Supreme Court Upholds Labour Court Decision: State of Uttarakhand vs. Smt. Sureshwati (2021)

Introduction

Date of the Judgment: January 20, 2021

Citation: (2021) INSC 21

Judges: L. Nageswara Rao, Navin Sinha, and Indu Malhotra, JJ.

Can a High Court reverse a Labour Court’s decision simply because a disciplinary inquiry wasn’t conducted, even if the Labour Court considered all the evidence? The Supreme Court of India recently addressed this question in a case involving the State of Uttarakhand and a former school employee. The core issue was whether the High Court was right to overturn a Labour Court’s award that had denied reinstatement to an employee who was found to have abandoned her job. The Supreme Court bench, comprising Justices L. Nageswara Rao, Navin Sinha, and Indu Malhotra, delivered the judgment.

Case Background

The respondent, Smt. Sureshwati, was initially engaged as an Assistant Teacher at Jai Bharat Junior High School, Haridwar, from July 1993 to May 21, 1994. Subsequently, she worked as a Clerk from July 1, 1994. On March 25, 1996, the District Basic Education Officer approved her appointment, along with other staff, effective from July 1, 1994. At this time, the school was an unaided private institution.

From May 24, 2005, the school began receiving grants-in-aid from the State and became governed by the Uttaranchal School Education Act, 2006. The appellants contended that Smt. Sureshwati had abandoned her service as a clerk from July 1, 1997, after getting married and moving to Dehradun.

After nine years, on July 15, 2006, Smt. Sureshwati filed a complaint claiming she had worked continuously until March 7, 2006, and that her services were illegally terminated on March 8, 2006, without a hearing or retrenchment compensation. The school requested an inquiry, which revealed discrepancies in her employment records and that she had not worked since July 1997.

The Labour Court initially ruled in favor of the employee, but this was challenged and the case was remanded for a fresh decision. The Labour Court then ruled against the employee, stating that she had failed to prove her continuous employment. The High Court reversed this decision solely on the ground that no disciplinary inquiry was conducted by the school.

Timeline

Course of Proceedings

The Labour Commissioner, Haridwar, referred the complaint to the Additional Labour Commissioner to determine the validity of the termination. The Labour Court initially passed an ex-parte award in favor of the employee on February 5, 2010. This was challenged in the High Court, which remanded the case back to the Labour Court on September 16, 2015, for a fresh decision.

On remand, the Labour Court allowed both parties to present evidence. The Labour Court, after considering the evidence, ruled against the employee on August 22, 2016, stating that she had not proven her continuous employment. The High Court reversed this decision on August 28, 2019, solely on the ground that the school had not conducted a disciplinary inquiry.

Legal Framework

The case is primarily governed by the Industrial Disputes Act, 1947, which deals with the investigation and settlement of industrial disputes. The Act provides the framework for resolving disputes between employers and employees, including matters related to termination of service.

The Supreme Court also considered the principles established in various precedents regarding the need for disciplinary inquiries before termination and the burden of proof in such cases.

Specifically, the court referred to the concept of “abandonment of service” and the requirement for an employee to prove continuous service of 240 days in the preceding year to claim retrenchment benefits under the Industrial Disputes Act, 1947.

Arguments

Arguments of the Respondent (Smt. Sureshwati):

• Smt. Sureshwati claimed that she had been employed by the school from July 1, 1994, until March 8, 2006, when her services were illegally terminated without any inquiry or personal hearing.
• She contended that she had worked for more than 240 days in the year preceding her alleged termination, entitling her to reinstatement with continuity of service.
• She relied on a letter dated March 25, 1996, from the District Basic Education Officer, which approved the appointments of employees in the school.
• She also relied on a letter dated June 20, 2013, from the Block Education Officer, Roorkee, which requested her reinstatement in compliance with a previous order from the Labour Court.

Arguments of the Appellants (State of Uttarakhand & Ors.):

• The appellants argued that Smt. Sureshwati had abandoned her service on July 1, 1997, after getting married and moving to Dehradun.
• They contended that she never returned to work and that her claim of termination on March 8, 2006, was false.
• The school submitted that it was not an “industry” under the Industrial Disputes Act, 1947.
• The school presented evidence that Smt. Sureshwati’s initial appointment as a teacher was invalid, as she did not have the required B.Ed. degree.
• They also pointed out that Smt. Sureshwati’s mother was the President and her father was a member of the Managing Committee at the time of her appointment.
• The school provided evidence that Smt. Sneh Lata was appointed as a clerk in her place on July 17, 2002, and that Smt. Sureshwati’s name was not included in the list of employees forwarded to the government in 2005.

Issues Framed by the Supreme Court

The Supreme Court considered the following issue:

1. Whether the High Court was justified in setting aside the Award of the Labour Court on the sole ground that no disciplinary enquiry was held by the School regarding the alleged abandonment of service by the employee?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court relied on several authorities to support its decision:

Cases:

• Workmen of the Motipur Sugar Factory Private Ltd. v. Motipur Sugar Factory [AIR 1965 SC 1803] – Supreme Court: This case established that if an employer fails to conduct an inquiry before dismissing an employee, they can still justify their actions by presenting evidence before the Labour Court.
• Indian Iron & Steel Co. v. Workmen [AIR: 1958 SC 130] – Supreme Court: This case was referred to in the Motipur Sugar Factory case regarding the limited questions a tribunal can consider when a proper domestic inquiry has been held.
• Sana Musa Sugar Works (P) Limited v. Shobrati Khan [AIR 1959 SC 923] – Supreme Court: This case was cited in the Motipur Sugar Factory case, relating to applications under Section 23 of the Industrial Disputes Act, 1947.
• Phulbari Tea Estate v. Workmen [AIR 1959 SC 1111] – Supreme Court: This case was cited in the Motipur Sugar Factory case, applying the same principle even when there was a defective inquiry.
• Punjab National Bank Limited v. Workmen [AIR 1960 SC 160] – Supreme Court: This case was also cited in the Motipur Sugar Factory case, relating to applications under Section 23 of the Industrial Disputes Act, 1947.
• Bharat Sugar Mills Limited v. Jai Singh [(1962) 3 SCR 684] – Supreme Court: This case further considered the principles laid down in previous cases, emphasizing that the tribunal must decide on the evidence whether the charges have been made out.
• Ram Swarath Sinha v. Belsund Sugar Co. [(1954) LAC 697] – Labour Appellate Tribunal: This case was referred to in the Bharat Sugar Mills case regarding the effect of omitting to hold an inquiry.
• Delhi Cloth and General Mills Co. v. Ludh Budh Singh [(1972) 1 SCC 595] – Supreme Court: This case clarified the procedure when no domestic inquiry is held or if the management does not rely on it.
• Workmen of Firestone Tyre & Rubber Co. of India (P) Ltd. v. The Management of Firestone Tyre & Rubber Co. of India (P) Ltd and Others [(1973) 1 SCC 813] – Supreme Court: This case outlined the principles regarding disciplinary action, inquiry procedures, and the powers of the Tribunal.
• Management of Panitole Tea Estate v. Workmens [(1971) 1 SCC 742] – Supreme Court: This case was cited in the Firestone Tyre case regarding the judicial discretion of a Labour Court or Tribunal to decide whether a workman should be reinstated or paid compensation.
• Bhavnagar Municipal Corpn. v. Jadeja Govubha Chhanubha [(2014) 16 SCC 130] – Supreme Court: This case reiterated that the burden of proving continuous service of 240 days lies on the workman.
• Range Forest Officer v. S.T. Hadimani [(2002) 3 SCC 25] – Supreme Court: This case was cited in the Bhavnagar Municipal Corpn. case regarding the burden of proof on the workman.
• Municipal Corpn., Faridabad v. Siri Niwas [(2004) 8 SCC 195] – Supreme Court: This case was cited in the Bhavnagar Municipal Corpn. case regarding the burden of proof on the workman.
• M.P. Electricity Board v. Hariram [(2004) 8 SCC 246] – Supreme Court: This case was cited in the Bhavnagar Municipal Corpn. case regarding the burden of proof on the workman.
• Rajasthan State Ganganagar S. Mills Ltd. v. State of Rajasthan [(2004) 8 SCC 161] – Supreme Court: This case was cited in the Bhavnagar Municipal Corpn. case regarding the burden of proof on the workman.
• Surendranagar District Panchayat v. Jethabhai Pitamberbhai [(2005) 8 SCC 450] – Supreme Court: This case was cited in the Bhavnagar Municipal Corpn. case regarding the burden of proof on the workman.
• R.M. Yellatti v. Executive Engineer [(2006) 1 SCC 106] – Supreme Court: This case was cited in the Bhavnagar Municipal Corpn. case regarding the burden of proof on the workman.
• RBI v. S. Mani [(2005) 5 SCC 100] – Supreme Court: This case was cited in the Bhavnagar Municipal Corpn. case regarding the burden of proof on the workman.

Judgment

How each authority was viewed by the Court?

• The Court relied on Workmen of the Motipur Sugar Factory Private Ltd. v. Motipur Sugar Factory [AIR 1965 SC 1803]* to emphasize that an employer can justify their actions before the Labour Court even without a prior inquiry.
• The Court cited Delhi Cloth and General Mills Co. v. Ludh Budh Singh [(1972) 1 SCC 595]* to support the view that the Labour Court can consider evidence even if no domestic inquiry was conducted.
• The Court referred to Workmen of Firestone Tyre & Rubber Co. of India (P) Ltd. v. The Management of Firestone Tyre & Rubber Co. of India (P) Ltd and Others [(1973) 1 SCC 813]* to highlight that the Tribunal has the power to review the evidence and come to its own conclusion.
• The Court relied on Bhavnagar Municipal Corpn. v. Jadeja Govubha Chhanubha [(2014) 16 SCC 130]* to reiterate that the burden of proving continuous service of 240 days lies on the workman.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The Labour Court had already considered all the evidence presented by both parties and had come to a reasoned conclusion.
• The High Court had erred in reversing the Labour Court’s decision solely on the ground that no disciplinary inquiry was conducted.
• The employee had failed to prove her continuous employment and had not approached the court with clean hands.
• The burden of proof was on the employee to demonstrate that she had worked for 240 days in the preceding year, which she failed to do.
• The school had presented sufficient evidence to prove that the employee had abandoned her service in 1997.

The sentiment analysis of the reasons given by the Supreme Court indicates a strong emphasis on the factual evidence and the procedural correctness of the Labour Court’s decision. The court was also critical of the High Court’s approach in overturning the Labour Court’s award solely on the basis of the lack of disciplinary inquiry.

The ratio of fact to law indicates that the court placed more emphasis on the factual aspects of the case, such as the evidence presented by both parties, and the employee’s failure to prove her continuous employment. The legal considerations, such as the principles of natural justice and the burden of proof, also played a role in the court’s decision, but to a lesser extent.

The Supreme Court reasoned that the High Court should not have reversed the Labour Court’s decision solely on the ground that no disciplinary inquiry was conducted. The Labour Court had considered all the evidence presented by both parties and had come to a reasoned conclusion. The Supreme Court held that the employer can justify their action before the Labour Court by leading evidence, and the Labour Court has the jurisdiction to satisfy itself on the evidence adduced by the parties whether the dismissal or discharge was justified.

The Court stated, “The High Court has not even adverted to the said evidence, and has disposed of the Writ Petition on the sole ground that the School had not conducted a disciplinary enquiry before discharging the respondent from service.”

The Court also noted, “The Respondent has failed to prove that she had worked for 240 days during the year preceding her alleged termination on 8.3.2006. She has merely made a bald averment in her affidavit of evidence filed before the Labour Court.”

The Court further emphasized, “The onus was entirely upon the employee to prove that she had worked continuously for 240 days’ in the twelve months preceding the date of her alleged termination on 8.3.2006, which she failed to discharge.”

Key Takeaways

• A High Court should not reverse a Labour Court’s decision solelyon the ground that no disciplinary inquiry was conducted if the Labour Court has considered all the evidence presented by both parties.
• An employer can justify their actions before the Labour Court by presenting evidence, even if no prior disciplinary inquiry was conducted.
• The burden of proof lies on the employee to demonstrate that they have worked continuously for 240 days in the year preceding their alleged termination.
• The Labour Court has the jurisdiction to satisfy itself on the evidence adduced by the parties whether the dismissal or discharge was justified.
• The court emphasized the importance of considering the factual evidence and the procedural correctness of the Labour Court’s decision.