L. MICHAEL & ANR. versus M/S. JOHNSTON PUMPS INDIA LTD.

Citation: [1975] 3 S.C.R. 489 · Decided: 10-02-1975 · Supreme Court of India · Bench: A. ALAGIRISWAMI · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

48 9 
A 
L. MICHAEL & ANR. 
B 
c 
D 
F 
G 
H 
v. 
M/S. JOHNSTON PUMPS INDIA LTD. 
February 10, 1975 
[A. ALAGIRISWAMI, V. R. KRISHNA IYER AND R. S. SA!XAIUA, JJ.] 
f11dmtrial Dispules Act (14 of 1947)-Dismlssa/ of art e:mployee-Powcr 
of Tribunal to go behind an order of tennr'nation-Employer must diM:/osie the 
cro11nd3 of his action when challenged as colourable or ma/a fide-W lle11 Cort rt 
.1/ro11/d irt1erfcre with a {iJuling of fact. 
The service<i of \he appellant, who was an empl,Jyee of the respondents, w.crc 
terminated by the !alter by ,.iving h.i.m a month's .not!ce as por th" stand1!1g 
orders without assigning anv reasons for the tern11Q.at1on. 
The consequential 
industrial dispute was referred to the Labour c.,urt. 
f he management alleged 
that the dismissed employee misused his position by p<15sing on important and 
secret inform.'\.tion about the affairs of the company to certain out~idcro, that 
even after he was transferred to another section he made attempts to elicit 
information from the section with a view to pass it on to outsiders, 11nd that, 
therefore, ihe management lost confidence in the emolovee and terminated his 
service~ by a bona fide orJcr. lhe Labotir Court confirmed the order of termi-
nation. 
In appeal to this Court, it was contend~'1 that, even where a man.ige-
ment had the power to terminate the services of its employees without reasons 
but with notice pay the colourable exercise of <fi~t power invalidated the order 
and the Court could probe beneath the surface to check upon the hona {1.-lc.1 
hehind the e~ercise of the power. 
Allowing the appeal to this Court. 
HEL'.) : I (a) The Labour Court has nJ.iskJ itself on the law and its onle1 
'hould be set 11Side. 
The workman will be reinstated with back wages. [498 GJ 
(b) The manner of dressing up 11.n order doe$ not matter. The Court will 
lift the veil to view the reality or substance of the order. [495 F] 
(2) (a) The Tribunal has the oower and, indeed, the dutv to 
X-ray the 
order and discover its true nature, if the object and effect, if the attendant cir-
clllUslances and the ulterior purpose be to dismiss the employee because he is 
"D evil to be eliminated .. Bui if the management, to cover up the inability to 
establish by an inquiry, illegitimately but ingeniously passes an innocent looking 
<1fder of termination simpliciter, such action is !:lad and is liable to be set aside. 
Loss of confidence is no new armour for the man?tgement; otherwise security·of 
tcnu;·c, ensured by the new industrial jurispruden,:e and authenticated by a. 
catcna of cases of this Court can be subverted ,by thi.5 neo formula Loss of 
confiden;;o in the law will be the consequence of tho Loss of Confidence 
doctrine. [497 C-D] 
(b) An employer who believe or suspects that his employee, particularly 
ono holrung a position of confidence, has betrayed that confid=. can, if the 
conditions and terms of the employment permit, terminate bis employment and 
discharge him without any stigma attaching to the discharge. 
But such belief 
or suspicion of the employer should not be a mere whim or fancy. It should 
be bona fide and reasonable. It must rest on some tangible 
basis 
and 
the 
POWer bas to be exercised by the employer objectively, in good faith. which: 
~ns honestly and with due care. and prudence. If the exercise of such powe1 
is challenged on the gl'cund of bemg cotourable or mala fide or an act of victi-
m.isation or unfair labour practice, the employer must disclose to the ('..onrt the 
grounds of his impugned action so that tho same may be tested judicially. 
1498 B-CJ 
fo tho instant case this has n?t been done. There is only the ipse di.tit of 
the ewployer that he was suspecting since 1968 that the appellant was divulging 
'ecrets relatinR to his business. The employer has not disclbsed the grounds on 
which this suspicion arose in 1968. 
Further, aft~r 1968, the appellant was gi••en 
490 
SU1'REME COURT REPORTS 
[1975] 3 S.C.R. 
two extra increments in addition to his normal increments in appreciation of 
his hard wo.rk. 
This circumstance completely demolishes even the whimsical 
and tenuous stand taken bv the employer. It was manifest that the impugned 
action was not bona fidie. [498 DJ 
The Chartered Bank v. The Chartered Bank Emplovces' Union 
f!960] 
3 
S.C.R. 441; Murgan Mill's I.rd. v. fodustrial Tribunal. Madras [1965] 2 S.C.R. 
1-48 and Workmen of Suddcr Office, Cimwmare v. 
Management, 
[19701 
II 
L.L.J. 620. follo

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