Shambu Nath Goyal v Bank of Baroda (1983)

When a domestic enquiry is found defective, the employer is not simply finished: it may ask the tribunal for an opportunity to prove the misconduct afresh by leading evidence before the tribunal itself. That right was settled by Workmen of Motipur Sugar Factory and confirmed by the Constitution Bench in Workmen of Firestone Tyre & Rubber Co v Management.

This case answers the question those cases left open, and it is the question that decides real disputes: by when must the employer ask?

The answer is strict. The request must be made in the written statement — at the stage when the employer first answers the workman's case — and not later. An employer who waits to see whether the enquiry survives scrutiny, and only asks for a second chance once the tribunal has held the enquiry bad, has asked too late. Reserve that one sentence; it is the whole case.

The appellant was a clerk at a branch of the Bank of Baroda. The Deputy General Manager issued him a notice stating that a departmental enquiry had been decided upon, that Sen Gupta, the Agent of another branch, had been appointed Enquiry Officer, and that any appeal arising out of his order could be made to Majumdar, the Chief Agent at Delhi.

Sen Gupta held the enquiry, found the charges proved, and proposed dismissal. The appellant protested that the enquiry was arbitrary, biased and improper. Sen Gupta dismissed him. The appeal to the appellate authority failed.

The union raised an industrial dispute and the Central Government eventually referred it. The Tribunal first held that this was not an industrial dispute at all; on appeal the Supreme Court held that it was, and remanded.

On remand the Tribunal held that the domestic enquiry was vitiated and contrary to natural justice. It further held that Sen Gupta had no authority to impose dismissal as disciplinary authority, and that no useful purpose would be served by allowing the management to lead fresh evidence before it, as the management had by then applied to do. It set aside the dismissal and ordered reinstatement with full back wages.

The High Court took the view that Sen Gupta was also the disciplinary authority, going by the terms of the notice of enquiry, quashed the award, and remitted the matter so that the management could lead further evidence before the Tribunal.

1. Was Sen Gupta, appointed as Enquiry Officer, also clothed with authority as disciplinary authority to impose dismissal?
2. At what stage must an employer ask the tribunal for an opportunity to lead fresh evidence to support the charges?
3. Could the management's request, made only after the enquiry had been held defective, be allowed?

The appeal was allowed.

(1) Sen Gupta did have authority. "It is difficult to say that the order of dismissal suffers from any lack of authority of Sen Gupta to award that punishment." The inference came from the notice itself: he was named Enquiry Officer, and the notice said that any appeal from his order lay to the Chief Agent — which "could be inferred that Sen Gupta had been constituted also as the disciplinary authority as otherwise it would not have been stated in that notice that any appeal against his order" would lie. The Court also noted that the workman had never contended that the names of the competent officers had not been published on the Bank's notice board as the awards required.

(2) But the management's request came too late, and that is what decided the appeal: "The management's request for giving an opportunity to lead further evidence to support the charges before the Tribunal made at that late stage cannot be allowed."

Set this out in the Court's own language, because examiners reward the precision:

"The rights which the employer has in law to adduce additional evidence in a proceeding before the Labour Court or Industrial Tribunal either under s. 10 or s. 33 of the Industrial Disputes Act questioning the legality of the order terminating the service must be availed of by the employer by 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 Court then separated the two situations, which is the part most answers miss:

• Under s. 33 (employer applies for permission or approval): the management learns of the alleged defect in the domestic enquiry from the workman's written statement of defence. If it wishes to exercise the right, "it must make up its mind at the earliest stage and file the application for that purpose without any unreasonable delay."
• Under s. 10 (a reference after the workman has already been punished): there is no question of a separate application at all. The defect is pointed out by the workman in his written claim statement, the management has the chance to read it before filing its own written statement, "and could make the request for the opportunity in the written statement itself. If it does not choose to do so at that stage it cannot be allowed to do it at any later stage of the proceedings."

The rule was applied and debated in later benches, and a conflict developed about how absolute it is — in particular whether the request must invariably be in the written statement or whether a tribunal retains discretion to permit it later. Karnataka State Road Transport Corporation v Lakshmidevamma (2001), a Constitution Bench, settled the conflict and approved the Shambu Nath Goyal rule: the employer must seek the opportunity in the written statement. Cite the two together — this case for the rule, Lakshmidevamma for its final endorsement.

• Direct question: When may an employer lead fresh evidence before the Tribunal to justify a dismissal after a defective domestic enquiry? Build the answer as a chain: Motipur Sugar establishes the right, Firestone confirms it, Shambu Nath Goyal fixes the stage, Lakshmidevamma settles it.
• Problem question pattern: the enquiry is held bad; the employer then applies to lead evidence. Refuse it, and quote the "in the written statement itself" passage. If instead the employer asked in its written statement, the opportunity must be given.
• Second point worth marks: authority to punish can be inferred from the terms of the notice of enquiry — here, from the statement that an appeal lay against the Enquiry Officer's order.
• Read with: Cooper Engineering Ltd v P.P. Mundhe on how the tribunal should deal with the preliminary issue of enquiry validity, and D.K. Yadav v J.M.A. Industries on natural justice in termination.