering an application for approval of dismissal under Section 33(2)(b) of the Industrial Disputes Act, 1947, act like an appellate authority and re-appreciate evidence? The Supreme Court addressed this critical question in a case concerning a bus conductor’s dismissal. The Court clarified the limited scope of inquiry under Section 33(2)(b), emphasizing that it is not a substitute for a full adjudication of an industrial dispute. The judgment was authored by Justice Surya Kant.

Case Background

The appellant, John D’Souza, worked as a bus conductor for the Karnataka State Road Transport Corporation (KSRTC) since November 28, 1984. He was also a union activist. He was absent from duty from August 18, 2005, without permission. The Depot Manager reported his absence on August 25, 2005, and a notice was sent to him on September 5, 2005, to resume his duties. A charge sheet was issued on June 23, 2006, for his absence from August 18, 2005, to October 29, 2005. The appellant did not reply to the charge sheet, leading to a disciplinary enquiry. The enquiry concluded on August 12, 2010, finding the charges proved. A show cause notice was issued on August 21, 2010, and after considering his reply, the disciplinary authority dismissed him from service on October 11, 2010.

The disciplinary authority considered the appellant’s past service record, which included 30 other default charges and two previous dismissals (which were later set aside). Since an industrial dispute was pending, the Corporation applied to the Labour Court under Section 33(2)(b) of the Industrial Disputes Act, 1947, seeking approval for the dismissal. The appellant had, by this time, reached superannuation.

Timeline

Course of Proceedings

The Labour Court framed four issues, including whether the domestic enquiry was fair and whether the dismissal was justified. The Labour Court initially held the domestic enquiry was fair on March 16, 2012. The appellant’s challenge to this order was unsuccessful. However, on November 6, 2013, the Labour Court rejected the Corporation’s application under Section 33(2)(b), ruling in favor of the appellant. A Single Judge of the High Court dismissed the Corporation’s writ petition on November 21, 2014. The Division Bench of the High Court allowed the Corporation’s appeal on July 14, 2016, stating that the Labour Court exceeded its jurisdiction by allowing parties to adduce evidence. The matter was remanded back to the Labour Court.

The Labour Court again rejected the Corporation’s application on October 28, 2016, relying on additional documents produced by the appellant. A Single Judge again upheld this order on September 20, 2017. The Division Bench of the High Court allowed the Corporation’s appeal on November 30, 2018, stating that the Labour Court had acted like an appellate authority by considering additional evidence not part of the domestic enquiry. The High Court directed the Labour Court to decide the matter afresh, leading to the present appeal before the Supreme Court.

Legal Framework

The Supreme Court discussed the following provisions of the Industrial Disputes Act, 1947:

• Section 10: This section allows the government to refer industrial disputes to a Board, Court, or Tribunal for settlement or adjudication. Section 10(1)(c) allows the government to refer disputes related to “discharge or dismissal of workmen” to a Labour Court.
• Section 11: This section outlines the procedure and powers of conciliation officers, Boards, Courts, and Tribunals. Section 11(3) grants these bodies the powers of a Civil Court for securing evidence.
• Section 11A: This section empowers Labour Courts, Tribunals, and National Tribunals to set aside orders of discharge or dismissal and direct reinstatement or award lesser punishment if the dismissal is deemed unjustified.
• Section 33: This section regulates conditions of service during the pendency of proceedings. Section 33(2)(b) allows an employer to discharge or dismiss a workman for misconduct not connected with the pending dispute, provided they pay one month’s wages and seek approval from the authority before which the proceedings are pending. The provision states:

  “33. Conditions of service, etc. to remain unchanged under certain circumstances during pendency of proceedings .-
  (1) …..
  (2) During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute [or, where there are no such standing orders, in accordance with the terms of the contract, whether express or implied between him and the workman]-
  (a) alter, in regard to any matter not connected with the dispute, the conditions of service applicable to that workman immediately before the commencement of such proceeding; or
  (b) for any misconduct not connected with the dispute, discharge or punish whether by dismissal or otherwise, that workman:
  Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer.”

Arguments

The appellant, appearing in person, argued that the Labour Court has the power to re-appreciate the evidence and come to a conclusion on its own. The appellant argued that the Labour Court was correct in considering the documents produced by him and holding that he was not an absentee. The appellant argued that the Labour Court was correct in holding that there was victimization by the management.

The respondent, KSRTC, argued that the Labour Court exceeded its jurisdiction under Section 33(2)(b) of the Industrial Disputes Act, 1947, by re-appreciating the evidence and acting like an appellate authority. They contended that the Labour Court should only examine if a prima facie case was made out by the employer based on the domestic enquiry and not re-evaluate the evidence.

Issues Framed by the Supreme Court

The main issue before the Supreme Court was:

1. What is the scope and ambit of the enquiry to be held by a Labour Court or Industrial Tribunal while granting or refusing approval for the discharge or dismissal of a workman under Section 33(2)(b) of the Industrial Disputes Act, 1947?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to maintain the statutory scheme of the Industrial Disputes Act, 1947, and to prevent the expansion of the scope of Section 33(2)(b) beyond its intended purpose. The Court emphasized that Section 33(2)(b) is a preventive measure to ensure that employers do not victimize employees during pending disputes, and it is not a substitute for the full adjudication of an industrial dispute under Section 10. The Court also considered the need to balance the rights of the employer to maintain discipline and the rights of the employee to be protected from unfair dismissal.

Fact:Law Ratio

The Court’s reasoning was primarily based on legal interpretations and precedents, rather than factual analysis.

The Court considered alternative interpretations of Section 33(2)(b), but rejected the view that the Labour Court can act as an appellate authority and re-appreciate evidence. The Court emphasized that the Labour Court’s role is limited to ensuring that the domestic enquiry was fair and that a prima facie case for dismissal exists. The final decision was reached by interpreting the statutory provisions and applying the precedents laid down by the Supreme Court.

The court held that the Labour Court’s power under Section 33(2)(b) is limited. It can only examine if the domestic enquiry was fair and if a prima facie case for dismissal exists. The Labour Court cannot re-appreciate evidence or act as an appellate authority. The Court emphasized that Section 33(2)(b) is not a substitute for the adjudication of an industrial dispute under Section 10 of the Industrial Disputes Act, 1947.

The Court’s reasoning was based on the following points:

• Section 33(2)(b) is a preventive measure to maintain the status quo during pending disputes.
• The Labour Court’s role is to ensure the domestic enquiry was fair and a prima facie case exists.
• The Labour Court cannot re-appreciate evidence or act as an appellate authority.
• The Labour Court cannot consider additional evidence unless the domestic enquiry is defective.
• The power to decide the proportionality of punishment is under Section 11A and not Section 33(2)(b) of the Act.

The Court quoted the following from the judgment:

“Section 33(2)(b) of the Act, thus, in the very nature of things contemplates an enquiry by way of summary proceedings as to whether a proper domestic enquiry has been held to prove the misconduct so attributed to the workmen and whether he has been afforded reasonable opportunity to defend himself in consonance with the principles of natural justice.”

“Where the Labour Court/Tribunal, thus, do not find the domestic enquiry defective and the principles of fair and just play have been adhered to, they will accord the necessary approval to the action taken by the employer, albeit without prejudice to the right of the workman to raise an `industrial dispute’ referrable for adjudication under Section 10(1)(c) or (d), as the case may be.”

“The scope and object of Section 33(2)(b) cannot be expanded to an extent that the very scheme of adjudication of an `industrial dispute’ under Sections 10(1)(c) and (d) read with Section 11A of the Act becomes superfluous.”

There were no dissenting opinions in this case.

Key Takeaways

• The Labour Court’s power under Section 33(2)(b) is limited to a prima facie review of the domestic enquiry.
• The Labour Court cannot act as an appellate authority and re-appreciate evidence.
• The Labour Court can consider additional evidence only if the domestic enquiry is found to be defective.
• An approval under Section 33(2)(b) does not prevent the workman from raising an industrial dispute under Section 10.
• The proportionality of punishment is to be decided under Section 11A, not Section 33(2)(b).

Directions

The Supreme Court directed the parties to appear before the Mediation Centre of the High Court of Karnataka at Bangalore for amicable settlement. If mediation fails, the Labour Court was directed to decide the matter on merits without being influenced by the settlement discussions.

Development of Law

The ratio decidendi of this case is that the Labour Court’s jurisdiction under Section 33(2)(b) of the Industrial Disputes Act, 1947, is limited to a prima facie review of the domestic enquiry. The Labour Court should not act as an appellate authority and re-appreciate evidence. This judgment clarifies the scope of enquiry under Section 33(2)(b) and reinforces the two-stage process: first, examining the domestic enquiry, and second, if the enquiry is defective, allowing parties to adduce evidence. This judgment reinforces the legal position established in previous cases like Punjab National Bank Ltd. v. Workmen and Mysore Steel Works Pvt. Ltd. v. Jitendra Chandra Kar and Others.

Conclusion

The Supreme Court clarified that the Labour Court’s role under Section 33(2)(b) of the Industrial Disputes Act, 1947, is limited to a prima facie review of the domestic enquiry. The Labour Court cannot act as an appellate authority and re-appreciate evidence. The Court emphasized the importance of maintaining the statutory scheme of the Act and preventing the expansion of Section 33(2)(b) beyond its intended purpose. The matter was remanded back to the Labour Court for reconsideration within the parameters laid down by the Supreme Court.

Category

Parent Category: Industrial Disputes Act, 1947

Child Categories:

• Section 33(2)(b), Industrial Disputes Act, 1947
• Labour Court
• Industrial Tribunal
• Domestic Enquiry
• Dismissal of Workmen
• Prima Facie Case

FAQ

Q: What is Section 33(2)(b) of the Industrial Disputes Act, 1947?

A: Section 33(2)(b) allows an employer to dismiss or punish a workman for misconduct during the pendency of an industrial dispute, provided they pay one month’s wages and seek approval from the relevant authority.

Q: What is the role of the Labour Court under Section 33(2)(b)?

A: The Labour Court’s role is to ensure that the domestic enquiry was fair and that a prima facie case for dismissal exists. It cannot act as an appellate authority and re-appreciate evidence.

Q: Can the Labour Court consider additional evidence under Section 33(2)(b)?

A: Yes, but only if the domestic enquiry is found to be defective. Otherwise, it must rely on the record of the domestic enquiry.

Q: Does an approval under Section 33(2)(b) mean the dismissal is final?

A: No. The workman can still raise an industrial dispute under Section 10 of the Industrial Disputes Act, 1947, to challenge the dismissal.

Q: What is the difference between Section 33(2)(b) and Section 11A of the Industrial Disputes Act, 1947?

A: Section 33(2)(b) deals with the approval of dismissal during pending proceedings, while Section 11A empowers the Labour Court to set aside the order of dismissal and direct reinstatement or award lesser punishment after a full adjudication of the dispute.