Holding

Termination of the appellant’s service without a domestic enquiry is unjustified; the award of the Labour Court is set aside and the appellant is to be reinstated with back wages.

Summary

Makhan Singh, the Secretary of Narainpura Co‑operative Agricultural Service Society Ltd., was absent from work between 11‑May‑1981 and 29‑May‑1981, claiming illness and leave. The Society terminated his employment on 30‑May‑1981 without conducting a domestic enquiry and alleged that he had gone on strike without leave and had embezzled society funds. The Labour Court accepted the Society’s evidence, including photocopies of account entries, and held the termination justified. The High Court dismissed Singh’s writ petition, but the Supreme Court set aside both the High Court’s order and the Labour Court’s award, holding that termination without a domestic enquiry is unjustified and that the evidence on embezzlement was inadmissible. The Court ordered Singh’s reinstatement with full back wages, subject to reduction if he earned a salary elsewhere, and awarded costs.

Issues considered

Whether termination of a workman’s service without a domestic enquiry is justified under the Industrial Disputes Act, 1947.
Whether the Labour Court could rely on photocopies of documents without producing the originals to find embezzlement.
Whether the Society qualifies as an 'industry' within the ambit of the Industrial Disputes Act.
If the appellant’s absence constituted a strike, and whether leave was required in such a case.
Whether back wages payable should be reduced by any salary earned by the appellant in another society.

Legislation cited

Industrial Disputes Act, 1947s. 10(1)(c)

Subjects

termination of servicedomestic enquiryIndustrial Disputes Actlabour courtem embezzlementstrikeleavereinstatementback wagesco‑operative society

Judgment

MAKHAN SINGH
A
v.
NARAINPURA CO-OPERATIVE AGRICULTURAL
SERVICE SOCIETY LTD. & ANR.

JULY 17, 1987
B
[E.S. VENKATARAMIAH, AND K.N. SINGH, JJ.]

Industrial Disputes Act 1947-Termination of service of a work-
man without holding a domestic enquiry is not justified.

The respondent-Society terminated the service of the appellant, C
who stayed away from work for a few days, without holding a domestic
enquiry. Upon an industrial dispute having been raised, the question
whether the termination of service was justified was referred to the
Labour Court under S. lO(l)(c) of the Industrial Disputes Act, 1947.
Tbe appellant submitted that he had stayed away from work due to his
illness and gave evidence in support thereof. The respondent pleaded D
that the appellant had gone 'on a strike' without obtaining any leave
and had also committed embezzlement of money belonging to it. The
Labour Court came to the conclusion that the appellant had absented
himself from duties without obtaining leave and, accepting photostat
copies of certain documents furnished by the respondent found that the
appellant had committed the alleged embezzlement. It accordingly held E
that the termination of service was justified. The appellant's writ peti-
tion against the award of the Labour Court was dismissed in limine by
the High Court.

Allowing the appeal by special leave and ordering reinstatement
-, of the appellant in service with full back wages, F

HELD:The termination of the service of the appellant without
holding any domestic enquiry is unjustified. [530E-F]

The finding of the Labour Court that the appellant had embezzled
amounts belonging to the respondent without going into the question G
whether the photomat copies of documents produced could be accepted as
evidence in the absence of the originals, when no explanation was given
by the respondent for not producing the originals, is without any basis
and is liable to be set aside. The finding of the Labour Court that the
appellant had absented himself from duties without obtaining leave is
not sustainable for the reason that the case of the respondent was that H
527
528 SUPREME COURT REPORTS [1987] 3.S.C.R.

A the appellant had gone 'on a strike' and, if that was so, no question of
obtaining any leave would arise. There was also no,reason to reject the
evidence given by the appellant in support of his assertion that he had
not attended to his wori< during the relevant period due to his illness. [SJOA-C]

(ii) If the appellant has worked in any other society, the amount
B of back wages payable shall be reduced by the salary drawn by the
appellant from such society during the period subsequent to his termi-
nation ofservice. [531A]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1080
of 1987.
c From the Judgment and Order dated 3.2.1986 of the Punjab and
Haryana High Court in C. W. No. 561 of 1986.

Pramod Ahuja and Kailash Vasdev for the Appellant.

D P.N. Puri for the Respondents.

The Judgment of the Court was delivered by

VENKATARAMIAH, J. The appella.JJt, Makhan Singh, was
working as the Secretary of Narainpura Co-operative Agricultural
E Service Society Limited, Narainpura, District Ferozepur-Respon-
dent No. 1 (hereinafter referred to as 'the Society'). He did not attend
to his duties between May 11, 1981 and May 29, 1981 and that he had
stayed away from work during that period. The Society passed a re-
1
•
solution on May 30, 1981 terminating his services. On an industrial
dispute being raised the Labour Commissioner, Punjab referred.the
F following questions to the Labour Court, Bhatinda under section
10( 1)(c) of the Industrial Disputes Act, 1947:

Whether termination of services of Makhan Singh, workman is
jus\ified and in order? If not, to what relief/exact amount of
compensation is he entitled?
G
Before the Labout Court the appellant filed his statement of
claim in which he asserted that he had not attended to his work bet-
ween May 11, 1981 and May 29, 1981 due to his illness, that he had
taken leave for that period and that his services had been terminated
by the management without any justification. He further alleged that he
H had put in six years of service in the Society and was drawing a salary
MAKHAN v. NARAINPURA SOCIETY [VENKATARAMIAH. J.J 529
(

...... of Rs.460 per month at the time of the termination of his services. He
A
prayed for reinstatement in his post and also for back wages. The
Society contested the claim of the appellant on various grounds. It
alleged that the Society was not an industry and the Industrial Dis-
putcs Act, 1947 was not applicable. It pleaded that the appellant had
gone 'on a strike' without obtaining any leave and that he had also
committed embezzlement of the money belonging to the Society. The B
). Labour Court found that the appellant had committed embezzlement
and that he had absented himself from duties without obtaining leave.

·-- It accordingly found that the termination of the services of the appel-
lant was justified. It, however, held that the Society was an industry
and the Labour Court had jurisdiction to pass the award. The Labour
Court accordingly rejected the claim. Aggrieved by the award passed
by the Labour Court the appellant filed a writ petition in Civil Writ
c
>... Petition No. 561 of 1986 on the file of the High Court of Punjab &
Haryana. That petition was dismissed in limine by the High Court on
February 3, 1986. This appeal by special leave has been filed by the
appellant against the decision of the High Court as well as against the
award of the Labour Court. D
~ Admittedly, no domestic enquiry was held by the management
before passing the order of termination of the appellant's services.
Before the Labour Court the management tried to justify the order of
termination of appellant's services on the two grounds, namely, that
the appellant had embezzled certain amounts of the Society and that E
he had absented himself from duty without obtaining leave. The evi-

~
dence led by the management in support of the embezzlement alleged
by it is very scrappy indeed. It relied upon the evidence of Ram Sarup,
who was working as the Secretary of the Society that the appellant had
~ received a sum of Rs.125 from one shareholder Bhaga Ram but he had
made an entry in the account books stating that only a sum of Rs. 100 F
had been received and that the appellant had received a sum of
Rs.1145 and Rs.150 from Sat Pal and Jagir Singh, shareholders of the
Society respectively and had made entries in the account books show-
ing that he had received Rs. 920 and Rs.125 respectively from them.
The management produced three photostat copies of the entries in the
. )'
pass books which were marked as Exhibits M 11 to M 13. The originals G
were not produced. The appellant denied having misappropriated the
amount of Rs.25 in the first case"Rs.205 in the second case and Rs.25
in the third case. he stated that the photostat copies were fabricated
documents. The Labour Court however accepted the evidence placed
before it by the management. It did not go into the question whether
the photostat copies, Exhibits M'l to M 3, could be accepted as evi- H
530 SUPREME COURT REPORTS {1987] 3.S.C.R.
'
A dence in the absence of the originals. The award shows that no expla-
nation had been given by the management for not producing the origi-
nals. We are not satisfied with the finding recorded by the Labour
Court that the appellant had embezzled amounts belonging to the
Society. The said finding is without any basis and is, therefore, liable
to be set aside. The Labour Court has also accepted that the appellant
B had absented himself from duty without obtaining leave. It is interest-
ing to note that the case of the Society before the Labour Court was
that the appellant had gone on a strike without getting any leave. If he
had gone on a strike no question of obtaining any leave would arise.
The appellant gave evidence before the Labour Court stating that he ---·
was ill and, therefore, he was not able to attend to his duties. He also
C stated that he had obtained necessary leave sanctioned before absent-
ing himself from duties. Of course, the appellant could not produce
any record showing that he had given the application for leave to the
management which could only be in the possession of the Society. In
any event there was no reason at all for rejecting the evidence given by
him. The finding on the above question is also not sustainable on the
D material placed before the Court. We regret to observe that the
approach of the Labour Court to the whole case is highly casual and
superficial.

On a consideration pf the whole material placed before this
Court we are of the view that the decision of the management in the
E instant case to terminate the services of the appellant without holding
any domestic enquiry is not a bona fide one. We accordingly hold that
the termination of the appellant's services is unjustified. In the result we
set aside the judgment of the High Court and the award passed by the
Labour Court and pass an award directing the Society to reinstate the
appellant in its service with effect from May 30, 1981, the date on
F which the Society passed the resolution terminating the appellant's
services. The appellant shall be treated as being in the service of the
Society without any break in his service. He is entitled to all the
consequential benefits. We direct the Society to pay full back wages to
the appellant from the date of termination of his service till the date of
reinstatement.
G
Shri P.N. Puri, learned counsel for the Society pleaded that the
appellant was working in another co-operative society after his ser-
vices were terminated and that the back wages payable to the appellant
should be reduced by the salary drawn by him from the said society. If
the appellant has worked in any other society, as pleaded by the
H learned counsel for the Society, the amount of back wages payable
MAKHAN v. NARAINPURA SOCIETY (VENKATARAMIAH, J.] 531

under this award shall be reduced by the salary drawn by the appellant A
during the period subsequent to his termination of service from any
other society. The Labour Court shall determine the actual amount
payable by the Society to the appellant after hearing both the parties.
The appeal is accordingly allowed. The appellant is entitled to recover
costs from the Society which we quantify at Rs.1,000.
B
). H.L.C. Appeal allowed.