DAKSHIN GUJARAT VIJ COMPANY LTD.versusRAMANBHAI MATHURBHAI TADVI

     C/SCA/8525/2025                                 JUDGMENT DATED: 03/03/2026




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

               R/SPECIAL CIVIL APPLICATION NO. 8525 of 2025


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
================================================================

            Approved for Reporting                  Yes          No

================================================================
                       DAKSHIN GUJARAT VIJ COMPANY LTD.
                                    Versus
                         RAMANBHAI MATHURBHAI TADVI
================================================================
Appearance:
MR DIPAK R DAVE(1232) for the Petitioner(s) No. 1
KRISHNAN M GHAVARIYA(8133) for the Respondent(s) No. 1
MS ASHLESHA M PATEL(6127) for the Respondent(s) No. 1
================================================================

 CORAM:HONOURABLE MR. JUSTICE HEMANT M.
       PRACHCHHAK

                                Date : 03/03/2026

                                  JUDGMENT


1.      RULE returnable forthwith. Learned counsel Mr. Krishnan
Ghavariya, waives service of notice of Rule for and on behalf of the
respondent-workman.


2.      Present petition is $led by the petitioner - Dakshin Gujarat Vij
Company Ltd. under Articles 226 & 227 of the Constitution of India
read with the provisions of the Industrial Disputes Act, 1947
(hereinafter be referred to as “the Act”) challenging the judgment and
award dated 01.01.2025 passed by the learned Presiding O8cer,
Industrial Tribunal, Vadodara (hereinafter be referred to as “the
Tribunal”) in Reference (I.T.) No. 14 of 2023 seeking following reliefs :


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        “(A) This Hon'ble Court may pleased to issue mandamus and/or nature of a
        a writ be of writ in the mandamus and/or any other appropriate writ, order
        or direction to quash and set aside the impugned Reference Order dated
        04.02.2023 at Annexure-J to the petition as also the impugned award dated
        01.01.2025 passed by learned Industrial Tribunal, Vadodara in Reference
        (I.T.) No.14 of 2023 at Annexure-A to the petition and further may be
        pleased to reject the Reference of the respondent in full;

        (B) Pending the admission hearing and 4nal disposal of this petition, this
        Hon'ble Court may be pleased to stay the execution, implementation and
        operation of the impugned award dated 01.01.2025 passed by learned
        Industrial Tribunal, Vadodara in Reference (I.T.) No.14 of 2023 at Annexure-
        A;

        (C) Any other and further relief or reliefs to which this Hon'ble Court
        deemed 4t, in the interest of justice; may kindly be granted;”


3.      Brief facts giving rise to the present petition are that, the
respondent was working as Surveyor in the Ankleshwar Rural Division
O8ce of the petitioner. That, for the serious act of misconduct
committed         by   the   respondent,           which   amounts        dishonesty,
misappropriation to fraud, and cheating with the petitioner, charge
sheet was issued against him on 24.05.2012. That, the respondent
attained the age of superannuation on 27.06.2014 and accordingly, as
per Service Regulation 72, the respondent was relieved from service.
That, the inquiry was conducted after giving full opportunity to the
respondent and the inquiry o8cer submitted his $ndings. That,
second show-cause notice was issued to the respondent and the
inquiry report was supplied to the respondent. That, penalty order
was issued, whereby the respondent was in@icted penalty of forfeiture
of leave encashment and gratuity and therefore, the respondent
preferred departmental appeal before the competent authority
challenging the said penalty order. After hearing the respondent, the
appeal of the respondent was dismissed and therefore, the
respondent approached this Court by way of $ling Special Civil



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     C/SCA/8525/2025                                 JUDGMENT DATED: 03/03/2026




Application No.6835 of 2019 against the order of dismissal of the
appeal, whereby, this Court dismissed the petition preferred by the
respondent vide order dated 03.02.2022. That thereafter, the
respondent         approached   Commissioner    of     Labour       by    written
application. That, the conciliation o8cer submitted his failure report
and accordingly, the Reference was made to the learned Industrial
Tribunal, Vadodara City at Bharuch, whereby, the learned Tribunal
without passing Part I award whereby validity of the inquiry was
required to be decided, straightway, passed the impugned award
dated 01.01.2025, whereby the inquiry against the respondent has
been held to be illegal and the petitioner is thus directed to pay leave
encashment and gratuity with 68 interest from 01.07.2014.


4.      Being aggrieved and dissatis$ed with the impugned award
dated 01.01.2025 passed by the learned Presiding O8cer, Industrial
Tribunal, Vadodara in Reference (I.T.) No. 14 of 2023, the petitioner
has preferred this petition.


5.      Heard Mr. Dipak R. Dave, learned counsel appearing for the
petitioner-Company and Mr. Krishnan Ghavariya, learned counsel
appearing for the respondent-workman.


6.        Learned counsel Mr. Dave has submitted that the impugned
judgment and award passed by the Tribunal is illegal, unjust,
arbitrary, erroneous and contrary to the facts and evidence on record
and the provisions of the Act and therefore, the same is required to be
quashed and set aside. He has submitted that the Tribunal has
committed a serious error of law and on facts while allowing the
reference of the respondent-workman and directing the petitioner to
pay leave encashment and gratuity with 6% interest. He has further


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   C/SCA/8525/2025                             JUDGMENT DATED: 03/03/2026




submitted that in the earlier round of litigation, the order passed by
the petitioner was challenged by the respondent before this Court by
way of preferring Special Civil Application No.6835 of 2019
challenging the powers of the petitioner to withhold the amount of
leave encashment and gratuity, wherein, this Court after considering
the submissions and after hearing all the concerned parties, has
dismissed the petition observing that the respondent-workman having
alternative e8cacious remedy under the provisions of the I.D. Act can
challenge the order of withholding. He has submitted that this Court
has also observed that under the provisions of the Service Regulation
No. 72 of the petitioner-Company, the petitioner has powers to
withhold and forfeit the amount of leave encashment and gratuity,
however, while dealing with the submissions, the Tribunal has illegally
interpreted the order passed by the Co-ordinate Bench as referred in
para-7 of the impugned award, the issue no.1 but, the Tribunal has
not discussed about the directions and the powers of the petitioner,
which are discussed by the Co-ordinate Bench in paras-17 and 18 and
therefore, the impugned award passed by the Tribunal is illegal,
erroneous and unjust and thereby, the Tribunal has exceeded its
jurisdiction which is not vested in it while passing the impugned
award. He has further submitted that the Tribunal once came to the
conclusion that the inquiry was bad and it was declared illegal, then
the course of action should be that the Tribunal ought to have granted
permission to the petitioner to lead evidence and prove the charges
levelled against the respondent-workman as if, the reference was to
be considered under Section 10 of the Act, instead of that, without
giving any opportunity and without even considering the settled legal
principles enunciated by the Hon’ble Apex Court way back in the year
1965 in case of Motipur Sugar Factory (Private) Limited vs.
Rikhdeo Prasad, reported in AIR 1965 SC 1803 and subsequently,


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     C/SCA/8525/2025                            JUDGMENT DATED: 03/03/2026




which is reiterated by the Hon’ble Apex Court in a number of
decisions in case of Workmen Of Indian Express Newspaper
Private Limited vs. Management Of Indian Express Newspaper
Private Limited, reported in 1969 (1) SCC 228 the Tribunal has
passed the impugned award, which is illegal, erroneous and unjust,
and under such circumstances, learned counsel Mr. Dave has urged
that the present petition be allowed and the matter be remanded
back to the concerned authority for deciding the issue afresh.


7.      In the order dated 30.06.2025, this Court has recorded that in
view of the observations made by the Hon’ble Apex Court in case of
Cooper Engineering Limited vs. Shri P.P. Mundhe, reported in
AIR 1975 SC 1900, the preliminary issue has to be decided $rst with
regard to the legality and validity of the inquiry and thereafter, the
Tribunal ought to have proceeded further to decide the issue and in
view of the same, this Court has issued notice. Today, learned counsel
Mr. Ghavariya, appearing for the respondent-workman was unable to
give any answer on this legal aspect.


8.      I have heard the learned counsel appearing for the respective
parties and perused the material placed on record. I have also gone
through the impugned judgment and award passed by the Tribunal.
The disputed facts involved in the present case is that as to whether
the Tribunal was right and justi$ed in passing the $nal award without
giving proper opportunity to the petitioner to lead evidence once the
Tribunal has held that the inquiry against the respondent-workman
was illegal and null and void and without aFording any opportunity to
lead evidence, can the Tribunal pass the $nal award in favour of the
respondent-workman or not; whether the impugned award passed by
the Tribunal is against the settled legal principles or not; whether the


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     C/SCA/8525/2025                                      JUDGMENT DATED: 03/03/2026




Tribunal was justi$ed in passing the $nal award and thereby directing
the petitioner thought he subject matter was already decided by the
Co-ordinate Bench of this Court or not.


9.       It transpires from the record that the respondent-workman was
facing serious charges of moral turpitude and for that, inquiry was
held by the petitioner under the Service Regulation No.72 of the
petitioner-Company and in the proceedings before this Court $led by
the respondent-workman being Special Civil Application No. 6835 of
2019, the Co-ordinate Bench of this Court, while dealing with the
powers of the petitioner-Company, has observed in paras-17 and 18
thus :

         “17. As observed hereinabove, the Service Regulation No.72 of the
         respondent-Company permits the forfeiture of the gratuity and terminal
         bene4ts after the retirement. The Supreme Court has held that it is not only
         for pecuniary loss caused the proceedings can continue after the date of
         superannuation, but an employee can be proceeded against for a grave
         misconduct. The Apex Court has expressed disapproval of the
         interpretation of Section 4(6) of the Act in the manner as contended by the
         petitioner, which suggests that “in case after superannuation of the
         employee, there cannot be any dismissal i.e. termination of service as
         contemplated in Section 4(6) of the Act, and hence, there can be no
         recovery of pecuniary loss caused by employee or forfeiture of gratuity
         wholly or partially as that can only to be done in the event of termination of
         services on charges found established.”

         18. Thus, a conjoint reading of the observations made by the Apex Court
         and Service Regulation No.72 justi4es the action of the respondent
         authorities in forfeiting the amount of leave encashment and gratuity of the
         petitioner as it empowers the respondent-Company to forfeit the same in
         case of proved misconduct against the employee, after holding the
         departmental proceedings. There is no requirement of passing actual order
         of termination since the Apex Court has observed that such order of
         termination of service of the employee could not be passed after retirement
         of the employee. Thus, merely because the petitioner has reached the age
         of superannuation and no termination order is passed; the same will not
         dilute the powers of the respondent-Company of forfeiting the amount of
         gratuity and leave encashment under its Regulation.”




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      C/SCA/8525/2025                           JUDGMENT DATED: 03/03/2026




9.1      In view of above, once this Court has held that the petitioner
having powers under Service Regulation No.72 of the petitioner-
Company to withhold / forfeit the amount of leave encashment and
gratuity and that order became $nal since it was not further
challenged by the respondent herein, however, the Tribunal, as if,
sitting in appeal over the said judgment, held that the petitioner has
no powers to withhold the amount of leave encashment and gratuity
as the Tribunal has declared the inquiry legal and void ab initio but, at
the same time, the Tribunal has failed to consider the ratio laid down
by the Hon’ble Apex Court in case of Cooper Engineering Limited
(Supra), wherein, the Hon'ble Apex Court has observed that the
preliminary issue challenged to dismissal or re-agitation at the 4nal
hearing on merits, absence of inquiry or defective inquiry, once there
is a question of violation of the principles of natural justice, Court
ought to have decided as a preliminary issue and that preliminary
issue is required to be decided 4rst and once that issue is decided and
the employer choose not to lead any evidence, the employer would
not agitate again but, herein the present case, without aFording that
opportunity to lead the evidence, the Tribunal has passed the $nal
order, without following the principles laid down by the Hon’ble Apex
Court in paras-21 to 23, which was subsequently followed in case of
Panchmahal Steel Limited vs. Ranjitsinh Udaysing Parmar
(Deceased) & Ors., reported in [2024] LawSuit (Guj) 616 the
observations made in para-9.


9.2      Subsequently, the Hon’ble Apex Court in case of Karnataka
State Road Transport Corporation vs. Lakshmidev Amma
(Smt.) and Another, reported in [2001] 5 SCC 433, more
particularly the observations made in paras-8 to 24, 31 and 45. The
relevant observations made in para-45 is reproduced hereunder :


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      C/SCA/8525/2025                                      JUDGMENT DATED: 03/03/2026




         “45. It is consistently held and accepted that strict rules of evidence are not
         applicable to the proceedings before labour court / tribunal but essentially
         the rules of natural justice are to be observed in such proceedings. Labour
         courts / tribunal have power to call for any evidence at any stage of the
         proceedings if the facts and circumstances of the case demand the same to
         meet the ends of justice in a given situation.”


9.3      So far as the direction issued by the Tribunal with regard to
release of the amount of leave encashment and gratuity are
concerned, that amount is already forfeited by the respondent and
that was not challenged further by the respondent and therefore, it is
not open for the Tribunal to pass the order with regard to release of
the amount towards leave encashment and gratuity. Therefore, in
view of above referred decisions and the ratio laid down by the
Hon’ble Apex Court, I am of the opinion that the impugned award
passed by the Tribunal is required to be quashed and set aside and
the matter is required to be remanded back to the Tribunal for fresh
consideration, as the petitioner has not give up his right to lead
evidence and therefore, without giving an opportunity to the
petitioner to lead evidence to prove the correctness and legality of
the inquiry, the Tribunal cannot pass the $nal order as laid down by
the Hon’ble Apex Court.


10.      In the result, the present petition is partly allowed. The
impugned judgment and award dated 01.01.2025 passed by the
learned Presiding O8cer, Industrial Tribunal, Vadodara in Reference
(I.T.) No. 14 of 2023 is hereby quashed and set aside. The matter is
remanded back to the Tribunal for deciding the issue afresh, after
giving proper opportunity to the petitioner to lead evidence. It is open
for the parties to raise all the contentions available in the eye of law
and the same shall be decided by the Tribunal in accordance with law,


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         C/SCA/8525/2025                                                      JUDGMENT DATED: 03/03/2026




 after aFording proper opportunity to all the concerned parties, as
 expeditiously as possible, preferably within a period of six months
 from the date of receipt of writ of this Order. Rule is made absolute to
 the aforesaid extent. There shall be no order as to costs.
            Direct service is permitted.



                                                                    (HEMANT M. PRACHCHHAK,J)

 Dolly




Original copy of this order has been signed by the Hon'ble Judge.
Digitally signed by: DOLLYBEN CHETANBHAI VADUKAR(HC01392), PRIVATE SECRETARY, at High Court of Gujarat on 09/03/2026 17:45:25

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