Holding

When a Labour Court finds that workmen have participated in an illegal strike, it may not interfere with the quantum of punishment unless the penalty is wholly disproportionate, and the discretion under Section 11‑A must be exercised judiciously.

Summary

The employer, a public utility, dismissed eight workmen after they participated in a five‑month illegal strike. The Labour Court held the strike unlawful, set aside the dismissals and ordered reinstatement without back wages. The Gujarat High Court reversed that award, holding that once the misconduct was proved the Labour Court could not tamper with the quantum of punishment and that Section 11‑A of the Industrial Disputes Act had not been considered. On appeal, the Supreme Court examined the scope of Section 11‑A, emphasizing that its discretion to reduce punishment must be exercised only when the penalty is wholly disproportionate to the guilt. The Court affirmed that, given the seriousness of the misconduct, the public‑utility nature of the employer and the prolonged strike, the Labour Court should not have interfered with the dismissal. Consequently, the appeal was dismissed and the employer’s offer of a one‑lakh‑rupee payment to each workman was deemed fair and ordered to be paid.

Issues considered

The extent of the Labour Court's power under Section 11‑A of the Industrial Disputes Act, 1947 to reduce the quantum of punishment for workmen who participated in an illegal strike.
Whether the High Court erred in not considering the parameters of Section 11‑A while setting aside the Labour Court's award.
Whether the punishment of dismissal without back wages was proportionate to the proved misconduct in a public‑utility service.

Legislation cited

Industrial Disputes Act, 1947s. 11-A

Subjects

Industrial disputeIllegal strikeSection 11-ALabour Court discretionPublic utility serviceProportionality of punishmentReinstatementBack wages

Judgment

\

A U.B. GADHE AND ORS. ETC. ETC.
v.
G.M. GUJARAT AMBUJA CEMENT PVT. LTD.

SEPTEMBER 28, 2007
B
[DR. ARIJITPASAYAT AND LOKESHWAR SINGHPANTA,JJ.)

-(
Industrial Dispute Act, 1947: ·'1'

c s. I IA-Jurisdiction of Labour Court to give relief-Scope-
Workmen went on strike-Dismissed by employer-labour Court held
that the strike was not justified however, directed the workmen to be
re-instated without back wages-Correctness of-Held, not correct-
Having found that the workmen had proceeded on illegal strike,
D Labour Court ought not to have interfered with the quantum of
punishment especially when the employer was engaged in public utility
_-4
service and the strike prolonged for a period offour to five months. '-

Respondent-employer is engaged in public utility senice. Pursuan~
to certain dispute, Appellants-workmen, went on strike for a period of
E
5 months. Disciplinary action was initiated and the Appellants were
dismissed from senice. Labour Court held that the Appellants were not
justified in going on strike, however, it held that for such misconduct,
punishment ofwithholdingofbackwages would be sufficient Aa:ordingly,
the Court set aside the order of dismissal and directed the Appellants .>,,.
F
to be re-instead in service with continuity but without back wages. High
Court held that once the charges had been proved against the
Appellants, the Labour Court ought not to have interfered with the
quantum ofpuni~hment imposed by Respondent-employer.
G In appeal to this Court, the primary contention made was that the
parameters of s. HA of the Industrial Disputes Act, 1947 bad not been y
considered by the High Court while setting aside the order ofthe Labour
Court.

H 452
~
U.B. GADHE v. G.M. GUJARAT AMBUJA 453
CEMENT PVT. LTD.
Disposing of the appeal, the Court A

HELD: 1. When the Labour Court found that the workmen had
proceeded on illegal strike and that they were leading participants in
such a strike, the Labour Court ought not to the have interfered with
the quantum of punishment especially when it was established that the B
employer is engaged in Public Utility service and that the strike
prolonged for a period of four to five months. Even in the absence of
,~ any further proofof involvement of the workmen for other misconduct
ofunruly behaviour, abusing superiors officers, preventing officers from
entering the premises, preventing co-workers from resuming duties and c
threatening the family members of the workmen and collecting union
subscription illegally, it is doubtful whether the Labour Court could have
reduced the punishment and substituted the order ofdismissal oflessar
punishment. [Para 14] [460-E,F,G]
Mill Manager, Model Mills Nagpur Ltd v. Dharam Das, Etc., AIR D
..l (1958) SC 311, relied on•
../

2.1. The High court had not considered the case in the background
ofSection 11-AofthelndustrialDisputesAct, 1947. Under Section 11-
A wide discretion had been vested in the Tribunal in the matter of E
awarding relief according to the circumstances of the case, whereas in
the writ jurisdiction it is extremely limited. [Para 17] [461-E, F]

..,...4..,
2.2. The power under said Section 11-A has to be exercised
judiciously and the Industrial Tribunal or the Labour Court, as the case
F
may be, is expected to interfere with the decision of a management
under Section 11-A of the Act only when it is satisfied that punishment
imposed by the management is wholly and shockingly disproportionate
to the degree of guilt of the workman concerned. To support its
conclusion, the Industrial Tribunal or the Labour Court, as the case may
G•
~ be, has to give reasons in support of its decision. The power has to be
exercised judiciously and mere use of the words 'disproportionate' or
'grossly disproportinate' by itselfwill not be sufficient.
[Para 18] [461-F, G; 462-A]
H
'-
454 SUPREME COURT REPORTS [2007] 10 S.C.R.

A 2.3. In recent times, there is an increasing evidence of this, perhaps
well-meant but wholly unsustainable, tendency towards a denudation
of the legitimacy of judicial reasoning and process. The reliefs granted
by the Courts must be seen to be logical and tenable within the
framework ofthe law and should not incur and justify the criticism that
B the jurisdiction of the Courts tends to degenerate into misplaced
sympathy, generosity and private benevolenc. It is essential to maintain
the integrity oflegal reasoning and the legitimacy of the conclusions.
They must emanate logically from the legal findings and the judicial
results must be seen to be principled and supportable on those findings.
C Expansive judicial mood of mistaken and misplaced companssion at the
expense of the legitimacy of the process will eventually lead to mutally
irreconcilable situations and denude the judicial process of its dignity,
authority, predictability and respectability. [Para 19] (462-B, C, D]

D 2.4. Though under Section 11-A the Tribunal has the power to
reduce the quantam of punishment, it has to be done within the
parameters oflaw. Possession of power is itself not sufficient; it has to
be exercised in accordance with law. [Para 20] [462-E)

2.5. Power and discretion conferred under the Section needless to
E
say have to be exercised judicially and judiciously. The Court exercising
such power and finding the misconduct to have been proved has to first
advert to the question of necessity or desirability to interfere with the
punishment imposed and if the employer does not justify the same on
F the circumstances, thereafter to consider the relief that can be granted.
There must be compelling reason to vary the punishment and it should
not be done in a casual manner. [Para 21) [462-F, G)

2.6. This Court would have asked the High Court to consider that
aspect. But considering the long passage oftime, it would not be proper
G to do so since the employer seems to be a public utility service and the
workmens' continued utility to the employer is gravely doubtful in view
of their conduct. After such a long period, it would not be in the interest
of parties to direct the High Court to consider parameters of Section
11-A ofthe Act. Therefore, this Court has considered the matter, taking
H
~
I

U.B. GAD HE v. G.M. GUJARAT AMBUJA 455
CEMENT PVT. LTD. [PASAYAT,J.]
into account the background facts. The proved misconduct is definnitely A
serious. The respondent has, as a matter of good gesture, offered to
pay each ofthe appellant rupees one lakh, in view of the fact that they
have received payment upto Dcember, 2004. Taking into account all
relevant aspects, the offer of respondent appears to be fair and
reasonable. Let the payment be accordingly made. B
[Paras 23 and 24] [463-A, B, CJ

;- Kera/a Solvent Extractions Ltd v.A. Unnikrishnan andAnr., (1994)
1 SCALE 631 and Life Insurance Corporation ofIndia v. R. Dhandapani,
AIR (2006) SC 615, relied on. c
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 892 of
2007.
From the Judgment and Order dated 24.l 0.2005 of the High Court
of Gujarat at Ahmedabad in Special Civil Application Nos. 9106 to 9108 D
and 19421of2005.
J.K. Das, Amit Sharma, Anupam Lal Das and Gaurav Agrawal for
the Appellants.
Shyam Diwan, Rahul Ray, Vikram Bajaj, Sanjeev Kumar and E
Basumen (for Mis. Khaitan & Co.) for the Respondents.
The Judgment of the Court was delivered by
DR. ARIJIT PASAYAT, J. l. Appellants call in question the
judgment rendered by a learned Single Judge of the Gujarat High Court F
allowing the Special Civil Applications filed by the respondent (hereinafter
referred to as the 'employer').
2. The respondent had filed the applications questioning correctness
of the award dated 31.12.2004 passed by the Labour Court. Another
set of petitions were filed by the employer questioning correctness of the G
said award by which the Labour Court had partially allowed the reference
of the concerned workmen. By the said award the workmen were
directed to be re-instated in service with continuity but without back
wages.Chailenge of the workmen was to the award insofar as it provided
for no back wages and only re-instatement. H
456 SUPREME COURT REPORTS [2007] 10 S.C.R.

A 3. Background facts in a nutshell are as follows:
Respondent is involved in providing public utility services. In the year
1989-1990, there were certain disputes between the management and
the employees. There was an extended strike in which a large number of
B employees employed by the respondent-company participated. This
disrupted the working of the plant where the concerned workmen were
employed. The respondent-company, therefore, initiated disciplinary action
against the striking employees. Against the workmen concerned, charge
sheet came to be issued. Since the workmen did not participate they were
C proceeded ex-parte. Eventually, eight workmen were dismissed from the
service by the respondent-company by order dated 01.03.1990. The
concerned workmen, therefore, raised industrial disputes challenging their
dismissal orders.
Earlier once the references were disposed of by the Labour Court
D by an award dated 23 .04.1999. The workmen concerned were directed
to be reinstated in service with full back-wages from the date of dismissal
till reinstatement. The employer challenged the award of the Labour Court
by filing Special Civil Application No.6055/1999. The learned Single
Judge disposed of the application on 14.5.2004 by giving certain
E directions, and the proceedings were remanded back to the Labour Court.
These directions read as follows:
"11. For the reason stated above, it is necessary to quash and set
aside the impugned judgment and awards while giving the following
F directions:-
I. The proceedings of aforesaid Reference Cases are remanded
back to the Labour Court for re-trial.
II. When the proceedings of the aforesaid cases are remanded
G back to the Labour Court, the petitioner will be at liberty to lead
additional evidence to substantiate its action taken against the y
respondents.
III. The tespondents will be at liberty to lead evidence contra.
H IV. The material already adduced before the Labour Court
U.B. GADHE v. G.M. GUJARAT AMBUJA 457
CEMENT PVT. LTD. [PASAYAT, J.]
including the oral evidence led on behalf of the respondents will A
remain as it is.
V. The Labour Court to complete the hearing and final declaration
of the judgment and awards on or before 30th September, 2004.
VI. That parties to the aforesaid Reference cases will fully cooperate B
the Labour Court with the hearing ofthe cases and no adjournment
~
will be sought without compelling reasons. The common judgment
and award passed in Reference LC.A. Nos. 13911998, 146/1998,
162/1998, 145/1998 and 150/1998 dated 23rd April, 1999 are
hereby ordered to be quashed and set aside. The petitions are c
allowed. Rule made absolute with no order as to costs".
4. After remand, the Labour Court took up the proceedings afresh,
recorded the evidence and passed the awards on 31.12.2004.
5. Before recording the observations and conclusions of the Labour D
..-- ~ Court in the impugned award, it would be useful to notice the allegations
made against the concerned workmen by the employer.
6. Charges against all the workmen were identical. Twelve different
charges were levelled against them. By way of illustration the High Court E
took the case of appellant No. I. The charges read as follows:
"( 1) Use of impertinent languages, insult to superiors, indecent
behaviour, insubordination and any act which is subversive of
~~
discipline.
F
(2) Unlawful cessation of work or going on illegal strike in
contravention of the provisions of law and the standing orders and
participation in a sit down strike.
(3) Inciting and/or instigating other employees to take part in an
illegal strike, sit down strike and action in furtherance of such strike G
launched in contravention of the provision of law.
(4) Disorderly behaviour and conduct endangering the life or safety
of any person within the factory premises.
H
458 SUPREME COURT REPORTS [2007] 10 S.C.R.

A (5) Act of sabotage of causing damage to the work in progress or
to any property of the management wilfully.
(6) Wilful interference with the work of another workman or of a
person authorised by the management to work on its premises.
B (7) Holding or participating in the meetings, demonstrations and
shouting of slogans inside the factory premises or mines or
residential colony.
(8) Unauthorised absence from duty for more than eight consecutive
days.
c
(9) Committing a nuisance in the premises of the factory, breach
of these standing orders.
(10) Canvassing for trade union membership and collection of union
D funds within the premises except as permissible under law.
(11) Making a false, vicious or malicious statement in public against ,A-...

management/factory or officer.
(12) Instigation, incitement, abetment or furtherance of any of the
E above acts.
7. Out of the said charges, charge Nos. 2, 4, 7, 8, 9 and 11 were
held to have been proved while charge No. I was held to be partially .
proved. Other charges were not proved.
F 8. The question relating to legality of the departmental proceedings
was examined first. The Labour Court held that the enquiry conducted
was legal and proper, but the Labour Couri: found that some of the charges
were not proved. It was held that so far as the strike is concerned it .was
established that the workmen were not justified in going on strike. It was
G noted that undisputedly the concerned workmen had participated in a
strike. Accordingly, the Labour Court had held that denial of back wages
for a period of 14 to 15 years for which the concerned workmen remained
out of employment would be sufficient punishment for the misconduct
i-;roved against them. The High Court held that once the charges have been
H proved, the Labour Court ought not to have interfered with the quantum
U.B. GADHE v. G.M. GUJARAT AMBUJA 459
CEMENT PVT. LTD. [PASAYAT, J.]
of punishment. Accordingly, the employer's Special Civil Applications A
were allowed and those filed by the workmen were dismissed. It was
concluded inter alia as follows:
"7.3. The above observations were made with regard to the scope
of jurisdiction of the High Court under Article 226 of the B
Constitution of India, same would however, apply also to the
powers of the Labour Court or Industrial Tribunal while examining
the conclusions arrived at by the employer during the course of
departmental inquiry.
7.5. I do not find that Labour Court considered the evidence on C
record to come to the above conclusions. The power of the
Labour Court to interfere with the findings arrived at by the
employer are extremely narrow. If there is some evidence on
record to permit the employee to draw such conclusions, it is not
for the Labour Court to decide the sufficiency of such evidence D
and unless the conclusions are based on no evidence and,
therefore, perverse, Labour Court could not have interfered with
the same.
7. 7. The Labour Court also proceeded to consider the question E
of quantum of punishment on the basis that the charge of going on
illegal strike was proved against the workmen. The Labour Court
ultimately found that for the proved misconduct, punishment of
withholding of the back wages for a period of 14 to 15 years would
be sufficient punishment. The Labour Court found that order of F
dismissal cannot be sustained."

9. It was concluded that since the Labour Court had held that the
workmen had proceeded on illegal strike and they were leading
participants in such a strike, the Labour Court ought not to have interfered
with the quantum of punishment, specially when it was established that G
the employer is a public utility service and the strike prolonged for a period
of five months.

10. The stand of learned counsel for the workmen was that before
the Conciliation Officer the employer had agreed to re-instate the workmen H
'
~ '-
460 SUPREME COURT REPORTS (2007] 10 S.C.R.

A and to take a sympathetic view.
11. The main plank of the appellants' arguments was that the
parameters of Section 11-A of the Act had not been considered by the
High Court.
B 12. After the amendment of Section 11-A, the Labour Court or the
Tribunal, as the case may be, had ample power to decide the question
relating to quantum of punishment. Decisions relied upon by the High Court
either related to a stage where amendment to Section 11-A was not there
or under Article 226 of the Constitution of India, 1950 (in short the
C 'Constitution'). The situation is different in cases in which Section 11-A
of the Act can apply.
13. Learned counsel for the respondent submitted that the primary
stand of the respondent before the High Court was alleged agreement to
D consider the cases sympathetically. That aspect was considered by the
High Court in proper perspective, considering the fact that after the
arrangement was agreed to, the employer appointed a Committee to
examine the matter that no sympathy was required to be shown. The High
Court's approach is clearly correct in view of the serious nature of the
E allegations against the appellants.
14. When the Labour Court found that the workmen had proceeded
on illegal strike and that they were leading participants in such a strike,
the Labour Court ought not to have interfered with the quantum of
punishment especially when it was established that the employer is a Public
F Utility service and that the strike prolonged for a period of four to five
months. Even in the absence of any further proof of involvement of the
workmen for other misconduct of unruly behaviour, abusing superiors
officers, preventing officers from entering the premises, preventing co-
workers from resuming duties and threatening the family members of the
G workmen and collecting union subscription illegally, it is doubtful whether
the Labour Court could have reduced the punishment and substituted the ·
order of dismissal oflesser punishment. As noted earlier, this Court in
Mill Manager, Model Mills Nagpur Ltd. v. Dharam Das, Etc., AIR
(1958) SC 311 had upheld the action of the employer in dismissing the
H
I

/
f
U.B. GADHE v. G.M. GUJARAT AMBUJA 461
CEMENT PVT. LTD. [PASAYAT,J.]"
employees who were found to have gone on illegal strike. A

15. We are unable to accept the contention of the learned counsel
for the workmen that before the Conciliation Officer, the employer had
agreed to reinstate the workmen concerned as also the contention that
having agreed to take a sympathetic review of the situation, the employer B
failed to do so and that therefore, the order is rendered illegal.

>- 16. In the agreement, the following terms were provided:
"(1) The case of eight disputed workmen will be reviewed
sympathetically within a period of one month. c
(2) The workmen will give undertaking as decided.
(3) The management has proposed the principle of "No work no
pay" as against which the demand has been raised by the union
which will be decided jointly by Shri Sureshbhai and Managing D
~ Director.
!'

(4) If the company finds that the workman has committed any
misconduct or has done something wrong after taking him in service
it will be open for the management to take steps in accordance
with law." E

17. The High Court, as noted above, has not considered the case_
in the background of Section 11-A of the Act. Under Section 11-A, wide
discretion has been vested in the Tribunal in the matter of awarding relief
according to the circumstances of the case, whereas in the writ jurisdiction F
it is extremely limited.
18. It is not necessary to go into in detail regarding the power
exercisable under Section 11-A of the Act. The power under said Section
11-A has to be exercised judiciously and the Industrial Tribunal or the
G
'"'(
Labour Court, as the case may be, is expected to interfere with the decision
of a management under Section 11-A of the Act only when it is satisfied
that punishment imposed by the management is wholly and shockingly
disproportionate to the degree of guilt of the workman concerned. To
support its conclusion, the Industrial Tribunal or the Labour Court, as the
H
\

462 SUPREME COURT REPORTS [2007] 10 S.C.R.
-\
A case may be, has to give reasons in support of its decision. The power
has to be exercised judiciously and mere use of the words
'disproportionate' or 'grossly disproportionate' by itself will not be
sufficient
19. In recent times, there is an increasing evidence of this, perhaps
B
well-meant but wholly unsustainable, tendency towards a denudation of
the legitimacy of judicial reasoning and process. The reliefs granted by
the Courts must be seen to be logical and tenable within the framework ..(

of the law and should not incur and justify the criticism that the jurisdiction
of the Courts tends to degenerate into misplaced sympathy, generosity
c and private benevolence. It is essential to maintain the integrity oflegal
reasoning and the legitimacy ofthe conclusions. They must emanate logically
from the legal findings and the judicial results must be seen to be principled
and supportable on those findings. Expansive judicial mood of mistaken
D
and misplaced compassion at the expense of the legitimacy of the process
will eventually lead to mutually irreconcilable situations and denude the
.J..
judicial process of its dignity, authority, predictability and respectability.
[See: Kera/a Solvent Extractions Ltd. v. A. Unnikrishnan and Anr.,
(1994) 1SCALE631].
E 20. Though under Section 11-A, the Tribunal has the power to
reduce the quantum of punishment, it has to be done within the parameters
of law. Possession of power is itself not sufficient; it has to be exercised
in accordance with law.
~

F 21. These aspects were highlighted in Life Insurance Corporation
of India v. R. Dhandapani, AIR (2006) SC 615;

22. Power and discretion conferred under the Section needless to
say have to be exercised judicially and judiciously. The Court exercising
such power and finding the misconduct to have been proved has to first
G advert to the question of necessity or desirability to interfere with the
r
punishment imposed and if the employer does not justify the same on the
circumstances, thereafter to consider the relief that can be granted. There
must be compelling reason to vary the punishment and it should not be
done in a casual manner.
H
I U.B. GADHE v. G.M. GUJARAT AMBUJA 463
CEMENT PVT. LTD. [PASAYAT, J.]
23. We would have asked the High Court to consider that aspect. A
But considering the long passage of time, it would not be proper to do
so since the employer seems to be a public utility service and the
workmens' continued utility to the employer is gravely doubtful in view
of their conduct. After such a long period, it would not be in the interest
of parties to direct the High Court to consider parameters of Section 1l - B
A of the Act. Therefore, we have considered the matter, taking into
account the background facts. The proved misconduct is definitely serious.
The respondent has, as a matter of good gesture, offered to pay each of
the appellant rupees one lakh, in view of the fact that they have received
payment upto December, 2004. C
24. Taking into account all relevant aspects, the offer of respondent
appears to be fair and reasonable. Let the payment be made within eight
weeks from today.
25. The appeal is disposed of accordingly with no order as to costs. D
B.B.B. Appeal disposed of.