Holding

The Labour Court’s jurisdiction under s.11‑A is wide enough to re‑appreciate evidence and decide if a case for interference exists, and the High Court’s finding of jurisdictional error was incorrect.

Summary

The case concerned a dispute between the union USHA BRECO MAZDOOR SANGH and the management of M/s. USHA BRECO Ltd. over disciplinary action taken against two union leaders. The Labour Court, exercising jurisdiction under s.11‑A of the Industrial Disputes Act, 1947, upheld the validity of the domestic enquiry, re‑appreciated the evidence and held that the management had failed to prove the charges. The High Court held that the Labour Court had erred by posing a wrong question and exceeded its jurisdiction. The Supreme Court examined the scope of s.11‑A, held that the Labour Court was correctly entitled to consider whether a case for interference existed and could re‑appreciate the evidence, and that the High Court’s finding of jurisdictional error was erroneous. Consequently, the appeals were dismissed.

Issues considered

The extent of the Labour Court's jurisdiction under s.11‑A of the Industrial Disputes Act, 1947 to re‑appreciate evidence and alter the quantum of punishment after finding a domestic enquiry valid.
Whether the Labour Court erred by posing a question of proof of charges after deciding the preliminary issue in favour of the management.
Whether the High Court correctly held that the Labour Court committed a jurisdictional error.

Legislation cited

Subjects

Industrial Disputes ActSection 11-ALabour Court jurisdictionDomestic enquiryNatural justiceProof on pre‑ponderanceUnfair labour practiceVictimisationAppellate review

Judgment

[2008] 6 S.C.R. 13

USHA BRECO MAZDOOR SANGH A
V.

-
MANAGEMENT OF M/S. USHA BRECO LTD. AND ANR.
(Civil Appeal Nos. 3051-3052 of 2008)
APRIL 29, 2008
.... B
[S.8. SINHA AND V.S. SIRPURKAR, JJ.]

Industrial Disputes Act, 1947 - s.11A - Jurisdiction of ·
Labour Court under - Scope of - Held: Decision of Labour
Court should not be based on mere hypothesis - It cannot c
overturn a decision of the Management on 'ipse dixit' - Its
iurisdiction under s.11-A although is a wide one, must be
judiciously exercised - Judicial discretion cannot be exercised
either whimsically or capriciously - It may scrutinize and·
analyse the evidence but what is important is how it does so.
D
Application of s.11-A of the Industrial Disputes Act,
1947, as noticed by this Court in Firestone Tyre and Rubber
Co. 's case* in the facts and circumstances of the present
case, is in question in the present appeals.·
In the instant case, the Labour Court after holding E
that the domestic enquiry had been made following the
principles of natural justice and was legal, proceeded to
record a finding that the Management had not proved the
charges levelled against the workmen concerned. High
__) Court, by the impugned judgment, held that once the F
Labour Court held that the Domestic enquiry was valid
and proper, there was no occasion for the Labour Court
,_. to ask itself the question whether on the evidence, the
charges were proved against the concerned workmen.
The High Court held that the Labour Court had committed G
an error of jurisdiction.
-i
The contention on behalf of the impleaded applicant
is that the High Court committed a manifest error in
...
~

13 H

-·
14 SUPREME COURT REPORTS [2008] 7 S.C.R.

A passing the impugned judgment insofar as it failed to take
into consideration that the jurisdiction of the Labour Court
under s.11-A of the Act being a wide one, the same can be
exercised not only for the purpose of determination of a
preliminary issue with regard to the validity or otherwise
B of holding of the Domestic Enquiry, the Labour Court is
entitled to reappreciate the evidence and alter the
quantum of punishment.
Respondent, on the other hand, contended that
although jurisdiction of the Labour Court under Section
C 11-A of the Act is wide, in a case of this nature where the
preliminary issue was answered in favour of the
Management, the Labour Court could not have gone into
the merit of the decision of the disciplinary authority
relying on or on the basis of the enquiry report to arrive at
0 a different finding on the me·rit of the matter to hold that
the charges of misconduct against the impleaded
applicant was not proved and quantum of punishment
imposed upon the impleaded applicant was excessive.
Declining to interfere with the ultimate conclusion of
E High Court, albeit for different reasons and thereafter
dismissing the appeals, the Court
HELD: 1. The jurisdictional issue determined by the
Labour Court was not premised on a wrong question. It
F was one thing to say that an administrative body or a quasi-
judicial authority misdirected itself in determining the
issue by posing unto itself a wrong question which would
obviously lead to a wrong answer, but, it would be.another
thing to say that although the administrative authority or
G the quasi-judicial body did not lack inherent jurisdiction
but committed a jurisdictional error in exercising its
jurisdiction. The High Court, therefore, was not correct in
its view having regard to the binding precedent operating
in this behalf in Firestone Tyre and Rubber Co. that the
H qu~stion posed by the Lalbour Court amounted to a
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 15
OF M/S. USHA BRECO LTD. & ANR.

misdirection in law. The proper issue which should have A
been posed was as to whether a case for interference had
been made out. [Para 20] [30-C-G]
Anisminic v. Foreign Compensation Commission [1969]
2 AC 147: (1969) 1 All ER 208 - re.ferred to.
B
2. In the instant case, the Ma,nagement filed an
application for determination of the preliminary issue in
regard to the legality or validity of the domestic enquiry.
The entire records of the enquiry proceedings were
, produced before the Labour Court. The workmen c
f

concerned had raised all possible objections therein. They
examined themselves. The Labour Court in its order dated
..... 16.08.1990, however, determined the issue in favour of the
Management and against the workmen. It not only held
that the principles of natural justice have been complied
D
/'- with, it opined that the enquiry report was not perverse.
However, the Presiding Officer of the Labour Court in the
said order itself stated that the evidence would be
reappreciated on merit at the time of hearing. The parties,
despite the said observations, did not adduce any fresh
evifdence. The merit of the decision of the Enquiry Officer E
vis-· -vis the Disciplinary Authority was judged on the basis
of the materials brought on records in the domestic
enquiry. The question, therefore, although was posed
correctly by the Labour Court but what was also
~\ necessary to be considered for arriving at a decision F
thereupon was as to whether it was a proper case where
the Labour Court should exercise its discretionary
jurisdiction under Section 11-A of the Act or not. Whereas
the Management cannot resort to victimization and
unfair labour practice so as to get rid of the Union leaders, G
they in turn are bound to maintain discipline. [Paras 21,
-<
22, 23] [30-G, H; 31-A-E]
3. It. may not be a correct approach for a superior
court to proceed on the premise that an Act is a beneficient
H
16 SUPREME COURT REPORTS [2008] 7 S.C.R.

A legislation in favour of the Management or the workmen.
The provisions of the statute must be construed having
regard to the tenor of the terms used by the Parlian:ient.
The court must construe the statutory provision with a
view to uphold the object and purport of the Parliament. It
B is only in a case where there exists a grey area and the
court feels difficulty in interpreting or in construing and
applying the statute, the doctrine of beneficient
construction can be taken recourse to. Even in cases
where such a principle is resorted to, the same would not
c mean that the statute should be interpreted in a manner
which would take it beyond the object and purport thereof.
[Para 23] [31-E, F, G]
4. An enquiry against a workman is held in terms of
Standing Orders certified under the Industrial Employment
D (Standing Orders) Act, 1946 or in absence thereof in terms
of the Model Standing Order. Tlhe Management is not only
required to scrupulously follow the procedures laid down
therein but was otherwise bound to comply with the
principles of natural justice. 1lf a misconduct has been
E committed within the purview of the provisions of the
Standing Order, whether certified or Model, the workmen
should be punished. The gravity of the offence, the impact
of the same would have on the other workmen as also
the fact as to whether the same will have an adverse effect
F over the functioning of the industry are relevant
considerations. [Paras 24, 25] [32-A, B, C]
5.1. Interpretation. of s.11-A of the Industrial Disputes
Act, 1947 came up for conside~ration.before this Court in
Firestone Tyre and Rubber Co. 's case. It was opined that
G s.11-A of the Act had brought about a complete .change in
this behalf. This Court, despite insertion of s.11-A, not only
conferred jurisdiction on the Tribunal to alter the quantum
of punishment imposed upon a workman, but also held
that it can enter into the merit of the matter sq far as
H determination of the proof of misconduc~ or otherwise on
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 17
__; OF M/S. USHA BRECO LTD. & ANR.

the part of the workman is concerned: [Para 19] [28-G; A
29-A]
5.2. Firestone Tyre and Rubber Co.'s case must be
understood in the context in which it was rendered. 5.11-
A of the Act as interpreted by Firestone Tyre and Rubber
Co. must be applied at different stages. Firstly, when the B
validity or legality of the domestic enquiries is in question;
secondly, in the event, the issue is d~termined in favour
of the Management, no fresh evidence is required to be
' adduced by it whereas in the event it is determined in
favour of the workmen, subject to the request which may c
be made by the Management in an appropriate stage, it
will be permitted to adduce fresh evidence before the
Labour Court. [Para 25] [32-C, D, E]
5.3. In the event, fresh evidence is adduced before
D
the Labour Court by the Management, the Labour Court
will have the jurisdiction to appreciate the evidence. But,
in a case where the materials brought on record by the
Enquiry Officer fall for re-appreciation by the Labour
Court, it should be slow to interfere therewith. It must
come to a conclusion that the case was a "proper" one E
therefor. The Labour Court sh.all not interfere with the
findings of the Enquiry Officer only because it is lawful to
do so. It would not take recourse thereto only because
another view is possible. Even assuming that, for all intent
.) and purport, the Labour Court acts as an appellate F
authority over the judgment of the Enquiry Officer, it would
exercise appropriate restraint. It must bear in mind that
the Enquiry Officer also acts as a quasi-judicial body.
Before it, parties are not only entitled to examine their
respective witnesses, they can cross-examine the G
witnesses examined on behalf of the other side. They are
' -'
free to adduce documentary evidence. The parties as also
the Enquiry Officer can also summon witnesses to
determine the truth. The Enquiry Officer can call for even
- other records. It must indisputably comply with the basic H
18 SUPREME COURT REPORTS [2008] 7 S.C.R.

L
A principles of natural justice. [Para 26J [32-F, G; 33-A, BJ
5.4. While determining th•~ issue as to whether the
workman is guilty of misconduct alleged to have been
committed by him or not, the workman would be entitled
to raise all contentions including the contention of lack
B of bona fide or unfair labour practice as also acts of
victimization on the part of the Management. Even
evidences in that behalf can be laid. Save and except,
however, for sufficient and cogent reasons, neither the
Enquiry Officer would arrive at a finding in regard to lack
c of bona fide or victimization or unfair labour practice on
the part of the management; the Labour Court while
considering the said findings would ordinarily not do so.
Such a question must be appropriately raised. Materials
must be brought on records to establish the said
D allegations. [Para 27J [32-F, G; ~13-A, BJ
5.5. It is one thing to say that the finding of an Enquiry
Officer is perverse or betrays the well-known doctrine of
proportionality but it is another thing to say that only
because two views are possible, the Labour Court shall
E interfere therewith. In other words, it is one thing to say
that on the basis of the materials on record, the Labour
Court comes to a conclusion that a verdict of guilt has
been arrived at by the Enquiry Officer where the materials
suggested otherwise but it is another thing to say that
F such a verdict was also a possible view. For the l
aforementioned purpose, certain basic principles must be
kept in mind, viz., even the first appellate court although
is entitled to interfere with the findings of a Trial Court in
terms of Section 96 of the Code of Civil Procedure,
G ordinarily a finding of fact arrived at on the basis of the
oral evidence by the Trial Court should be accepted.
[Paras 28, 29] (33-E, F, G; 33-AJ
. r- -
5.6. Before a departmental proceeding, the standard
of proof is not that the misconduct must be proved beyond
H
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 19
OF M/S. USHA BRECO LTD. & ANR.
-.{
'
all reasonable doubt but the standard of proof is as to A
whether the test of pre-ponderance of probability has
been met. In the present case, the approach of the Labour
Court appeared to be that the standard of proof on the
Management was very high. When both the parties had
J adduced evidence, the Labour Court should have borne B
in mind that the onus of proof loses all its significance for
all practical purpose. [Para 29] [34-E, F, G]
5.7. The Labour Court in the instant case has taken
into consideration only some portion of the depositions
of the witnesses and not the other portions. It merely c
stated that the workmen examined themselves as W.W/1
and W.W/2. Even if the finding that there had been a scuffle
between the contractor and the workmen and both .
shouted against each other, is correct, the purported
inference that the same was mere psychological and D
r·
natural in such a situation and nothing untoward had
happened is based on no evidence. No injury had been
caused to anybody. If the workman was found to be not
only abusing the contractors, even an iron rod had been
taken out so as to threaten a contractor with a view to E
assault him, a clear case of misconduct had been made
out. It was a matter of utmost importance to determine as
to who started the quarrel; who started using abusive
language; who started shouting; whether the workmen
_) were more sinned against than sinning; whether there F
were materials on record to arrive at the findings on the
said issue. These should have been the questions posed
by the Labour Court. [Para 31] [35-C, D, E, I::']
5.8. There might have been a power cut for some time
but the Labour Court even did not enter into the question G
-I
as to whether the workmen were otherwise instigated to
stop work. Without there being any material on record,
the Labour Court has arrived at a finding that the
Management had taken side in favour of the contractors
and against the workmen "probably because of their H
20 SUPREME COURT REPORTS [2008] 7 S.C. R.
L

A demand and trade union activities". The finding is based
on surmises. If that be so, the Labour Court should have
tried to find out as to whether the Management's witnesses
were confronted with such questions and documents in
the departmental proceedings or not. On what basis a
B finding was arrived at that th e act of Management proves
1

victimization of the workmen had not been spelt out. [Para
32] [35-F, G; 36-A, B]
5.9. Assault, intimidation are penal offences. A
workman indulging in commission of a criminal offence
c should not be spared only because he happens to be a
Union leader. The Act does not encourage indiscipline. It
will be a matter of some concern if the opinion of the
Enquiry Officer can be totally ignored despite the fact that
the Management is precluded from adducing any fresh
D evidence before the Labour Court. A Union leader does
not enjoy immunity from being proceeded with in a case
of misconduct. [Para 33] [36-B, C]
6. The upshot of the discussion is that the decision
of the Labour Court should not be based on mere
E hypothesis. It cannot overturn a decision of the
Management on ipse dixit. Its jurisdiction under Section
11-A of the Act although is a wide one, must be judiciously
exercised. Judicial discrntion, it is trite, cannot be
exercised either whimsically or capriciously. It may
F scrutinize and analyse the evidence but what is important \....
is how it does so. [Para 34] [36-D, E]
*Firestone Tyre and Rubber Co. v. The Management and
Others [(1973) 1 SCC 813]; Delhi Cloth & General Mills Co.
v Ludh Budh Singh (1972) 1 SCC 595; Tata Engineering and
G
Locomotive Co. Ltd. v N.K. Singh (2006) 12 SCC 554; Delhi
Transport Corporation v. Sardar Singh (2004) 7 SCC 574; >--
Martin Burn Ltd. v. R.N Bane1jee (1958) SCR 514; State Bank
of (ndia v. R.K. Jain and Ors. (1972) 4 SCC 304; Bharat Heavy
Electricals Ltd v M. Chandrasekhar Reddy and Ors. (2005) 2 ,..
H ....
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 21
OF M/S. USHA BRECO LTD. & ANR. [S.B. SINHA, J.]

SCC 481; United Bank of India v. Tamil Nadu Banks Deposit A
Collectors Union and Anr. (2007) 13 SCALE 681;
Chinthamani Ammal v. Nandagopal Gounder (2007) 4 SCC
163; Ajit Kumar Nag v. General Manager (PJ), Indian Oil
Corpn. Ltd., Haldia and Ors. (2005) 7 SCC 764; North-Eastern
).
Karnataka RTC v. Ashappa (2006) 5 SCC 137 and B
Government of India & Anr. v. George Philip (2006) 12 SCALE
122 - referred to.
CIVIL APPELLATE JURISDICTION. : Civil Appeal Nos.
3051-52 of 2008.
c
From the final Judgment and Order dated 16.2.2004 of
the High Court of Jharkhand at Ranchi in LPA No. 348 of 2004
(R) and LPA No. 9 of 2001 (R).

Ambhoj Kumar Sinha for the Appellant.
0
Ajit Kumar Sinha, Amitabh, S.K. Yashovardhan, Nitish
Massey, Kanhaiya Priyadarshi and R.K. Singh for the
Respondents.

The Judgment of the Court was delivered by
E
S.B. SINHA, J. 1. Leave granted.
2. Application of Section 11-A of the Industrial Disputes
Act, 1947 (for short "the Act"), as noticed by this Court in
Firestone Tyre and Rubber Co. v. The Management and
J Others [(1973) 1 SCC 813], in the facts and circumstances of F
the present case, is in question in these appeals which arise
out of a judgment and order dated 16.02.2004 passed by a
Division Bench of the High Court of Jharkhand at Ranchi in
Letters Patent Appeal No. 348 of 2000 and Letters Patent
Appeal No. 9 of 2001. G
3. Krishna Kishore Yadav, Intervenor and one R.P. Singh
were employees of the respondent. They were said to be Union
leaders. On or about 17.02.1984, the respondent received a
complaint from one G. Natarajan with regard to acts of
misconduct committed by the said workmen in the factory H
22 SUPREME COURT REPORTS [2008] 7 S.C.R.

'--
A premises contending that while he was having discussions with
one Shekhar Rao, representative of the contractor known as M/
s. Techno Fab, the said workmen came and asked him as to
whether there existed any arrangement for grant of first aid or
not, whereto he replied that such a provision has. to be made by
'

B the Company and not by the Contractor. Discussion therein
ensued. The workmen were informed by Natarajan that the
matter should be discussed with the Personnel Manager of the
Company.
One Shri Dara Singh, another contractor being M/s. S.D.
c Construction also reached there. The same question was asked
to Mr. Dara Singh to which also he replied that the grant of
making provision of first aid was the duty of the Management
and not that of the Contractor.
The workmen started misbehaving with the said persons
D
. using indecent and unparliamentary languages. They were
abused in a harsh tone whereto an objection was raised by Shri
Dara Singh whereupon he was abused in filthy languages and
threatened him with dire consequences. He was also assaulted
by iron rod by the intervenor herein. Thereafter Shri Dara Singh
E also picked up an iron rod. R.P. Singh also picked up another
iron rod in his hand. With the intervention of the officers and
some workers, they were separated. The said workmen
thereafter instigated the workers to stop the work.

F 4. On the aforementioned allegations, a First Information
~
Report was lodged.
A disciplinary proceeding was also initiated. The
delinquent workmen were placed under suspension. In the
departmental proceedings, they were found guilty. An industrial
G dispute was raised whereupon the appropriate government
referred the dispute for adjudication by a Labour Court,
>-
Jamshedpur. Before the Labour Court, a r+:a was raised by
the YJOrkmen that they as Secretary and V:, e-President of the
workers of the Company had gone to Shri Natarajan and others
-~

H for ventilating their grievances, but the manage; nent with a view
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 23
OF M/S. USHA BRECO LTD. & ANR. [S.B. SINHA, J.]
_J

to victimize them and by way of resorting to unfair labour A
practices had placed them under suspension.
5. Several issues were framed having regard to the
pleadings of the parties by the learned Labour Court .
..+ The question as to whether the domestic enquiry has been B
conducted in accordance with the principles of natural justice
or otherwise legal was taken up as a preliminary issue. The
Enquiry Officer was examined before the. Labour Court. The
Presiding Officer, Labour Court by an order dated 16.08.1990
opined: c
"6. Perused the inquiry report. In the inquiry report, the
Enquiry Officer has mentioned the evidence of all
witnesses on the basis of which decision was taken in
respect of the charges. The oral and the documentary
evidence has been mentioned and the decision is based D
on them. The show cause of the workmen has also been
considered. Therefore, enquiry report cannot be said to
be perverse.
7. Therefore, it is held that the domestic enquiry has been
made following the principles of natural justice and is legal E
and the second question is answered against the workmen
and in favour of the Management."
6. However, by reason ofa final award dated 17.02.1992,
.)
the Presiding Officer, Labour Court, while determining the issue F
as to whether the management had been able to prove the
charges levelled against the workmen, upon considering the
report of the Enquiry Officer, held:
"13. On the basis of evidences on record adduced on
behalf of both the parties and discussions made above G
the picture comes out on the surface that in course of
demanding First Aid for the workmen by the~e two
dismissed workmen from the management and
contractors caused heated discussions between the
contractors and these workmen who are office bearers of H
24 SUPREME COURT REPORTS [2008] 7 S.C.R.
,_
A the union and the management has taken side on favour
of the contractors and against these two workmen such
probably because of their demand and trade union
activities (vide ext W/2 series and statements of W.W/1
and W.W/2 and ext. M/4 and M/7) and has made a mole
B to mountain. It has also established that the management
has failed to establish any of the charges against any of
the workmen successfully. Hence, issue no. (1) is answered
accordingly."

7. On the aforementioned premise, the Labour Court held
c that no charge had been proved against the workmen and as
such they were entitled tp be reinstated in service. So far as the
workman Krishna Kishore Yadav is concerned, similar finding
was arrived at by the Labour Court opining:

''. .. From the perusal of the evidences in the statement of
D
W.W/1 and W.W/2 it appears that the Workmen K.K. Yadav -"\

received the c/sheet dated 18.2.84 on the same day and
submitted his explanation within the time limit therein.
Hence, on the basis of the evidences and the statement,
noted above and the statements of the management
E witnesses and the statement as W.W/1 and W.W/2. I find
~
that there was scuffle between the contractor and this
workman and both shouted against each other which was
merely psychological and natural in such a situation and
nothing untoward happened nor any injury was caused to
F anybody. The record reflects that the workman K. K. Yadav
has taken the c/sheet and submitted the explanation
responding it and there was power cut on the day of
occurrence for some time as well which caused the
stopping of the factory."
G
8. A writ petition was filed by the appellant questioning the
legality and validity of the said Award. A learned Single Judge
••
k

of the High Court by a judgment and order dated 31.07.2000
refused to interfere with the findings of fact arrived at by the •
learned Labour Court. However, the learned Single Judge ~

H
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 25
OF M/S. USHA BRECO LTD. & ANR. [S.B. SINHA, J.]

reduced the amount of back wages to 50%. A
9. The matter was taken to the Division Bench of the High
Court by way of Letters Patent Appeals preferred by both the
appellant and the respondent. The said appeal was allowed as
regards the question posed by the Labour Court as to whether
,./ B
the management had been able to prove the charges levelled
against the workmen on the basis of the evidences brought on
records. Having regard to the fact that no evidence was lai~ by
the parties before the Labour Court, it was observed:
" ... Obviously, it was because of its own conclusion that c
the Domestic Enquiry was valid and proper. So, no
occasion arose for the Labour Court to ask itself the
question whether on the evidence, the charges have been
proved. In fact, as we have earlier noted, the very finding
on 16.8.1990 was to the effect that the findings of the
D
Domestic Enquiry was supported by the evidence taken
at that Enquiry. Thus, in our view, the Labour Court had
asked itself a wrong que~tion when it posed the first
question for decision. Thereafter it has proceeded to
record a finding that the Management has not proved the
1t
charged levelled against the workmen. When a Tribunal E
has asked itself a wrong question and even if it has
answered that question correctly, it acts outside its
jurisdiction attracting the certiorari jurisdiction of this Court
(see Anisiminic). Here, the Labour Court has committed
..) such an error of jurisdiction." F

10. Before us, Krishna Kish ore Yadav got himself
impleaded as a party and the learned counsel appearing on
behalf of the original appellant was permitted to withdraw.
11. Mr. Ambhoj Kumar Sinha, learned counsel appearing G
on behalf of the impleaded party, would submit that the Division
Bench of the High Court committed a manifest error in passing
the impugned judgment insofar as it failed to take into
consideration that the jurisdiction of the Labour Court under
Section 11-A of the Act being a wide one, the same can be H
26 SUPREME COURT REPORTS [2008] 7 S.C.R.

A exercised not only for the purpose of determination of a
preliminary issue with regard to the validity or otherwise of
holding of the Domestic Enquiry, the Labour Court is entitled to
reappreciate the evidence and alter the quantum of punishment.
Strong reliance in this behalf has been placed on Delhi Cloth &
B General Mills Co v Ludh Budh Singh [(1972) 1 SCC 595] \..
and Firestone Tyre and Rubber Co. (supra).
12. Mr. Ajit Kumar Sinha, learned counsel appearing on
behalf of the respondent, on the other hand, would submit that
although the jurisdiction of the Labour Court under Section 11-
C A of the Act is wide, in a case of this nature where the preliminary
issue was answered in favour of the Management, it could not
have been gone into the merit of the decision of the ciisciplinary
authority relying on or on the basis of the enquiry report to arrive
at a different finding on the merit of the matter to hold :
D
(a) that the charges of misconduct against the impleaded
applicant has not been proved;
(b) the quantum of punishment imposed upon the
impleaded applicant was excessive.
E Reliance in this behalf has been placed on Tata
Engineering and Locomotive Co. Ltd. v N.K. Singh [(2006)
12 SCC 554] and Delhi Transport Corporation v Sardar Singh
[(2004) 7 sec 574].
F 13. An order of punishment meted out to a workman
indisputably can be a subject matter of reference by the
appropriate government in terms of Section 10 of the Act.
14. Validity or legality of a Domestic Enquiry as also the
question as to whether the principles of natural justice had been
G complied or not could be determined by way of a preliminary
issue. What would be the extent of jurisdiction of the Labour
Court in this behalf, had come up for consideration before this
· Court in a large number of decisions. The view taken by this
• Court was that if the conclusion arrived at by the enquiry officer
H • on the materials placed before it was a possible view, the Labour
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 27
OF M/S. USHA BRECO LTD. & ANR. [S.8. SINHA, J.)

Court would have no jurisdiction to substitute its own judgment A
although it could itself have arrived at a different conclusion on
the same materials. [See Martin Burn Ltd. v. R.N. Banerjee
(1958) SCR 514 and State Bank of India v. R.K. Jain and
Others, (1972) 4 SCC 304]
,,; 15. In Delhi Cloth & General Mills Co. (supra), this Court 8
inter alia relied upon the aforementioned decisions amongst
others to opine that the propriety of a domestic enquiry held by
the Management should be gone into as a preliminary issue
and in the event the same is decided against it, a request could
be made to the tribunal to permit it to adduce fresh evidence C
before it. [See also Bharat Heavy Electricals Ltd. v. M.
Chandrasekhar Reddy and Others (2005) 2 SCC 481]
16. Keeping in view the diverse opinion rendered by
different High Courts which had been noticed by this Court in
0
Delhi Cloth & General Mills Co. (supra), the Parliament inserted
Section 11-A in the Act by Act No. 45 of 1971 which came into
force with effect from 15.12.1971.
17. In the statement of objects and reasons for inserting
Section 11-A of the Act, it was stated: E
"In Indian Iron and Steel Company Limited v. Workmen
(AIR 1958 SC 130 at 138), the Supreme Court, while
considering the Tribunal's power to interfere with the
management's decision to dismiss, discharge or terminate
..J
the services of a workman, has observed that in case of F
dismissal on misconduct, the Tribunal does not act as a
Court of appeal and substitute its own judgment for that of
the management and that the Tribunal will interfere only
when there is want of good faith, victimisation, unfair labour
practice, etc., on the part of the management. G
The International Labour Organisation, in its
recommendation (No. 119) concerning termination of
employment at the initiative to the employer, adopted in
June 1963, has recommended that a worker aggrieved H
28 SUPREME COURT REPORTS [2008] 7 S.C.R.
pm

I...
A by the termination of his employment should be entitled to
appeal against the termination among others, to a neutral
"""
body such as an arbitrator, a court, an arbitration
committee or a similar body and that the neutral body ••
concerned should be empowered to examine the reasons """
B given in the termination of employment and that other )-,_
circumstances relating to the case and to render a decision
on the justification of the termination. The International
Labour Organization has further recommended that the
neutral body should be empowered (if it finds that the
c termination of employment was unjustified) to order that
the worker concerned, unless reinstated with unpaid
wages, should be paid adequate compensation or afforded
some other relief.
In accordance with these recommendations, it is
D considered that the Tribunal's power in an adjudication
proceeding relating to discharge or dismissal of a 1
workman should not be limited and that the Tribunal should
have the power in cases wherever necessary to set aside ·
the order of discharge or dismissal and direct
E reinstatement of the workman on such terms and
conditions, if any, as it thinks fit or give such other reliefs
to the workman including the award of any letter punishment
in lieu of discharge or dismissal as the circumstances of
the case may require. For this purpose, a new Section 11-
F A is proposed to be inserted in the Industrial Disputes Act,
1947 .... " .\....
~liilii
I
18. We may, however, notice that new Section 11-A was
not noticed by this Court in Delhi Cloth & General Mills Co.
....
(supra) although the same was inserted on 15.12.1971.
G
19. Interpretation of Section 11-A of the Act came up for
consideration before this Court in Firestone Tyre and Rubber
Co. (supra). It was opined that Section 11-A of the Act had
brought about a complete change in this behalf. This Court,
despite insertion of Section 11-A, not only conferred jurisdiction
H
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 29
~ OF MIS. USHA BRECO LTD. & ANR. [S.B. SINHA, J.]

on the Tribunal to alter the quantum of punishment imposed upon A
a workman, but also held that it can enter into the merit of the.
matter so far as determination of the proof of misconduct or
otherwise on the part of the workman is concerned.
,..
Two extreme views, viz., that the entire law has been re-
written and despite insertion of Section 11-A, the Management B
neither could raise the legality or validity of the Domestic Enquiry
as a preliminary issue or request the Tribunal to allow itto adduce
evidence before it even if no enquiry has been held or as to
whether such a right can still be exercised by the management
came up for consideration in Firestone Tyre and Rubber Co. c
(supra).

One of the questions posed byVaidialingam, J. was as to
... whether Section 11-A has made any changes in the legal position

• as regards the principles which· had emerged from various
decisions and as noticed in Delhi Cloth & General Mills Co.
D
(supra). Rejecting both the extreme contentions and starting on
the premise that the Act is a beneficial piece of legislation
enacted in the interest of the employees, it was helc:I that although
the legal right of the Management to raise such a preliminary
issue and in the event the same was determined in favour of the E
workmen to lead evidence for the first time before the Tribunal/
Labour Court could not be denied, opining:

" ... The Tribunal is now at liberty to consider not only whether
-' the finding of misconduct recorded by an employer is F
• correct; but also to differ from the said finding if a proper
case is made out. What wa~ once largely in the realm of
the satisfaction of the employer, has ceased to be so; and
now it is the satisfaction of the Tribunal that finally decides
the matter."
G
It was furthermore held:
"40. Therefore, it will be seen that both in respect of cases
where a domestic enquiry has been held as also in cases
where the Tribunal considers the matter on the evidence
H
30 SUPREME COURT REPORTS (2008] 7 S.C.R.

A adduced before it for the first time, the satisfaction under
Section 11-A, about the guilt or otherwise of the workman
concerned, is that of the Tribunal. It has to consider the
evidence and come to a conclusion one way or other.
Even in cases where an enquiry has been held by an
B employer and a findin!~ of misconduct arrived at, the
Tribunal can now differ from that finding in a proper case
and hold that no misconduct is proved."
,,,
[See also United Bank of India v. Tamil Nadu Banks
Deposit Collectors Union and Ann 2007 (13) SCALE 681]
c
20. The legal principle, in our opinion, is neither in doubt
nor in dispute. The question is that of its application.
We at the outset must, with respect, observe that the
jurisdictional issue determi111ed by the Labour Court was not i
D premised on a wrong question. It was one thing to say that an
- administrative body or a quasi-judicial authority misdirected
itself in determining the issue by posing unto itself ~ wrong
question which would obviously lead to a wrong answer, but, it
would be another thing to say that although the administrative
E authority or the quasi-judicial body did not lack inherent
jurisdiction but committed a jurisdictional error in exercising its
jurisdiction. Anisminic v. Foreign Compensation Commission
[1969) 2 AC 147: (1969) 1 All ER 208, to which reference has
been made by the Division Bench says so. The High Court,
F therefore, in our opinion, was not correct in its view having regard
to the binding precedent operating in this behalf in Firestone
Tyre and Rubber Co. (supra) that the first question posed by
the Labour Court amounted fo a misdirection in law. The proper
issue which should have been posed was as to whether a case
G for interference had been made out.
21. The Management filed an application for determination
'
, of the preliminary issue in regard to the legality or validity of the
1 domestic enquiry. The entire records of the enquiry proceedings
1

were produced before' the Labour Court: ~Th~_ workmen
H ,' concerned had. raised all possible objections therein: They
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 31
~ OF M/S. USHA BRECO LTD. & ANR. [S.B. SINHA, J.]

examined themselves. The Labour Court in its order dated A
16.08.1990, however, determined the issue in favour of the
Management and against the workmen. It not only held that the
principles of natural justice have been complied with, it opined
that the enquiry report was not perverse.
..f 22. We may, however, notice that the Presiding Officer of B
the Labour Court in the said order itself stated that the evidence
would be reappreciated on merit at the time of hearing. The
parties, despite the said observations, did not adduce any fresh
evidence. The merit of the decision of the Enquiry Officer vis-a-
vis the Disciplinary Authority was judged on the basis of the c
materials brought on records in the domestic enquiry.

23. The question, therefore, although was posed correctly
by the Labour Court but what was also necessary to be
., considered for arriving at a decision thereupon was as to
D
I .t. whether it was a proper case where the Labour Court should
exercise its discretionary jurisdiction under Section 11-A of the
Act or not.

Whereas the Management cannot resort to victimization
and unfair labour practice so as to get rid of the Union leaders, E
they in turn are bound to maintain discipline.

It may not be a correct approach for a superior court to
proceed on the premise that an Act is a beneficient legislation
in favour of the Management or the workmen. The provisions of
• the statute must be construed having regard to the tenor of the F
terms used by the Parliament. The court must construe the
statutory provision with a view to uphold the object and purport
of the Parliame.nt. It is only in a case where there exists a grey
area and the court feels difficulty in interpreting or in construing
and applying the statute, the doctrine of beneficient construction G
JI', can be taken recourse to. Even in cases where such a principle
is resorted to, the same would not mean that the statute should
be interpreted in a manner which would take it beyond the object
and purport thereof.
H
32 SUPREME COURT REPORTS [2008] 7 S.C.R.

A 24. An enquiry against a workman is held in terms of
•
Standing Orders certified under the Industrial Employment
(Standing Orders) Act, 1946 or in absence thereof in terms of
the Model Standing Order.
25. The Management is not only required to scrupulously ~
B follow the procedures laid down therein but was otherwise bound ...
to comply with the principles of natural justice. If a misconduct
has been committed within the purview of the provisions of the
Standing Order, whether certified or Model, theworkmen should
be punished. The gravity of the offence, the impact the same
c would have on the other workmen as also the fact as to whether
the same will have an adverse effect over the functioning of the
industry are relevant considerations.
Firestone Tyre and Rub,ber Co. (supra) must be
understood in the context in which it was rendered. Section 11- ,
D ':.
A of the Act as interpreted by Firestone Tyre and Rubber Co.
(supra) must be applied at different stages. Firstly, when the
validity or legality of the domestic enquiries is in question;
secondly, in the event, the issue is determined in favour of the
Management, no fresh evidence is required to be adduced by
E it whereas in the event it is determined in favour of the workmen,
subject to the request which may be made by the Management
in an appropriate stage, it will be permitted to adduce fresh
evidence before the Labour Court.

F 26. Indisputably, in the event, fresh evid,~nce is adduced
before the Labour Court by the Management, the Labour Court
••
will have the jurisdiction to appreciate the evidence. But, in a
case where the materials brought on record by the Enquiry
Officer fall for re-appreciation by the Labour Court, it should be
slow to interfere therewith. It must come to a conclusion that the
G
case was a "proper" one therefor. The Labour Court shall not
r~.
interfere with the findings of the Enquiry Officer only because it
is lawful to do so. It would not take n:!course thereto only because
another view is possible. Even assuming that, for all intent and
purport, the Labour Court acts as an appellate authority over
H
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 33
OF M/S. USHA BRECO LTD. & ANR [S.B. SINHA, J]

the judgment of the Enquiry Officer, it would exercise appropriate A
restraint. It must bear in mind that the Enquiry Officer also acts
as a quasi-judicial body. Before it, parties are not only entitled
to examine their respective witnesses, they can cross-examine
the witnesses examined on behalf of the other side. They are
free to adduce documentary evidence. The parties as also the B
J••
Enquiry Officer can also summon witnesses to determine the
truth. The Enquiry Officer can call for even other records. It must
indisputably comply with the basic principles of natural justice.

27. While determining the issue as to whether the workman
is guilty of misconduct alleged to have been committed by him C
or not, the workman would be entitled to raise all contentions
including the contention of lack of bona fide or unfair labour
practice as also acts of victimization on the part of the
Management. Even evidences in that behalf can be laid. Save
and except, however, for sufficient and cogent reasons, neither D
the Enquiry Officer would arrive at a finding in regard to lack of
bona fide or victimization or unfair labour practice on the part of
the management; the Labour Court while considering the said
findings would ordinarily not do so. Such a question must be
appropriately raised. Materials must be bro·ught on records to E
establish the said allegations.
28. It is one thing to say that the finding of an Enquiry Officer
is perverse or betrays the well-known doctrine of proportionality
but it is another thing to say that only because two views are
possible, the Labour Court shall interfere therewith. In other F
words, it is one thing to say that on the basis of the materials on
record, the Labour Court comes to a conclusion that a verdict
of guilt has been arrived at by the Enquiry Officer where the
materials suggested otherwise but it is another thing to say that
such a verdict was also a possible view. G
For the aforementioned purpose, certain basic principles
must be kept in mind, viz., even the first appellate court although
is entitled to interfere with the findings of a Trial Court in terms
of Section 96 of the Code of Civil Procedure, ordinarily a finding H
34 SUPREME COURT REPORTS [2008] 7 S.C.R.
1.-'
A of fact arrived at on the basis of the oral evidence by the Trial
Court should be accepted.
In Chinthamani Ammal v. Nandagopa/ Gounder [(2007)
4 SCC 163], this Court observed:

B "18. Furthermore, when the learned trial Judge arrived at ~
~

a finding on the basis of appreciation of oral evidence, the
first appellate court could have reversed the same only on
assigning sufficient reasons therefor. Save and except
the said statement of OW 2, the learned Judge did not
c consider any other materials brought on record by the
parties.
19. In Madho/a/ Sindhu v. Official Assignee of Bombay
it was observed: (AIR p. 30, para 21)
"It is true that a judge of first instance can never be treated
D
as infalliable in determining on which side the truth lies '_,_
and like other tribunals he may go wrong on questions of
fact, but on such matters if the evidence as a whole can
reasonably be regarded as justifying the conclusion arrived
at, the appeal court should not lightly interfere with the
E judgment." ),

(See also Madhusudan Das v. Narayanibai.)"
29. Before a departmental proceeding, the standard of
proof is not that the misconduct must be proved beyond all
F reasonable doubt but the standard of proof is as to whether the If':

test of pre-ponderance of probability has been met. The
approach of the Labour Court appeared to be that the standard
of proof on the Management wa:s very high. When both the
parties had adduced evidence, the Labour Court should have
G borne in mind that the onus of proof loses all its significance for
all practical purpose.
30. In Ajit Kumar Nag v. Gemeral Manager (PJ), Indian
Oil Corpn. Ltd., Haldia and Others [(2005) 7 SCC 764], a Three-
Judge Bench of this Court opined:
H
USHA BRECO MAZDOOR SANGH v MANAGEMENT 35
OF M/S. USHA BRECO LTD. & ANR. [S.S. SINHA, J.]

" ... It is well settled that the burden of proving ma/a fide is A
on the person making the allegations and the burden is
"very heavy". (vide E. P. Royappa v. State of TN.) There is
·every presumption in favour of the administration that the
power has been exercised bona fide and in good faith. It
r is to be remembered that the allegations of ma/a fide are B
_J.
often more easily made than made out and the very
seriousness of such allegations demands proof of a high
degree of credibility."

31. The Labour Court, on the one hand, has taken into
consideration only some portion of the depositions of the c
witnesses and not the other portions. It merely stated that the
workmen examined themselves as W.W/1 and W.W/2. Even if
the finding that there had been a scuffle between the contractor
and the workmen and both shouted against each other, is
correct, the purported inference that the same was mere D
'
I psychological and natural in such a situation and nothing
untoward had happened is based on no evidence. No injury
had been caused to anybody. If the workman was found to be
not only abusing the contractors, even an iron rod had been
taken out so as to threaten Shri Dara Singh with a view to assault E
him, a clear case of misconduct had been made out.
It was a matter of utmost importance to determine as to
who started the quarrel; who started using abusive language;
who started shouting; whether the workmen were more sinned
against than sinning; whether there were materials on record to F
arrive at the findings on the said issue. These should have been
the questions posed by the Labour Court.
32. There might have been a power cut for some time but
the Labour Court even did not enter into the question as to
G
whether the workmen were otherwise instigated to stop work.
... Without there being any material on record. the Labour Court
has arrived at a finding that the Management had taken side in
favour of the contractors and against the workmen "probably
because of their demand and trade union activities". The finding
H
36. SUPREME COURT REPORTS [2008] 7 S.C.R

A is based on surmises. If that be so, the Labour Court should
have tried to find out as to whether the Management's witnesses
were confronted with such questions and documents in the
departmental proceedings or not. On what basis a finding was
arrived at that the act of Management proves victimization of
B the workmen had not been spelt out.
33. Assault, intimidation are penal offences. A workman
indulging in commission of a criminal offence should not be
spared only because he happens to be a Union leader. The Act
does not encourage indiscipline. It will be a matter of some
C concern if the opinion of the Enquiry Officer can be totally
ignored despite the fact that the Management is precluded from
adducing any fresh evidence bE~fore the Labour Court. A Union
leader does not enjoy immunity from being proceeded with in a
case of misconduct.
D
34. The upshot of our discussion is that the decision of the
Labour Court should not be based on mere hypothesis. It cannot •
1

overturn a decision of the Management on ipse dixit. Its
jurisdiction under Section 11-A of the Act although is a wide
one, must be judiciously exercised. Judicial discretion, it is trite,
E cannot be exercised either whimsically or capriciously. It may
scrutinize and analyse the evidence but what is important is how
it does so.
35. It is also of some significance that the co-delinquent
F workman R.P. Singh who came to the aid of the impleaded
applicant Krishna Kishore Yadav has accepted the finding of
the High Court.
36. Before us, Mr. Ajit Kumar Sinha, has relied upon a
decision of this Court in Sardar Singh (supra). We do not find
G that any legal principle has been laid down therein. It was a case
of habitual unauthorized absence which was found to have been
proved.
37. Reliance has also been placed on Tata Engineering
H and Locomotive Co. Ltd. (supra) where the question was as to
USHA BRECO MAZDOOR SANGH v. MANAGEMENT 37
OF M/S. USHA BRECO LTD. & ANR. [S.B. SINHA, J.]
--\
whether on the basis of a relief granted to one of the workmen a A
direction for reinstatement with half of the back wages could be
issued. In the fact of the said case, it was held:

"10. We find that the Labour Court has found the inquiry
to be fair and proper. The conduct highlighted by the
~- management and established in inquiry was certainly of a B
J.
very grave nature. The Labour Court and the High Court
have not found that misconduct was of any minor nature.
On the contrary, the finding on facts that the acts
complained of were establis~ed has not been disturbed.
That being so, the leniency shown by the Labour Court is c
clearly unwarranted and would in fact encourage
indiscipline. Without indicating any reason as to why it
was felt that the punishment was disproportionate, the
Labour Court should not have passed the order in the
manner done. The case of R.P. Singh was not on a similar D
)
:/
footing. He was one of the persons instigating whereas
the respondent was the person who committed the acts.
Therefore, the orders of the Labour Court as affirmed by
the High Court cannot be sustained and are set aside.
The order of dismissal from service in the disciplinary E
proceedings stand restored."

38. The said decision again was rendered on its facts and
no legal principle can be culled out therefrom.

39. We may, however, notice that this Court in North- F
Eastern Karnataka RTC v. Ashappa [(2006) 5 SCC 137]
opined:.

"8. Remaining absent for a long time, in our opinion, cannot
be said to be a minor misconduct. The appellant runs a
fleet of buses. It is a statutory organisation. It has to provide G
public utility services. For running the buses, the service
of the conductor is imperative. No employer running a
fleet of buses can allow an employee to remain absent for
a long time. The respondent had been given opportunities
to resume his duties. Despite such notices, he remained H
38 SUPREME COURT REPORTS (2008) 7 S.C.R.

A absent. He was found not only to have remained absent
for a period of more than three years, his leave records
were seen and it was found that he remained unauthorisedly
absent on several occasions. In this view of the matter, it
cannot be said that the misconduct committed by the
B respondent herein has to be treated lightly."
40. In Government of India<~ Anr. v. George Philip ((2006)
12 SCALE 122], overstay of leave and absence from duty was
held to be not only an act of indiscipline but also subversive of
the work culture in the organization, stating:
c
"... Article 51 AO) of the Constitution lays down that it shall
be the duty of every citizen to strive towards excellence in
all spheres of individual and collective activity so that the
nation constantly rises to higher levels of endeavour and
achievement. This cannot be achieved unless the
D
employees maintain discipline and devotion to duty. Courts
should not pass such orders which instead of achieving
the underlying spirit and objects of Part IV-A of the
Constitution has the ~endency to negate or destroy the
same."
E
41. We, therefore, are of the opinion no case has been
made out for interfering with the ultimate conclusion of the High
Court, albeit for different reasons.
42. For the reasons aforementioned, the appeals are
F dismissed. No costs. •
B.B.B . Appeals dismissed.