Wanchoo, J. - (1.) This is an appeal by special leave in an industrial matter. The brief facts necessary for present purposes are these. The appellant is saw-mill carrying on business in Kozhikode in the State of Kerala. One Sankaran was in the employ of the appellant as a cross-cutter. It IS said that on June 21, 1958, Sankaran came drunk to the mill and abused the Engineer, the Secretary and other and threatened them with physical violence. He was caught hold of by other workmen and taken outside. It is said that he came again a short time later at 4-30 p.m. and abused the same persons again. Thereupon the appellant served a chargesheet on Sankaran on June 24, 1958 setting out the above facts and asked him to show cause why his services should not be terminated on account of his grave indiscipline and misconduct. Sankaran gave an explanation the same day denying the allegations of fact made against him, though he admitted that he had come to the mill at the relevant time for taking his wages for that week. On June 25, 1958 Sankaran was informed that in view of his denial, a departmental inquiry would be held and he was also placed under suspension pending inquiry. The same day Sankaran protested against his suspension and requested that in any case the departmental inquiry should be expedited. As no inquiry was held till July 2, 1958, Sankaran again wrote to the appellant to hold the inquiry as early as possible. On July 8, 1958, the appellant terminated the services of Sankaran under R. 18(a) of the Standing Orders without holding any departmental inquiry and the order was communicated to Sankaran the same day. In that order the appellant informed Sankarar that the proposed inquiry, if conducted, would lead to further friction and deterioration in the rank and file of the employees in general and also that maintenance of discipline in the undertaking would be prejudiced if he was retained in the service of the appellant, and therefore it considered that no inquiry should be held. A dispute was then raised by the union which was referred to the industrial tribunal for adjudication by the Government of Kerala in October 1958. The tribunal held that something seemed to have happened on the afternoon of June 21, 1958 but there was no evidence to prove what had actually happened. It further held that the appellant had intended to take disciplinary action against the workman but subsequently departmental proceedings were dropped and action was taken under R. 18(a)of the Standing Orders. The tribunal was of the view that this was a colourable exercise of the power given under R. 18(a) to the appellant and therefore its action could not be upheld as a bona fide exercise of the power conferred. The tribunal also pointed out that no attempt was made before it to defend the action taken under U. 18(a) by proving the alleged misconduct. Two witnesses were produced before the tribunal in connection with the alleged misconduct, but the tribunal did not rely on them on the ground that the important witnesses, namely, the Engineer, the Secretary and other members of the staff whose evidence would have been of more value had not been produced and no explanation had been given why they were not produced. The tribunal therefore held that on the facts it could not come to the conclusion that Sankaran had come drunk to the mill and abused or attempted to assault either the Engineer or the Secretary or other officers. In the result the order of discharge was set aside and Sankaran was ordered to be reinstated. The appellant thereupon applied for special leave which was granted; and that is how the matter has come up before us.
(2.) The main contention of the appellant is that it is entitled under, R. 18(a) of the Standing Orders to dispense with the service of any employee after complying with its terms. Rule 18 (a) is in these terms:- "When the management desires to determine the services of any permanent workman receiving 12 as, or more as daily wages, otherwise than under rule 21, he shall be given 14 days notice or be paid 12 days wages.' It may be mentioned that R. 21 deals with cases of misconduct and provides for dismissal or suspension for misconduct and in such a case the workman so suspended is not entitled to any wages during the period of suspension. The claim thus put forward on behalf of the appellant is that it is entitled under R. 18(a) of the Standing Orders which is a term of contract between the appellant and its employees to dispense with the service of any employee at any time by just giving 14 days notice or paying 12 days wages.
(3.) We are of opinion that this claim of the appellant cannot be accepted, and it is too late in the day for an employer to raise such a claim for it amounts to a claim "to hire and fire" an employee as the employer pleases and thus completely negatives security of service which has been secured to industrial employees through industrial adjudication for over a long period of time now. As far back as 1952, the Labour Appellate Tribunal had occasion to consider this matter relating to discharge by notice or in lieu thereof by payment of wages for a certain period without assigning any reason:(see Buckingham and Carnatic Co. Ltd. vs. Workers of the Co. 1952 Lab A. C. 490 (LATI). It was of opinion that even in a case of this kind the requirement of bona fides is essential and if the termination of service is a colourable exercise of the power or as a result of victimisation or unfair labour practice the industrial tribunal would have the jurisdiction to intervene and set aside such termination. Further it held that where the termination of service is capricious, arbitrary or unnecessarily harsh on the part of the employer judged by normal standards of a reasonable man that may be cogent evidence of victimisation or unfair labour practice. These observations of the Labour Appellate Tribunal were approved by this Court in Chartered Bank, Bombay vs. Chartered Bank Employees' Union (1960) 3 SCR 441, and Assam Oil Co. vs. Its Workmen (1960) 3 SCR 457. Therefore if as in this case the employer wanted to take action for misconduct and then suddenly dropped the departmental proceedings which were intended to be held and decided to discharge the employee under R. 18(a) of the Standing Orders, it was clearly a colourable exercise of the power under that rule inasmuch as that rule was used to get rid of an employee instead of following the course of holding an inquiry for misconduct, notice for which had been given to the employee and for which a departmental inquiry was intended to be held. The reason given by the appellant in the order terminating the services of Sankaran of July 8. 1958, namely, that the proposed inquiry, if conducted, would lead to further friction and deterioration in the rank and file of the employees in general and also that maintenance of discipline in the undertaking would be prejudiced if Sankaran were retained in service, cannot be accepted at its face value, so that the necessity for an inquiry intended to be held for misconduct actually charged might be done away with. In any case even if the inquiry was not held by the appellant and action was taken under R. 18(a) it is now well settled, in view of the decisions cited above, that the employer could defend the action under R. 18(a) by leading evidence before the tribunal to show that there was in fact a misconduct and therefore the action taken under R. 18(a) was bona fide and was not colourable exercise of the power under that rule. But the tribunal has pointed out that the employer did not attempt to do so before it. It satisfied itself by producing two witnesses but withholding the important witnesses on this question. In the circumstances, if the tribunal did not accept the evidence of the two witnesses who were produced it cannot be said to have gone wrong.;