(1.)The principal question which arises in this appeal relates to the true scope and effect of the provisions contained in S. 73 of the Employees' State insurance Act, 1948 (hereinafter called the Act). The Appellant, the Buckingham and Carnatic Company Ltd., is a company registered under the Indian Companies Act and its registered office is at Madras. It has a Textile Mill in Madras City which employs 14,000 workmen. On January 10, 1957, the respondent Venkatiah whose case is sponsored by the respondent Union, the Madras Labour Union, had gone on leave for six days. Taking into account the intervening holidays, the said leave expired on January 18, 1957. He, however, did not join duty on January 19, as he should have, but remained absent without leave without sending to the appellant any communication for extending his leave. On March 11, 1957 he sent a letter to the appellant stating that sometime after reaching his village near Kanigiri he suffered from fever and dysentery and was treated by the Civil Assistant Surgeon, Kanigiri. This letter was accompanied by a certificate issued by the said Civil Assistant Surgeon. In this certificate it was stated that Venkatiah suffered from chronic malaria and dysentery from 15th January to 7th march 1957. When he appeared before the Manager of the Company, he was asked to go to the Senior medical Officer of the appellant for examination. The said Officer examined him and was unable to confirm that he had been ailing for a period of nearly two months. Acting on that opinion, the appellant refused to take back Venkatiah and when Venkatiah pressed to be taken back, the appellant informed him on March 23, 1957 that he could not be reinstated as his explanation for his absence was unsatisfactory. The case of Venkatiah was treated by the appellant under Standing Order No. 8(ii) of the Standing Orders of the appellant.
(2.)Meanwhile, Venkatiah had applied to the Employees State Insurance Corporation and on or about June 5, 1957 he obtained cash sickness benefit for the period covered by the medical certificate issued by the Civil Assistant Surgeon. Kanigiri. The Regional Director to whom Venkatiah had applied for the said assistance accepted the said certificate as alternative evidence and directed that payment may be made to him to the extent permissible under the Act. Accordingly, Rs. 82/14/- were paid to him.
(3.)When the appellant refused to take back Venkatiah in its employment, the respondent Union took up his case and it was referred for adjudication to the Labour Court at Madras as an industrial dispute (S. R. O. No. A-5411 of 1958). Before the Labour Court the appellant urged that the reference made was invalid and it also contended that the termination of Venkatiah's services was justified. The Labour Court rejected the appellant's preliminary objection about the invalidity of the reference. It held that if the matter had to be considered solely by reference to the Standing Orders, the appellant was entitled to succeed, because it was justified in acting upon the opinion given by its Medical Officer in regard to the alleged illness of Venkatiah. When the said opinion was attacked before the Labour Court it observed that it was easy to make such an attack and it held that "he was not inclined to accept the correctness of the criticism in the absence of any strong evidence to show that the Medical Officer was prejudiced against the worker and was motivated with the idea of victimisation." The respondent, however, succeeded before the Labour Court primarily on the ground that the decision of the appellant not to take back Venkatiah was inconsistent with the provisions of Section 73 of the Act. That is why the Labour Court directed the management of the appellant to reinstate Venkatiah within two weeks after its award came into force without liability to pay back wages, but with continuity of service.