P.K. Misra, J.
1. Both these writ appeals, first one by workman and the other one by the management of M/s. Sundaram Motors, a private limited company, are directed against the common order passed in W.P. Nos. 14608/2006 and 16417 of 2006, dated 27.09.2006 and they were heard together and therefore dealt with by this common judgment.
2. The facts in brief are as follows:
The appellant in W.A. No. 1419/2006, hereinafter referred to as 'the workman', was working under M/s. Sundaram Motors, hereinafter referred to as 'the management'. A disciplinary proceeding was initiated against the workman and the charge memo dated 11.10.1989 was served on him. In such charge memo, it was indicated that some employees of the Bangalore Branch have organised and conducted Service Campaign and indulged in anti-company activities. It is further stated that the delinquent workman had also participated and he was
...found instigating and inciting other workmen/persons in the group, and had taken active part in the said campaign.
The said allegation, if proved would constitute misconducts falling within the following provisions of the certified Standing Orders of our Company.
(i) Wilful disobedience of lawful instructions of the Supervisors vide Clause 18 Sub-clause (1).
(ii) an act of subversive of discipline of the Company vide Clause 18 Sub-clause XI(b).
(iii) an act amounting to breach of trust vide Clause 18 Sub-Clause III(a).
(iv) an act to bring down the image of the Company vide Clause VII(b) and (d).
(b) Deliberately making false, vicious or malicious statements, public or otherwise, against the company or any Officer or employee of the Company.
(d) Issuing public statements, giving interviews, publishing articles, speaking at public gatherings, etc. Criticising the affairs of the Company which is likely to bring down the image of the Company.
(v) an act to engage in other employment while in the service of company - vide Clause 18, Sub Clause V(b).
(vi) an act of distributing the notice and pamphlets to the employees without the permission of the Management vide Clause 18 Sub Clause V(e).
(vii) Deliberate Violation of the provisions of the Standing Orders - Clause 18 X....
3. On the basis of the aforesaid charge memo, the workman was required to furnish his explanation. The workman furnished the following explanation dated 17.10.1989.
I hereby deny the allegations in your aforesaid Show Cause Memo. I submit that the decision to conduct a Free Service Campaign was taken by the Sundaram Motors Employees Union as a campaign to focus the public's attention to the Unfair Labour Practices of your Management and also to help a pollution free atmosphere.
Conducting a Free Service Campaign by the Sundaram Motors Employees Union on a holiday and participation in such Free Service Campaign is not a misconduct as per the Standing Orders. It is for this reason you had not proceeded with the earlier Show Cause Memo issued on the same subject. I deny the allegation that I organised, incited or intimated or instigated the Co-Workers to participate in the Free Service Campaign. This allegation devoid of any factual particulars is vague and untrue. I have not violated any of the Standing Orders nor have I committed any misconduct. Hence, kindly do not indulge in abuse of disciplinary powers for extraneous considerations viz. My membership of Sundaram Motors Employees Union and drop all further action as you did before.
4. Thereafter, without holding any further enquiry, the management passed a detailed order dated 04.11.1989 dismissing the workman from service with immediate effect. The workman filed a petition before the Joint Commissioner for Labour regarding conciliation and a reply was given by the management and the Joint Commissioner of Labour submitted a failure report. Thereafter, the workman initiated an industrial dispute in I.D. No. 1029/1990 by filing claim statement under Section 2(A)(2) of the Industrial Disputes Act before the Labour Court, Madras. Among other things, it was contended that the order of dismissal was invalid as no enquiry had been conducted and 22 workmen, including the present workman, had been dismissed by adopting unfair labour practice within the meaning of Item 5(a), 5(b), 5(d) and 5(f) of V-Schedule to the Industrial Disputes Act, 1947. It was also contended that the order of dismissal was grossly disproportionate to the alleged misconduct.
5. A counter was filed by the management, wherein it was indicated that there was no necessity to hold a formal enquiry inasmuch as the workman had admitted his guilt by admitting that he had participated in the Free Service Campaign which was against the interest of the employer management. It was further indicated that the workman and others had deliberately and wilfully indulged in serious acts of misconduct and they had threatened to continue the Free Service Campaign which would be against the business interest of the company and since such workman had admitted the acts of misconduct it was decided to terminate his service as it would not be in the business interest of the company or in the interest of discipline to retain him in service any longer.
6. Similarly industrial disputes had been raised by other dismissed workmen. Nine Industrial Disputes, including I.D. No. 1029/1990, had been taken together and disposed of by the common award dated 24.04.1995 by the Principal Labour Court. During the proceedings, evidence had been adduced on behalf of various workmen and similarly evidence was adduced on behalf of the management. The Labour Court, after referring to the petition filed by the workman before the Joint Commissioner of Labour, came to the conclusion that the workmen, including the present appellant in W.A. No. 1419/2006, had admitted their participation in the Free Service Campaign held on 30.40.1989 and on 01.10.1989. While dealing with the case of the present workman, the labour court in paragraph 21 of the Common Award referred to the statement made by the workman while being examined as W.W.3 and concluded that the workman had participated in the Free Service Campaign and the contention of some of the workmen, including the present workman, that there was no evidence to prove their participation was negatived. The Labour Court accepted the contention that there was no evidence on the side of the management to prove the allegation that the workman had instigated the other workers to participate in the Free Service Campaign. Regarding the allegation relating to unfair labour practice, the Labour Court rejected the contention of the workman and held that the workmen belonging to other Union affiliated to INTUC and the workman belonging to SMEU were being treated equally and there was no truth in the allegation that the management was adopting unfair labour practice and victimising the workers who were members of SMEU.
7. While dealing with the question of disproportionate punishment, the Labour Court concluded that by organising free service campaign the workmen had jeopardised the fair name of the management and their participation in such free service campaign, inspite of notice by the management warning them not to participate, amounted to misconduct and the order of dismissal was sustainable in law and the request of the workman for reinstatement could not be granted. At the same time, the Labour Court however directed payment of compensation to different workmen depending upon the number of years of service.So far as the present workman appellant is concerned, the Labour Court directed payment of Rs. 1,25,000/- as compensation.
8. Against such an common award of the Labour Court, nine workmen had filed writ petitions, including the present workman. The present workman had filed W.P. No. 14608/1995. The main contention in such writ petition is for reinstatement with backwages. The management also filed W.P. No. 16417/1995. The main contention of the management in such writ petition was to the effect that having held that the workman had committed misconduct and the termination order was justified, there was no scope for giving a direction for payment of compensation of Rs. 1,25,000/-.
9. The dispute raised in other writ petitions by other workmen had been settled by payment of fair higher compensation on the basis of mutual arrangement. Both the writ petitions were disposed of by the learned Single Judge in the common order dated 27.09.2006. The learned single Judge had held that the termination order was invalid as no enquiry had been held. Since the workman had reached the age of superannuation, the learned single Judge observed that the workman was entitled to 50% of backwages from the date of dismissal till the date of superanuation and other consequential terminal benefits as if he was in continuous service till the date of superannuation. Accordingly, the writ petition filed by the workman was allowed to the extent indicated, whereas the writ petition No. 16417/1995 filed by the management was disposed of with the observation that in view of the direction regarding payment of 50% of the entire backwages, there was no need to pay any compensation of Rs. 1,25,000/-.
10. The workman has filed W.A. No. 1419/2006 contending that in view of the conclusion of the learned Single Judge, there should have been a direction for payment of the entire backwages. The management has filed W.A. No. 1488/2006 contending that the order of the learned single Judge setting aside the award of the labour court, so far as the validity of termination is concerned, is not justified.
11. The learned Counsel appearing for the management has contended that inspite of the warning issued by the management, the workman participated in the free service campaign which was against the interest of the company as found by the labour court and therefore the learned single Judge, while deciding the writ petition under Article 226 of the Constitution, should not have re-appreciated the materials on record to come to any contrary conclusion. It has been further contended that at any rate even assuming that the misconduct had not been proved, it is apparent that the management had lost confidence in the workman on account of his conduct in participating in such free service campaign and by insisting that he would also participate in any such campaign in future and therefore instead of deemed reinstatement and payment of terminal benefits, some reasonable compensation could have been paid.
12. The learned Counsel appearing for the workman, on the other hand, has submitted that even assuming that the workman had participated in the free service campaign conducted at Bangalore on a Sunday, which was a non-working day at Madras, it cannot be said that any misconduct had been committed and the order of termination which passed without holding any enquiry cannot be sustained.
13. : (1970)ILLJ228SC Hindustan Steels v. A.K. Roy, it was observed:
16. The Tribunal no doubt felt that it was not established whether the investigation and the report following it were properly done and made, that the company ought to have disclosed it to the workman and given him an opportunity to vindicate himself and that the non-disclosure of the report made the termination illegal and unjustified. That may or may not be right. But what was relevant, at the stage when the Tribunal came to decide what relief the workman was entitled to, was the question whether the management genuinely apprehended as a result of the report that it would be risky to retain the workman in the company's service. They may have gone wrong in the manner of terminating the workman's service as held by the Tribunal. But, if the management truly believed that it was not possible to retain the workman in the company's service on grounds of security and consequently could not place confidence in him any longer, that present case would be one of those exceptional cases where the general rule as to reinstatement could not properly be applied. Thus of course does not mean that in every case where the employer says that he has lost confidence in the workman, and therefore, has terminated his service that reinstatement cannot be granted and the Tribunal has to award compensation. On the other hand, if on an examination of all the circumstances of the case, the Tribunal comes to the conclusion that the apprehensions of the employer were genuine and the employer truly felt that it was hazardous or prejudicial to the interests of the industry to retain the workman in his service on grounds of security, the case would be properly one where compensation would meet the ends of justice.
17. On a consideration of all the circumstance, the present case, in our view, was one such case. The Tribunal exercised its discretion mechanically without weighing the circumstances of the case. That was no exercise of discretion at all. There is ample authority to the effect that if a statutory tribunal exercises its discretion on the basis of irrelevant considerations or without regard to relevant considerations, certiorari may properly issue to quash its order. [See S.A. de. Smith. Judicial Review of Administrative Action. (2nd ed.) 324-325]. One such relevant consideration, the disregard of which would render its order amenable to interference, would be the well-settled principles laid down in decisions binding on the tribunal to whom the discretion is entrusted. The refusal by the High Court to interfere was equally mechanical and amounted to refusal to exercise its jurisdiction. Its order, therefore, becomes liable to interference.
14. In I.T.C. Ltd. Monghyr, Bihar v. Presiding Officer, Labour Court, Patna (Bihar) and Ors., while considering the question whether the reinstatement should be ordered or compensation should be paid, it was observed:
20. ...the present case the service card of the employee shows that he had committed several faults in the past and was sometimes warned, sometimes suspended and sometimes reprimanded for all those omissions and commissions. In the incident in question, he was clearly guilty of neglect of duty in putting wrong slides, although they wee wrongly supplied to him, while packing the cigarettes on the packing machine. Even shortly before the incident in question, as pointed out to the High Court on behalf of respondent No. 3 himself, he was once warned for absence from proper place of work without permission and was suspended for three days for an act subversive of discipline before he was dismissed in June, 1966. We were also informed by the management that respondent No. 3 has superannuated, according to them in December, 1972. The fact that he has superannuated was not disputed by Mr. Santokh Singh. What was, however, asserted on his behalf was that he had superannuated not in December, 1972, but about two years later. At the time of the hearing of the appeal, the management offered to pay a very reasonable amount of compensation and all sums of money due to the workman on account of gratuity and provident fund. We think on the facts and in the circumstances of this case it is not a fit case where the High Court ought to have sustained the order of reinstatement as passed by the Labour Court....
15. In 1985 (II) LLN 181 Chandu Lal v. Management of Pan America World Airways Inc., the Supreme Court observed:
8. Ordinarily, when the order of termination is quashed a declaration follows that the workman continues to be in employment and is, therefore, reinstated in service with full back wages as was held by this Court in Hindustan Tin Works (Private) Ltd. v. Employees of Hindustan Tin Works (Private) Ltd. : (1978)IILLJ474SC . This Court held in Jitendra Singh Rathor v. Shri Baidyanath Ayurved Bhawan Ltd. and : (1984)IILLJ10SC , that under Section 11A of the Act advisedly wide discretion has been vested in the Tribunal in the matter of awarding relief according to circumstances of the case. In Hindustan Steels Ltd. Rowkela v. A.K. Roy and Ors. this Court has held that the Labour Court has discretion to award compensation instead of reinstatement if the circumstances of a particular case make reinstatement inexpedient or improper. In this case it has been the stand of the respondent that the management had lost confidence in the appellant and there has been some pleading about the importance of the role of confidence in the business set-up of the respondent. Without examining the tenability of the stand on loss of confidence as a defence to reinstatement and accepting the allegations advanced by the respondent that there has been loss of confidence, we are of the view that while the termination of service of the appellant is held to be bad, he may not be reinstated in service. On the other hand he should be adequately compensated.
16. In : (1986)IILLJ509SC O.P. Bhandari v. Indian Tourism Development Corporation Ltd. and Ors., it was observed:
6. It is in public interest that such undertakings or their Board of Directors are not compelled and obliged to entrust their managements to personnel in whom, on reasonable grounds, they have no trust or faith and with whom they are in a bona fide manner unable to function harmoniously as a team working arm-in-arm with success in the aforesaid three-dimensional sense as their common goal. These factors have to be taken into account by the Court at the time of passing the consequential order, for the Court has full discretion in the matter of granting relief, and the Court can sculpture the relief to suit the needs of the matter at hand. The Court, if satisfied that ends of justice so demand, can certainly direct that the employer shall have the option not to reinstate provided the employer pays reasonable compensation as indicated by the Court.
17. In Bharat Pritz vz. Workmen, it was observed by the Supreme Court:
18. Ever since the decision of the Federal Court in Western India Automobile Association v. Industrial Tribunal, Bombay and Ors. 1949 F.C.R. 321 the settled position in law is that the industrial tribunal has the jurisdiction to direct reinstatement in appropriate cases. In a case of wrongful dismissal the normal rule adopted in industrial adjudication is to order reinstatement. There are, however, exceptions to this rule and even when it is found that the dismissal was wrongful the workman has been denied reinstatement for the reason that it would not be expedient to direct reinstatement.
19. In The Punjab National Bank Ltd. v. Its Workmen this Court has approved the following observations of the Full Bench of the Labour Appellate Tribunal in Buckingham & Carnatic Mills Ltd. v. Their Workmen 1955 II LLJ 314:
But in so ordering the tribunal is expected to be inspired by a sense of fairplay towards the employee on the one hand and considerations of discipline in the concern on the other. The past record of the employee the nature or his alleged present lapse and the ground on which the order of the management is set aside are also relevant factors for consideration.
20. In that case this Court has laid down:
It is obvious that no hard and fast rule can be laid down in dealing with this problem. Each case must be considered on its own merits, and, in reaching final decision an attempt must be made to reconcile the conflicting claims made by the employee and the employer. The employee is entitled to security of service and would be protected against wrongful dismissals, and so the normal rule would be reinstatement in such cases. Nevertheless in unusual or exceptional cases the tribunal may have to consider whether, in the interest of the industry itself, it would be desirable or expedient not to direct reinstatement As in many other matters arising before the industrial court for their decision this question also has to be decided after balancing the relevant factors and without adopting any legalistic or doctrinaire approach.
18. Coming now to the decisions of the Madras High Court as to the question as to whether reinstatement should be ordered or compensation should be paid, in W.A. No. 909 of 1983, D. Seeralan v. Management of Facit Asia Ltd. and Anr., disposed on 08.09.1983, it was observed:
Then the question is: Should we order reinstatement of the appellant into the service of the first respondent? The impressions gathered by the first respondent with regard to the discharge of the functions of the appellant, while he was in service, could not be stated to be a bona fide. That impression appears to be a bona fide one. Here is a case where the first respondent seemed to have lost the confidence in the appellant's services to it and his honesty in the discharge of his duties. It would perpetuate the ruptured feeling between the parties, if we should order reinstatement. There are other features which also dissuade us from ordering the normal relief of reinstatement.
19. In Writ Appeal No. 2311 of 1987 Engine Valves Ltd. v. Labour Court, Madras and Anr., disposed on 27.11.1990, the Division Bench headed by Justice A.S. Anand (His Lordship as he then was) observed:
18. The decision of this Court in Madras Fertilisers case relied upon by the learned Counsel for the respondents only lays down that where the Labour Court has not made a proper exercise of the discretion vested in it under Section 11(A) of the Act, this Court in the exercise of its powers under Article 226 of the Constitution of India can certainly do what the Labour Court failed to do. Having regard to the principles referred to above, we are of the view that the power and discretion conferred under Section 11(A) of the Act have to be exercised judicially and judiciously and that there should be sufficient indication in the order itself of the fact that the Court exercising powers under Section 11(A) of the Act was aware of and alive to the norms and requirements of Section 11(A) of the Act. The Court exercising powers under Section 11(A) of the Act after finding the misconduct to have been proved is first obliged to advert itself to the question of necessity or desirability to interfere with the punishment imposed by the management and, if the management could not justify the punishment imposed thereafter it must consider the question as to the relief that is to be granted to the employee. In so considering the relief to be granted, the Court has an obligation to consider whether the punishment imposed is disproportionate or shockingly sever to the charges held proved and if so whether a reinstatement has to be ordered or whether any other lesser punishment has to be imposed. A specific finding must be recorded whether it was expedient and proper to reinstate the employee or whether award of compensation in lieu of reinstatement will meet the requirements and ends of justice of the case concerned. Absence of reasons to invoke the power and interfere under provision of Section 11(A) in a particular case would render the very exercise of powers arbitrary and perverse and the order consequently would stand vitiated.
20. On the basis of these observations, learned Counsel for the management has submitted that the fact that the workman had participated in the free service campaign is not in dispute. It is also no longer in dispute that similar campaign had been held earlier and the workmen, both in Bangalore as well as in Madras, threatened to continue such free service campaign. Obviously, in view of most of the customers availed such free service were the customers of the company and by running such free service campaign obviously the economic interest of the company would be hampered. Moreover, if the service rendered is not upto the expectation, the image of the company would otherwise be hampered. Thus, not only there would be direct pecuniary loss, there would also be possibility of tarnishing the image of the company. In such a background, keeping in view the fact that participation in the free service campaign was not denied and at any rate no longer in dispute. The order of termination need not have been interfered with by the learned Single Judge by differing from the conclusion of the Labour Court. Learned Counsel had also submitted that incase the compensation awarded by the Labour Court is found to be unsuitable, this Court may enhance such compensation by any reasonable amount.
21. Counsel for the workman has submitted that mere participation in free service campaign cannot be considered as misconduct as it does not come within any of the stated misconduct as per the Standing Orders. Moreover, since the gravaman of charge was the alleged instigation, in the absence of any proof to prove such institution, it cannot be said that the other allegation was serious enough justifying any termination.
22. We have given our anxious consideration to the rival submissions made at the Bar.
23. A perusal of the judgment rendered by the learned Single Judge indicates that the learned single Judge has tried to re-appreciate the entire matter as if he was exercising appellate jurisdiction about the findings of the Labour Court. It is no doubt true, as has been observed by the Labour Court as well as the learned Single Judge, a formal enquiry had not been held and therefore, it can be concluded that there was no evidence in support of the allegation that the workman had instigated other workmen to participate. However, the fact remains and there is no dispute that the workman had participated in such free service campaign not only on 01.10.1989 but previously in April, 1989. Moreover, the finding of the Labour Court that the management had issued instructions warning the workmen against undertaking such free service campaign has not been quashed by the learned Single Judge. The undisputed fact therefore is that the workman had participated in the free service campaign raising protest against the conduct of the management and had also participated in similar campaign on an earlier occasion. In view of such undisputed facts, merely because no enquiry was held it cannot be said that the order of termination was invalid.
24. On the other hand, a perusal of the order of the Labour Court indicates that the Labour Court was very much conscious of the fact that in view of the seriousness of the allegations relating to participation in the free service campaign, it would not be proper to direct any reinstatement in service and compensation would be payable. This was essentially a discretionary order passed by the Labour Court and in the absence of any cogent reason, the High Court while in exercising of jurisdiction under Article 226 of the Constitution of India should not have reviewed the matter like an appeal court. Therefore, in our opinion, the learned Single Judge has exceeded the well defined and well recognised limitation of writ court under Article 226 in reviewing the matter and directing that the workman was deemed to be in service till the date of superannuation and was entitled to all other service benefits. Such direction of the learned Single Judge is required to be modified suitably.
25. In course of hearing, the counsel appearing for the management had produced before us a chart indicating that the compensation awarded to the other workmen had been enhanced by the management. It s found from record that during pendency of the proceedings before the Labour Court, direction had been issued regarding payment of last drawn wages to the workmen. Having regard to the years of service rendered by the workman and his age at the time of the order of termination, we feel, interest of justice would be served by directing payment of Rs. 3,50,000/- (Rupees three lakhs fifty thousand only) as compensation to the workman.
26. For the aforesaid reasons, the orders of learned single Judge and the Labour Court are modified and the appellant management is directed to pay a sum of Rs. 3,50,000/- (Rupees three lakhs and fifty thousand only) to the appellant workman, which may be done within a period of six weeks from the date of receipt of a copy of this order. Both the Writ Appeals are disposed of accordingly.