Employer should reserve right to adduce more evidence under IDA

Khanderao B Dabke

A Bench of 5 judges of Supreme Court had, in Karnataka State Road Transport Corp v Lakshmideviamma (2001 ATR SCW 1981), to consider, review and resolve the conflict, if any, in decisions of the apex court in Shambhunath Goyal v Bank of Baroda (AIR 1984 SC289) & Rajendra Jha v Presiding Officer, Labour Court (AIR 1984 SC1696).

The SC examined its decision in Shambunath Goyal’s case wherein it was stated “The rights which employer has in law to adduce additional evidence in a proceeding before the labour court or industrial tribunal either under section 10 or section 33 of the Industrial Disputes Act, 1947 (the Act) questioning the legality of the order of terminating service must be availed by the employer making a proper request at the time when it files its statement of claim or written statement or makes an application seeking either permission to take certain action or seeking approval of the action taken by it.”

The management should avail itself of the opportunity to adduce additional evidence by making suitable request to the tribunal before the proceedings are closed.

KHANDERAO B DABKE Chartered Accountant, Mumbai

The court examined its decision in Rajendra Jha’s case & stated that it had decided it on facts of that case without laying down any principle of law. The court has not taken any view opposed to Shambunath’s case.

The court noted that in all its judgments it has agreed to conferment of this right of the management, there seems to be some differences of opinion in regard to timing of making such application. In Delhi Cloth & General Mills Co v Ludh Budh Singh (AIR 1972 SC 1031) it was stated “But the management should avail itself of the said opportunity by making suitable request to the tribunal before the proceedings are closed. If no such opportunity has been availed of before the proceedings were closed, the employer can make no grievance that the tribunal did not provide for such an opportunity.”

In Cooper Engineering’s case (AIR 1975 SC 1900) it was held that when tribunal/labour court was called upon to decide the validity of the domestic enquiry, the same has to be tried as a preliminary issue and thereafter if necessary the management was to be given an opportunity to adduce fresh evidence.

By the judgment in Goyal’s case the management was given the right to adduce evidence to justify its domestic enquiry only if it had reserved its right to do so, in the application made by it under section 33 of the Act or in the objection that the management had to file to the reference made under section 10 of the Act meaning thereby the management had to exercise its right of leading fresh evidence of the first available opportunity and not at any time thereafter during the proceedings before the tribunal/labour court.

The Supreme Court observed that keeping in mind the object of providing an opportunity to the management to adduce evidence before the tribunal/labour court, the directions issued by Supreme Court in Shambunath’s Goyal case need not be varied being just & fair.

The court observed that Shambunath Goyal’s case was decided in September 1983 and it has taken note of almost all the earlier judgments of the court and has laid down the procedure for exercising the right of leading evidence by the management which we have held is neither oppressive nor contrary to the object & scheme of the Act.

The judgment having held the field for nearly 18 years the doctrine of “state decisis” require us to approve the said judgment to see that a long standing decision is not unsettled without strong cause. The court concluded that law laid down by it in Shambunath Goyal v Bank of Baroda is the correct law in point.

It is worth noting that Justice YK Sabbrawal in his dissenting judgment has considered observations of Supreme Court in:

(1) Delhi Cloth Mills v Ludh Budh Singh (AIR 1972 SC 1031) wherein it was stated that the management should avail of the opportunity to adduce evidence by making a suitable request to the tribunal before the proceedings are closed.

(2) In the workmen of M/s.Firestone Tyre & Rubber Co. v The Management (AIR 1973 SC 1227) it was stated “An employer who wants to avail himself of the opportunity of adducing evidence for the first time before tribunal to justify his action should ask for it at the appropriate stage. If such an opportunity is asked for, the tribunal has no power to refuse, the giving of an opportunity to an employer to adduce evidence for the first time before the tribunal is in the interest of both the management and the employee to enable the tribunal itself to be satisfied about the alleged misconduct.”

(3) What is an appropriate time was considered in Cooper Engineering Ltd. v Shri PP Mundhe (AIR 1975 SC 1900).

(4) In Shankar Chakrabarti v Britannia Biscuit Co Ltd (AIR 1979 SC 1652) it was stated that “If the request is made before the proceedings are concluded the labour court/industrial tribunal should ordinarily grant an opportunity to adduce evidence. If no request is made at any stage of the proceedings there is no duty in law on the labour court or the industrial tribunal to give such an opportunity.” Justice Sabharwal felt that the only reason which seems to have weighed for coming to the conclusion that the management is barred from making such an application at a later stage is the likely delay of the proceedings.

Justice Sabharwal in his dissenting judgment after considering above cases concluded “It is not possible to hold that if the employer does not express his desire to lead additional evidence in reply to statement of claim in proceedings under section 10 or when an application is filed for approval under section 33(2)(b) of the Act, the employer cannot be allowed to exercise option at a later stage of the proceedings by making an application for the purpose.

The employers request when made before close of proceedings deserves to be examined by the labour court/tribunal on its own merits and it goes without saying that labour court/tribunal will exercise discretion on well settled judicial principles and would examine the bonafides of the employer in making such an application. Justice Sabharwal held that Shambu Nath Goyal case does not lay down correct law.

In the present case it was held by the Supreme Court that “appellant employer did not seek permission to lead evidence until after the labour court had held that its domestic enquiry was vitiated. Hence the high court has rightly dismissed the writ petition of the appellant. Hence the appeal is dismissed with costs.

It will be seen that majority of the judges had held that decision in Shambhu Nath Goyal’s case has laid down correct law on the point.