Case Note & Summary
The case arose from the dismissal of Prakash Chand Jain, an employee of the Central Bank of India Ltd., after a domestic enquiry found him guilty of misconduct. The employee was charged with failing to report the retirement of bogus bills drawn on bogus firms and giving a false explanation regarding the late deposit of cash to cover the misdeeds of another employee. As an industrial dispute was pending before the Industrial Tribunal, Delhi, the bank filed an application under section 33(2)(b) of the Industrial Disputes Act, 1947 seeking approval of the dismissal order. The Industrial Tribunal held that although the domestic enquiry was fair and not vitiated by irregularity, the findings recorded by the Enquiry Officer were perverse, not based on legal evidence, and the result of conjecture. Consequently, the Tribunal refused to grant approval. The bank appealed to the Supreme Court by special leave. The main legal issue was whether the Tribunal could interfere with the factual findings of a fair domestic enquiry. The appellant bank argued that once the enquiry was held to be fair, the Tribunal had no jurisdiction to sit in appeal over the findings and could only examine whether a prima facie case for approval was made out. The Supreme Court, after reviewing its earlier decisions in Bangalore Woollen, Cotton and Silk Mills Company Ltd. v. Dasappa (B) (Binny Mills Labour Union) & Ors., Lord Krishna Textile Mills v. Its Workmen, and State of Andhra Pradesh v. S. Sree Rama Rao, reiterated that an Industrial Tribunal under section 33(2)(b) can disregard the findings of a domestic enquiry only if they are perverse. Perversity means that the findings are either not supported by any legal evidence or are such that no reasonable person could have arrived at them on the material before the domestic tribunal. The Court further held that while a domestic tribunal is not bound by the technical rules of the Indian Evidence Act, it must observe substantive rules that form part of the principles of natural justice. One such principle is that a fact sought to be proved must be supported by statements made in the presence of the person charged, and statements made behind his back cannot be treated as substantive evidence. Hearsay evidence does not constitute legal evidence. In the present case, the Enquiry Officer had based his conclusions on hearsay and conjecture, not on legal evidence. Therefore, the Industrial Tribunal was justified in holding the findings perverse and refusing approval. The appeal was dismissed, affirming the Tribunal’s order.
Headnote
A) Labour Law - Scope of Interference under Section 33(2)(b) - Test of Perversity - Industrial Disputes Act, 1947, Section 33(2)(b) - The Industrial Tribunal may disregard findings of a domestic enquiry only if the findings are perverse. Perversity means the findings are not supported by any legal evidence, or no reasonable person could have arrived at such findings on the material before the domestic tribunal. Held that earlier decisions in Bangalore Woollen, Cotton and Silk Mills Company Ltd. v. Dasappa (B) (Binny Mills Labour Union) & Ors., Lord Krishna Textile Mills v. Its Workmen, and State of Andhra Pradesh v. S. Sree Rama Rao lay down this principle. B) Labour Law - Domestic Enquiry - Admissibility of Evidence and Natural Justice - Industrial Disputes Act, 1947, Section 33(2)(b) - A domestic tribunal, though not bound by technical rules of evidence, must follow substantive rules of natural justice. Hearsay evidence is not legal evidence; previous statements of a witness not affirmed in the presence of the person charged cannot be treated as substantive evidence. Held that the Enquiry Officer's reliance on hearsay and statements not affirmed made the findings perverse. C) Labour Law - Application of Perversity Test - Findings Based on No Legal Evidence - Industrial Disputes Act, 1947, Section 33(2)(b) - On facts, the Industrial Tribunal correctly held the Enquiry Officer's findings were perverse because they were not based on legal evidence but on conjecture and hearsay. The Tribunal was justified in refusing approval of the dismissal order.
Issue of Consideration
Whether the Industrial Tribunal has jurisdiction to interfere with findings of fact of a domestic enquiry when the enquiry is found to be fair, under section 33(2)(b) of the Industrial Disputes Act, 1947, and what constitutes perversity of such findings.
Final Decision
The Supreme Court dismissed the appeal, holding that the Industrial Tribunal was justified in refusing approval because the findings of the Enquiry Officer were perverse, not being based on any legal evidence. The test of perversity, established in earlier decisions, was correctly applied.
Law Points
- Legal points not extracted
- Industrial Tribunal can disregard findings of domestic enquiry only if perverse
- findings are perverse when not based on legal evidence or no reasonable person could have arrived at them
- domestic tribunal must follow substantive rules of natural justice
- hearsay is not legal evidence even in domestic enquiries
- previous statements not substantive unless affirmed in presence of workman charged
